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EXECUTIVE COUNCIL

REA MAY G. HERMOSURA

Chairperson

JANINE NICOLE C. ORCENA TRISHA ALEXIS R. MAINGAT JAYNIE P. PAJARILLAGA

Vice Chairperson for Academics Secretary Creative Director

SHASHLEY R. BERNARDEZ LANIE GRACE S. LIM IRISH ANA A. SALINAS

Vice Chairperson for Administration Treasurer Volunteer Core Head

CRISTOBAL N. RABINO GRACE PEREZ-SONIDO TIMOTHY JAMES D. PACSON

Operations Head Auditor Ways and Means Officer

LABOR LAW COMMISSION

Mary Joy O. Jonieca Biance Esber Ian Keith Capuz

Commissioner Subject Head – Social Welfare Legislation Alia Jacinta Coleen A. Del Rosario
Robert P. Dillera
Shann Jevi V. Tanaka-Montefrio Jadrin Edison D. Zetha Berl Stephen Dutosme
Deputy Commissioner Subject Head – Labor Relations Maria Westphalia B. Gozon
Ricci Jazelle A. Ibarreta
Bryan Del Castillo Hissah Macaraya
Subject Head – General Principles Ellaine Quizon
Juselle Roble
Subject Head – Management Prerogative
Ray Angelo L. Roces
Lissa Loo Korina Cyril Sermonia
Subject Head – Recruitment and Placement Keisha Mariah C. Lauigan Members
of Workers, Termination of Employment Subject Head – Jurisdiction and Reliefs

Airess Casimero
Subject Head – Labor Standards

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CENTER FOR LEGAL EDUCATION AND RESEARCH

ATTY. RODERICK M. VILLOSTAS

Director

ATTY. ANTONY J. PARREÑO

ATTY. LESTER NAZARENE V. OPLE
ATTY. RICKSON M. BUEVIAJE
Research Fellows

BRANDO F. DE TORRES
MARICAR S. ASUNCION
Research Staff

PHILIPPINE COPYRIGHT

This material is an intellectual creation of the Arellano Law Bar Operations Commission 2021. Any unauthorized reprint or use of this material is
prohibited. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including but not
limited to photocopying, recording, or by any information storage or retrieval system without the express written consent of both Arellano Law bar
Operations Commission 2021 and the Arellano University School of Law.

ALL RIGHTS RESERVED © 2022

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Table of Contents

I. GENERAL PRINCIPLES
A. Basic Policy on Labor…………………………………………………………………………….. 1
B. Construction in Favor of Labor ……………………………………………………………… 3
C. Burden of Proof and Quantum of Evidence in Labor Cases ……………………… 4
D. Legal Basis Under the 1987 Constitution, Civil Code and Labor Code ……….. 4

II. RECRUITMENT AND PLACEMENT OF WORKERS

A. Recruitment and Placement (Labor Code and R.A. No.8042, as amended by
R.A. No. No. 10022)………………………………………………………………………………. 8
B. Employment and Non-Resident Aliens …………………………………………………….. 17

III. LABOR STANDARDS

A. Conditions of Employment …………………………………………………………………… 22
B. Wages ……………………………………………………………………………………………….. 31
C. Leaves ………………………………………………………………………………………………. 34
D. Special Groups of Employees ………………………………………………………………. 38
E. Sexual Harassment in the Work Environment ………………………………………… 45

IV. SOCIAL WELFARE LEGISLATION

A. SSS Law (R.A. No. 8282) ……………………………………………………………………… 47
B. GSIS Law (R.A. No. 8291) ……………………………………………………………………. 54
C. Limited Portability Law (R.A. No. 7699) …………………………………………………. 61
D. Disability and Death Benefits ………………………………………………………………… 62

V. LABOR RELATIONS
A. Right to Self-Organization ……………………………………………………………………. 65
B. Legitimate Labor Organizations ……………………………………………………………. 72
C. Bargaining Representative ……………………………………………………………………. 87
D. Collective Bargaining …………………………………………………………………………… 102
E. Unfair Labor Practices …………………………………………………………………………. 111
F. Peaceful Concerted Activities ……………………………………………………………….. 118

VI. TERMINATION OF EMPLOYMENT

A. Security of Tenure ………………………………………………………………………………. 132
B. Termination by Employer …………………………………………………………………….. 140
C. Termination by Employee …………………………………………………………………….. 152
D. Preventive Suspension …………………………………………………………………………. 161
E. Floating Suspension …………………………………………………………………………….. 161
F. Retirement …………………………………………………………………………………………. 162

VII. MANAGEMENT PREROGATIVE

A. Discipline …………………………………………………………………………………………… 168
B. Transfer of Employees …………………………………………………………………………. 168
C. Productivity Standards …………………………………………………………………………. 170

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D. Bonus ………………………………………………………………………………………………… 171

E. Change of Working Hours ……………………………………………………………………… 174
F. Bona Fide Occupational Qualifications …………………………………………………… 174
G. Post-Employment Restrictions ……………………………………………………………… 176
H. Clearance Procedures …………………………………………………………………………. 177
I. Limitations on Management Prerogative; Police Power of the State …………. 178

VIII. JURISDICTION AND RELIEFS

A. Mandatory Conciliation-Mediation, SENA ……………………………………………..... 179
B. Labor Arbiter ………………………………………………………………………………………. 182
C. National Labor Relations Commission ……………………………………………………. 185
D. Judicial Review of Labor Rulings …………………………………………………………… 190
E. Bureau of Labor Relations ……………………………………………………………………. 192
F. National Conciliation and Mediation Board ……………………………………………… 193
G. POEA …………………………………………………………………………………………………. 194
H. DOLE Regional Directors ……………………………………………………………………… 194
I. DOLE Secretary ………………………………………………………………………………….. 195
J. Grievance Machinery …………………………………………………………………………… 199
K. Voluntary Arbitrator ……………………………………………………………………………. 199
L. Prescription of Actions ………………………………………………………………………… 202

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I. GENERAL PRINCIPLES welfare of the worker and his family, on

account of the effects of employment such as
Labor Law diseases, injuries, disabilities or death (Poquiz,
Labor Standards and Social Legislation with Notes
It is a branch of law that governs and regulates and Comments, 2018, p. 2).
the relationship between employers and
employees. (Ungos & Ungos, Fundamentals of LABOR LEGISLATION VS. SOCIAL
Labor Law Review, 2018, p. 3). LEGISLATION

Labor Labor Social

1. In its limited concept, refers to physical or Legislation Legislation
mental exertion necessary to produce
goods. As to Effect of Employment
2. In its broader concept, may include the
labor force who are employed or those who Directly affects Governs the effect
are able and willing to work but are actual employment of employment
temporarily or involuntarily unemployed (e.g., wages) (e.g.,
(Moore, Industrial Relations and the Social compensation for
Order, pp. 455-456; as mentioned in Poquiz, injuries and death)
Labor Standards and Social Legislation, 2018, p.
1).
As to Purpose
Labor Legislation - consists of statutes,
regulations, and jurisprudence governing the Designed to meet Involves long
relations between capital and labor, by providing the daily needs of range involvement
for certain employment standards and a legal the public
framework for negotiating, adjusting, and
administering those standards and other As to Coverage
incidents of employment (Azucena, The Labor Code
with Comments and Cases, 2016, p. 7). Covers Covers
employment for employment for
Major Divisions of Labor Legislation: profit or gain profit or non-profit

1. Labor Standards Law – prescribes the As to Effect on Employee

terms and conditions of employment as affecting
wages or monetary benefits, hours of work, cost Affects work of Affects life of
of living allowances, and occupational health, employee employee
safety, and welfare of the workers
As to Payor
2. Labor Relations Law – deals with all matters
arising out of employer-employee relationship
Benefits are paid Benefits are paid
involving the concerted action on the part of the
by the worker’s by government
workers which is usually related with right to self-
employer agencies i.e.,
organization, collective bargaining and
Employee’s
negotiation processes (Poquiz, Labor Standards and
Compensation
Social Legislation with Notes and Comments, 2018, pp.
1-2) Commission
(Poquiz, Labor Standards and Social
Labor Relations laws enable workers to obtain Legislation with Notes and Comments, 2018,
from their employers more than the minimum p. 3).
benefits set by the labor standards law (Alcantara,
Reviewer in Labor and Social Legislation, 2008, p.2). A. BASIC POLICY ON LABOR

Social Legislation – a law governing employer- Declaration of Basic Policy

employee relationship while the latter is not at
work due to hazards beyond his control arising Article 3 of the Labor Code declares the
from employment which immobilize him from State’s basic policy on labor. It is a substantial
working. It is designed to uplift and protect the reiteration of Section 9, Article II of the 1973

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Constitution under whose regime the Labor Code destruction of the employer. The
was enacted. Both under Section 3, Article XIII constitutional commitment to the policy of
of the 1987 Constitution and the Labor Code, the social justice cannot be understood to mean
state is duty-bound to: [APERA] that every labor dispute shall automatically be
a. Afford full protection to labor; decided in favor of labor. The constitutional
b. Promote full employment; and legal protection equally recognize the
c. Ensure equal work opportunities regardless employer’s right and prerogative to manage
of sex, race or creed; its operation according to reasonable
d. Regulate the relations between workers and standards and norms of fair play. (Imasen
employers; and Philippine Manufacturing Corporation vs. Alcon,
e. Assure the rights of workers to [CJSS] G.R. No. 194884, October 22, 2014)
i. Collective bargaining;
ii. Just and humane conditions of work; Examples of non-application of protection to
iii. Self-organization; and labor are:
iv. Security of Tenure (Chan, Bar Reviewer
on Labor, 2019, pp. 1-2). ● If an employee is found guilty of violating
Note: rules designed for the safety of the
laborers themselves, his dismissal should
Right to Labor, a property right. The right of be upheld. In this manner, labor is
a person to his labor is deemed to be his property protected and at the same time capital is
within the mantle of constitutional protection. given its due. (Northern Motors vs.
That is his means of livelihood. He cannot be National Labor Union, G.R. No. L-10022,
deprived of his labor or work without due process January 31, 1958)
of law. (BLTB Bus Company vs. CA, G.R. No. L-38482, ● Protection to labor cannot be extended to
June 18, 1976) an employee found guilty of malfeasance
or misfeasance because the law, in
Full employment means that “those who want protecting the rights of labor, authorizes
to work at the prevailing rates of pay are able to neither oppression nor self-destruction of
find work without undue difficulty” (Poquiz, Labor the employer. (Manila Trading and Supply
Standards and Social Legislation, 2018, p. 15; Co. vs. Zulueta, G.R. No. L-46853,
Lester, Economics of Employment, p. 17). It January 30, 1940)
covers a situation under which there are more job ● Where both parties have violated the law,
openings than there are job applicants (Poquiz, neither party is entitled to protection.
Labor Standards and Social Legislation, 2018, p. 15; (PAMBUSCO Employees Union vs. CIR, G.R.
Dankert, An Introduction to Labor, p. 68). It does not No. 46727, September 27, 1939)
mean that everybody is working and the society does
not experience involuntary unemployment (Ibid.). Declaration of Policy on Labor Relations

Reason for Affording Protection to Labor It is the policy of the State:

a. To promote and emphasize the primacy
Due to labor’s economic dependence upon the of free collective bargaining and
capital, it is considered the weaker factor of negotiations, including voluntary
production and therefore needs protection from arbitration, mediation and conciliation, as
the State. (Poquiz, Labor Standards and Social modes of settling labor or industrial
Legislation with Notes and Comments, 2018, p. 14) disputes;
b. To promote free trade unionism as an
Extent of Protection instrument for the enhancement of
democracy and the promotion of social
Protection extends to all of labor – local and justice and development;
overseas, organized and unorganized, whether in c. To foster the free and voluntary
private or public sectors. (Lopez vs. MWSS, G.R. No. organization of a strong and united labor
154472, June 30, 2005) movement;
d. To promote the enlightenment of workers
Limitations on Protection to Labor concerning their rights and obligations as
union members and employees;
In protecting the rights of the workers, the law
does not authorize the oppression or self-

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e. To provide an adequate administrative employee. (Peñaflor vs. Outdoor Clothing Mfg.

machinery for the expeditious settlement of Corp., G.R. No. 177114, April 13, 2010)
labor or industrial disputes;
f. To ensure a stable but dynamic and just When the evidence of the employer and the
industrial peace; and employee are in equipoise, doubts are
g. To ensure the participation of workers in resolved in favor of labor. This is in line with
decision and policy-making processes the policy of the State to afford greater
affecting their rights, duties and welfare (Art. protection to labor. (Hubilla vs. HSY Marketing
218.A, Labor Code, as amended). Ltd., Co., G.R. No. 207354, January 10, 2018)

To encourage a truly democratic method of The rule remains that where the law
regulating the relations between the employers speaks in clear and categorical
and employees by means of agreements freely language, there is no room for
entered into through collective bargaining, no interpretation; there is only room for
court or administrative agency or official shall application (Leoncio vs. MST Marine Services,
have the power to set or fix wages, rates of pay, Inc., G.R. No. 230357, December 6, 2017).
hours of work or other terms and conditions of
employment, except as otherwise provided under Those who have less in life should have
this Code (Art. 218.B, Labor Code, as amended). more in law

B. CONSTRUCTION IN FAVOR OF LABOR When conflicting interests of labor and capital

are weighed on the scales of social justice, the
heavier influence of the latter must be
In Case of Doubt in the...
counterbalanced by the sympathy and
compassion the law must accord the
Labor Code and GR: Interpretation in underprivileged worker. This is in line with the
Implementing favor of labor express mandate of the Labor Code and the
Rules and principle that those with less in life should
Regulations (IRR) have more in law (Eastern Shipping Lines vs.
POEA, G.R. No. L-76633, October 18, 1988).
Labor legislation GR: Interpretation in
and all labor favor of the safety A contrary ruling would be a dilution and
contracts and decent living for emasculation of the protection to labor clause
the laborer of the Constitution. (MD Transit vs. Estrella, G.R.
No. L-52188, March 30, 1982)
All doubts in the implementation and
interpretation of the provisions of this Code, The Rule Does Not Deprive Employers of
including its implementing rules and regulations, Fair Treatment
shall be resolved in favor of labor (Art. 4, Labor
Code, as amended). The rule of interpretation and construction in
favor of labor does not mean that capital
In case of doubt, all labor legislation and all should, at all times, be at the losing end of a
labor contracts shall be construed in favor of controversy. The law does not say so. For
the safety and decent living for the laborer (Art. while the Constitution and the law rnd to favor
1702, New Civil Code). the working man, protection to the employer
is also assured. Protection of the rights of the
In case of doubt in the interpretation or laborer authorizes neither the oppression nor
application of laws, it is presumed that the self-destruction of the employer. [...]
lawmaking body intended right and justice to Management also has its own rights which as
prevail (Art. 10, New Civil Code). such are entitled to respect and enforcement
in the interest of simple fair play. Out of its
Note: Article 4 of the Labor Code applies only concern for those with less privilege in life, the
when there is doubt. This principle has been Court has inclined more often than not
extended by jurisprudence to cover doubts in the towards the workers and upheld his cause
evidence presented by the employer and the with his conflicts with the employer. Such
favoritism, however, has not blinded the

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Court to rule that justice is, in every case, for the To discharge its burden, the employer must
deserving to be dispensed in the light of the rely on the strength of its own evidence.
established facts and applicable law and doctrine Hence, any doubt or vagueness in the
(Chan, Bar Reviewer on Labor Law, 2019, p. 6). provisions of the contract of employment
should have been interpreted and resolved in
The Philippine Constitution, while inexorably favor of the employee (Centro Project
committed towards the protection of the working Manpower Services Corporation vs. Naluis and
class from exploitation and unfair treatment, CA, G.R. No. 160123, June 17, 2015).
nevertheless mandates the policy of social justice
so as to strike a balance between an avowed When there is doubt between the evidence
predilection for labor, on the one hand, and the submitted by the employer and that
maintenance of the legal rights of capital, the submitted by the employee, the scales of
proverbial hen that lays the golden egg, on the justice must be tilted in favor of the employee.
other (Id.) This is consistent with the rule that an
employer’s cause could only succeed on the
C. BURDEN OF PROOF AND QUANTUM strength of its own evidence and not on the
OF EVIDENCE weakness of the employee’s evidence
(Misamis Oriental II Electric Service
Cooperative vs. Virgilio Cagalawan, G.R. No.
Summary on Burden of Proof
175170, September 5, 2012).

Existence of ER-EE EmployEE Quantum of Proof; Substantial Evidence

Relationship
In all cases, as in other administrative and
Fact of dismissal EmployEE quasi-judicial proceedings, the quantum of
proof necessary is substantial evidence, or
Validity of EmployER such amount of relevant evidence which a
Dismissal reasonable mind might accept as adequate to
(compliance with justify a conclusion (Valencia vs. Classic Vinyl
procedural & Products Corp., G.R. No. 206390, January 30,
substantive due 2017).
process)
D. LEGAL BASIS UNDER THE 1987
CONSTITUTION, CIVIL CODE, AND
Employee has burden of proving fact of
LABOR CODE
employment and of dismissal
1. 1987 Constitution;
Before a case for illegal dismissal can prosper, an 2. Civil Code;
employer-employee relationship must first be 3. Labor Code and other related special
established by the employee (Javier vs. Fly Ace legislations (including their respective
Corp., G.R. No. 192558, February 15, 2012).
IRRs);
The employee must first establish by
1. 1987 CONSTITUTION
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 Basic Rights of Workers as
thereof (MZR Industries vs. Colambot, G.R. No. Guaranteed by the Constitution
179001, August 28, 2013).
Labor Standards; Labor Relations;
Employer has burden of proving valid Rights to [TWSH] Right to [COPE]
dismissal
a. Security of a. Conduct
The unflinching rule in illegal dismissal cases is Tenure; Collective
that the employer bears the burden of proof b. Receive a bargaining or
(Garza vs. Coca-Cola Bottlers Philippines, Inc., G.R. Living Wage; negotiation with
No. 180972, January 20, 2014). management;

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● When conflicting interests of labor and

c. A just Share b. Organize
capital are to be weighed on the scales of
in the fruits of themselves;
social justice, the law should accord more
production; c. Participate in
sympathy and compassion to the less
and policy and
privileged workingman. This is only fair if
d. Work under decision-making
the worker is to be given the opportunity
Humane processes; and
and the right to assert and defend his
conditions d. Engage in
cause, not as a subordinate, but as part
(Sec. 3, Art. peaceful
of management with which he can
XIII, 1987 concerted
negotiate on even plane, thus, labor is not
Constitution). activities
a mere employee of capital but it’s active
including strike
as equal partner (Fuentes vs. NLRC, G.R. No.
(Id). 110017, January 2, 1997).

Security of tenure ● Social justice is essentially both a juridical

principle and a societal goal. As a juridical
The State shall guarantee the rights of all principle, it prescribes equality of the
workers to self-organization, collective people, rich or poor, before the law. As a
bargaining and negotiations, and peaceful societal goal, it means the attainment of
concerted activities, including the right to strike decent quality of life of the masses
in accordance with law. They shall be entitled to through humane and productive efforts
security of tenure, humane conditions of work, (Azucena, The Labor Code with Comments
and a living wage. They shall also participate in and Cases Volume I, 2013, p. 10).
policy and decision-making processes affecting
their rights and benefits as may be provided by ● It should be borne in mind that social
law (Par. 2, Sec. 3, Art. XIII, 1987 Constitution). justice ceases to be an effective
instrument for the “equalization of the
Social justice social and economic forces” by the State
when it is used to shield wrongdoing
Social Justice is neither communism, nor (Jamer vs. NLRC, G.R. No. 112630, September
5, 1997).
despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of
Equal work opportunities
social and economic forces by the State so that
justice in its rational and objectively secular The State shall afford protection to labor,
conception may at least be approximated. Social promote full employment, ensure equal
justice means the promotion of the welfare of all work opportunities regardless of sex,
the people, the adoption by the Government of race or creed and regulate the relation
measures calculated to insure economic stability between workers and employers. The State
of all the competent elements of society, through shall assure the rights of workers to self-
the maintenance of a proper economic and social organization, collective bargaining, security of
equilibrium in the interrelations of the members tenure, and just and humane conditions of
of the community, constitutionally, through the work (Art. 3, Labor Code, as amended).
adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers Right to self-organization and collective
underlying the existence of all governments on bargaining
the time-honored principle of salus populi est
suprema lex (Calalang vs. Willams, G.R. No. It is the right of workers and employees to
47800, December 2, 1940). form, join or assist unions, organizations for
purposes of collective bargaining and
● The aim and the reason and therefore the negotiation and for mutual aid and protection.
justification of labor laws is social justice. It also refers to the right to engage in peaceful
While social justice is the reason for concerted activities or to participate in policy
existence of labor laws, their BASIS or and decision-making processes affecting their
FOUNDATION is the police power of the rights and benefits.
State (Azucena, Everyone’s Labor Code, 2021,
pg. 3).

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● The right of the government employees to ● Article II is merely a statement of

deal and negotiate with their respective principles and state policies. Its
employers is not quite as extensive as that of provisions are not self-executing.
private employees. Excluded from They do not embody judicially
negotiation are the “terms and conditions of enforceable constitutional rights but
employment…that are fixed by law.” The guidelines for legislation. These broad
right to engage in concerted activities, principles need legislative enactments
including the right to strike, must be to implement them. The disregard of
exercised in accordance with law i.e. are these provisions cannot give rise to a
subject both to Civil Service Law and rules cause of action in the courts.
and any legislation that may be enacted by Consequently, no case can be filed
the Congress (Arizala vs. CA, G.R. Nos. 43633- based on these principles. There must
34, September 14, 1990). be enabling laws to implement them
(Kilosbayan, Inc. vs. Morato, G.R. No.
● The right to form and join associations and 118910, November 16, 1995).
unions is not absolute or unlimited. Thus, if
a person accepts employment that falls Art. III –Bill of Rights
under the civil service law and his employer
performs governmental functions, he may 1. No person shall be deprived of life, liberty
not resort to strike, because that is prohibited or property without due process of law,
by law. Having accepted the employment nor shall any person be denied the equal
freely and being chargeable with knowledge protection of the laws (Sec. 1);
of the fact that he has no right to resort to 2. No law shall be passed abridging the
strike to enforce his demands against his freedom of speech, of expression, or of
employer, his only recourse is either to the press, or the right of the people to
respect and comply with that condition or peaceably assemble and petition the
resign (Confederation of Unions in Government government for redress of grievances
Corporations and Offices vs. The Commissioner of (Sec. 4);
Civil Service, et. al, G.R. No. L-22723, April 30, 3. The right of the people including those
1970). employed in the public and private
sectors, to form unions, association, or
Article II – Declaration of Principles and societies for purposes not contrary to law
State Policies shall not be abridged (Sec. 8);
4. No law impairing the obligation of
1. The State shall promote a just and dynamic contracts shall be passed (Sec. 10);
social order that will ensure the prosperity
and independence of the nation, and free the ● The constitutional guaranty of non-
people from poverty through policies that impairment of contract is limited by
provide adequate social service, promote full the exercise of the police power of the
employment, a rising standard of living, and State in the interest of public health,
an improved quality of life for all (Sec. 9); safety, morals, and general welfare
2. The State shall promote social justice in all (Philamlife Insurance Co. vs. The Auditor
phases of national development (Sec.10); General, G.R. No. L-19225, January 18,
3. The State recognizes the role of women in 1968).
nation-building, and shall ensure the 5. All persons shall have the right to a
fundamental equality before the law of speedy disposition of their cases before all
women and men (Sec. 14); judicial, quasi-judicial, or administrative
4. The State affirms labor as a primary social bodies (Sec. 16); and
economic force. It shall protect the rights the 6. No involuntary servitude in any form shall
workers and promote their welfare (Sec. 18); exist except as punishment for a crime
and whereof the party shall have been duly
5. The State recognizes the indispensable role convicted (Sec. 18[2]).
of private sector, encourages private
enterprise and incentives to needed
investments (Sec. 20).

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Art. XIII – Social Justice and Human Rights Constitutional rights that cannot be
invoked in company-level
1. The promotion of social justice shall include administrative cases:
the commitment to create economic
opportunities based on freedom of initiative The following constitutional rights and
and self-reliance (Sec. 2); precepts cannot be invoked in labor cases,
2. The State shall afford full protection to labor, particularly in company-level administrative
local and overseas, organized and investigations leading to the termination of
unorganized, and promote full employment employment:
and equality of employment opportunities for
all. a. Right to constitutional due process;
b. Right to equal protection of the laws; and
It shall guarantee the rights of all workers to c. Right to counsel.
self-organization, collective bargaining and
negotiations, and peaceful concerted These rights can only be asserted against the
activities, including the right to strike in government or the State but not against a
accordance with law. They shall be entitled private party like an employer. The
to security of tenure, humane condition of aforementioned constitutional rights may only
work, and a living wage. They shall also be invoked when a labor case is finally lodged
participate in policy and decision-making with the labor and judicial courts.
processes affecting their rights and benefits
as may be provided by law. 2. CIVIL CODE

The State shall promote the principle of a. The relations between capital and
shared responsibility between workers and labor are not merely contractual.
employers and the preferential use of They are so impressed with public
voluntary modes in settling disputes, interest that labor contracts must
including conciliation, and shall enforce their yield to the common good. Therefore,
mutual compliance therewith to foster such contracts are subject to the
industrial peace. special laws on labor unions,
collective bargaining, strikes and
The State shall regulate the relations lockouts, closed shop, wages,
between workers and employers, recognizing working conditions, hours of labor
the right of labor to its just share in the fruits and similar subjects (Art. 1700).
of production and the right of enterprises to
reasonable returns to investments, and to
expansion and growth (Sec. 3) Labor contracts are placed on a
higher plane than ordinary contracts;
Sec. 3, Article XIII of the 1987 Constitution these are imbued with public interest
is also known as the PROTECTION-TO- and therefore subject to the police
LABOR CLAUSE. power of the State. However, when
parties enter into contracts
3. The State shall establish a special agency for voluntarily, without force, duress or
disabled persons for their rehabilitation, self- acts tending to vitiate the workers’
development and self-reliance, and their consent, there is no reason not to
integration into the mainstream of society honor and give effect to the terms
(Sec. 13); and and conditions stipulated therein
(Leyte Geothermal Power Progressive
Employees Union – ALU-TUCP vs.
● The intent is to balance the scale of Philippine National Oil Company Energy
justice; to put the two parties on Development Corporation, G.R. No.
relatively equal positions. There may be 170351, March 30, 2011).
cases where the circumstance warrants
favoring labor over the interest of The contracts referred to in Article
management but never injustice to the 1700 may either be (1) employment
employer (Abad, Compendium on Labor contract, or (2) Collective Bargaining
Law, 2009). Agreement (CBA).

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CBA, as a labor contract within the Applicability of the Labor Code

contemplation of Article 1700 of the Civil General rule: All rights and benefits granted
Code, is not merely contractual in nature to workers under the Labor Code shall apply
but impressed with public interest, thus, alike to all workers whether agricultural or
it must yield to the common good (Davao non-agricultural (Art. 6, Labor Code, as
Integrated Port Stevedoring Services vs. amended).
Abarquez, G.R. No. 102132, March 19, 1993).
Exceptions:
b. Neither capital nor labor shall act 1. Government employees;
oppressively against the other, or impair 2. Employees of government-owned and
the interest or convenience of the public controlled corporations with original
(Art. 1701, Civil Code). charter or created by special laws;
3. Foreign governments;
The preferential treatment given by our 4. International agencies;
law to labor is not a license for abuse; it 5. Corporate officers; intra-corporate
is not a signal to commit acts of disputes which fall under the jurisdiction
unfairness that will unreasonably infringe of regular courts pursuant to the
on the property rights of the company. Securities Regulation Code;
Both labor and employer have social 6. Local water districts, except where
utility, and the law is not so biased that NLRC’s jurisdiction is invoked; and
it does not find a middle ground to give 7. As may otherwise be provided by the
each their due (Milan vs. NLRC, G.R. No. Labor Code. (Labor Code, Azucena, Vol. 1,
202961, February 4, 2015). 2016, p. 3).
c. In case of doubt, all labor legislation and
NB: Pursuant to Atienza v. Saluta (G.R. No.
all labor contracts shall be construed in
233413, 17 June 2019), rights of family
favor of the safety and decent living for
drivers are governed by the Civil Code and not
the laborer (Art. 1702).
by the Labor Code
This Civil Code provision pertains to
construction of labor contracts and Note: The Labor Code may apply even if the
labor legislation, in contrast to Article 4 parties are not employers or employees of
of the Labor Code which mandates each other. It is not correct to say that
construction of Labor Laws and Social employment relationship is a precondition to
Legislation (Dealco Farms vs. NLRC, GR the applicability of the Code. (Ibid).
No. 153192, January 30, 2009).
II. RECRUITMENT AND PLACEMENT OF
d. No contract which practically amounts to WORKERS
involuntary servitude, under any guise
whatsoever, shall be valid (Art.1703). A. RECRUITMENT AND PLACEMENT
(Labor Code and R.A. No. 8042, as
3. LABOR CODE (P.D No. 442, as amended by R.A. No. 10022)
amended)
Recruitment And Placement Refers To Any Act
Labor Code – defined as the “charter of human Of: [CETCHUP]
rights and a bill of obligations” for every working 1. Canvassing,
man (Poquiz, Labor Standards and Social Legislation 2. Enlisting,
with Notes and Comments, 2018, p. 3). 3. Transporting,
4. Contracting,
The Labor Code is a social legislation primarily 5. Hiring
intended to help the employees in conformity 6. Utilizing, or
with social justice which is guaranteed in the 7. Procuring workers.
Constitution (Cristobal vs. ECC, et al., G.R. No. L-
49280, April 30, 1980). It Includes: [CRAP]
1. Contract services;
2. Referrals;
3. Advertising for; or

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4. Promising employment, locally or abroad, Private Employment Agency – means any

whether for profit or not. person or entity engaged in recruitment and
placement of workers for a fee which is
Provided that any person or entity which, in any charged, directly or indirectly, from the
manner, offers or promises for a fee, workers or employers or both. (Art. 13[c],
employment to two or more persons shall be Labor Code)
deemed engaged in recruitment and placement.
(Art. 13 [b], Labor Code, as amended). Private Recruitment Entity – means any
person or association engaged in the
NOTE: recruitment and placement of workers, locally
Worker - any member of the labor force, or overseas, without charging, directly or
whether employed or unemployed (Art. 13, Labor indirectly, any fee from the workers or
Code, as amended). employees. (Art. 13[e], Labor Code).

The act of referral, which is included in License And Authority; Distinguished

recruitment, is the “act of passing along or
forwarding of an applicant for employment after
an initial interview of a selected applicant for LICENSE AUTHORITY
employment to a selected employer, placement
Refers to the A document issued
officer or bureau” (Rodolfo vs. People, G.R. No.
document issued by the DOLE
146964, August 10, 2006).
by the DOLE Secretary
Definition of Terms Secretary authorizing the
authorizing a officers,
Overseas Filipino – Dependents of migrant person, personnel, agents
workers and other Filipino nationals abroad who partnership, or or
are in distress as mentioned in Sections 24 and corporation to representatives
26 of the Migrant Workers Act. (Sec. 3[c], R.A. operate a private of a licensed
No. 8042) recruitment/man recruitment/man
ning agency. ning agency to
(Section 1 [w], Rule II, conduct
Overseas Filipino Worker – is a person who is
Omnibus Rules and recruitment and
to be engaged, is engaged or has been engaged
Regulations placement
in a remunerated activity in a state of which he Implementing the
or she is not a citizen or on board a vessel activities in a
Migrant Workers and
navigating the foreign seas other than a place stated in
Overseas Filipinos Act
government ship used for military or non- of 1995, as amended the license or in a
commercial purposes or on an installation located by Republic Act No. specified place.
offshore or on the high seas; to be used 10022) (Section 1 [b], Rule II,
Omnibus Rules and
interchangeably with migrant worker. (Sec. 2[a],
Regulations
R.A. No. 8042) Implementing the
Migrant Workers and
Who May Engage in Recruitment and Overseas Filipinos Act
Placement of 1995, as amended
by Republic Act No.
No person or entity shall engage in the 10022)
recruitment and placement of workers either for
local or overseas employment except: 1. Illegal Recruitment and Other
a) Public Employment Offices; Prohibited Activities
b) Private Recruitment Offices
c) Private Employment Agencies a & b. Types of Illegal Recruitment and
d) Shipping or Manning Agents & Their Elements
Representatives; and
e) Such other persons or entities as may be
authorized by the Secretary (Rule III, Sec. 1,
Omnibus Rules Implementing the Labor Code)

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The essential elements of illegal recruitment vary e. To influence or to attempt to

in accordance with the following classifications: influence any person or entity not to
employ any worker who has not
1. Simple illegal recruitment; applied for employment through his
a. For Local workers agency; [Influence not to employ]
b. For Migrant Workers f. To engage in the recruitment or
2. Illegal Recruitment involving economic placement of workers in jobs harmful
sabotage to public health or morality or to the
a. When committed by a syndicate; or dignity of the Republic of the
b. When committed in large scale. (Chan, Philippines; [Harmful jobs]
Bar Reviewer on Labor Law, 2019, p. 46). g. To obstruct or attempt to obstruct
inspection by the Secretary of Labor
Simple Illegal Recruitment for Local or by his duly authorized
Workers: representatives; [Obstruct
inspection]
1. The person charged with the crime does Not h. To withhold or deny travel documents
have a License or Authority [NLA] and the from applicant workers before
offender undertakes recruitment activities departure for monetary or financial
defined under Art. 13 (b) [CETCHUP - considerations other than those
CRAP]; or authorized under this Code and its
2. The offender, whether with a non-licensee, implementing rules and regulations.
non-holder of authority, or a licensee or [Withholding travel documents];
holder of authority, undertakes prohibited i. To fail to file reports on the status of
activities defined under Art. 34 of the Labor employment, placement vacancies,
Code, or (Art. 38, Labor Code, as amended). remittance of foreign exchange
earnings, separation from jobs,
NOTE: departures and such other matters or
The number of recruiter/s who committed the information, as may be required by
unlawful acts and/or recruitee/s who fell victim/s the Secretary of Labor; [Non-
thereto should not be more than two (2) persons. submission of reports]
(People vs. Sadiosa, G.R. No. 107084, May 15, 1998) j. To substitute or alter employment
contracts approved and verified by
Prohibited Practices under D.O the Department of Labor from the
[Recruitment of Local Workers] [FOMII- time of actual signing thereof by the
HOWNAT] parties up to and including the
a. To furnish or publish any false notice or periods of expiration of the same
information or document in relation to without the approval of the Secretary
recruitment or employment; [False notice] of Labor; [Alteration of Contracts]
b. To charge or accept, directly or indirectly, and
any amount greater than that specified in the k. To become an officer or member of
schedule of allowable fees prescribed by the the Board of any corporation engaged
Secretary of Labor, or to make a worker pay in travel agency or to be engaged
any amount greater than that actually directly or indirectly in the
received by him as a loan or advance; management of a travel agency.
[Overcharging] [Travel agency officer recruitment]
c. To give any false notice, testimony,
information or document or commit any act Perfection of employment contract
of mispresentation for the purpose of gives rise to Illegal recruitment
securing a license or authority under this
Code; [Misrepresentation for license] The commencement of the employment
d. To induce or attempt to induce a worker relationship must be treated separately from
already employed to quit his employment in the perfection of an employment contract.
order to offer him to another, unless the
transfer is designed to liberate the worker The perfection of the contract, which (as a
from oppressive terms and conditions of general rule) coincides with the date of
employment; [Induce to quit] execution, occurred when the parties agreed

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on the object and the cause, and the terms and worker who has not applied for
conditions. Despite the non-deployment (which employment through his agency or
caused the non-commencement of the who has formed, joined or supported,
employment relationship), rights have arisen or has contacted or is supported by
based on the perfected contract (C.F. Sharp vs. any union or workers’ organization
Pioneer Insurance, G.R. No. 179469, February 15, [Influence not to employ];
2012). F. To engage in the recruitment or
placement of workers in jobs harmful
Simple Illegal Recruitment for Migrant to public health or morality or to the
Worker dignity of the Republic of the
1. When a non-licensee or non-holder of Philippines; [Harmful jobs]
authority [NLA] undertakes an act of G. To obstruct or attempt to obstruct
recruitment [CETCHUP-CRAP] for inspection by the Secretary of Labor
employment abroad, whether for profit or and Employment or by his duly
not. (Sec. 6, R.A. No. 8042, as amended by Sec. authorized representative [Obstruct
5 of R.A. No. 10022) inspection]
2. When any of the following acts which have H. To withhold or deny travel documents
been declared prohibited by law, are from applicant workers before
committed by any person, whether a non- departure for monetary or financial
licensee, non-holder, licensee or holder of considerations, or for any other
authority: [FOMII-HOWNAT-FFN- reasons, other than those authorized
CRESSSV] under the Labor Code and its
A. To furnish or publish any false notice or implementing rules and regulations
information or document in relation to [Withholding travel documents];
recruitment or employment [False I. To fail to submit reports on the status
Notice] of employment, placement vacancies,
B. To charge or accept directly or indirectly remittance of foreign exchange
any amount greater than that specified earnings, separation from jobs,
in the schedule of allowable fees departures and such other matters or
prescribed by the Secretary of Labor and information as may be required by
Employment, or to make a worker pay or the Secretary of Labor and
acknowledge any amount greater than Employment. [Non-submission of
that actually received by him as a loan or reports]
advance [Overcharging] J. To substitute or alter to the prejudice
C. To give any false notice, testimony, of the worker, employment contracts
information or document or commit any approved and verified by the
act of misrepresentation for the purpose Department of Labor and
of securing a license or authority under Employment from the time of actual
the Labor Code, or for the purpose of signing thereof by the parties up to
documenting hired workers with the and including the period of the
POEA, which include the act of expiration of the same without the
reprocessing workers through a job approval of the Department of Labor
order that pertains to non-existent work, and Employment [Alteration of
work different from the actual overseas Contracts]
work, or work with a different employer, K. For an officer or agent of a
whether registered or not with the POEA recruitment or placement agency to
[Misrepresentation for license]; become an officer or member of the
D. To induce or attempt to induce a worker Board of any corporation engaged in
already employed to quit his travel agency or to be engaged
employment in order to offer him directly or indirectly in the
another unless the transfer is designed management of travel agency [Travel
to liberate a worker from oppressive agency officer recruitment]
terms and conditions of employment L. Failure to actually deploy a contracted
[Induce to quit] worker without valid reason as
E. To influence or attempt to influence any determined by the Department of
person or entity not to employ any

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Labor and Employment [Failure to of any kind only from specifically

Deploy] designated institutions, entities or
M. Failure to reimburse expenses incurred persons, except for recommendatory
by the worker in connection with his trainings mandated by
documentation and processing for principals/shipowners where the latter
purposes of deployment, in cases where shoulder the cost of such trainings
the deployment does not actually take [Specific training entity]
place without the worker’s fault, [Failure U. For a suspended recruitment/manning
to reimburse] and agency to engage in any kind of
N. To allow a non-Filipino citizen to head or recruitment activity, including the
manage a licensed recruitment/manning processing of pending workers’
agency [Non-Filipino Manager]. application [Violation of suspension] (Art.
O. For a recruitment/manning agency or a 34, Labor Code; Sec. 6, R.A. No. 8042, as
foreign principal/employer to pass on the amended by Sec. 5, R.A. No. 10022)
overseas Filipino worker or deduct from
his or her salary the payment of the cost Accused must give the impression of
of insurance fees, premium or other ability to send complainant abroad
insurance related charges, as provided
under the compulsory worker’s insurance To prove illegal recruitment, it must be shown
coverage [Collection of insurance that the accused, without being duly
premium] authorized by law, gave complainants the
P. Refusal to condone or renegotiate a loan distinct impression that he had the power or
incurred by an overseas Filipino worker ability to send them abroad for work, such
after the latter’s employment contract that the latter were convinced to part with
has been prematurely terminated their money in order to be employed. It is
through no fault of his or her own important that there must at least be a
[Refusal to condone] promise or offer of employment from the
Q. Granting of a loan to an overseas Filipino person posing as a recruiter, whether locally
worker with interest exceeding 8% per or abroad. (People vs. Laogo. G.R. No. 176264,
annum, which will be used for payment January 10, 2011)
of legal and allowable placement fees
and make the migrant worker issue, Lack of Receipts Not Fatal
either personally or through a guarantor
or accommodation party, post-dated Mere failure of the complainant to present
checks in relation to the said loan written receipts for money paid for acts
[Excessive interest] constituting recruitment activities is not fatal
R. Imposition of a compulsory and exclusive to the prosecution, provided payment can be
arrangement whereby an overseas proved by clear and convincing testimonies of
Filipino worker is required to avail of a credible witnesses. (People vs. Alvarez, G.R.
loan only from specifically designated 142981, August 20, 2002)
institutions, entities or persons [Specific
loan entity] Illegal Recruitment Involving Economic
S. Imposition of a compulsory and exclusive Sabotage
arrangement whereby an overseas
Filipino worker is required to undergo Illegal Recruitment by Syndicate
health examinations only from 1. That the offender has no valid license
specifically designated medical clinics, or authority required by law to enable
institutions, entities or persons, except in them to lawfully engage in the
the case of a seafarer whose medical recruitment and placement of workers
examination cost is shouldered by the [NLA] and offender undertakes any of
principal/shipowner [Specific medical the recruitment and placement
entity] activities as defined under Article 13 (b)
T. Imposition of a compulsory and exclusive of the Labor Code or Sec. 6 of R.A. No.
arrangement whereby an overseas 8042, as amended by Sec. 5 of R.A. No.
Filipino worker is required to undergo 10022; [CETCHUP-CRAP] or
training, seminar, instruction or schooling

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2. Offender undertakes any of the prohibited

Syndicate Large-Scale
activities enumerated under Art. 34 and 38
of the Labor Code or RA No. 8042, as As to Recruiters
amended by RA No.10022, whenever
applicable, irrespective of whether the
offender is a non-licensee, non-holder, Carried out by a May be committed
licensee or holder of authority. group of three (3) by only one (1)
or more persons person.
3. That there be at least three (3) conspiring and/or
recruiters. (Chan, Bar Reviewer on Labor Law, confederating with
2019, p. 50). one another.

Note: Illegal recruitment is committed by a

group of 3 or more persons conspiring or As to Recruitees
confederating with one another. (People vs.
Gallo, G.R. No. 187730, June 29, 2010).
Recruitment of one At least 3, whether
Large-Scale Illegal Recruitment (1) person would individually or as a
suffice. group.
1. That the offender has no valid license or (Chan, Bar Reviewer on Labor Law, 2019, pp. 50-
authority required by law to enable them to 52).
lawfully engage in the recruitment and
placement of workers [NLA] and offender c. Illegal Recruitment vs. Estafa
undertakes any of the recruitment and
placement activities as defined under
Article 13 (b) of the Labor Code or Sec. 6 of ILLEGAL ESTAFA
R.A. No. 8042, as amended by Sec. 5 of R.A. RECRUITMENT
No. 10022; [CETCHUP-CRAP] or
As to the Nature of the Criminal
2. Offender undertakes any of the prohibited
Offense
activities enumerated under Art. 34 and 38
of the Labor Code or RA No. 8042, as
Malum Prohibitum Malum In Se
amended by RA No.10022, whenever
applicable, irrespective of whether the
offender is a non-licensee, non-holder, As to Necessity of Criminal Intent
licensee or holder of authority; and
3. The offender committed the same against
three (3) or more persons, individually Not necessary Required
or as a group. (People vs. Taguinay, G.R. No.
186132, February 27, 2012)
As to the Law Punishing the
Note: A conviction for large-scale illegal Offense
recruitment must be based on a finding in each
case of illegal recruitment of three (3) or more Labor Code, a Revised Penal
persons having been recruited, whether special law Code, a general
individually or as a group. (People vs. Ang, G.R. No. law
181245, August 6, 2008)
As to the Scope
The failure to prove at least three (3) persons
recruited makes the crime a case of simple illegal
recruitment. (People vs. Hu, G.R. No. 182232, Limited to Broader scope;
October 6, 2008) recruitment and covers and applies
placement to deceits whether
activities. or not related to
recruitment and
placement
activities.

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Act Constituting Estafa deployment. (Sec. 10, R.A. No. 8042, as amended
The accused represented themselves to by Sec. 7, R.A. No. 10022)
complaintants to have the capacity to send
workers abroad although they did not have any Incorporation into the contract
authority or license. It is by this representation The provision of joint and several liability shall
that they induced complainants to pay a be incorporated in the contract for overseas
placement fee. Such act constitutes estafa under employment and shall be a condition
Art. 315 (2) of the RPC (People vs. Hernandez, G.R precedent for its approval (Id).
No. 199211, June 4, 2014).
Posting of bond by recruiter
Note: The offended party must have relied on the The performance bond to be filed by the
false pretense, fraudulent act or fraudulent recruitment/placement agency, as provided
means of the accused, and as a result thereof, by law, shall be answerable for all money
the offended party suffered damages (Id.) claims or damages that may be awarded to
the workers. (Id).
Illegal recruitment and estafa cases may
be filed simultaneously or separately; If the recruitment/placement agency is a
double jeopardy will not set in. juridical being, the corporate officers and
directors and partners as the case may be,
Illegal recruitment is an independent action. shall themselves be jointly and solidarily liable
(Aquino vs. Court of Appeals. G.R. No. 91896, with the corporation or partnership for the
November 21, 1991) aforesaid claims and damages.

[...] illegal recruitment and estafa cases may be Effect of severance of agency
filed simultaneously and separately. The filing of agreement on liability
charges for illegal recruitment does not bar the
filing of estafa and vice versa. (Sy vs. People, G.R. Such liabilities shall continue during the entire
No. 183879, April 14, 2010) period or duration of the employment contract
and shall not be affected by any substitution,
Illegal recruitment and estafa are entirely amendment or modification made locally or in
different offenses and neither one necessarily a foreign country of the said contract. (Sec. 10,
includes or is necessarily included in the other. A R.A. No. 8042, as amended by Sec. 7, R.A. No.
person who is convicted of illegal recruitment 10022)
may in addition, be convicted of estafa under Art.
315, par 2(a) of the Revised Penal code (People The agency agreement with the principal even
vs. Billaber, G.R. No. 114967-68, January 26, if ended as between them, still extends up to
2004). In the same manner, a person acquitted and until the expiration of, the employment
of illegal recruitment may be held liable for contracts of the employees recruited and
estafa. Double jeopardy will not set in because employed pursuant to the said recruitment
illegal recruitment is malum prohibitum, in which agreement. (OSM Shipping Phil, Inc. vs. NLRC,
there is no necessity to prove criminal intent, G.R. No. 138193, March 5, 2003)
whereas estafa is malum in se, in the prosecution
of which, proof or criminal intent is necessary (Sy Liability of corporate directors and
vs. People, G.R No. 183879, April 14, 2010). officers not automatic

2. Liability of Local Recruitment Agency The liability of corporate directors and officers
and Foreign Employer is not automatic. To make them jointly and
solidarily liable with their company, there
a. Solidary liability must be a finding that they were remiss
in directing the affairs of that company,
The joint and several nature of the liability of the such as sponsoring or tolerating the conduct
principal/foreign employer and the local of illegal activities (Becmen Service Exporter and
recruitment/placement agency applies to any and Promotion, Inc. vs. Sps. Simplicio and Mila
all monetary claims arising out of the Cuaresma, et al., G.R Nos. 167590, 182978-79,
implementation of the employment contract November 12, 2013).
involving Filipino workers for overseas

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Non-suability cannot defeat the solidary E. Cooperatives whether registered or not

nature of the liability under the Cooperative Act of the
Philippines;
It is settled that immunity from suit of a foreign F. Law enforcers and any official and
principal, a foreign government instrumentality, employee of the Department of Labor and
cannot be invoked to defeat the solidary nature Employment (DOLE);
of the liability (ATCI Overseas Corp. vs. Echin, G.R. G. Sole proprietors of duly licensed agencies
No. 178551, October 11, 2010). are prohibited from securing another
license to engage in recruitment and
Liability of the previous owner not placement; and
extinguished by an undertaking to assume H. Sole proprietors, partnerships or
responsibility by the new owner corporations licensed to engage in private
recruitment and placement for local
The liability of the previous owner not employment are prohibited from
extinguished by an undertaking made by the new engaging in job contracting or
owner to its employees assuming responsibility. subcontracting activities. (Section 5,
Such undertaking does not bind the employees Department Order No. 141-14, Revised Rules
as would release the former from its liability to and Regulations Governing Recruitment and
the latter (Skippers United Pacific, Inc. vs. Maguad, Placement for Local Employment)
G.R. No. 166363, August 15, 2006).
Entities Prohibited from Recruiting for
b. Theory of Imputed Knowledge Overseas Employment

Knowledge of the agent is deemed A. Travel agencies and sales agencies of

knowledge of the principal but not the airline companies, whether for profit or
other way around not; (Art. 26, Labor Code, as amended)
B. Officers or members of the Board of any
The theory of imputed knowledge ascribes the corporation or partners in a partnership
knowledge of the agent to the principal, not the engaged in the business of a travel
other way around. The knowledge of the agency;
principal-foreign employer cannot, therefore, be C. Corporations and partnerships, where any
imputed to its agent. (Sunace International of its officers, members of the board or
Management Services, Inc. vs. NLRC, G.R. No. partners is also an officer, member of the
161757, January 25, 2006.) board or partner of a corporation or
partnership engaged in the business of a
3. Entities Prohibited from Recruiting travel agency;
D. Individuals, partners, officers, or directors
Entities Prohibited from Recruiting for of an insurance company who make,
Local Employment propose or provide an insurance contract
under the compulsory insurance coverage
A. Travel agencies and sales agencies of airline for agency-hired OFWs;
companies, whether for profit or not; (Art. E. Sole proprietors, partners or officers and
26, Labor Code) members of the board with derogatory
B. Those who are convicted of illegal records, such as, but not limited to the
recruitment, trafficking in persons, anti- child following:
labor violation, or crimes involving moral a. Those convicted or against whom
turpitude; probable cause or prima facie finding
C. Those against whom probable cause or of guilt is determined by a competent
prima facie finding of guilt for illegal authority for illegal recruitment or for
recruitment or other related cases exist other related crimes or offenses
particularly to owners or directors of committed in the course of, related
agencies who have committed illegal to, or resulting from, illegal
recruitment or other related cases; recruitment, or for crimes involving
D. Those agencies whose licenses have been moral turpitude; b. Those agencies
previously revoked or cancelled by the whose licenses have been revoked for
Department under Sec. 54 of these Rules; violation of RA 8042, PD 442, RA

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9208, and their IRRs; Those agencies 2. In case of any unauthorized deductions
whose licenses have been cancelled, or from the migrant worker's salary. (Sec. 10,
those who, pursuant to the order of the R.A. No, 8042, as amended by Sec. 7, R.A. No.
Administrator, were included in the list of 10022)
persons with derogatory record for
violation of recruitment laws and The full reimbursement shall consist of:
regulations; 1. His placement fee and the deductions
F. Any official employee of the DOLE, POEA, made with interest at twelve percent
OWWA, DFA, DOJ, DOH, BI, IC, NLRC, (12%) per annum; and
TESDA, CFO, NBI, PNP, Civil Aviation 2. His salaries for the unexpired portion of
Authority of the Philippines, international his employment contract or for three (3)
airport authorities, and other government months for every year of the unexpired
agencies directly involved in the term, whichever is less. (Sec. 10, R.A. No,
implementation of RA 8042, as amended, 8042, as amended by Sec. 7, R.A. No. 10022)
and/or any of his/her relatives within the
fourth civil degree of consanguinity or Note: The phrase “or for three (3) months for
affinity. (Sec. 3, Rule I, Part II, Rule II, Part III, every year of the unexpired term, whichever
Revised POEA Rules and Regulations Governing is less” has been declared as
the Recruitment and Employment of Land-Based unconstitutional. Despite the fact that the
Overseas Filipino Workers of 2016) clause “or for three (3) months for every year
of the unexpired term, whichever is less” was
4. Suspension or Cancellation of License or reinstated in R.A 8042 upon promulgation of
Authority R.A. 10022 in 2010, the Supreme Court
The Secretary of Labor shall have the power to reiterated its finding in Serrano vs. Gallant
suspend or cancel any license or authority to Maritime that limiting wages that could be
recruit employees for overseas employment for: recovered by an illegally dismissed overseas
worker to three months is both a violation of
1. Violation of Rules and Regulations issued by due process and the equal protection clauses
the Department of Labor and Employment, of the Constitution. (Sameer Overseas Placement
the Overseas Employment Development Agency vs. Cabiles, G.R. 170139, August 5, 2014)
Board, and the National Seamen Board; or
2. Violation of the provisions of this and other The three-month salary rule
applicable laws, General Orders and Letters ● Rule before Serrano (1995-2009)
of Instructions. (Art. 35, Labor Code, as The employment contract involved in the
amended) instant case covers a two-year period but
the overseas contract worker actually
Note: Illegal recruitment and acts prohibited worked for only 26 days prior to his illegal
under Art. 34 or R.A. No. 8042, as amended by dismissal. Thus, the three months’ salary
R.A. No. 10022, as the case may be, are grounds rule applies. (Flourish Maritime Shipping
for suspension or cancellation of license. vs. Almanzor, G.R. No. 177948, March 14,
2008)
Who Can Suspend or Cancel the License?
1. Secretary of Labor and Employment, and ● Rule after Serrano (2009-present)
2. POEA Administrator (delegated authority - Invalidated the 3-month salary cap
from the SOLE) clause
- Sec. 10 of 8042, which limited the
5. Termination of Contract of Migrant separation pay to three months, was
Workers Without Just or Valid Cause unconstitutional for violating the
equal protection clause. (Serrano vs.
Gallant, G.R. No. 167614, March 24,
The worker shall be entitled to full 2009).
reimbursement: 6. Ban on Direct-Hiring, exceptions
1. In case of termination of overseas
employment without just, valid or authorized Direct Hiring
cause as defined by law or contract, or Direct hiring refers to the process of directly
hiring workers by employers for overseas
employment as authorized by the DOLE

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Secretary and processed by the POEA, including: Considering that McBurnie, an Australian,
alleged illegal dismissal and sought to claim
A. Those hired by international organizations. under our labor laws, it was necessary for him
B. Those hired by members of the diplomatic to establish that he was qualified and duly
corps. authorized to obtain employment within our
C. Name hires or workers who are able to jurisdiction. His failure to obtain an
secure overseas employment opportunities employment permit, by itself, necessitates the
with an employer without the assistance or dismissal of his labor complaint. (McBurnie vs.
participation of any agency. (Sec. 1[i], Rule II, Ganzon, G.R. Nos. 178034, 178117 & 186984-85
Omnibus Rules and Regulations Implementing the [Resolution], October 17, 2013)
Migrant Workers and Overseas Filipinos Act of
1995, as amended by R.A. No. 10022) Persons required to secure Alien
Employment Permit [AEP]:
Ban On Direct-Hiring 1. Any alien seeking admission to the
No employer may hire a Filipino worker for Philippines for employment purposes, and
overseas employment except through the Boards 2. any domestic or foreign employer who
and entities authorized by the Department of desires to engage an alien for
Labor and Employment. (Art. 18, Labor Code, as employment in the Philippines (Article 40,
amended) Labor Code, as amended).
Exceptions Note: Resident aliens do not fall within the
The following are the exceptions to the ban on ambit of this provision (Almodiel vs. NLRC, G.R.
direct-hiring: No. 100641, June 14, 1993).
1. Members of the diplomatic corps.
2. International organizations. Qualifications to secure AEP:
3. Heads of state and government officials with ● In the case of a nonresident alien or to
the rank of at least deputy minister. the applicant employer after a
4. Other employers as may be allowed by the determination of the non-availability of a
DOLE Secretary (Section 8, Rule III, POEA Rules person in the Philippines who is
on Land-based Overseas Workers) competent, able and willing at the time of
application to perform the services for
B. EMPLOYMENT OF NON-RESIDENT which the alien is desired.
ALIENS ● For an enterprise registered in preferred
areas of investments, upon
Alien Employment Permit (AEP) recommendation of the government
A document issued by the DOLE Secretary agency charged with the supervision of
through the DOLE-Regional Director who has said registered enterprise (Article 40,
jurisdiction over the intended place of work of the Labor Code, as amended).
foreign national. All foreign nationals who intend
to engage in gainful employment in the Exceptions: [DOSBLART]
Philippines shall apply for an AEP. (Sec. 1 [1], D.O. 1. Members of the Diplomatic services and
No. 221 s. 2021; D.O. No. 146 s. 2015) foreign government officials accredited by
the Philippine government;
Gainful Employment 2. Officers and staff of international
Gainful Employment refers to a state or condition Organizations of which the Philippine
that creates an employer-employee relationship government is a cooperating member,
between the Philippine-based employer and the and their legitimate Spouses desiring to
foreign national, where the former has the power work in the Philippines;
to: 3. Foreign nationals elected as members of
A. Hire/Dismiss the foreign national from the Governing Board who do not occupy
employment; any other position, but have only voting
B. Pays the salaries or wages thereof; Has
rights in the corporation;
authority to control the performance or 4. All foreign nationals granted exemption
conduct of the tasks and duties. (Sec. 1, D.O. by special Laws and all other laws that
No. 186, s. 2017)
may be promulgated by the Congress;

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5. Owners and representatives of foreign No. 146 s. 2015; Sec. 1[22], D.O. No. 221, s.
principals, whose companies are Accredited 2021)
by the Philippine Overseas Employment 3. Authority to Employ Alien (AEA) from the
Administration (POEA), who come to the DOJ where the employment is in a
Philippines for a limited period solely for the nationalized or partially nationalized
purpose of interviewing Filipino applicants for industry and DENR, in case of mining.
employment abroad; (Sec.1[4], D.O. No. 221, s. 2021)
6. Resident foreign nationals and temporary or
probationary resident visa holders employed Procedure in The Processing of
or seeking employment in the Philippines; Applications for AEP
7. Foreign nationals who come to the
Philippines to Teach, present and/or conduct All applications for AEP shall be filed and
research studies in universities and colleges processed at the DOLE Regional Office or
provided that the exemption is on a Field Office having jurisdiction over the
reciprocal basis; and (Sec. 2, D.O. No. 186, intended place of work. In case the foreign
s. 2017) national will be assigned in related companies
of his employer, the applications may be filed
Exclusions From Permit Requirement in the Regional Office or Field Office having
1. Members of the governing board with voting jurisdiction over any of the applicant’s
rights only and do not intervene in the intended place of work. In case there is
management of the corporation or in the change of position or assignment of the alien
day-to-day operation of the enterprise; applicant, another application for issuance of
2. President and Treasurer, who are part- new AEP shall be made. (Sec. 5, D.O. No. 186,
owners of the company; s. 2017)
3. Those providing consultancy services who do
not have employees in the Philippines; Prohibitions against transfer of
4. Intra-corporate transferee who is a manager,
employment
executive or specialist as defined below in
accordance with Trade Agreements and an After the issuance of an employment permit,
employee of the foreign service supplier for the alien shall not transfer to another job or
at least one (1) year continuous employment change his employer without prior approval of
prior to the deployment to a branch, the Secretary of Labor (Article 41, Labor Code,
as amended).
subsidiary, affiliate or representative office in
the Philippines. (Sec. 3, D.O. No. 186, s. 2017)
Validity Of AEP
Note: Pursuant to Sec. 4 of DO 186-17, all foreign
The AEP shall be valid for the position and the
nationals excluded from securing AEP shall
company for which it was issued for a period
secure Certificate of Exclusion from the
of one (1) year, unless the employment
Regional Office. (Sec. 4, D.O. No. 186, s. 2017)
contract, or other modes of engagement
provides otherwise, which in no case shall
AEP Is Not an Exclusive Authority
exceed three (3) years. (Sec. 10, D.O. No. 186,
s. 2017)
Generally, the issuance of Alien Employment
Permit (AEP) is not an exclusive authority for a Renewal Of AEP
foreign national to work in the Philippines (D.O
No. 186, s. 2017).
Application for renewal of AEP shall be filed
not earlier than sixty (60) days before its
A Foreign National Must Obtain
expiration.
In case the foreign national needs to leave the
1. Alien Employment Permit (AEP) from the
country or in other similar circumstances that
DOLE; (Sec. 3, D.O. No. 97-09; Sec. 1[2], D.O.
will hinder the filing of renewal within this
No. 221, s. 2021)
2. Special Temporary Permit (STP) from the prescribed period, the application may be filed
PRC, in case the employment involves earlier.
practice of profession; (Policy Declaration, D.O.
In case of officers whose appointment or
election takes place before the expiration of

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AEP, the application must be filed not later than 7. Grave misconduct in dealing with or ill
fifteen (15) working days after appointment, or treatment of workers. (Sec. 13, D.O. No.
before its expiration, whichever comes later. 186, s. 2017)

In case appointment or election will take place Additional Ground

after the expiration of the AEP, the application for
renewal must be filed before the expiration of the Here, the alien, without the prior approval of
AEP which can be renewed for one (1) year. (Sec. the DOLE secretary, is prohibited from
11, D.O. No. 186, s. 2017) committing any of the following:
1. Transfer to another job;
Grounds for DENIAL of Application for New 2. Change his employer;
or Renewal of Permit
1. Misrepresentation of facts in the application, Such transfer to another job or change of
including fraudulent misrepresentation i.e., position or in employer requires the filing of
false statement that has a negative effect in an application for new AEP. (par. (a), Art. 41,
the evaluation of the application made Labor Code, as amended)
knowingly. Or without belief in its truth, or
recklessly whether it is true or false; Effect of Denial/Cancellation or
2. Submission of falsified document; Revocation of AEP
3. Conviction of a criminal offense or a fugitive
from justice in the country or abroad; A foreign national whose AEP has been denied
4. Grave misconduct in dealing with or ill or canceled is disqualified to reapply within a
treatment of workers; period of:
5. Availability of a Filipino who is competent, 1. Ten (10) years in case the grounds for
able and willing to do the job intended for or denial or cancellation is any of the ff:
being performed by the foreign national a. Conviction of criminal offense or
based on data in the PEIS, PRC Registry of fugitive from justice in the country or
Professional and TESDA Registry of Certified abroad; or
Workers. b. Grave misconduct in dealing with or
6. Worked without valid AEP for more than a ill treatment of workers.
year; or 2. Five (5) years if the grounds be:
7. Application for renewal with expired visa or a. misrepresentation of facts or
with temporary visitor’s visa. (Sec. 12, D.O. submission of falsified documents
No. 186, s. 2017) with the intent to deceive, conceal or
omit to state material facts and,
Grounds for Cancellation or Revocation of b. by reason of such omission or
Permit concealment, the DOLE was
1. Non-compliance with any of the prompted to approve/issue the AEP
requirements or conditions for which the AEP that would not otherwise have been
was issued; approved/issued, shall be disqualified
2. Misrepresentation of facts in the application, to reapply within a period of five (5)
including fraudulent misrepresentation i.e., years. (Sec. 14, D.O. No. 186, s. 2017)
false statement that has a negative effect in
the evaluation of the application made Effect of Fraudulent Application for AEP
knowingly. Or without belief in its truth, or
recklessly whether it is true or false; Employees, employer’s or foreign national’s
3. Submission of falsified or tampered representatives, and/or agents acting on
documents; behalf of the applicant found to have filed
4. Meritorious objection or information against fraudulent application for AEP for three (3)
the employment of the foreign national; counts shall be barred from filing application
5. Foreign national has been convicted of a for a period of five (5) years after due
criminal offense or a fugitive from justice; process. (Sec. 15, D.O. No. 186, s. 2017)
6. Employer terminated the employment of
foreign national; and

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Appeal 1. Four-Fold Test

Aggrieved foreign national or his authorized 1. Selection and engagement of the

representative may file an appeal with the DOLE employee;
Secretary within ten (10) days after receipt of 2. Payment of wages or salaries;
the copy of denial/cancellation/revocation order. 3. Exercise of the power of dismissal; or
The decision of the DOLE Secretary shall be final 4. Exercise of the power to control the
and executory unless a motion for employee’s conduct. (Chan, Bar
reconsideration is filed within ten (1) days after Reviewer on Labor Law, 2019, p. 621).
the receipt of the decision. (Sec. 16, D.O. No. 186,
s. 2017) The Most Important Test is the Control Test

III. LABOR STANDARDS Absent the power to control the employee

with respect to the means and methods of
1. Employer-employee relationship accomplishing his work, there is no employer-
employee relationship between the parties
The application of the provisions of the Labor (Continental Marble Corp., et.al vs. NLRC, G.R. No.
Code to any situation contemplated therein 43825, May 9, 1988).
requires the existence of employer-employee
relationship. Without this relationship, the Labor The control test assumes primacy in the
Code does not apply. (Chan, Labor Code of the overall consideration. There is an Er-Ee
Philippines, Vol. 1, 2019, p. 18) relationship when the person for whom the
services are performed reserves the right to
The basic factor underlying the exercise of rights control not only the end achieved but also the
and the filing of claims for benefits under the manner and means used to achieve that end
Labor Code and other presidential issuances or (Television and Production Exponents Inc. vs.
Servaña, G.R. No. 167648, January 28, 2008).
labor legislations is the status and nature of one’s
employment. (Villuga vs. NLRC, GR No. 75038,
August 23, 1993). The control test means that the employer
controls or has reserved the right to control
Employer is any person, natural or juridical, the employee not only as to the result of the
domestic or foreign, who carries on it the work to be done but also as to the means and
Philippines any trade, business, industry, methods by which the same is to be
undertaking or activity of any kind and uses the accomplished. The three (3) terms: (1)
services of another person who is under his means, (2) methods and (3) results are the
orders as regards the employment, except the critical elements of the control test.
Government and any of its political subdivisions, (Chan, 2019 Pre-week Notes on Labor Law,
branches or instrumentalities, including p. 76)
corporations owned or controlled by the
Government (Sec. 8[c], R.A. No. 8282, Social Situation 1:
Security Law).
If the employer controls the means and
Employee is any person who performs services methods of performing the job, work or
for an employer in which either or both mental service, including the results thereof, then the
and physical efforts are used and who receives arrangement is one of employer-employee
compensation for such services, where there is relationship. (Chan, 2019 Pre-week Notes
an employer‐employee relationship (Sec. 8[d], on Labor Law, supra)
R.A. No. 8282, Social Security Law).
Situation 2:
2. Tests To Determine Employer- If the so-called employer does not control
Employee Relationship such means and methods but is only
interested in the results thereof, then the
Employment relationship is determined by law arrangement is called “independent job
and not by contract (Insular Life Assurance Co. Ltd. contracting” or “contractualization”, the
vs. NLRC, G.R. No. 119930, March 12, 1998). party controlling the means and methods is
called the independent contractor and the

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party interested only in the results is called the

principal/client/indirect employer/statutory This two-tiered test would provide us with a
employer. (Chan, 2019 Pre-week Notes on Labor framework of analysis, which would take into
Law, supra) consideration the totality of circumstances
surrounding the true nature of the
Note: The control test merely calls for the relationship between the parties. This is
existence of the right to control, and not especially appropriate in this case where there
necessarily the exercise thereof. It is not is no written agreement or terms of reference
essential that the employer actually supervises to base the relationship on and due to the
the performance of duties by the employee. It is complexity of the relationship based on the
enough that the former has a right to wield the various positions and responsibilities given to
power. (Gapayao vs. Fulo, G.R. No. 193493, June 13, the worker over the period of the latter’s
2013). employment. (Francisco vs. NLRC, supra).

2. The “whole economic activity or totality 3. Employee vs. Independent Contractor

of circumstances” test
Regular Employment
The determination of the relationship between
employer and employee depends upon the Types of regular employment
circumstances of the whole economic activity, 1. As to nature of work
such as: An employment shall be deemed to be regular
1. the extent to which the services performed where the Employee has been engaged to
are an integral part of the employer’s perform activities which are usually necessary
business; or desirable in the usual business or trade of
2. the extent of the worker’s investment in the Er, the provisions of written agreements
equipment and facilities; to the contrary notwithstanding and
3. the nature and degree of control exercised regardless of the oral agreements of the
by the employer; parties (Sec. 5 [a], Rule I, Book VI, IRR).
4. the worker’s opportunity for profit and loss;
5. the amount of initiative, skill, judgment or 2. As to length of service
foresight required for the success of the Any employee who has rendered at least one
claimed independent enterprise; (1) year of service, whether such service is
6. the permanency and duration of the continuous or broken, shall be considered a
relationship between the worker and the regular Ee with respect to the activity in which
employer; and he is employed and his employment shall
7. the degree of dependency of the worker continue while such activity exists (Sec. 5 [b],
upon the employer for his continued Rule I, Book VI, IRR).
employment in that line of business.
(Francisco vs. NLRC, G.R. No. 170087, August 31, Regularization is not a management
2006)
prerogative; rather, it is the nature of
employment that determines it. It is a
The proper standard of economic dependence is
mandate of the law (PAL vs. Pascua, G.R. No.
whether the worker is dependent on the alleged
143258, August 15, 2003).
employer for his continued employment in that
line of business. (Francisco vs. NLRC, supra). What determines regularity or casualness is
not the employment contract, written or
3. Two-Tiered Test otherwise, but the nature of the job (Policy
Instructions No. 12 of the Ministry of Labor and
The two-tiered test involves: Employment).
1. The putative employer’s power to control the The practice of entering into employment
employee with respect to the means and contracts which would prevent the workers
methods by which the work is to be from becoming regular should be struck down
accomplished [control test]; and as contrary to public policy and morals
2. The underlying economic realities of the (Universal Robina Corp. vs. Catapang, G.R. No.
activity or relationship [broader economic 164736, October 14, 2005).
reality test] (Francisco vs. NLRC, supra).

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Tests to determine regular employment ABS-CBN Broadcasting Corporation, G.R. No.

1. The primary standard of determining regular 138051, June 10, 2004).
employment is the reasonable connection 2. A newspaper columnist is not an
between the particular activity performed by employee but an independent contractor
the Ee to the usual trade or business of the of the newspaper publishing the column
Er. The test is whether the former is usually (Orozco vs. The Fifth Division of the Honorable
necessary or desirable in the usual business Court of Appeals, G.R. No. 155207, August 13,
2008).
or trade of the Er (De Leon vs. NLRC, G.R. No.
3. Basketball or soccer referee or umpire is
70705, August 21, 1989).
an independent contractor (Bernarte vs.
The connection can be determined by Philippine Basketball Association, G.R. No.
considering the nature of the work performed 192084, September 14, 2011).
and its relation to the scheme of the particular 4. Cockpit masiador and sentenciador are
business or trade in its entirety (Highway Copra independent contractors (Semblante vs.
CA, G.R. No. 196426, August 15, 2011).
Traders vs. NLRC, G.R. No. 108889, July 30, 1998).
5. A doctor may be engaged as an
1. Also, the performance of a job for at least a independent contractor (Escasinas vs.
Shangri-la’s Mactan Island Resort, G.R. No.
year is sufficient evidence of the job’s
178827, March 4, 2009).
necessity if not indispensability to the
business. This is the rule even if its Control over the manner or method of doing
performance is not continuous and merely the work characterizes employment. In
intermittent. The employment is considered contrast, control only of the desired result of
regular, but only with respect to such activity the work often indicates a contracting
and while such activity exists (Universal Robina arrangement (Azucena, Labor Code Vol 1, 2016,
Corp. vs. Catapang, G.R. No. 164736, October 14,
p. 371).
2005).
A. CONDITIONS OF EMPLOYMENT
The status of regular employment attaches to the
casual Ee on the day immediately after the end
1. Covered employees/workers
of his first year of service. The law does not
provide the qualification that the Ee must first be
Title I, Book III of the Labor Code deals with
issued a regular appointment or must first be
hours of work, weekly rest periods, holidays,
formally declared as such before he can acquire
service incentive leaves and service charges.
a regular status (Aurora Land Projects Corp. vs.
NLRC, G.R. No. 114733, January 2, 1997).
General Rule: It shall apply to employees in
Independent Contractor all establishments and undertakings, whether
for profit or not (Art. 82, Labor Code, as
Those who undertake “job-contracting.” They amended).
exercise independent employment, contracting
to do a piece of work according to their own EXCEPTIONS:
methods and without being subject to control of 1. Government employees
their employer except as to the result of their 2. Managerial employees
work (Villuga vs. NLRC, G.R. No. 75038, August 23, 3. Field personnel
1993). 4. Officers and members of the managerial
staff
NOTE: Independent contractors often present 5. Members of the family of the employer
themselves to possess unique skills, expertise or who are dependent on him for support
talent to distinguish them from ordinary 6. Workers who are paid by results
employees (Sonza vs. ABS-CBN, G.R. No. 138051, 7. Persons in the personal service of
June 10, 2004). another; and
8. Domestic helpers
Examples of individuals as independent
contractors The aforementioned employees are not
1. TV and radio talents and others with special entitled to overtime pay, premium pay for rest
talents and skills are not employees but days and holidays, night shift differential pay,
legitimate independent contractors (Sonza vs. holiday pay, service incentive leave and

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service charges (Poquiz, Labor Standards and Social Employees are not prohibited from
Legislation, 2018, p. 219). going out of the premises during meal
period
2. Hours of Work
As a general rule, employees are entitled to at
a. Normal working hours least one hour time-off for regular meals
which can be taken inside or outside company
The normal hours of work of any employee shall premises. No where in the law may it be
not exceed eight (8) hours a day. (Art. 83, Labor inferred that employees must take their meals
Code, as amended) within the company premises. Employees are
not prohibited from going out of the premises
The eight-hour work requirement does not, as long as they return to their post on time.
however, preclude the employer in the exercise (PAL vs. NLRC, GR No. 138205, February 2,
of its management prerogatives to reduce the 1999).
number of working hours, provided that there is
no diminution of existing benefits (Poquiz, Labor For a full one-hour undisturbed lunch break,
Standards and Social Legislation, 2018, p. 225). the employees can freely and effectively use
this hour not only for eating but also for their
If by the nature of employment, an employee is rest and comfort which are conducive to more
required to be on the job for only six (6) hours efficiency and better performance in their
daily, the such period should be regarded as full work. (Sime Darby Pilipinas, Inc. vs. NLRC, G.R.
working day. (Ibid.). No. 119205, April 15, 1998).

Minimum normal 8 working hours fixed by law Meal break is not compensable
need not be continuous to constitute the legal
working day. It may mean broken hours of say, Since the employees are no longer required to
4 hours in the morning and 4 hours in the work during this one-hour lunch break, there
evening or variation thereof provided the total of is no more need for them to be compensated
8 hours is accomplished within the work day for this period. (Sime Darby Pilipinas, Inc. vs.
(Chan, Labor Law Vol I, 2018, p. 381). NLRC, supra).

Compensable Hours worked shall include: c. Night Shift Differential (NSD)

a. All time during which an employee is required
to be on duty or to be at the employer’s Every employee shall be paid a night shift
premises or to be at a prescribed workplace, differential of not less than ten percent (10%)
and of his regular wage for each hour of work
b. All time during which an employee is suffered performed between ten o’clock in the evening
or permitted to work. (Art. 84, Labor Code, as and six o’clock in the morning. (Sec. 2, Rule II,
amended). Book III, Rules Implementing the Labor Code)

Rest periods of short durations during working The computation is:

hours shall be counted as hours worked. (Ibid.)
𝐵𝑎𝑠𝑖𝑐 𝑃𝑎𝑦
Note: all hours are hours worked which the 𝑥 110% (𝑓𝑜𝑟 𝑒𝑎𝑐ℎ ℎ𝑜𝑢𝑟 𝑟𝑒𝑛𝑑𝑒𝑟𝑒𝑑)
8
employee is required to give his employer, *between 10:00 PM to
regardless of whether or not such hours are 6:00 PM
spent in productive labor or involve physical or
mental exertion. (Sec. 4, Rule I, Book III, Rules General Rule: All employees are entitled
Implementing the Labor Code.) to NSD.

b. Meal Periods Exceptions:

1. Government employees including those
Every employer is required to give his employees employed in government-owned or
not less than sixty (60) minutes time-off for their controlled corporations with original
regular meals. (Art. 85, Labor Code, as amended) charters;

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2. Employees of retail and service

establishments regularly employing not more 3. For overtime work in the night shift. Since
than five (5) workers; overtime work is not usually eight (8)
3. Domestic helpers hours, the compensation for overtime
4. Persons in the personal service of another; night shift work is also computed on the
5. Managerial employees as defined in Book basis of the hourly rate.
Three of this Code;
6. Field personnel and other employees whose a. On an ordinary day. Plus 10% of
time and performance is unsupervised by the 125% of basic hourly rate or a total
employer of 110% of 125% of basic hourly
7. Workers who are engaged on task or rate.
contract basis, purely commission basis, or b. On a rest day or special day or regular
those who are paid a fixed amount for holiday. Plus 10% of 130% of regular
performing work irrespective of the time hourly rate on said days or a total of
consumed in the performance thereof (Sec 1, 110% of 130% of the applicable
Rule II, Book III, Rules Implementing the regular hourly rate.
Labor Code).
8. Members of the family of the employer who d. Overtime Work
are dependent upon him for support (Art. 82,
Labor Code, as amended). ● Work rendered after or beyond the
normal eight (8) hours of work is
Where the night-time work of an employee called “overtime work” (Chan, Bar
overlaps with overtime work, the receipt of Reviewer on Labor Law, 2019, p. 131).
overtime pay does not preclude the receipt of ● In computing overtime work, "regular
night differential pay. The latter is night pay; the wage" or "basic salary" means "cash"
former is payment beyond eight-hour work wage only without deduction for
(Poquiz, Labor Standards and Social Legislation, 2018, facilities provided by the employer
page 234). (Ibid.).
● "Premium pay" means the additional
NSD Pay (2020 DOLE-BWC
Computations compensation required by law for
Handbook on Worker’s Statutory Monetary work performed within eight (8)
Benefits): hours on non-working days, such as
1. Where night shift is at 10 p.m. to 6 a.m.: regular holidays, special holidays and
considered regular work. rest days while "Overtime pay" means
the additional compensation for work
a. On an ordinary day: Plus 10% of the performed beyond eight (8) hours
basic hourly rate or a total of 110% of (No. III and IV, DOLE Handbook on
the basic hourly rate. Workers Statutory Monetary
Benefits).
b. On a rest day, special day or regular
holiday: Plus 10% of the regular hourly Rationale Behind The Overtime Pay
rate on a rest day, special day or regular
holiday or a total of 110% of the regular Employee is made to work longer than what
hourly rate. is commensurate with his agreed
compensation for the statutory fixed or
2. Where night shift (10 p.m. to 6 a.m.) work is voluntarily agreed hours of labor he is
overtime work. supposed to do (PNB vs. PEMA and CIR, G.R. No.
L-30279, July 30, 1982).
c. On an ordinary day: Plus 10% of the
overtime hourly rate on an ordinary day Undertime Not Offset by Overtime Nor
or a total of 110% of the overtime hourly by Holiday
rate on an ordinary day.
d. On a rest day or special day or regular Undertime work on any particular day shall
holiday: Plus 10% of the overtime hourly not be offset by overtime work on any other
rate on a rest day or special day or day. Permission given to the employee to go
regular holiday. on leave on some other day of the week shall

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not exempt the employer from paying the the business or operations of the
additional compensation required. (Art. 88, Labor employer (Article 89, Labor Code); and
Code, as amended) 6. When overtime work is necessary to avail
of favorable weather or environmental
Offsetting the overtime with the undertime and conditions where performance or quality
at the same time charging said undertime to the of work is dependent thereon (Chan, Bar
accrued leave of the employee is unfair, for under Reviewer on Labor Law, 2019, p. 133).
such method the employee is made to pay twice
for his undertime because his leave is reduced to Refusal to render emergency overtime
that extent while he was made to pay for it with work is insubordination
work beyond the regular working hours. The
proper method should be to deduct the When an employee refuses to render
undertime from the accrued leave but pay the emergency overtime work under any of the
employee the overtime to which he is entitled. foregoing conditions, he may be dismissed on
This method also obviates the irregular schedule the ground of insubordination or willful
that would result if the overtime should be set off disobedience of the lawful order of the
against the undertime for that would place the employer (Chan, Bar Reviewer on Labor Law,
schedule for working hours dependent on the supra).
employee. (NAWASA vs NWSA Consolidated Unions,
GR No. L-18939, August 31, 1964). The right to claim overtime pay is not subject
to a waiver. Such right is governed by law and
Offsetting work on a regular day with work not merely by the agreement of the parties
rendered on a holiday or rest day is prohibited (Mercader vs. Manila Polo Club, G.R. No. L-
because such deprives the employee of 8373, September 28, 1956).
additional pay or premium. (Lagatic vs. NLRC,
G.R. No. 121004, January 28, 1988). e. Compressed work week, flexible
work arrangement alternative work
Emergency overtime work arrangements, telecommuting
program
General Rule: No employee may be compelled
to render overtime work against his will. (Chan, COMPRESSED WORK WEEK (CWW)
Bar Reviewer on Labor Law, 2019, p. 132).
“Compressed Workweek” or “CWW” refers to
Exceptions: a situation where the normal workweek is
1. When the country is at war or when any reduced to less than six (6) days but the total
other national or local emergency has been number of work-hours of 48 hours per week
declared by the National Assembly or the remains. The normal workday is increased to
Chief Executive; more than eight (8) hours but not to exceed
2. When overtime work is necessary to prevent twelve (12) hours, without corresponding
loss of life or property or in case of imminent overtime premium. This concept can be
danger to public safety due to actual or adjusted accordingly in cases where the
impending emergency in the locality caused normal workweek of the firm is five (5) days.
by serious accident, fire, flood, typhoon, (Department Advisory Order No. 2, Series of
earthquake, epidemic or other disaster or 2004).
calamity;
3. When there is urgent work to be performed Requisites:
on machines, installations, or equipment, in 1. The scheme is expressly and voluntarily
order to avoid serious loss or damage to the supported by majority of the employees.
employer or some other causes of similar 2. In firms using substances, or operating in
nature; conditions that are hazardous to health, a
4. When the work is necessary to prevent loss certification is needed from an accredited
or damage to perishable goods; and safety organization or the firm’s safety
5. When the completion or continuation of the committee that work beyond 8 hours is
work started before the 8th hour is necessary within the limit or levels of exposure set
to prevent serious obstruction or prejudice to by DOLE’s occupational safety and health
standards.

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3. The DOLE Regional Office is duly notified FLEXIBLE WORK ARRANGEMENT /

(Ibid). ALTERNATIVE WORK ARRANGEMENTS

Effects of CWW: Flexible Work Arrangement

1. Unless there is a more favorable practice
existing in the firm, work beyond eight hours Refers to alternative arrangements or
will not be compensable by overtime schedules other than the traditional or
premium provided the total number of hours standard work hours, workdays, and
worked per day shall not exceed twelve (12) workweek. (Department Advisory No. 4,
hours. In any case, any work performed Guidelines on the Implementation of Flexible Work
beyond 12 hours a day or 48 hours a week Arrangement, Series of 2010.).
shall be subject to overtime premium.
2. Consistent with Article 85 of the Labor Code, The following are the flexible work
employees under a CWW scheme are entitled arrangements which may be
to meal periods of not less than sixty (60) considered, among others:
minutes. Nothing herein shall impair the right 1. Compressed Workweek (as previously
of employees to rest days as well as to discussed)
holiday pay, rest day pay or leaves in 2. Gliding or Flexi-time schedule - refers to
accordance with law or applicable collective one where the employees are required to
bargaining agreement or company practice. complete the core workhours in the
3. Adoption of the CWW scheme shall in no case establishment but are free to determine
result in diminution of existing benefits. their arrival and departure time.
Reversion to the normal eight-hour workday 3. Flexi-holidays schedule - refers to one
shall not constitute a dimunition of benefits. where the employees agree to avail the
The reversion shall be considered a holidays at some other days provided
legitimate exercise of management there is no diminution of existing benefits
prerogative, provided that the employer shall as a result of such arrangement. (Ibid.).
give the employees prior notice of such
reversion within a reasonable period of time. Note: The employers and employees may
(Ibid.). likewise explore other alternative work
arrangements under any agreement and
Valid CWW company policy or practice in accordance with
existing laws and regulations. (Ibid.).
The validity of the reduction of working hours can
be upheld when the arrangement is: Flexible Work Arrangement; Voluntary
1. Temporary;
2. It is a more humane solution instead of a The effectivity and implementation of any of
retrenchment of personnel; the flexible work arrangements shall be based
3. There is notice and consultations with the on voluntary agreements between the
workers and supervisors; employer and the employees. (Ibid.).
4. A consensus is reached on how to deal with
deteriorating economic conditions; and Application of Non-Diminution of
5. It is sufficiently proven that the company was Benefits
suffering from losses. (Philippine Graphic Arts
Inc. vs. NLRC, G.R. No. L-80737, September 29, The adoption of the flexible work
1988). arrangements provided herein shall in no case
result in diminution of existing benefits of the
Under the Bureau of Working Conditions’ bulletin, employees. (Ibid.).
a reduction of the number of regular working
days (RWD) is valid where the arrangement is TELECOMMUTING PROGRAM
resorted to by the Er to prevent serious losses
due to causes beyond his control, such as when Telecommuting
there is a substantial slump in the demand for his
goods or services or when there is a lack of raw Refers to a work arrangement that allows an
materials (Linton Commercial vs. Hellera, G.R. No. employee in the private sector to work from
163147, October 10, 2007). an alternative workplace with the use of

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telecommunication and/or computer f. Conditions of employment,

technologies. (Section 2, D.O No. 202, Implementing compensation, and benefits particularly
Rules and Regulations of RA No. 11165, Series of those unique to telecommuting
2019). employees;
g. Non-diminution of benefits;
Telecommuting Agreement h. Occupational safety and health;
i. Observance of data privacy policy;
Refers to the mutual consent of the employer and j. Dispute settlement; and
the employee in the implementation of a k. Termination or change of work
telecommuting work arrangement based on the arrangement. (Ibid).
telecommuting program of the company, CBA, if
any, and other company rules and regulations. Fair Treatment to Telecommuting
(Ibid.). Employees

Telecommuting Program; Voluntary or by The employer shall ensure that

CBA telecommuting employees are given the same
treatment as that of comparable working
An employer in the private sector may offer a employees working at the employer’s
telecommuting program to its employees on a premises. All employees shall be covered by
voluntary basis or as a result of collective the same set of applicable rules and existing
bargaining, if any, and upon such terms and CBA, if any. (Sec. 4, Ibid.).
conditions as they may mutually agree upon.
(Sec. 3, Ibid.). Notice and Monitoring

Terms and Conditions of Telecommuting The employer shall notify the DOLE on the
Program adoption of a telecommuting work
1. Shall not be less than the minimum labor arrangement, by accomplishing the DOLE
standards set by law; prescribed report form and submitting the
2. Shall include compensable work hours, same in print or digital copy, to the nearest
minimum number of work hours, overtime, DOLE Field or Provincial Office having
rest days; and jurisdiction over the area where the principal
3. Shall include entitlement to leave benefits, office is located. (Sec. 7, Ibid.).
social welfare benefits, and security of
tenure. (Ibid.). 3. Rest Periods

Note: In all cases, the employer shall provide the Weekly Rest Day
telecommuting employee with relevant written It shall be the duty of every employer,
information in order to adequately apprise the whether operating for profit or not, to provide
individual employee of the terms and conditions each of his employees a rest period of not less
of the telecommuting program, including the than twenty-four (24) consecutive hours after
duration of the program, rights, duties, and every six (6) consecutive normal work days.
responsibilities of the employee. (Ibid). (Sec. 3, Rule III, Book III, IRR)
Telecommuting Agreement Stipulations Scope

To effectively implement the telecommuting It shall apply to all Ers whether operating for
program, the employer and employees shall profit or not, including public utilities operated
adhere to and be guided by the mutually agreed by private persons (Sec. 1, Rule III, Book III,
policy or telecommuting agreement which IRR)
stitpulates the following provisions, including but
not limited to: Rest Day Not Necessarily Sunday or
a. Eligibility; Holiday
b. Applicable code of conduct and performance
evaluation and assessment; All establishments and enterprises may
c. Appropriate alternative workplace/s; operate or open for business on Sundays and
d. Use and cost of equipment; holidays provided that the employees are
e. Work days and/or hours; given the weekly rest day and the benefits

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provided under the law (Sec. 2, Rule III, Book Note: No employee shall be required against
III, IRR). his will to work on his scheduled rest day
except under the above-mentioned
The employer shall determine and schedule the circumstances provided, however, that where
weekly rest day of his employees subject to the an employee volunteers to work on his rest
CBA and to such rules and regulations as the day under other circumstances, he shall
DOLE Secretary may provide. (Art 91, Labor express such desire in writing, subject to the
Code, as amended). provision regarding additional compensation.
(Sec. 6, Rule III, Book III, Rules Implementing the
Preference of Employee If Based on Labor Code).
Religious Grounds
4. Holidays
The employer shall respect the preference of
employees as to their weekly rest day when such Holiday Pay
preference is based on religious grounds. (Ibid.).
The payment of the regular daily wage for any
The employee shall make known his preference unworked regular holiday (Handbook on
to the employer in writing at least seven (7) days Workers’ Statutory Monetary Benefits, Bureau of
Working Conditions, 2016).
before the desired effectivity of the initial rest day
so preferred. (Poquiz, Labor Standards and Social
Holiday Pay is a form of premium accorded to
Legislation, 2018, p. 243).
an employee who does not work on regular
When Employer May Require Work on a holidays. If he works on said regular holidays,
Rest Day he is entitled to an additional compensation
over his regular or basic remuneration known
The employer may require any of its employees as premium pay. (Poquiz, Labor Standards and
Social Legislation, 2018, p. 248).
to work on their scheduled rest day for the
duration of the following emergency and Note: If an employee is on leave of absence
exceptional conditions: with pay on the day immediately preceding
a regular holiday, he is entitled to holiday pay.
a. In case of actual or impending emergencies (Sec. 6(a), Rule IV, Book III, Rules Implementing
caused by serious accident, fire, flood, the Labor Code).
typhoon, earthquake, epidemic or other
disaster or calamity to prevent loss of life and If an employee is on leave of absence
property, or imminent danger to public without pay on the day immediately
safety; preceding a regular holiday, he is not entitled
b. In cases of urgent work to be performed on to holiday pay unless he works on such
the machinery, equipment, or installation, to regular holiday. (Sec. 6(a), Rule IV, Book III,
avoid serious loss which the employer would Rules Implementing the Labor Code).
otherwise suffer;
c. In the event of abnormal pressure of work Coverage
due to special circumstances, where the
employer cannot ordinarily be expected to General Rule: Every worker shall be paid his
resort to other measures; regular daily wage during regular holidays
d. To prevent serious loss or damage to (Art. 94, Labor Code, as amended).
perishable goods;
e. Where the nature of the work requires Exceptions:
continuous operations and the stoppage of 1. Government employees and any of its
work may result in irreparable injury or loss political subdivisions, including GOCCs
to the employer; and (with original charter);
f. Under other circumstances analogous or 2. Retail and service establishments
similar to the foregoing as determined by the regularly employing less than 10 workers;
Secretary of Labor and Employment (Article 3. Domestic helpers or kasambahays and
92, Labor Code, as amended). persons in the personal service of
another;

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4. Employee engaged on task or contract basis actually providing the service to the
or purely commission basis; customers. It allows allows frontline service
5. Members of the Family of the Employer who workers to enjoy the fruits of their labor, the
are dependent on him for support; reward for providing good, quality service.
6. Managerial Employee and other members of (Senator Joel Villanueva, Chair of the Senate
the managerial staff; Committee on Labor, Employment and Human
7. Field personnel and other Employee whose Resources Development)
time and performance are unsupervised by
the Employer; and Coverage
8. Employee paid fixed amount for performing
work irrespective of the time consumed in Establishments covered
the performance thereof (Sec. 1, Rule IV, All establishments collecting service charges
Book III, IRR) for work or service they offer, such as hotels,
restaurants, lodging houses, night clubs,
Purpose of Holiday Pay cocktail lounges, massage clinics, bars,
casinos and gambling houses, and sports
To secure the payment of undiminished monthly clubs, including those entities operating
income undisturbed by any work interruption. In primarily as private subsidiaries of the
other words, although the worker is forced to government.
take a rest, he earns what he should earn, that
is, his holiday pay (JRC vs. NLRC, G.R. No. 65482, Employees covered
December 1, 1987). All employees, except managerial employees,
under the direct employ of the covered
Regular Holidays establishment, regardless of their positions,
designations, or employment status, and
General Rule: irrespective of the method by which their
They are compensable whether worked or wages are paid. (Sec. 2, Rule VI, Book III, Rule
unworked subject to certain conditions. They are VI, IRR)
also called legal holidays (Sec. 94, Labor Code as
amended). ● Employees not covered
Specifically excluded from coverage are
EXCEPTION: managerial employees, or those vested with
A legal holiday falling on a Sunday creates no powers or prerogatives to lay down and
legal obligation for the employer to pay extra, execute management policies or hire,
aside from the usual holiday pay, to its monthly- transfer, suspend, lay-off, recall, discharge,
paid employees. There is no provision of law assign or discipline employees or to effectively
requiring any employer to make such recommend such managerial action. (Sec 2.,
adjustments in the monthly salary rate set by him Rule VI, Book III, IRR)
to take account of legal holidays falling on
Sundays in a given year, or, contrary to the legal 6. 13th Month Pay
provisions bearing on the point, otherwise to
reckon a year at more than 365 days (Wellington It is a form of monetary benefit equivalent to
Investment and Manufacturing Corporation vs. the monthly basic compensation received by
Trajano et al., G.R. No. 114698, July 3, 1995). an employee, computed pro-rata according to
the number of months within a year that the
5. Service Charges employee has rendered service to the
employer (DOLE’s BWC issues Q & A on 13th
Service Charge is the amount that is added to a month pay)
bill for any work or services rendered in all a
hotel, restaurant, or similar establishments, Coverage
which shall be distributed completely and equally All rank-and-file employees who have worked
among the covered workers, except managerial for at least one (1) month during the calendar
employees. (Sec. 1, RA 11360; Sec. 2(e), DO 206-19) year, are entitled to receive 13th month pay
regardless of the nature of their employment
When customers pay a service charge, their and irrespective of the methods by which their
intention is to give credit to the people who are wages are paid (Presidential Decree No. 851;

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Memorandum Order No. 28, Revised Guidelines c. Ers of those who are paid on purely basis
on the Implementation of the 13 th Month Pay of:
Law).
i. Commission;
When should be paid?
It should be paid not later than December 24 of NOTE:
each year. An employer, however, may give to
his employees one-half of the 13th month pay Bus drivers and conductors who are paid a
before the opening of the regular school year and fixed or guaranteed minimum wage in case
the other half on or before the 24th day of their commission be less than the statutory
December of every year (Section 1, IRR; Ibid). minimum are entitled to a 13th-month pay
equivalent to one-twelfth of their total
Persons Covered (PD 851) earnings during the calendar year (Philippine
Agricultural Commercial and Industrial Workers
1. Employees Union vs. NLRC, GR No. 107994, 14 August 1995).

G.R.: ii. Boundary; or

All rank-and-file Ees are covered by P.D. 851 iii. Task; and
regardless of the amount of basic salary that they iv. Fixed amount for performing a specific
receive in a month, if their Ers are not otherwise work irrespective of the time consumed in
exempted from paying the 13th month pay. Such the performance thereof.
Ees are entitled to the 13th month pay regardless
of said designation of employment status, and XPN:
irrespective of the method by which their wages Where the workers are paid on a piece-rate
are paid. basis, in which case, the employer shall be
covered by the Revised Guidelines insofar as
Provided, that they have worked for at least 1 the workers are concerned.
month, during a calendar year (Revised Guidelines
on the Implementation of the 13th Month Pay Law). d. Distressed Ers:
i. Currently incurring substantial losses; or
EXCEPTIONS: ii. In the case of non-profit institutions and
a. Government Ees; organizations, where their income,
b. Ees paid purely on commission basis; whether from donations, contributions,
c. Ees already receiving 13th month pay; grants and other earnings from any
d. Managers; and source, has consistently declined by
e. Seafarers more than 40% of their normal income
for the last 2 years (Sec. 7, IRR; P.D.
2. Employers 851).

General Rule: Equivalent forms of the 13th month pay:

All Employers are covered by PD 851.
1. Christmas Bonus
Exceptions: 2. Midyear Bonus
a. The Government and any of its political 3. Profit Sharing Scheme
subdivisions, including GOCCs; 4. Other Cash bonuses amounting to not less
than 1/12 of its basic salary (Sec. 3, P.D. No.
XPN to XPN: Corporations operating 851)
essentially as private subsidiaries of the
Government. Things Not Proper Substitutes For 13th
Month Pay
b. Ers already paying their Ees 13th month pay,
or more in a calendar year in its equivalent at 1. Free rice;
the time of the issuance of the Revised 2. Electricity;
Guidelines; 3. Cash and stock dividends; and
4. Cost-of-living Allowance (Ibid.)

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Coverage from Income Tax Persons who work with substantially equal
qualifications, skill, effort and responsibility,
New Tax Obligation Rate under TRAIN Law for under similar conditions, should be paid
2018 Onwards similar salaries.
● The 13th month pay is generally exempt Employees holding the same position and
from taxation. However, there is a prescribed rank are presumed to be performing equal
limit to this exemption provided under work. The rule equal pay for equal work
Section 32 (B)(7)(e) of the National Internal applies whether the employee is hired locally
Revenue Code (NIRC) – which was amended or abroad (International School Alliance of
by Republic Act No. 10963 or the TRAIN law Educators vs. Quisumbing, G.R. No. 128845, June
on January 2018. The amendment stipulates 1, 2000).
that the 13th month pay and other
equivalent benefits shall not be subject to tax Basic wage
for a maximum of P90,000. This new amount
is a relative increase from the previous tax All the remuneration or earnings paid by an
exclusion rate of P82,000. employer to a worker for services rendered on
● Anything beyond the maximum exclusion normal working days and hours but does not
rate of P90,000 must be included in the include cost-of-living allowances, profit-
computation of the employee’s gross income sharing payments, premium payments, 13th
for the applicable taxable year (Sec. 9, R.A. month pay or other monetary benefits which
No. 10963) are not considered as part of or integrated
into the regular salary of the workers (IRR;
B. WAGES Wage Rationalization Act; R.A. 6727).

Attributes of a wage: Statutory minimum wage

1. It is the remuneration or earnings, however
designated, Refers simply to the lowest basic wage rate
2. capable of being expressed in terms of fixed by law that an employer can pay his
money, whether fixed or ascertained on a workers (Ibid.).
time, task, piece, or commission basis, or
other method of calculating the same, Salary
3. payable by an Employer to an Employee
under a written or unwritten contract of It denotes a higher degree of employment, or
employment for work done or to be done, or a superior grade of services, and implies a
for services rendered or to be rendered; and, position of office and is suggestive of a larger
4. Includes fair and reasonable value of board, and more important service. The word salary
lodging, or other facilities customarily is understood to relate to position of office, to
furnished by the Er to the Ee as determined be the compensation given for official or other
by SOLE. (Art. 97 (f), Labor Code, as amended). service. It is subject to execution or
attachment (Gaa vs. CA, G.R. No. L-44169,
NOTE: Fair and reasonable value shall not December 3, 1985).
include any profit to the employer or to any
person affiliated with the employer (Art. 97, Labor Basic Salary
Code, as amended).
The term includes remunerations or earnings
The term "wages" also covers all benefits of the paid by the employer to employee, but
employee under the CBA such as severance pay, excludes cost-of-living allowances, profit-
educational allowance, accrued vacation leave sharing, payments, and all allowances and
earned but not enjoyed, as well as workmen's monetary benefits which have not been
compensation awards and unpaid salaries for considered as part of the basic salary of the
services rendered (PNB vs. Cruz, G.R. No. 80593, employee (Duka, Labor Laws and Social
December 18, 1989). Legislation, A Barrister’s Companion, 2016, p. 161).

1. Payment of Wages

“Equal Pay For Equal Work” Principle

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2. Prohibitions Regarding Wages Supplements

Employer shall not limit or interfere with the Supplements are extra remuneration or
freedom of any employee to dispose of his benefits given to, or received by laborers,
wages. He shall not force, compel or oblige his over and above their ordinary earnings or
Ees to purchase merchandise, commodities or wages (e.g., vacation leave pay, overtime pay
other property from any other person, or in excess of the legal rate, profit-sharing
otherwise make use of any store services of such benefits, sick pension, retirement and death
employer or any other person (Art. 112, Labor benefits, family allowances, Christmas bonus,
Code). war-risk or cost-of-living bonuses or other
bonuses other than those paid as reward for
Civil Code Provisions On Non-Interference extra output or time spent on the jobs) (Atok-
In Disposal Of Wages Big Wedge Mutual Benefit Assn. vs. Atok-Big
Wedge Mining Co., Inc., supra).
Art. 1705. The laborer's wages shall be paid in
legal currency. The benefit or privilege given to the employee
which constitutes an extra remuneration over
Art. 1706. Withholding of the wages, except for and above his basic or ordinary earning or
a debt due, shall not be made by the employer. wage is supplement; and when said benefit or
Art. 1707. The laborer's wages shall be a lien on privilege is made part of the laborer’s basic
the goods manufactured or the work done. wage, it is a facility. The criterion is not so
Art. 1708. The laborer's wages shall not be much with the kind of the benefit or item
subject to execution or attachment, except for (food, lodging, bonus or sick leave) given but
debts incurred for food, shelter, clothing and its purpose. Thus, free meals supplied by the
medical attendance. ship operator to crew members, out of
Art. 1709. The employer shall neither seize nor necessity, cannot be considered as facilities
retain any tool or other articles belonging to the but supplements which could not be reduced
laborer. having been given not as part of wages but as
a necessary matter in the maintenance of the
3. Facilities vs Supplements health and efficiency of the crew during the
voyage. Facilities are deductible from wage
Facilities but not supplements (Chan, 2018 Last-Minute
Pre-Week Notes on Labor Law, p.23-24).
Facilities include those articles or services of
benefit to the employee and his family such as 4. Minimum Wage
rice ration, housing, recreational facilities,
medical treatment to dependents, school Minimum wage is the lowest wage rate fixed
facilities, cost of light, water, fuel, meals or by law that an employer can pay his workers
snacks (Atok-Big Wedge Mutual Benefit Assn. vs. (Sec. 1, Rule VII-A, Book III, Rules to Implement
Atok-Big Wedge Mining Co., Inc., G.R. No. L-7349, July the Labor Code, as amended by Memorandum
19, 1955; Mayon Hotel vs. Adana, G.R. No. 157634, Circular No, 3, Series of 1992).
May 16, 2005).
The term “statutory minimum wage” refers to
Requirements For Deducting Values For the lowest basic wage rate fixed by law that
Facilities: an employer can pay his workers (Rules
1. Proof must be shown that such facilities are Implementing R.A. No. 6727).
customarily furnished by the trade;
2. The provision of deductible facilities must be Regional minimum wage rates is the lowest
voluntarily accepted in writing; and, basic wage rates that an employer can pay his
3. The facilities must be charged at fair and workers, as fixed by the Regional Tripartite
reasonable value (Mabeza vs. NLRC, G.R. No. Wages and Productivity Boards (RTWPBs),
118506, April 18, 1997) which shall not be lower than the applicable
statutory minimum wage rates (Sec. 4[k], Rule
I, NWPC Guidelines No. 01, Series of 2007; Chan,
Bar Reviewer on Labor Law, 2019, p. 159).

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Minimum Wage is mandatory 6. Non-Diminution of Benefits

The minimum wage fixed by law is mandatory;
thus it is non-waivable and non-negotiable. The The principle against diminution of benefits is
enactment is compulsory in nature in order to applicable if it is shown that:
ensure decent living conditions (PAM Co. vs. 1. The grant of benefit is based on a policy
PAMEA-FFW, G.R. No. L-35254, May 25, 1973). or has ripened into a practice over a long
period;
National Wages and Productivity Commission 2. The practice is consistent and deliberate;
(NWPC) 3. The practice is not due to an error in the
construction or application of a doubtful
The NWPC was created by the Wage or difficult question of law; and
Rationalization Act (R.A. No. 6727). 4. It is done unilaterally by the employer.
(Vergara vs. Coca-Cola Bottlers Philippines,
5. Wage Distortion Inc., GR No. 176985, April 1, 2013).

A situation where an increase in wage results in Nothing in the Labor Code shall be construed
the elimination or severe contraction of to eliminate or in any way diminish
intentional quantitative differences in wage or supplements, or other employee benefits
salary rates between and among- the employee- being enjoyed at the time of the promulgation
groups in an establishment as to effectively of the Code (Art. 100, Labor Code, as amended).
obliterate the distinctions embodied in such wage
structure based on skills, length of service or Employers are prohibited from reducing
other logical bases of differentiation (Rules benefits already enjoyed by employees
Implementing R.A. No. 6727).
The non-diminution rule under Art. 100 of the
Elements of Wage Distortion: Labor Code explicitly prohibits employers from
eliminating or reducing the benefits already
1. An existing hierarchy of positions with enjoyed by their employees. (Wesleyan
corresponding salary rates. University-Philippines vs. Wesleyan University-
2. A significant change or increase in the salary Philippines Faculty and Staff Association, GR No.
rate of a lower pay class without a 181806, March 12, 2014). Employees have vested
corresponding increase in the salary rate of a right over such existing benefits (Poquiz, Labor
higher one; Standards and Social Legislation, 2018, p. 294).
3. The elimination of the distinction between the
2 groups or classes; and Exception; Payment by mistake
4. The WD exists in the same region of the provided corrected immediately;
country (Alliance Trade Unions vs. NLRC, G.R. No. Principle of solutio indebiti applies
140689, February 17, 2004).
An exception to the rule is when "the practice
Causes: is due to error in the construction or
Wage distortions have often been the result of: application of a doubtful or difficult question
1. Government-decreed increases in minimum of law." The error, however, must be
wages corrected immediately after its discovery;
2. Merger of two companies (with differing otherwise, the rule on Non-Diminution of
classifications of employees and different Benefits would still apply. (Wesleyan University-
wage rates) where the surviving company Philippines vs. Wesleyan University-Philippines
Faculty and Staff Association, GR No. 181806,
absorbs all the employees of the dissolved
March 12, 2014).
corporation,
3. Wage distortion arose because the An employer does not violate the rule on non-
effectivity dates of wage increases given to diminution of benefits if it discontinues a
each of the two classes of employees (rank- benefit that has been paid by mistake.
and-file and supervisory) had not been ((Poquiz, Labor Standards and Social Legislation,
synchronized in their respective CBAs (Metro 2018, p. 296).
Transit Organization, Inc. vs. NLRC, G.R. No.
116008, July 11, 1995) Exceptions:
1. Correction of error

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2. Contingent benefit or conditional bonus with original charters or created under special
3. Wage order compliance laws;
4. Benefits on reimbursement basis 2. Persons in the personal service of another;
5. Reclassification of position 3. Managerial employees, if they meet all of
6. Negotiated benefits the following conditions:
7. Productivity incentives (Ibid.) a. Their primary duty is to manage the
establishment in which they are employed
Purpose Of Non-Diminution Of Benefits or of a department or subdivision thereof;
b. They customarily and regularly direct the
The philosophy behind the law is to prohibit work of two or more employees therein;
employers from reducing benefits already and
enjoyed by employees. A contrary rule will c. They have the authority to hire or fire other
corrupt the employer's mind to abuse and exploit employees of lower rank; or their
employees, prostituting the social justice and suggestions and recommendations as to
protection to labor clauses enshrined in the hiring, firing, and promotion, or any other
fundamental charter. (Poquiz, Labor Standards and change of status of other employees are
Social Legislation, 2018, p. 294; Opinion of the given particular weight.
Secretary of Labor, October 7, 1975). 4. Officers or members of managerial staff, if
they perform the following duties and
C. LEAVES responsibilities:
a. Primarily perform work directly related to
1. Service incentive leave (SIL) management policies of their employer;
b. Customarily and regularly exercise
It is a five (5)-day leave with pay for every discretion and independent judgment;
employee who has rendered at least one (1) year c. (i) Regularly and directly assist a proprietor
of service whether continuous or broken (Art. 95, or managerial employee in the
Labor Code, as amended). management of the establishment or
subdivision thereof in which he or she is
The term “at least one year of service” should employed; or (ii) execute, under general
mean service within twelve (12) months, whether supervision, work along specialized or
continuous or broken, reckoned from the date technical lines requiring special training,
the employee started working, including experience, or knowledge; or (iii) execute,
authorized absences and paid regular holidays, under general supervision, special
unless the number of working days in the assignments and tasks; and
establishment as a matter of practice or policy, d. Do not devote more than twenty percent
or that provided in the employment contract, is (20%) of their hours worked in a
less than twelve (12) months, in which case, said workweek to activities which are not
period should be considered as one (1) year for directly and closely related to the
the purpose of determining entitlement to the performance of the work described in
service incentive leave benefit. (Sec. 3, Rule V, paragraphs 4.a, 4.b, and 4.c above;
Book IIII, IRR) 5. Field personnel and those whose time and
performance are unsupervised by the
Purpose of the law: employer, including those who are engaged
The stipulation in the contract for the allowance on task or contract basis, purely commission
of vacation to employees is merely a recognition basis, or those who are paid a fixed amount
by management and labor that a short interval of for performing work irrespective of the time
complete rest and relaxation from daily routine consumed in the performance thereof;
with the benefit of full pay is essential to the 6. Those already enjoying this benefit;
mental and physical well-being of the workmen 7. Those enjoying vacation leave with pay of
(Sunripe Coconut Products vs. NLU, G.R. No. L-7964, at least five (5) days; and
October 18, 1955).
8. Those employed in establishments
regularly employing less than ten (10)
EXCEPTIONS:
employees. (No. 7 [A], 2019 Handbook on
1. Government employees, whether employed by
Workers’ Statutory Monetary Benefits; Chan, 2019
the National Government or any of its political Reviewer on Labor Law, p. 151)
subdivisions, including those employed in GOCCs

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Teachers of private schools on contract basis are Under the new law (Sec 4, R.A. No.
entitled to service incentive leave (Cebu Institute 11210):
of Technology vs. Ople, G.R. No. L-58870, December Paid leave benefit granted to a qualified
18, 1987). female worker in both the PUBLIC SECTOR
and the PRIVATE SECTOR (which is covered
2. Expanded Maternity leave by the SSS, including those in the informal
R.A. NO. 11210 – “105-DAY EXPANDED economy) for the duration of:
MATERNITY LEAVE LAW”
This is the new prevailing law on maternity leave
benefits. (effective March 2019) Maternity Benefit LIVE MISCARRI
TERMINATION CHILDBIR AGE AND
Maternity leave is the period of time which may OF PREGNANCY TH, EMERGEN
be availed of by a woman employee, married or regardles CY
unmarried, to undergo and recuperate from s of the TERMINAT
childbirth, miscarriage or complete abortion mode of ION OF
during which she is permitted to retain her rights delivery PREGNAN
and benefits flowing from her employment. CY
(Chan, 2018 Pre-week Notes on Labor Law, p. 29)
Period of 105 days 60 days of
Coverage: maternity leave of paid paid leave
All covered females, regardless of civil status leave
(married/unmarried), employment status, and
the legitimacy of her child, are entitled to For female 105 days, N/A
maternity leave. worker qualified with
as a solo parent additional
This is applicable to both live childbirth, under R.A. No. fifteen
regardless of the mode of delivery, miscarriage, 8972, or the (15) days
and emergency termination of pregnancy. (Sec. "Solo Parents' of paid
3, R.A. No. 11210) Welfare Act of leave
2000"
All female workers in the government and female
members of the SSS, regardless of their civil
status, shall be granted maternity leave, with full EXTENDED Additional N/A
pay. (Sec. 7, R.A. No. 11210) MATERNITY thirty (30)
LEAVE days
Maternity leave applies to all qualified female without
workers in the: pay
1. Public sector (Sec. 4)
FREQUENCY OF In every In every
2. Private sector (Sec. 5)
THE GRANT instance instance of
● Informal economy (self-employed,
(Old law: only of live pregnancy
occasionally or personally hired,
available for the childbirth, ,
subcontracted, paid and unpaid family
first 4 regardles miscarriag
workers in household, incorporated, and
deliveries/miscar s of e or
unincorporated enterprises, including
riages) frequency emergenc
home workers, micro-entrepreneurs and
y
producers, and operators of sari-sari
terminatio
store) (Sec. 10)
n of
● Voluntary contributors to the SSS (Sec.
pregnancy
10)
,
● National athletes (Sec. 13)
regardless
Period of Leave
of
Under the old law:
frequency
60 days – for normal delivery; and
78 days – for caesarian delivery

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ALLOCATION OF A female Not

Conditions for Entitlement To Paternity
MATERNITY worker available
Leave
LEAVE CREDITS entitled to
The male Ee is:
to the child's maternity
1. Legally married to, and is cohabiting with
father OR leave
the woman who delivers the baby;
alternate benefits
2. Ee of private or public sector;
caregiver may, at
3. Maybe availed of only for the first 4
her
deliveries of the legitimate spouse with whom
option,
he is cohabiting; and
allocate
4. Notify his Er of the pregnancy of his
up to
legitimate spouse and the expected date of
seven (7)
such delivery. (Sec. 2)
days of
said
NOTE: Delivery shall include childbirth or any
benefits
miscarriage.
to the
child's
Non-conversion to cash
father or
In the event that the paternity leave is not
alternate
availed of, it shall not be convertible to cash
caregiver
and shall not be cumulative (except if a more
favorable company policy exists)

Requirements In Order That Maternity Benefits Crediting of Existing Benefits

May Be Claimed 1. If the existing paternity leave benefit
1. There is childbirth, abortion or miscarriage under the collective bargaining
2. She has paid at least three (3) monthly agreement, contract, or company policy is
semester of her childbirth or miscarriage. greater than 7 calendar days as provided
for in RA 8187, the greater benefit shall
Maternity leave benefits and other benefits prevail.
provided by Social Security Act are granted to 2. If the existing paternity leave benefit is
employees in lieu of wages. Thus, the same are less than that provided in RA 8187, the
excluded in computing the employee's 13th employer shall adjust the existing benefit
month pay for the calendar year (Handbook on to cover the difference.
Workers’ Statutory Monetary Benefits, p. 37).
NOTE: Where a company policy, contract, or
3. Paternity Leave collective bargaining agreement provides for
R.A. No. 8187 – PATERNITY LEAVE ACT OF 1996 an emergency or contingency leave without
specific provisions on paternity leave, the
Paternity leave employer shall grant to the employee 7
It refers to the benefits granted to a married male calendar days of paternity leave (Handbook on
Ee allowing him not to report for work for 7 days Workers’ Statutory Monetary Benefits, Bureau of
but continues to earn the compensation Working Conditions, 2016).
therefore, on the condition that his spouse has
delivered a child or suffered a miscarriage for Availment of the Paternity Leave may be
purposes of enabling him to effectively lend After the Delivery
support to his wife in her period of recovery
and/or in the nursing of the newly-born child. In Paternity leave may be availed after the
the event it is not availed of, such leave is not delivery without prejudice to an employer’s
convertible to cash. (Sec. 3) policy of allowing the employee to avail of the
benefit before or during the delivery, provided
Concept of paternity leave benefits that the total number of days shall not be
Every married male Ee in the private and public more than seven (7) days for each covered
sectors shall be entitled to a paternity leave of 7 delivery (Handbook on Workers’ Statutory
days with full pay for the first 4 deliveries of the Monetary Benefits, p. 38).
legitimate spouse with whom he is cohabiting.

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4. Parental leave for solo parents a. having others care for them or
b. give them up to a welfare institution;
Leave benefits granted to a solo parent to enable 4. Any other person who solely provides:
him/her to perform parental duties and a. parental care and
responsibilities - where physical presence is b. support to a child or children;
required. (Sec. 8, R.A. No. 8972) 5. Any family member who assumes the
responsibility of head of family as a
In addition to leave privileges under existing result of the:
laws, parental leave of not more than 7 working a. death,
days every year shall be granted to any solo b. abandonment,
parent Ee who has rendered service of at least 1 c. disappearance or
year (Sec. 8, R.A. No. 8972). d. prolonged absence of the parents or
solo parent.
Conditions for entitlement of parental leave (Sec. 6, IRR, R.A. No. 8972)
1. He or she must fall among those referred to
as a solo parent; Termination of the Benefit
2. Must have the actual and physical custody of
the child or children; A change in the status or circumstance of the
3. Must have at least rendered service of one parent claiming benefits under this Act, such
year to his or her employer; that he/she is no longer left alone with the
4. He or she must remain a solo parent; responsibility of parenthood, shall terminate
5. He or she must have a SOLO PARENT ID his/her eligibility for these benefits (Sec. 3,
issued by the DSWD; and R.A. No. 8972).
6. He must notify the employer of the availment
thereof within reasonable period of time. (Art. 5. Leave benefits for women workers
IV, Criteria of Support, IRR, R.A. No. 8972) under R.A. No. 9710 and R.A. No.
9262
Persons considered a solo parent entitled
to parental leave Violence Against Women and their Children
(VAWC) refers to any act or a series of acts
1. A woman who gives birth as a result of rape committed by any person against a woman
and other crimes against chastity even who is his:
without a final conviction of the offender;  wife;
Provided, That the mother keeps and raises ● former wife; or
the child; ● against a woman with whom the person
2. Parent left solo or alone with the has or had sexual or dating relationship;
responsibility of parenthood due to: or
a. Death of spouse; B. with whom he has a common child; or
b. Detention or service of sentence of C. against her child whether legitimate or
spouse for a criminal conviction for at illegitimate within or without the family
least 1 yr; abode, which result in or is likely to result
c. Physical and/or mental incapacity of in physical, sexual, psychological harm or
spouse suffering, or economic abuse including
d. Legal separation or de facto separation threats of such acts, battery, assault,
from spouse for at least 1 year as long coercion, harassment or arbitrary
as he/she is entrusted with the custody deprivation of liberty. (Sec 3[a], R.A. No.
of the children; 9262)
e. Nullity or annulment of marriage as
decreed by a court or by a church as Leave Entitlement
long as he/she is entrusted with the
custody of the children; It allows the victim of violence, which may be
f. Abandonment of spouse for at least 1 physical, sexual, or psychological, to apply for
yr; the issuance of a protection order. If such
3. Unmarried mother/father who has preferred to victim is an employee, she is entitled to a paid
keep and rear his or her child/children leave of up to 10 days in addition to other paid
instead of:

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leaves under the Labor Code, other laws and 3. She has undergone surgery due to
company policies. (Sec. 43, R.A. No. 9262) gynecological disorders as certified by a
competent physician.
The employee has to submit a certification from
the Punong Barangay or Kagawad, prosecutor or The female employee is entitled to special
clerk of court that an action under R.A. 9262 has leave benefit of two (2) months with full pay
been filed and is pending. based on her gross monthly compensation
following surgery caused by gynecological
For government employees in addition to the disorders.
certification, the employee concerned must file The two (2) months special leave is the
an application for leave citing as basis R.A. 9262. maximum period of leave with pay that a
woman employee may avail of under R.A.
Penalties for Violation 9710.
Any employer who shall prejudice the right of the
person under this section shall be penalized in D. SPECIAL GROUP OF EMPLOYEES
accordance with the provisions of the Labor Code
and Civil Service Rules and Regulations. Likewise, 1. Women
an employer who shall prejudice any person for
assisting a co-employee who is a victim under Laws protecting women Workers:
this Act shall likewise be liable for discrimination. 1. The State recognizes the role of women
(Sec. 6, R.A. 9262) in nation-building, and shall ensure the
fundamental equality before the law of
Noncumulative/ Non-Conversion to Cash women and men (Art. II, Sec. 14, 1987
Constitution).
The availment of the ten day-leave shall be at the 2. The State shall protect working women by
option of the woman employee, which shall cover providing safe and healthful working
the days that she has to attend to medical and conditions, taking into account their
legal concerns. Leaves not availed of are maternal functions, and such facilities and
noncumulative and not convertible to cash. opportunities that will enhance their
welfare and enable them to realize their
Gynecological disorders full potential in the service of the nation
(Art. XIII, Sec. 14, 1987 Constitution).
Disorders that would require surgical procedures 3. R.A. No. 6725 – which explicitly prohibits
such as, but not limited to, dilatation and discrimination against women with
curettage and those involving female respect to terms and conditions of
reproductive organs such as the vagina, cervix, employment, promotion, and training
uterus, fallopian tubes, ovaries, breast, adnexa opportunities.
and pelvic floor, as certified by a competent 4. R.A. No. 6955 – which bans the “mail-
physician. Gynecological surgeries shall also order-bride” practice for a fee and the
include hysterectomy, ovariectomy, and export of female labor to countries that
mastectomy. cannot guarantee protection to the rights
of women workers.
For a female employee to be entitled to the 5. R.A. No. 7192 or “Women in Development
special leave benefits, she must comply with the and Nation Building Act.” – which affords
following conditions. women equal opportunities with men to
1. She has rendered at least six (6) months act and to enter into contracts, and for
continuous aggregate employment service for appointment, admission, training,
the last twelve (12) months prior to surgery; graduation, and commissioning in all
2. She has filed an application for special leave military or similar schools.
with her employer within a reasonable period of 6. R.A. No. 7322 – increasing the maternity
time from the expected date of surgery or within benefits granted to women in the private
such period as may be provided by company sector.
rules and regulations or collective bargaining 7. R.A. No. 7877 or “Anti-Sexual Harassment
agreement; and Act”
8. R.A. No. 8042 or the “Migrant Workers
and Overseas Filipinos Act of 1995” –

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which prescribes as a matter of policy, the with respect to dismissal of personnel

deployment of migrant workers, with or the application of the last in / first
emphasis on women, only in countries where out principle or other retrenchment
their rights are secure (Philippine Telegraph policy of the employer (Poquiz, Labor
and Telephone Co. vs. NLRC, G.R. No. Standards and Social Legislation, 2018, p.
118978, May 23, 1997). 405).
9. R.A. No. 9710 or “the Magna Carta of
Women” 2. Stipulating, whether as a condition for
10. R.A. No. 9262 or the “Anti-Violence against employment or continuation of
Women and Children” employment:
a. That a woman employee shall not get
State Policy on Non-Discrimination Against married; or
Women b. That upon marriage, such woman
employee shall be deemed resigned
The State condemns discrimination against or separated (Art. 134, Labor Code,
women in all its forms and pursues by all as amended).
appropriate means and without delay the policy c. Dismissing, discriminating or
of eliminating discrimination against women in otherwise prejudice a woman
keeping with the Convention on the Elimination employee by reason of her being
of All Forms of Discrimination Against Women married (Art. 134, Labor Code, as
(CEDAW) and other international instruments amended).
consistent with Philippine law. The State shall
accord women the rights, protection, and Reasonable Business Necessity Rule
opportunities available to every member of
society (Sec. 2, R.A. 9710 or the Magna Carta of To justify a bona fide occupational
Women). qualification, the employer must prove two
factors: (1) that the employment qualification
The State shall take steps to review and, when is reasonably related to the essential
necessary, amend and/or repeal existing laws operation of the job involved; and, (2) that
that are discriminatory to women within 3 years there is a factual basis for believing that all or
from the effectivity of this Act (Sec. 12, R.A. 9710). substantially all persons meeting the
qualification would be unable to properly
a. Discrimination perform the duties of the job. The concept of
a bona fide occupational qualification is not
1. Discrimination with respect to the terms and foreign in our jurisdiction. We employ the
conditions of employment solely on account standard of reasonableness of the company
of sex. policy which is parallel to the bona fide
a. Discrimination in pay - Payment of a occupational qualification requirement. (Star
lesser compensation including wage, Paper Corp. vs. Simbol, G.R. No. 164774, April 12,
salary or other forms of remuneration 2006).
and fringe benefits, to a female
employee as against a male employee; b. Stipulation against marriage
b. Discrimination in employment
opportunity Favoring a male employee It is unlawful for the employer to require as a
over a female employee with respect to condition for or continuation of employment
promotion, assignment, transfer, that a woman employee shall not get married
training opportunities, study and or to stipulate expressly or tacitly that upon
scholarship grants solely in account or getting married, a woman employee shall be
their sexes (Art. 133, Labor Code, as deemed resigned or separated. It is likewise
amended); an unlawful act of the employer, to actually
c. Discrimination in hiring – favoring a male dismiss, discharge, discriminate or otherwise
applicant with respect to hiring where prejudice a woman employee merely by
the particular job can equally be handled reason of her marriage. (Article 136, Labor
by a woman; Code, as amended)
d. Discrimination in dismissal – favoring a
male employee over a female employee

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No-Spouse Employment Policy 1. To discharge her on account of her

pregnancy ; or
It is a policy banning spouses from working in the 2. To discharge her while she is on leave due
same company. Generally, spouses are allowed to her pregnancy; or
from working in the same company, provided it 3. To discharge her while she is in
is not in the same department, where there is confinement due to her pregnancy; or
direct supervision or control. In case spouses are 4. To discharge her upon returning to her
in the same department, one of them may be work for fear that she may again be
reassigned to another department. pregnant; or
5. To refuse her admission upon returning to
Exception: her work for fear that she may again be
pregnant (Sec. 13, Rule XII, Book III, Rules
Bona Fide Occupational Qualification (BFOQ) to Implement the Labor Code).
Rule where the job itself necessarily requires a
particular question, then the job applicant or The court agreed that in concluding that
worker who does not possess it may be respondent’s sickness was pregnancy-related
disqualified on that basis. This will not be and therefore, the petitioner cannot terminate
unlawful discrimination (1, Azucena, 2016, p. 481). respondent’s services because in doing so,
petitioner will be violating the Article 137 of
There must be a finding of any BFOQ to justify the Labor Code (Del Monte Philippines, Inc.
an Er’s no spouse employment rule. There must vs. Velasco, G.R. No. 153477, March 6, 2007).
be a compelling business necessity for which no
alternative exists other than the discriminating 2. Minors (R.A. No. 7610, as
practice. To justify a BFOQ, the Er must prove amended by R.A. No. 9231)
two factors:
1. That the employment qualification is For legal purposes, the term “child” refers to
reasonably related to the essential operation any person less than eighteen (18) years of
of the job involved; and age.
2. That there is a factual basis for believing that
all or substantially all persons meeting the A “working child” refers to any child
qualification would be unable to properly engaged as follows:
perform the duties of the job (Star Paper vs. I. when the child is below eighteen (18) years
Simbol, G.R. No. 164774, April 12, 2006). of age, in work or economic activity that is not
“child labor;” and
c. Prohibited acts II. when the child below fifteen (15) years of
age:
It shall be unlawful for any employer to:  in work where he/she is directly under the
1. Deny any woman employee benefits provided responsibility of his/her parents or legal
by law. guardian and where only members of the
2. Discharge any woman for the purpose of child’s family are employed; or
preventing her from enjoying any of the
benefits provided by law.  in “public entertainment or information”
3. Discharge such woman on account of her which refers to artistic, literary, and
pregnancy, or while on leave or in cultural performances for television show,
confinement due to her pregnancy. radio program, cinema or film, theater,
4. Discharge or refuse the admission of such commercial advertisement, public
woman upon returning to her work for fear relations activities or campaigns, print
that she may again be pregnant (Article 135, materials, internet, and other media.
Labor Code, as amended).
Instances when the state can intervene
Discharging a woman due to pregnancy in behalf of the child

Article 137 contemplates the following prohibited 1. When the parent, guardian, teacher or
acts in connection with the pregnancy of a person having care or custody of the child
woman employee: fails or is unable to protect the child

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against abuse, exploitation and b. In public entertainment or

discrimination; or information (Sec. 3, R.A. No. 9231)
2. When such acts are committed against the
child by the said parent, guardian, teacher or b. Allowed working hours and industries
person having care and custody over the of a working child
child. (Sec. 2, Article I, RA 7610)
Working Hours for a Working Child:
a. Child Labor vs. Working Child The following hours of work shall be
observed for any child allowed to work under
Child Labor R.A. No. 9231 and its Implementing Rules:
a. For a child below 15 years of age, the
Any work or economic activity performed by a hours of work shall not be more than
child that subjects him or her to any form of twenty (20) hours per week, provided
exploitation or is harmful to his or her health and that the work shall not be more than four
safety or physical, mental or psychosocial (4) hours at any given day;
development (Sec. 3, R.A. No. 9231). b. For a child 15 years of age but below 18,
the hours of work shall not be more than
Worst forms of Child Labor eight (8) hours a day, and in no case
beyond forty (40) hours a week; and
1. All forms of slavery (Anti-Trafficking of c. No child below 15 years of age shall be
Persons Act of 2003) or practices similar to allowed to work between eight (8) o’clock
slavery such as sale and trafficking of in the evening and six (6) o’clock in the
children, debt bondage and serfdom and morning of the following day and no child
forced or compulsory labor, including 15 years of age but below 18 shall be
recruitment of children for use in armed allowed to work between ten (10) o’clock
conflict; in the evening and six (6) o’clock in the
2. The use, procuring, offering of a child for morning of the following day.
prostitution, for the production of
pornography or for pornographic Working Child Permit (WCP)
performances;
3. The use, procuring, offering or exposing of a A working child permit is required if a child
child for illegal or illicit activities, including below 15 years of age:
the production and trafficking of dangerous 1. Will be engaged in public entertainment
drugs and volatile substances prohibited or information regardless of his/her role
under existing laws; in a project. This includes projects which
4. Employing child models in all commercials or are non-profit, advocacy materials or
advertisements promoting alcoholic political advertisements; or
beverages, intoxicating drinks, tobacco and 2. Is a foreign national and will be engaged
its by-products and violence; and in public entertainment in the
5. Work which, by its nature or circumstances Philippines;
in which it is carried out, is hazardous or 3. Will be engaged as regular extra or as
likely to be harmful to the health, safety or part of a crowd and is included in the
morals of children. (Chan, Labor Code, Vol. 1, script or storyboard;
pp. 686-687). 4. Has been selected for a project after
undergoing auditions, workshops or VTR
Working child screenings; or
5. Has been selected as semi-finalist in a
Any child engaged as follows: singing, dance or talent contest for a
1. When the child is below 18 years of age in a television show. (1.1 DOLE Department
work or economic activity that is not child Order no. 02 s. 2018, Guidelines in Issuing
labor; or Work Permit to Children)
2. When the child is below 15 years of age:
a. In work where he/she is directly under WCP Not required
the responsibility of his/her parents or 1. Is a spot extra or is cast outright on the day
legal guardian and where only members of filming or taping of a project;
of the child’s family are employed; or 2. Will join auditions or VTR screenings;

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3. Is part of the audience of a live television show 3. Kasambahay (R.A. No. 10361)
unless the child’s participation is expected;
4. Is picked or chosen as contestant from the “Domestic worker” or “kasambahay”
audience of a live television show; refers to any person engaged in domestic
5. Is a contestant for a television show but has work within an employment relationship,
not yet been selected as a semi-finalist; whether on a live-in or live-out arrangement,
6. Is a recipient of gift-giving activities in such as, but not limited to, general househelp,
television; "yaya", cook, gardener, or laundry person,
7. Is a participant in school-related performance; but shall exclude service providers, family
8. Is a participant in sports activities, trainings or drivers, children who are under foster family
workshops; or arrangement, or any person who performs
9. Will be featured in a documentary material (1.2 domestic work only occasionally or
DOLE Department Order no. 02 s. 2018, Guidelines sporadically and not on an occupational
in Issuing Work Permit to Children) basis.

c. Prohibited Acts Persons covered by R.A. 10361 otherwise

known as “Batas Kasambahay”
Prohibition of employing minors in certain All kasambahay engaged in domestic work,
undertakings and advertisements whether on a live-in or live-out arrangement,
such as, but not limited to, the following:
No child below 18 years of age is allowed to be 1. General househelp;
employed as a model in any advertisement 2. Nursemaid or Yaya;
directly or indirectly promoting alcoholic 3. Cook;
beverages, intoxicating drinks, tobacco and its 4. Gardener;
by-products, gambling or any form of violence or 5. Laundry person;
pornography. (Sec. 5, R.A. No. 9231) 6. Working children or domestic workers 15
years and above but below 18 years of
The wages, salaries, earnings and other income age; or
of the working child shall belong to him/her in 7. Any person who regularly performs
ownership and shall be set aside primarily for domestic work in one household on an
his/her support, education or skills acquisition occupational basis (live-out arrangement)
and secondarily to the collective needs of the (Sec. 3[d], R.A. 10361).
family: Provided, That not more than twenty
percent (20%) of the child's income may be used Persons not covered by the batas
for the collective needs of the family (Sec. 12-B, kasambahay:
R.A. No. 7610). 1. Service providers
2. Family drivers (Civil Code)
The parent or legal guardian of a working child 3. Children under foster family arrangement;
below eighteen (18) years of age shall set up a and
trust fund for at least thirty percent (30%) of the 4. Any other person who performs work
earnings of the child whose wages and salaries occasionally or sporadically and not on an
from work and other income amount to at least occupational and regular basis. (Chan,
two hundred thousand pesos (P200, 000.00) Labor Code Vol. 1, 2018, pp. 691-692)
annually, for which he/she shall render a semi-
annual accounting of the fund to the Department Rights and Privileges
of Labor and Employment. The child shall have
full control over the trust fund upon reaching the The rights and privileges of the kasambahay
age of majority (Sec. 12-C, R.A. No. 7610). are as follows:
(a) Minimum wage;
Duty of the employer (b) Other mandatory benefits, such as the
The employer shall first secure a work permit daily and weekly rest periods, service
from the DOLE which shall ensure observance of incentive leave, and 13th month pay;
the requirements (Sec. 12, R.A. No. 7160). (c) Freedom from employers' interference in
the disposal of wages;
(d) Coverage under the SSS, PhilHealth and
Pag-IBIG laws;

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(e) Standard of treatment; Employer of a homeworker

(f) Board, lodging and medical attendance;
(g) Right to privacy; Includes any person, natural or artificial who,
(h) Access to outside communication; for his account or benefit, or on behalf of any
(i) Access to education and training; person residing outside the country, directly
(j) Right to form, join, or assist labor or indirectly, or through an employee, agent
organization; contractor, subcontractor or any other
(k) Right to be provided a copy of the person:
employment contract; 1. Delivers or causes to be delivered, any
(I) Right to certificate of employment; goods, articles or materials to be
(m) Right to terminate the employment; and processed or fabricated in or about a home
(n) Right to exercise their own religious beliefs and thereafter to be returned or to be
and cultural practices (Chan, Labor Code Vol. 1, disposed of or distributed in accordance
2018, pp 694-695) with his directions;
2. Sells any goods, articles or materials to be
Employable age for a kasambahay processed or fabricated in or abut a home
and then rebuys them after such
The employable age for a kasambahay is 15 processing or fabrication, either by himself
years old and above, provided that the or through some other person (DO No. 05-
employment contract is signed by his/her parent 92, Sec. 2[d]).
or lawful guardian on his/behalf. (Sec. 11, Art. III,
R.A. No. 10361) Prohibitions
No homework shall be performed on the
Minimum wage of kasambahay following:
P6,000.00 for NCR (WO NCR-DW-03, 13 July 2022) 1. Explosives, fireworks and articles of like
character;
4. Homeworkers 2. Drugs and poisons; and
3. Other articles, the processing of which
Homeworkers requires exposure to toxic substances.
(D.O. No. 05 (1992), Rule XIV of the Rules
They are those who perform in or about his own Implementing Book III of the Labor Code on
home any processing or fabrication of goods or Employment of Homeworkers)
materials, in whole or in part, which have been
furnished directly or indirectly, by an employer 5. Night workers
and sold thereafter to the latter. (D.O. No. 05
(1992), Rule XIV of the Rules Implementing Book III "Night worker" means any employed
of the Labor Code on Employment of Homeworkers) person whose work covers the period from 10
o'clock in the evening to 6 o'clock the
Industrial homework following morning provided that the worker
performs no less than seven (7) consecutive
It is a system of production under which work for hours of work. (Chan, 2018 Pre-Week Notes on
an employer or contractor is carried out by a Labor Law, p.38)
homeworker at his/her home. Materials may or
may not be furnished by the employer or Coverage
contractor.
General Rule:
It differs from regular factory production All persons who shall be employed or
principally in that, it is a decentralized form of permitted or suffered to work at night.
production where there is ordinarily very little
supervision or regulation of methods of work. Exception:
(D.O. No. 05 (1992), Rule XIV of the Rules Those employed in agriculture, stock raising,
Implementing Book III of the Labor Code on fishing, maritime transport and inland
Employment of Homeworkers) navigation, during a period of not less than 7
consecutive hours, including the interval from
midnight to 5 in the morning, to be
determined by the SLE after consulting the

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workers’ representatives/labor organizations and physical or sensory impairment, to

Ers. (Chan, Labor Code Vol.1, p. 715) perform an activity in the manner or
within the range considered normal for a
Right of the Workers to Health Assessment human being. (Rule III, Sec. 5.1, R.A. No.
7277, as amended by R.A. No. 9442)
At their request, workers shall have the right to
undergo health assessment without charge and Impairment
to receive advice on how to reduce or avoid
health problems associated with their work: Any loss, diminution or aberration of
1. Before taking up an assignment as a night psychological, physiological, or anatomical
worker; structure or function. (R.A. No. 7277, as
2. At regular intervals during such an amended by R.A. No. 9442)
assignment; and
3. If they experience health problems during Disability
such an assignment which are not caused by
factors other than the performance of night Means any of the following:
work (Art. 155, Labor Code, as amended). 1. a physical or mental impairment that
substantially limits one or more
Night workers who are certified as unfit for night psychological, physiological or anatomical
work, due to health reasons, shall be transferred, functions of an individual or activities of
whenever practicable, to a similar job for which such individual;
they are fit to work. 2. a record of such an impairment; or
3. being regarded as having such an
Mandatory Facilities impairment. (R.A. No. 7277, as amended by
1. Suitable first-aid facilities, including R.A. No. 9442)
arrangements where such workers, where
necessary, can be taken immediately to a Handicap
place for appropriate treatment.
2. Safe and healthful working conditions and A disadvantage for a given individual,
adequate or reasonable facilities, i.e. resulting from an impairment or a disability
sleeping or resting quarters in the that limits or prevents the function or activity
establishment, and transportation from the that is considered normal given the age and
work premises to the nearest point of their sex of the individual. (R.A. No. 7277, as
residence subject to exceptions and amended by R.A. No. 9442)
guidelines to be provided by the DOLE (Art.
a. Discrimination
156, Labor Code, as amended).

6. Persons with Disabilities R.A. No. 7277, Title III, Prohibition On

Discrimination Against Disabled Persons
The Magna Carta for Disabled Persons (R.A.
No. 7277) ensures equal opportunities for No entity, whether public or private, shall
disabled persons and prohibits discrimination discriminate against a qualified PWD by
against them. reason of disability in regard to job
Persons with disability (PWD) application procedures, the hiring,
Those whose earning capacity is impaired by: promotion, or discharge of employees,
1. Physical deficiency employee compensation, job training, and
2. Age other terms, conditions and privileges of
3. Injury employment. The following constitute
4. Disease acts of discrimination:
5. Mental deficiency
6. Illness (a) Limiting, segregating or classifying a
job applicant with disability in such a
Persons with Disability manner that adversely affects his
work opportunities;
● those who are suffering from restriction or (b) Using qualification standards,
different abilities, as a result of a mental, employment tests or other selection

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criteria that screen out or tend to screen b. Incentives of employer who are
out a PWD unless such standards, tests employing disabled workers
or other selection criteria are shown to
be job-related for the position in question 1. Entitled to an additional deduction,
and are consistent with business from their gross income, equivalent
necessity; to 25% of the total amount paid as
(c) Utilizing standards, criteria, or methods salaries and wages to disabled
of administration that: persons
1. have the effect of discrimination on Provided, however, that such
the basis of disability; or entities present proof as certified by
2. perpetuate the discrimination of the DOLE that disabled persons are
others who are subject to common under their employ
administrative control. Provided further, that the disabled
(d) Providing less compensation, such as Ee is accredited with the DOLE and
salary, wage or other forms of the Department of Health as to his
remuneration and fringe benefits, to a disability, skills and qualifications.
qualified employee with disability, by 2. Private entities that improve or
reason of his disability, than the amount modify their physical facilities in order
to which a non-disabled person to provide reasonable
performing the same work is entitled; accommodation for disabled persons
(e) Favoring a non-disabled employee over a shall also be entitled to an additional
qualified employee with disability with deduction from their net taxable
respect to promotion, training income, equivalent to 50% of the
opportunities, study and scholarship direct costs of the improvements or
grants, solely on account of the latter’s modifications (Sec. 8, R.A. No. 7277).
disability;
(f) Re-assigning or transferring an employee E. SEXUAL HARRASMENT IN WORK
with a disability to a job or position he ENVIRONMENT
cannot perform by reason of his
disability; 1. Anti-Sexual Harassment Act (R.A.
(g) Dismissing or terminating the services of No. 7877)
an employee with disability by reason of In a work-related or employment
his disability unless the employer can environment, sexual harassment is
prove that he impairs the satisfactory committed when:
performance of the work involved to the 1. The sexual favor is made a condition
prejudice of the business entity; in the hiring or in the employment, re-
provided, however, that the employer employment or continued
first sought to provide reasonable employment of said individual or in
accommodations for persons with granting said individual favorable
disability; compensation, terms, conditions,
(h) Failing to select or administer in the most promotions, or privileges; or the
effective manner employment tests refusal to grant the sexual favor
which accurately reflect the skills, results in limiting, segregating or
aptitude or other factor of the applicant classifying the employee which in any
or employee with disability that such way would discriminate, deprive or
tests purports to measure, rather than diminish employment opportunities or
the impaired sensory, manual or otherwise adversely affect said
speaking skills of such applicant or employee;
employee, if any; and 2. The above acts would impair the
(i) Excluding PWD from membership in employee’s rights or privileges under
labor unions or similar organizations. existing labor laws; or
(Title III, R.A. No. 7277). 3. The above acts would result in an
intimidating, hostile, or offensive
environment for the employee.

In an education or training environment

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Sexual harassment is employed: 2. Schools, buildings, malls, bars,

i. Against one who is under the care, restaurants
custody or supervision of the offender; 3. Transportation terminals, public markets
ii. Against one whose education, training, 4. Spaces used as evacuation centers
apprenticeship or tutorship is entrusted 5. Government offices
to the offender; 6. Public utility vehicles as well as private
1. When sexual favor is made a vehicles covered by app-based transport
condition to the giving of a passing network services
grade, or the granting of honors and 7. Other recreational spaces such as, but not
scholarships, or the payment of a limited to, cinema halls, theaters, and
stipend, allowance or other benefits, spas
privileges, or considerations; or
2. When sexual advances result in an Acts of gender-based sexual
intimidating, hostile or offensive harassment (GBSH) in public spaces
environment for the student, trainee
or apprentice. a. Catcalling or unwanted remarks directed
towards a person, commonly done in the
Requisites: form of wolf-whistling (paninipol),
1. Act is committed in a work, education, or misogynistic, transphobic, homophobic,
training-related environment; and sexist slurs, as well as unwanted
2. The doer, the harasser, is any person who has invitations;
authority, influence or moral ascendancy over
another; ● Sexist remarks or slurs-statements
3. Doer demands or requests, or requires a that are indicative of prejudice,
sexual favor from the victim; stereotyping, or discrimination on the
4. It does not matter whether such demand is basis of sex, typically against women
accepted or not (Sec. 3, R.A. No. 7877). ● Homophobic remarks are indicative of
fear, hatred or aversion towards
NOTE: persons who are perceived to be or
Based on the Congressional deliberations, Anti- actually identify as lesbian, gay,
Sexual Harassment Law aims to punish the bisexual, queer, pansexual and such
harasser without regard to gender. other persons of diverse sexual
orientation, gender identity or
Duties of the employer or head of office in expression, or towards any person
a work-related, education or training perceived to or actually have
environment experienced same-sex attraction.
1. Prevent or deter the commission of acts of ● Misogynistic remarks or slurs-
Sexual Harassment; and statements that are indicative of the
2. Provide the procedures for the resolution, feeling of hating women or the belief
settlement or prosecution of acts of Sexual that men are inherently better than
Harassment. women
● Transphobic remarks or slurs-
2. Safe Spaces Act (R.A. No. 11313) statements that are indicative of fear,
The law covers all forms of gender-based sexual hatred or aversion towards persons
harassment (GBSH) committed in public spaces, whose gender identity and/or
educational or training institutions, workplace, as expression do not conform with their
well as online space. sex assigned at birth.

GBSH in street and public spaces is defined as b. Persistent uninvited comments or

acts which are committed through any unwanted gestures on a person’s appearance;
and uninvited sexual actions or remarks against c. Relentless requests for personal details;
any person regardless of the motive for d. Statement of sexual comments and
committing such action or remarks. suggestions;
e. Public masturbation or flashing of private
The following are public spaces parts, groping, making offensive body
1. Streets and alleys, public parks

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gestures at someone, and other similar lewd of demeaning, harassing, threatening or

sexual actions; intimidating the offended party including
f. Any advances, whether verbal or physical, flashing of private parts, public
that is unwanted and has threatened one’s masturbation, groping, and similar lewd
sense of personal space and physical safety. actions.
This may include cursing, leering and
intrusive gazing, and taunting; 1st Offense
g. Persistent telling of sexual jokes, use of Fine of Php 10,000.00 and community service
sexual names; and of 12 hours inclusive of attendance to a
h. Stalking or conduct directed at a person Gender Sensitivity Seminar to be conducted
involving the repeated visual or physical by the PNP in accordance with the LGU and
proximity, non-consensual communication, the PCW
or a combination thereof that cause or will
likely cause a person to fear for one’s own 2nd Offense
safety or the safety of others, or to suffer Arresto menor (10 to 30 days) or a fine of Php
emotional distress. 15,000.00

Acts and Penalties 3rd Offense

Arresto menor (1 day to 6 months) and a fine
1. Cursing, wolf-whistling, catcalling, leering of Php 20,000.0
and intrusive gazing, taunting, cursing,
unwanted invitations, misogynistic, 3. Stalking, and any of the acts mentioned
transphobic, homophobic, and sexist slurs, in Sec. 11 (a) and (b), when accompanied
persistent unwanted comments on one’s by touching, pinching or brushing against
appearance, relentless requests for one’s the body of the offended personal or any
personal details such as name, contact and touching, pinching, or brushing against
social media details or destination, the use of the genitalia, face, arms, groin, breasts,
words, gestures or actions that ridicule on inner thighs, face, buttocks or any part of
the basis of sex, gender or sexual the victim’s body even when not
orientation, identity and/or expression accompanied
including sexist, homophobic, and
transphobic statements and slurs, the 4. By acts mentioned in Sec. 11 (a) and (b)
persistent telling of sexual jokes, use of 1st Offense
sexual names, comments and demands, and Arresto menor (11 to 30 days) or a fine of Php
any statement that has made an invasion on 30, 000.00 provided that it includes
a person’s personal space or threatens the attendance in a Gender Sensitivity Seminar to
person’s sense of personal safety. be conducted by the PNP in accordance with
the LGU and the PCW
1st Offense
Fine of Php 1,000.00 and community service of 2nd Offense
12 hours inclusive of attendance to a Gender Arresto mayor (1 month and 1 day to 6
Sensitivity Seminar to be conducted by the PNP months) or a fine of Php 50,000.00
in accordance with the LGU and the PCW
3rd Offense
Arresto mayor in its maximum period or a fine
2nd Offense of Php 100,000.0
Arresto menor (6 to 10 days) or a fine of Php
3,000.00 IV. SOCIAL WELFARE LEGISLATION

3rd Offense A. SSS LAW (R.A. No. 8282)

Arresto menor (11 to 30 days) and a fine of Php
10,000.0 R.A 11199 as prevailing law
Republic Act No. 1161 and Republic Act No.
2. Making offensive body gestures at someone, 8282 and all other laws, proclamations,
and exposing private parts for the sexual executive orders, rules and regulations or
gratification of the perpetrator with the effect parts thereof inconsistent with this Act are

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hereby repealed, modified or amended shall be integrated with the plan of the
accordingly (Sec. 33) SSS. If the employer's contribution to
his/her private plan is more than that
Declaration of Policy required of him/her in the Social Security
It is the policy of the Republic of the Philippines Act of 2018, he/she shall pay to the SSS
to establish, develop, promote and perfect a only the contribution required of him/her
sound and viable tax-exempt social security and he/she shall continue his/her
service suitable to the needs of the people contribution to such private plan less
throughout the Philippines which shall promote his/her contribution to the SSS so that
social justice and provide meaningful protection the employer's total contribution to
to members and their beneficiaries against the his/her benefit plan and to the SSS shall
hazards of disability, sickness, maternity, old age, be the same as his/her contribution to
death, and other contingencies resulting in loss his/her private benefit plan before the
of income or financial burden. Towards this end, compulsory coverage; [Sec 9, (a)]
the State shall endeavor to extend social security
protection to workers and their beneficiaries. iii. Any changes, adjustments,
(Sec. 2) modifications, eliminations or
improvements in the benefits to be
The SSS is mandated by law to establish a available under the remaining private
provident fund for the members which will plan, which may be necessary to adopt
consist of voluntary contributions of employers by reason of the reduced contributions
and/or employees, self-employed and voluntary thereto as a result of the integration,
members and their earnings, for the payment of shall be subject to agreements between
benefits to such members or their beneficiaries. the employers and employees
(Duka, Labor Laws and Social Legislations: A concerned; [Sec 9, (a)]
Barrister’s Companion ,2019 p.818)
iv. The private benefit plan which the
1. Coverage and Exclusions employer shall continue for his/her
employees shall remain under the
A. Compulsory employer's management and control
unless there is an existing agreement to
a. Employees And Their Employers the contrary; [Sec 9, (a)]

Coverage in the SSS shall be v. Nothing in the Social Security Act of 2018
compulsory upon all employees shall be construed as a limitation to the
including domestic workers or right of employers and employees to
“kasambahays” not over sixty (60) agree on and adopt benefits which are
years of age (up to the day of his/her over and above those provided under the
60th birthday) and their employers. Social Security Act of 2018; and [Sec 9,
(Sec. 1, Rule 13, IRR) (a)]

b. Covered Employees With Private vi. The guidelines on the single employer
Benefit Plans registration process shall continue to
apply, subject to Section 33 of the Social
The following are rules which governs employees Security Act of 2018 (SSC Circular No.
with private benefit plans: 2009-00, 2009).

i. The benefit already earned by the c. Self-Employed Person

employees under private benefit plans
existing at the time of the approval of the Coverage in the SSS shall be
Social Security Act of 2018 shall not be compulsory upon such self-
discontinued, reduced or otherwise employed persons as may be
impaired; determined by the Commission under
such rules and regulations as it may
ii. Private benefit plans which are existing and prescribe, including, but not limited to the
in force at the time of compulsory coverage following:

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a. All self-employed professionals; manner as self-employed persons under

b. Partners and single proprietors of such rules and regulations that the
businesses; Commission shall prescribe. [Sec. 9-B(c)]
c. Actors and actresses, directors, f. Filipino permanent migrants, including
scriptwriters and news correspondents Filipino immigrants, permanent residents
who do not fall within the definition of and naturalized citizens of their host
the term "employee" in Section 8(d) of countries may be covered by the SSS on
this Act; a voluntary basis [Sec. 9-B(g)]
d. Professional athletes, coaches, trainers
and jockeys; and A voluntary member (VM) shall pay
e. Individual farmers and fishermen. his/her contribution in accordance with
the guidelines on payment deadline
Unless otherwise specified herein, all applicable to self-employed members
provisions of this Act applicable to (Sec. 4, Rule 13, IRR)
covered employees shall also be
applicable to the covered self-employed EXCLUSIONS
persons. [Sec. 9(a)]
Excluded employers:
d. Overseas Filipino Workers (OFW)
The government and any of its political
Coverage in the SSS shall be compulsory subdivisions, branches or instrumentalities,
upon all sea-based and land-based OFWs as including corporations owned or controlled by
defined under R.A. No. 8042 or the Migrant the Government [Sec. 8(c), R.A. No. 11199]
Workers and Overseas Filipinos Act of 1995
as amended [by R.A. No. 10022], provided Excluded employees:
they are not over sixty (60) years of age (par
1., Sec 9-B, [a]). A. Services where there is no employer-
employee relationship in accordance with
The DFA, the DOLE and the SSS shall ensure existing labor laws, rules, regulations and
compulsory coverage of OFWs through jurisprudence;
bilateral social security and labor agreements B. Service performed in the employ of the
and other measures for enforcement (Sec. 9- Philippine Government or instrumentality
B, [e]). or agency thereof;
C. Service performed in the employ of a
B. Voluntary foreign government or international
organization, or their wholly-owned
Voluntary SSS Coverage instrumentality: they may however enter
The following may be covered by the SSS on a into an agreement with the Philippine
voluntary basis: Government for the inclusion of such
employees in the SSS except those
a. A spouse of a member who devotes full time already covered by their respective civil
to managing the household and family service retirement systems.
affairs, but does not engage in other vocation D. Such other services performed by
or employment which is subject to temporary and other employees which
compulsory or mandatory coverage; [Sec 9, may be excluded by regulation of the
(b)] Commission. Employees of bona fide
b. An OFW upon the termination of his/her independent contractors shall not be
employment overseas; [Sec 9-B, (f)] deemed employees of the employer
c. A covered employee who was separated engaging the service of said contractors.
from employment who continues to pay (8(j), R.A. No. 11199)
his/her contributions; [Sec 11]
d. A self-employed member who realizes no Effective Date of Coverage:
income in any given month who continues to
pay his/her contributions. [Sec 11-A] Employer - Compulsory coverage of the
e. Land-based OFWs are compulsory members employer shall take effect on the first day of
of the SSS and considered in the same his/her operation. (Sec. 10)

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upon reaching the age of 18, the child is

Employee - Compulsory coverage of the no longer qualified as a dependent.
employee shall take effect on the first day of
his/her employment (Sec. 10) (3) The parent who is receiving regular
support from the member. [8(e)]
Self-employed - Compulsory coverage of the
self-employed person shall take effect upon BENEFICIARIES
his/her registration with the SSS. Registration
shall mean payment of first contribution (Sec. 3, A. Primary
Rule 15, R.A. No. 11199 IRR). The following are considered as primary
beneficiaries:
OFWs
i. The dependent spouse who has not
i. A sea-based OFW shall take effect on the re-married [Sec 8, (k)], cohabited or
first day of his/her employment; entered in a “live-in” relationship
before or after the death of the
ii. A land-based OFW covered under BLAs member, and
shall take effect based on the provisions of
the Agreement and its implementing ii. The dependent legitimate,
arrangement; legitimated or legally adopted and
illegitimate children. Where there are
iii. Compulsory coverage of a land-based OFW legitimate or illegitimate children, the
not covered under BLAs shall take effect former shall be preferred. The
on the applicable month and year of the first dependent illegitimate children shall
contribution payment; and be entitled to fifty percent (50%) of
the share of the legitimate,
iv. Voluntary coverage of land-based overseas legitimated or legally adopted
Filipinos shall take effect on the applicable children.
month and year of the first contribution
payment. (Sec. 4, Rule 15, R.A. No. 11199, In the absence of the dependent
IRR) legitimate, legitimated or legally
adopted children of the member,
2. Dependents and Beneficiaries his/her dependent illegitimate
children shall be entitled to one
DEPENDENTS hundred percent (100%) of the
benefits. (Sec 8, [k], Rule 12 Sec 12
The dependents shall be the following: IRR)

(1) The legal spouse entitled by law to receive B. Secondary

support from the member; In the absence of primary beneficiaries,
the secondary beneficiaries are as
(2) The legitimate, legitimated or legally adopted, follows:
and illegitimate child who is
i. The dependent parents of the
a. Unmarried, deceased member; and
b. Not gainfully employed, and
c. Has not reached twenty-one (21) years ii. In the absence of dependent parents,
of age, or if over 21 years of age, he/she any other person/s designated and
is congenitally or while still a minor has reported by the member to the SSS
been permanently incapacitated and [Sec 8, (k)]. The person designated by
incapable of self-support, physically or the member shall be someone who has
mentally. [Sec 8, (e), (2)] a right to claim for support from the
deceased member under the Family
A child who has entered in a common-law Code of the Philippines, including
relationship and has not reached the age of dependent children who have reached
eighteen (18) is still a dependent. However,

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the age of majority. (Sec. 13, Rule 12, pesos (P250.00), whichever is higher.
IRR) (Sec 12-A in relation to Sec 8, [e], [2]).

3. Benefits 4. The dependent’s pension shall be paid

to dependent children, not exceeding
A. Dependent’s Pension (Sec.12-A) five (5), beginning from the youngest
B. Retirement (Sec.12-B) and without substitution. (Sec 12-A)
C. Death (Sec.13)
D. Permanent Disability (Sec. 13-A) Where there are legitimate and
E. Funeral (Sec. 13-B) illegitimate children, the former shall
F. Sickness (Sec. 14) be preferred. (Sec 12-A)
G. Maternity Leave (Sec. 14-A)
B. RETIREMENT BENEFIT
Unemployment Insurance or Involuntary
Separation Benefits (Sec.14-B) The Retirement Benefit is a monthly pension
or lump sum granted to a member who can
Non-Transferability of Benefits no longer work due to old age.

The SSS shall promptly pay the benefits provided 1. TWO TYPES OF RETIREMENT
in this Act to such persons as may be entitled BENEFITS
thereto in accordance with the provisions of this
Act. i. Monthly pension - a lifetime cash
benefit paid to a retiree who has paid
Such benefits are not transferable and no power at least 120 monthly contributions to
of attorney or other document executed by those the SSS prior to the semester of
entitled thereto in favor of any agent, attorney or retirement.
any other person for the collection thereof on
their behalf shall be recognized, except when ii. Lump sum amount - is granted to
they are physically unable to collect personally a retiree who has not paid the
such benefits: required 120 monthly contributions.
It is equal to the total contributions
In case of death benefits, if no beneficiary paid by the member and by the
qualifies under this Act, said benefits shall be paid employer including interest
to the legal heirs in accordance with the law of
succession (Sec 15). 2. WHO ARE QUALIFIED

A. DEPENDENT’S PENSION A member must have at least one

hundred twenty (120) monthly
1. Monthly pension is payable on account of: contributions prior to semester of
retirement; and
a. Death
b. Permanent total disability or i. Has reached sixty (60) years old
c. Retirement and is separated from employment
or has ceased to be self-employed
2. Amount for each dependent child (Optional Retirement)
conceived or legally adopted on or before
the date of the contingency to be paid is ii. Is at least sixty-five (65) years old
equivalent to ten percent (10%) of the (Technical Retirement)
monthly pension or two hundred fifty
pesos (P250.00), whichever is higher. iii. A separated member who has paid
(Sec 12-A in relation to Sec 8, [e], [2]). less than one hundred twenty (120)
3. Amount for each dependent child monthly contributions who
conceived or legally adopted on or before continues as a voluntary-paying
the date of the contingency to be paid is member to complete the required
equivalent to ten percent (10%) of the monthly contributions to qualify for
monthly pension or two hundred fifty

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full pension benefit (Sec. 11 and 11-A). 1. If a member has paid at least 36 monthly
contributions prior to the semester of
Exceptions as to age: death:
Underground Mineworker whose date of a. Primary Beneficiaries - entitled to
actual retirement is not earlier than March 13, monthly pension;
1998: b. Secondary Beneficiaries - entitled to a
Optional Retirement - 55 y/o lump sum benefit equivalent to thirty-
Technical Retirement - 60 y/o six (36) times the monthly pension;
and
Underground Mineworker whose date of c. If a member has not paid the
actual retirement is not earlier than April 27, required 36 monthly contributions the
2016: primary or secondary beneficiaries
Optional Retirement - 50 y/o shall be entitled to whichever is
Technical Retirement -60 y/o (Rule 21, Sec. 2 higher between.
IRR) 2. a lump sum benefit equivalent to the
monthly pension times the number of
13TH MONTH PENSION monthly contributions paid to the SSS;
and
A retired member is entitled to a thirteenth (13th) 3. twelve (12) times the monthly pension
month pension equivalent to the amount of the (Sec. 13, R.A No. 11199)
monthly pension due and additional benefit
allowance, payable every month of December of D. PERMANENT DISABILITY BENEFIT
the applicable year.
The Permanent Disability Benefit is a cash
REEMPLOYMENT OR RESUMPTION OF benefit granted to a member who becomes
SELF-EMPLOYMENT permanently disabled either partially or
totally. (Sec. 1 Rule 23, IRR R.A. No. 11199)
The monthly pension shall be suspended upon
the reemployment or resumption of self- DISABILITY BENEFITS
employment of a retired member who is less than i. Monthly pension
sixty-five (65) years old. He shall again be subject ii. Lump sum
to Section Eighteen and his employer to Section
Nineteen of this Act. (12-B[C]) MONTHLY PENSION
DEATH OF A RETIRED MEMBER
The disabled member is entitled to a monthly
pension if he/she has paid at least thirty-six
His primary beneficiaries as of the date of his
(36) monthly contributions prior to the
retirement shall be entitled to receive the semester of disability. (Sec 13-A, [a])
monthly pension Provided, That if he has no
primary beneficiaries and he dies within sixty (60)
LUMP SUM
months from the start of his monthly pension, his
secondary beneficiaries shall be entitled to a For members who have not met the required
lump sum benefit equivalent to the total monthly thirty-six (36) monthly contributions prior to
pensions corresponding to the balance of the the semester of disability, a lump sum
five-year guaranteed period, excluding the disability benefit is granted. [Sec 13-A, (a)]
dependents’ pension.
E. FUNERAL BENEFIT
C. DEATH BENEFITS
The Funeral Benefit is intended to help defray
The Death Benefit is a cash benefit either in the cost of funeral expenses upon the death
monthly pension or lump sum paid to the of a member, including permanently totally
beneficiaries of a deceased member (Sec. 1, Rule disabled or retired member. (Sec 13-B)
22, IRR R.A. No. 11199)
Twelve thousand pesos (₱12,000.00) shall
Upon death of the member: be paid, in cash or in kind, to help defray the
cost upon the death of a member, including

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permanently totally disabled member or retiree. within five (5) calendar days after receipt
of notification from the employee; [Sec.
Starting August 1, 2015, a variable amount 14, (c)]
ranging from a minimum of twenty thousand
pesos (P20,000.00) to a maximum of forty iii. For sickness/injury that occurred
thousand pesos (P40,000.00), depending on while working or within company’s
the member's number of contributions and premises- The employer shall notify the
AMSC, (Sec. 2, Rule 24, IRR R.A 11199) SSS of such sickness/injury/confinement
in the prescribed manner within five (5)
* AMSC - average monthly salary credit calendar days after onset of
sickness/injury. [Sec. 14, (a) (3)]
F. SICKNESS BENEFIT
Notification by the unemployed or self-
employed member, land-based OFWs,
The Sickness Benefit is a daily cash allowance to
or voluntary members
the member who is unable to work due to
sickness or injury for each day of compensable
They shall directly notify the SSS of the
confinement or a fraction thereof. (Sec 1 Rule 25,
confinement in the prescribed manner within
IRR R.A 11199)
five (5) calendar days after the start of
confinement, except when such confinement
Requisites for Eligibility is in a hospital, notification to the SSS in the
prescribed manner shall be within one (1)
i. Has paid at least three (3) monthly year from date of discharge; and [Sec. 14, (a)
contributions within the twelve-month (12) (3)]
period immediately before the semester of
sickness or injury; (Sec 14, [a]) Amount of Benefit

No contributions paid retroactively by The daily sickness allowance shall be

SE/VM/OFWs shall be used in determining equivalent to ninety-percent (90%) of the
his/her eligibility to sickness benefit wherein the member's average daily salary credit. [Sec 14,
date of payment is within or after the semester (a)]
of contingency;
begin on the first (1st) day of sickness and the
ii. Was confined for at least four (4) days either payment of such allowances shall be made by
in a hospital or elsewhere as defined by the the employer every
SSS; (Sec. 14, [a])
a. regular payday or on
iii. Has notified the employer, if employed, or the b. the fifteenth (15th) and last day of each
SSS, if unemployed or SE/VM of the sickness month
or injury; (Sec. 14, [a], 3); and
Sickness and disability benefits may be
iv. Has used up all current company sick leave availed of simultaneously, provided, that the
with pay for the current year, if employed, following conditions are satisfied:
except sea-based OFWs. (Sec. 14, [b])
a) Sickness/injury and disability are not
Notification by the EMPLOYER related; and
b) Member meets all the qualifying conditions
i. For Hospital confinement - employer for the grant of sickness and disability
shall notify the SSS in the prescribed manner benefits.
within one (1) year from date of discharge
[Sec. 14, (c)] G. MATERNITY LEAVE
(R.A No. 11210)
ii. For confinement elsewhere - employer
shall notify the SSS in the prescribed manner Maternity Leave Benefit is a daily cash
allowance granted to female members who

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gave birth via normal delivery or caesarean d) Closure or cessation of operation; or

section or suffered miscarriage, regardless of civil e) Disease/illness. (Sec. 2, Rule 27, IRR)
status or legitimacy of the child.
Limitation
Amount of Benefit A covered employee who is involuntarily
Covered female workers must receive their full unemployed can only claim unemployment
pay. Full payment of the maternity leave benefit benefits once every three (3) years starting
shall be advanced by the employer within thirty from the date of involuntary separation or
(30) days from the filing of the maternity leave unemployment. (Sec. 14-B)
application.
Overlapping Benefits
In the case of self-employed female members, In case of concurrence of two (2) or more
including those in the informal economy, OFWs contingencies within the same compensable
and voluntary SSS members, the SSS shall period, only the highest benefit shall be paid.
directly pay the maternity benefit. (Sec. 3, Rule 3, (Sec. 14-B)
IRR R.A 11210)
B. GOVERNMENT SERVICE INSURANCE
H. UNEMPLOYMENT INSURANCE OR
SYSTEM LAW (R.A. No. 8291)
INVOLUNTARY SEPARATION BENEFITS
1. Coverage and exclusions
The unemployment insurance or involuntary
separation benefit is a monthly cash payment Coverage
equivalent to fifty percent (50%) of the AMSC for
a maximum of two (2) months, subject to the 1. All government personnel, whether
rules and regulations that the Commission may elective or appointive, irrespective of
prescribe. (Sec. 14-B) status of appointment, provided they are
receiving fixed monthly compensation and
Eligibility have not reached the mandatory
retirement age of 65 years, are
i. Not over sixty (60) years old at the time of compulsorily covered as members of the
involuntary separation, except; GSIS and shall be required to pay
contributions.
a) In the case of underground mineworker or
surface mineworker [R.A. No. 10757], not 2. Employees who have reached the
over fifty (50) years old; or retirement age of 65 or more shall also be
covered, subject to the following rules:
b) In the case of racehorse jockey [R.A. No.
10789], not over 55 years old. An employee who is already beyond the
mandatory retirement age of 65 shall be
compulsorily covered and be required to pay
ii. Has paid at least thirty-six (36) monthly
both the life and retirement premiums
contributions, twelve (12) months of which
under the following situations:
should be in the eighteen (18) month period
immediately preceding the unemployment or
a. An elective official who at the time of
involuntary separation;
election to public office is below 65 years
of age and will be 65 years or more at the
iii. Involuntarily separated from employment end of his term of office, including the
provided that such separation did not arise from period/s of his re-election to public office
fault or negligence of the employee and which thereafter without interruption.
may be attributed to any of, but not limited to,
the following: b. Appointive officials who, before
reaching the mandatory age of 65, are
a) Installation of labor-saving devices; appointed to government position by the
b) Redundancy; President of the Republic of the
c) Retrenchment to prevent loss;

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Philippines and shall remain in government fixed monthly compensation. (Sec. 3,

service at age beyond 65. Rule 2, IRR)

c. Contractual employees including casuals 2. Dependents and Beneficiaries

and other employees with an employee-
government agency relationship are also Dependents
compulsorily covered, provided they are (a) the legitimate spouse dependent for
receiving fixed monthly compensation and support upon the member or pensioner;
rendering the required number of working
hours for the month (Sec. 2, Rule 2, IRR RA (b) the legitimate, legitimated, legally
8291) adopted child, including the illegitimate
child, who is unmarried, not gainfully
Compulsory Membership employed, not over the age of majority,
or is over the age of majority but
Membership in the GSIS shall be compulsory for incapacitated and incapable of self-
support due to a mental or physical
a. All employees receiving compensation who defect acquired prior to age of majority;
have not reached the compulsory retirement and
age, irrespective of employment status,
(c) the parents dependent upon the
Except: member for support; (Sec. 2(f), R.A. No.
i. members of the Armed Forces of the 8291):
Philippines;
Gainful Occupation - Any productive
ii. member of the Philippine National Police, activity that provided the member with
subject to the condition that they must settle income at least equal to the minimum
first their financial obligation with the GSIS, compensation of government employees (Sec.
and contractuals who have no employer and 2[p], R.A. No. 8291)
employee relationship with the agencies they
serve. Beneficiaries
A. Primary beneficiaries
b. Members of the judiciary and constitutional
commissions who shall have life insurance The legal dependent spouse until he/she
only. remarries and the dependent children
[Sec. 1(g), R.A. No. 8291]
All members of the GSIS shall have life insurance,
retirement, and all other social security B. Secondary beneficiaries
protection such as disability, survivorship,
separation, and unemployment benefits.
The dependent parents and, subject to
Exclusion from compulsory coverage the restrictions on dependent children,
the legitimate descendants; [Sec. 1(h),
i. Uniformed personnel of the Armed Forces of R.A. No. 8291]
the Philippines (AFP), Philippine National
Police (PNP), Bureau of Fire Protection Effectivity of Membership
(BFP) and Bureau of Jail Management and
Penology (BJMP); The effective date of membership shall be the
date of the member’s assumption to duty on
ii. Barangay and Sanggunian Officials who are his original appointment or election to public
not receiving fixed monthly compensation; office. (Sec. 5, Rule 2, IRR R.A. No. 8291)

3. Benefits
iii. Contractual Employees who are not
A. Compulsory Life Insurance Benefits
receiving fixed monthly compensation; and
under the Life Endowment Policy (LEP)
B. Compulsory Life Insurance Benefits
iv. Employees who do not have monthly
under the Enhanced Life Policy (ELP)
regular hours of work and are not receiving
C. Death Benefit

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D. Retirement Benefits legal heirs, less all outstanding obligations

E. Disability of the member in accordance with the
F. Survivorship CLIP;
G. Separation
H. Unemployment benefits ● Termination Value - The policy earns a
I. Funeral Termination Value during the life of the
policy computed from the percentage of
A. Compulsory Life Insurance Benefits life insurance premiums actually remitted
under the Life Endowment Policy (LEP) and paid to GSIS.
○ Termination value is equivalent to a
A member under this policy may be entitled to percentage of monthly life insurance
any of the following benefits, depending on the premiums as determined by the GSIS,
circumstances: due and paid in full, either by direct
remittance or through an APL facility.
1. Maturity benefits is the face amount ○ The accumulated termination value
payable to the member upon maturity of the will grow at such rate as determined
policy. by the Actuary.
○ The termination value shall be paid to
2. Cash Surrender Value is earned values the member upon his separation from
during the term of the insurance payable to the government service less all
the member when he is separated from the indebtedness of the member with the
service before maturity date of the policy or GSIS in accordance with CLIP.
when he is considered as a case of PTD.
● Cash Dividend - A policyholder is
3. Death Benefit is the face value of the policy entitled to dividends, subject to the
payable to the designated guidelines as approved by the GSIS
beneficiary/beneficiaries or legal heirs, in the Board. This is not a guaranteed benefit.
absence of the former, upon the death of a (Sec. 19, IRR of R.A. No. 8291)
member.
D. Retirement Benefits
4. Accidental Death Benefit (ADB) is an The retirement benefit consists of a
additional benefit equivalent to the amount monthly pension which is computed based
of Death Benefit when the member dies by on years of creditable service and AMC for
accident; Proof must be presented to the last 3 years.
sufficiently establish that the cause of the
member’s death is accidental & must be filed Eligibility:
within four (4) years after the death. 1. has rendered at least Fifteen (15) years of
service;
5. Cash Dividend - A policy holder is entitled 2. is at least Sixty (60) years of age; and
to dividends subject to the guidelines as 3. is not receiving a monthly pension benefit
approved by the GSIS Board. This is not a from permanent total disability.
guaranteed benefit. (Sec. 18.1. to 18.5, Rule
IV, IRR of R.A. No. 8291). Retirement Benefit Options

B. Compulsory Life Insurance Benefits A retiring member has the following options:
under the Enhanced Life Policy (ELP) 1. Five (5) year lump sum equivalent to sixty
(60) months of the BMP, subject to
A member under this policy may be entitled to qualification requirements, less all
any of the following benefits, depending on the outstanding obligations of the member in
circumstances: accordance with the CLIP, plus an old-age
pension benefit equal to the BMP payable
C. Death Benefit - equivalent to the latest for life, starting on the first day of the
annual salary multiplied by amount of month following the expiration of the five-
insurance (AOI) factor which is 1.5 or 18 times year guaranteed period; or
the current monthly salary of the member or 2. A cash payment benefit equivalent to
as determined by the GSIS, payable to the eighteen (18) times of the BMP, subject to

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qualification requirements, less all E. Disability Benefit

outstanding obligations of the member in
accordance with the CLIP, plus monthly Disability refers to any loss or impairment of
pension for life payable on the first month the normal functions of the physical and/or
following the date of retirement. mental faculties of a member, which
permanently or temporarily prevents him to
Conversion in the Mode of Retirement continue with his work or engage in any other
gainful occupation resulting in the loss of
Conversion in the mode of retirement from R.A. income.
No. 8291 to any other retirement laws and vice
versa administered by the GSIS shall not be The corresponding disability benefits for each
allowed. kind of disability shall be granted to a member
based on the duration of incapacity to work
Those who became GSIS members prior to the and actual loss of income.
implementation of this Act shall have the option
to retire under PD 1146, RA 660, or RA 1616, There are three (3) kinds of disability which
subject to eligibility. shall be determined by the GSIS based on
established medical standards:
Change of Retirement Benefit Option under 1. Permanent Total Disability
RA 8291 2. Permanent Partial Disability
3. Temporary Total Disability
Change of retirement benefit option from
eighteen (18) months cash payment plus Policies Governing Disability Benefits
immediate pension to five (5) year lump sum, or
vice versa, shall not be allowed. The GSIS shall Permanent Total Disability (PTD) –
process the claim for retirement benefits based disability due to injury or disease causing
on the member’s records in the GSIS database. complete, irreversible and permanent
incapacity that will permanently disable a
member to work or to engage in any gainful
Effects of Re-Employment occupation resulting to loss of income.
1. When a retired/separated member is re- The following disabilities shall be deemed
employed or reinstated in the service, his/her total and permanent:
previous services credited at the time of 1. complete loss of sight for both eyes;
his/her retirement/separation for which a 2. loss of two limbs at or above the ankle or
corresponding benefit had been awarded, wrists;
shall be excluded in the computation of 3. permanent complete paralysis of two
service. In effect, he/she shall be considered limbs; and
a new entrant. 4. brain injury resulting in incurable
2. However, for those who retired prior to the imbecility or insanity.
enactment of R.A. No. 8291, the previous 5. such other cases as may be determined
services of a retired/separated member may and approved by the GSIS
be added in the computation of his creditable
services (subject to premium-based policy) Permanent Partial Disability (PPD) –
upon subsequent retirement under R.A. No. arises due to the complete and permanent
8291 only when both conditions are met: loss of the use of any of the following resulting
a. the retiree re-entered government to the disability to work for a limited period of
service before June 24, 1997; and time:
b. the total amount of benefit previously
received, if any, including the prescribed 1. any finger
interest was refunded to GSIS on or 2. any toe
before March 2, 2006 (Sec. 20, IRR of RA 3. one arm;
8291) 4. one hand;
5. one foot;
6. one leg;
7. one or both ears;
8. hearing of one or both ears;

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9. sight of one eye; pension (BMP) effective from the date of

10. such other cases as may be determined and disability.
approved by the GSIS
Permanent Partial Disability (PPD) - The
Temporary Total Disability (TTD) – accrues period of entitlement to PPD benefit shall be
or arises when the impaired physical and/or determined after due medical evaluation; but
mental faculties can be rehabilitated and/or such period of entitlement to the benefit shall
restored to their normal functions, but such not exceed 12 months for the same
disability shall result in temporary incapacity to contingency. Only the leave of absence/s
work or to engage in any gainful occupation. without pay incurred during the period of
entitlement, duly certified by the authorized
**Any disability or injury as a result of, or due to officer of the agency where he is employed,
grave misconduct, participation in riots, gross shall be compensable.
and inexcusable negligence, under the influence
of drugs or alcohol or willful intention to injure or The amount of PPD benefit shall be computed
kill himself or another, shall not be compensable. by dividing the BMP by 30 days and
multiplying the quotient by the number of
The actual loss of income shall refer to the compensable calendar days of leave of
number of days when a member went on leave absence without pay (LWOP).
of absence without pay (LWOP) reckoned
immediately from the date of commencement of Temporary Total Disability (TTD) - The
disability and for the duration of entitlement period of entitlement to TTD benefit shall be
thereto, based on medical evaluation. Any LWOP determined after due medical evaluation and
incurred after the duration of entitlement to the proof of actual loss of work resulting in loss of
benefit shall not be compensable. income by way of the incurred actual number
of days of leave of absence/s without pay duly
If the member has two or more different certified by the authorized officer of the
contingencies during the same period of benefit agency where he is employed; but such
entitlement, he shall be compensated only once period of entitlement to the benefit shall not
for the overlapping periods. exceed 120 days in one calendar year.
However, if the disability requires more
All injuries, disabilities, illnesses and all other extensive treatment that lasts beyond 120
infirmities compensable under PD 626 shall not days, the payment of the TTD may be
be compensable under this Act. extended by the GSIS but not to exceed a
total of 240 days.
Suspension of Disability Benefit
Only the leave of absence/s without pay
Any applicable disability benefit shall be incurred during the period of entitlement shall
suspended when he/she: be compensable. Entitlement, however, shall
1. is re-employed; or start from the fourth day of the disability.
2. recovers from his/her disability as determined
by the GSIS, whose decision shall be final and The amount of TTD benefit shall be computed
binding; or by multiplying 75% of the daily salary of the
3. fails to present himself for medical member by the number of days of disability
examination when required by GSIS; or based on the medical evaluation but not to
4. is receiving any other pension either from exceed 240 days for the same contingency.
GSIS or another local or foreign institution or However, the computed daily salary shall not
organization. be less than seventy pesos (P70.00) but not
to exceed P340.00 per day.
Computation of Benefit
**For the purpose of computing the
Permanent Total Disability (PTD) - A corresponding benefit of inactive members for
member who becomes permanently and totally each kind of disability, the BMP, with respect
disabled shall be entitled to the monthly income to PTD and PPD, and daily salary, with respect
benefits for life equivalent to the basic monthly to TTD, shall be computed as of the time of
separation from GSIS.

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F. Survivorship Benefits The foregoing conditions, except the last one,

must be present immediately preceding the
Survivorship benefits upon death of death of the member or pensioner (Sec. 24.5,
member or pensioner Rule IV, IRR of R.A. No. 8291).

When a member or pensioner dies, the G. Separation Benefits

beneficiaries shall be entitled to the following
survivorship benefits, whichever is applicable: Is either one of the following:
1. For those members who are separated
1. Surviving pension consisting of: from service and who have at least 3
years of service but less than 15 years
a. The basic survivorship pension which is shall be entitled to cash payment
fifty percent (50%) of the BMP; and equivalent to 100% of the member’s AMC
b. The dependent children’s pension for each year of creditable service, but not
equivalent to 10% of the BMP for each less than P12,000.00, payable upon
child but not to exceed fifty percent (50%) reaching age 60, or upon his separation if
of the BMP (Sec. 24.1.1, Rule IV, IRR of he is already 60 years of age at the time
R.A. No. 8291). of separation.
2. A cash payment equivalent to eighteen
2. Cash payment equivalent to eighteen (18) (18) times the basic monthly pension
months BMP (Sec. 24.1.2, Rule IV, IRR of R.A. payable at the time of resignation or
No. 8291); separation, provided the member resigns
or separates from the service after he has
3. Cash payment equivalent to one hundred rendered at least 15 years of service and
percent (100%) of the AMC for every year of is below 60 years of age, plus an old-age
service with paid contributions but not less pension benefit equal to the basic
than Twelve Thousand Pesos (P12,000.00) monthly pension payable monthly for life
(Sec. 24.1.3, Rule IV, IRR of R.A. No. 8291). upon reaching the age of sixty (60).
3. Reckoning Date of Separation of
Conditions for entitlement to survivorship Uniformed PNP, BJMP and BFP Personnel
benefits shall be February 1, 1996. The
computation of benefit shall be based on
The primary and secondary beneficiaries, except their basic monthly salary (premium-
dependent children, shall be entitled to based) when they ceased to be members
applicable survivorship benefits, subject to the of the GSIS.
following: 4. Processing of Separation Benefit of
a. Not engaged in any gainful occupation as Members Who Died While Their Claims
defined in Sec. 2(p) of R.A. No. 8291; are Being Processed
b. The surviving spouse and the deceased a. If the member dies during the
member were living together as husband and pendency of his claim for separation
wife; benefit and he has rendered at least
c. Not gainfully engaged in a business or 15 years of creditable service, his
economic activity (self- employed); legal heirs shall be entitled to receive
d. Employed/engaged in a business or economic cash payment equivalent to eighteen
activity but receiving income less than the (18) times the basic monthly pension,
minimum compensation of government plus accrued BMP, if any, up to the
employees; date of death of the member.
e. Not receiving any other pension from the GSIS Thereafter, the primary beneficiaries
or another local or foreign institution or shall be entitled to survivorship
organization; and pension.
f. In the case of the dependent spouse, payment b. If the member dies during the
of the basic survivorship pension shall pendency of his claim for separation
discontinue when he remarries, cohabits, or benefit and he has rendered less than
engages in common-law relationship. 15 years of creditable service, his
legal heirs shall be entitled to cash
payment equivalent to one hundred

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percent (100%) of AMC for each year of separation or retirement benefits, as the case
creditable service, but not less than maybe, to which the member may be entitled
Twelve Thousand Pesos (P12,000.00) upon his voluntary resignation, separation or
(Sec. 21, IRR of R.A. No. 8291). retirement. (Sec. 22, IRR of R.A. No. 8291)

H. Unemployment Benefit I. Funeral Benefits

Conditions for Entitlement to Funeral benefits is intended to help defray the

Unemployment Benefit: expenses incident to the burial and
A member shall be entitled to the unemployment funeral of the deceased member, pensioner or
benefits if the following conditions are met: retiree under R.A. No. 660 (“Magic 87”), R.A.
1. he/she was a permanent employee at time of No. 1616 (“Take All Retirement Mode”), P.D.
separation; No. 1146 (“Revised Government Service
2. his/her separation was involuntary due to the Insurance Act of 1977”) and R.A. No. 8291
abolition of his/her office or position resulting (Sec. 25, Rule IV, IRR of R.A. No. 8291).
from reorganization; and
3. he/she has been paying the required Contingency for the Payment of Funeral
premium contributions for at least one (1) Benefit (Revised Guidelines on Funeral Benefit,
year but less than 15 years prior to 25 April 2018)
separation.
The funeral benefit shall be paid upon the
Amount, Duration and Payment of death of:
Unemployment Benefit
The amount of unemployment benefit is 1. A member who:
equivalent to 50% of the AMC and shall be paid
in accordance with the following Schedule: a. died while in active service; or
Contributions Benefit Duration b. although separated from government
Made service, is entitled to future
1 year 2 months separation or retirement benefits
but less than 3 under Section 11 (Separation
years Benefits) or Section 13 (Retirement
3 or more years 3 months Benefits) of R.A. No. 8291,
but less than 6 respectively, subject to the provisions
years of Section III of Policy and Procedural
Guidelines No. 329-18;
6 or more years 4 months
c. retired under R.A. No. 1616 prior to
but less than 9
24 June 1997 with at least 20 years
years
of service, regardless of age; or,
9 or more years 5 months
d. retirement under R.A. No. 1616 on or
but less than 11
after 24 June 1997, with at least 20
years
years of service, and is at least 60
11 or more years 6 months
years of age at the time of his/her
but less than 15
retirement; and
years
2. An old-age or disability
pensioner.
Those entitled to more than two (2) months of
Unemployment Benefits shall initially receive two Order of Priority in the Payment of
(2) monthly payments. A seven-day (7-day) Benefit
waiting period shall be imposed on succeeding
monthly payments to determine whether the The funeral benefit shall be payable to any
separated member has found gainful qualified individual, in accordance with the
employment either in the public or private sector. following order of priority:
1. Surviving legitimate spouse;
In cases of reemployment, all accumulated
unemployment benefit paid to the employee 2. Any of the following persons who can
during his/her entire membership with the GSIS present receipt/s, provided that the
shall be deducted without interest from the surviving spouse has acknowledged that

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this person shouldered the funeral expenses: shall release the same within fifteen (15)
a. Children of the deceased member or working days from receipt of the claim,
pensioner; or, subject to the submission of the required
b. Any other person who can show documents and availability of complete
incontrovertible proof that he or she employee/employer records in the System or
shouldered the funeral expenses of the Systems (Sec. 2, Rule IV, IRR of R.A. No. 7699).
deceased.
Totalization shall apply in the following
C. LIMITED PORTABILITY LAW (R.A. No. instances:
7699) a. If a worker is not qualified for any benefits
from both Systems;
Rationale: R.A. No. 7699 was enacted to enable
those from the private sector who transfer to the b. If a worker in the public sector is not
government service or from the government qualified for any benefits in the GSIS or
sector to the private sector:
c. If a worker in the private sector is not
● to combine their years of service and qualified for any benefits from the SSS.
contributions which have been credited with
the SSS or GSIS, as the case may be, For the purpose of computation of benefits,
● to satisfy the required number of years of totalization shall apply in all cases so that the
service for entitlement to the benefits under contributions made by the worker‐member in
the applicable laws. both Systems shall provide maximum benefits
(R.A. No. 8282, for SSS members and R.A. No. which otherwise will not be available. In no
8291, for GSIS members). case shall the contribution be lost or forfeited
Coverage (Rule V, Sec. 3, RA 7699 Rules and Regulations)
These rules and regulations shall apply to all
worker‐members of the GSIS and/or SSS who If after totalization the worker‐member still
transfer from one sector to another, and who does not qualify for any benefit listed in Rule
wish to retain their membership in both Systems. III, Section 1 (j), the member will then get
whatever benefits correspond to his/her
“Portability” – shall refer to the transfer of contributions in either or both Systems (Rule
funds for the account and benefit of a worker V, Sec. 4, RA 7699 Rules and Regulations).
who transfers from one system to the other.
[Rule 3 Sec. 1(b)] If a worker qualifies for benefits in both
Systems, totalization shall not apply (Rule V,
“Totalization” refers to the process of adding Sec. 5, RA 7699 Rules and Regulations).
up the periods of creditable services or
contributions under each of the Systems, SSS or Applicability
GSIS, for the purpose of eligibility and
computation of benefits (Sec. 2, R.A. No. 7699; Sec. The benefits herein provided shall apply to
1(e), Rule III, IRR of R.A. No. 7699). active or inactive members of either System
as of date of effectivity of the Act which is May
All creditable services or periods of contributions 20, 1994. (Rule 7, Sec. 1, IRR of R.A. No. 7699)
made continuously or in the aggregate of a
worker under either of the Sectors shall be added “Benefits” – shall refer to the following:
up and considered for purposes of eligibility and
computation of benefits. ● Old‐age benefit
● Disability benefit
Limited portability of funds ● Survivorship benefit
The processes involved in the prompt payment of ● Sickness benefit
money benefits to eligible members are the joint ● Medicare benefit, provided that the
responsibility of the GSIS and SSS (Sec. 1, Rule IV, member shall claim said benefit from the
IRR of R.A. No. 7699). System where he was last a member, and
● Such other benefits common to both
The System or Systems responsible for the System that may be availed of through
payment of money benefits due a covered worker totalization [Rule 3 Sec. 1 (j)]

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D. DISABILITY AND DEATH BENEFITS Disability Benefits

1. Labor Code Kinds of Disability

The State shall promote and develop a tax- 1. Temporary total disability (Art. 197,
exempt employees’ compensation program Labor Code, as amended)
whereby employees and their dependents, in the 2. Permanent total disability (Art. 198,
event of work connected disability or death, may Labor Code, as amended)
promptly secure adequate income benefit and 3. Permanent partial disability (Art.
medical related benefits (Art. 172, Labor Code, 199, Labor Code, as amended)
as amended)
Temporary total disability
EMPLOYEES COMPENSATION AND STATE
INSURANCE FUND Any employee who sustains an injury or
contracts sickness resulting in temporary total
Compulsory Coverage disability shall, for each day of such a
disability or fraction thereof, be paid by the
Coverage in the State Insurance Fund shall be System an income benefit equivalent to (90
compulsory upon %) ninety percent of his average daily
salary credit, subject to the following
● All employers and their employees not over conditions
sixty (60) years of age;
● An employee who is over sixty (60) years ● the daily income benefit shall not be less
of age and paying contributions to qualify than Ten Pesos nor more than Ninety
for the retirement or life insurance benefit Pesos,
administered by the System (Art. 174 LC as ● Not paid for a continuous period longer
amended) than one hundred twenty days, except
● An employee who is coverable by both the as otherwise provided for in the Rules,
GSIS and SSS and should be compulsorily ● and the System (SSS or GSIS) shall be
covered by both Systems (Art 174(168), notified of the injury or sickness.
Labor Code, as amended; Rule I, Sec. 2,
Amended Rules on Employees’ Compensation). Permanent Total Disability

Effective Date of Coverage. Any employee who contracts sickness or

sustains an injury resulting in his permanent
● Employer- on the first day of his operation total disability shall, for each month until his
● Employee- on the date of his employment death, be paid during
(Art. 176, Labor Code, as amended)
● an amount equivalent to the monthly
STATE INSURANCE FUND income benefit, plus ten percent thereof
for each dependent child, but not
The state insurance fund is built up by the exceeding five, beginning with the
contributions of the employers based on the youngest and without substitution.
salaries of their employees as provided under the
Labor Code (Chan, Labor Law Reviewer 2019, p.301) The monthly income benefit shall be
guaranteed for five years, and shall be
Kinds of State Insurance Funds suspended if the employee is gainfully
employed, or recovers from his permanent
● SSS- for private sector employees total disability, or fails to present himself for
● GSIS- for public sector employees examination at least once a year upon notice
by the System.

The following disabilities shall be deemed

total and permanent:

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1. Temporary total disability lasting

Hearing of one ear 10
continuously for more than one hundred
twenty days, except as otherwise provided Hearing of both 50
for in the Rules; ears
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or Sight of one eye 25
wrist;
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility Death Benefits
or insanity; and
6. Such cases as determined by the Medical Eligibility
Director of the System and approved by the
Commission. ● The employee has been duly reported to
the System
Permanent Partial Disability ● He has died as a result of an injury or
sickness; and
Any employee who contracts sickness or sustains ● The System has been duly notified of his
an injury resulting in permanent partial disability death as well as the injury or sickness
shall, for each month not exceeding the period which caused the death. His employer
designated herein, be paid by the System during shall be liable for the benefit if such death
such a disability an income benefit for permanent occured before the employee is duly
total disability. reported for coverage to the system
(Chan, Labor Law Reviewer, 2019, p.317)
The benefit shall be paid for not more than the
period designated in the following schedules: Benefits

The System shall pay to the primary

Complete and No. of Months beneficiaries upon the death of the covered
permanent loss employee:
of the use of:
An amount equivalent to his monthly
One thumb 10 income benefit, plus ten percent thereof
for each dependent child, but not exceeding
One index finger 8 five, beginning with the youngest and without
substitution, That the monthly income benefit
One middle finger 6
shall be guaranteed for five years
One ring finger 5
If he has no primary beneficiary:
One little finger 3
The System shall pay to his secondary
One big toe 6 beneficiaries the monthly income benefit
but not to exceed sixty months and the
One toe 3 minimum death benefit shall not be less than
fifteen thousand pesos.
One arm 50
A funeral benefit of Three Thousand Pesos
One hand 39 (P3,000.00) shall be paid upon the death of
a covered employee or permanently totally
One foot 31 disabled pensioner.

One leg 46 Beneficiaries

One ear 10 a. Primary Beneficiaries

Both ears 20 ● Dependent spouse until he remarries;

and

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● Dependent children (legitimate, 3. Upon sign-off from the vessel for medical
legitimated, natural-born, or legally treatment, the seafarer is entitled to
adopted). sickness allowance equivalent to his basic
wage until he is declared fit to work or the
b. Secondary Beneficiaries degree of permanent disability has been
assessed by the company-designated
● Illegitimate children and legitimate physician but in no case shall this period
descendants; and exceed one hundred twenty (120) days.
● ii. Parents, grandparents, grandchildren
[Art. 173(j), Labor Code, as amended] For this purpose, the seafarer shall submit
himself to a postemployment medical
2. POEA-Standard Employment Contract examination by a company-designated
for Seafarers physician within three working days upon his
return except when he is physically
Commencement of contract incapacitated to do so, in which case, a
written notice to the agency within the same
The employment contract between the employer period is deemed as compliance. Failure of the
and the seafarer shall commence upon actual seafarer to comply with the mandatory
departure of the seafare from the Philippine reporting requirement shall result in his
airport or seaport in the point of hire and with a forfeiture of the right to claim the above
POEA approved contract [Sec.2(a)] benefits.

Duration If a doctor appointed by the seafarer

disagrees with the assessment, a third doctor
The period of employment shall be a period may be agreed jointly between the Employer
mutually agreed upon by the seafarer and the and the seafarer. The third doctor’s decision
employer but not to exceed 12 months. Any shall be final and binding on both parties.
extension of the contract shall be subject to
mutual consent of both parties. 4. Those illnesses not listed in Section 32 of
this Contract are disputably presumed as
Benefits for Injury or Illness work related.

The liabilities of the employer when the seafarer 5. Upon sign-off of the seafarer from the
suffers work-related injury or illness during the vessel for medical treatment, the
term of his contract are as follows: employer shall bear the full cost of
repatriation in the event the seafarer is
1. The employer shall continue to pay the declared (1) fit for repatriation; or (2) fit
seafarer his wages during the time he is on to work but the employer is unable to find
board the vessel; employment for the seafarer on board his
former vessel or another vessel of the
2. If the injury or illness requires medical and/or employer despite earnest efforts.
dental treatment in a foreign port, the
employer shall be liable for the full cost of 6. In case of permanent total or partial
such medical, serious dental, surgical and disability of the seafarer caused by either
hospital treatment as well as board and injury or illness the seafarer shall be
lodging until the seafarer is declared fit to compensated in accordance with the
work or to repatriated. schedule of benefits arising from an
illness or disease shall be governed by the
However, if after repatriation, the seafarer rates and the rules of compensation
still requires medical attention arising from applicable at the time the illness or
said injury or illness, he shall be so provided disease was contracted.
at cost to the employer until such time he is
declared fit or the degree of his disability has Requisites for compensability of Injury
been established by the company-designated or Illness
physician. To be compensable under Section 20(A) of
the 2010 POEA-SEC:

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(1) The injury must be work-related; and

(2) The work-related injury or illness must C. The employer shall pay the beneficiaries
have existed during the term of the of the seafarer the Philippine currency
seafarer’s employment contract (Labor equivalent to the amount of One
Law Reviewer, Chan,2019 p.336) Thousand US dollars (US$1,000) for
burial expenses at the exchange rate
Benefits for Death prevailing during the time of payment.
(Sec. 20, B.4, POEA- SEC).
i. In case of work-related death the
employer: shall pay his beneficiaries the V. LABOR RELATIONS
Philippines currency equivalent to the amount
of Fifty Thousand US dollars A. RIGHT TO SELF-ORGANIZATION
(US$50,000) and additional amount of
Seven Thousand US dollars (US$7,000)
to each child under the age of twenty-one The right to self-organization for
(21) but not exceeding four (4) children, at purposes of collective bargaining
the exchange rate prevailing during the time
of payment. The right of self-organization includes the
right to organize or affiliate with a labor union
ii. In case death is caused by warlike or determine which of two or more unions in
activity while sailing within a declared an establishment to join, and to engage in
war zone or war risk area concerted activities with co-workers for
purposes of collective bargaining
The compensation payable shall be doubled. The through representatives of their own
employer shall undertake appropriate war zone choosing, or for their mutual aid and
insurance coverage for this purpose. protection, i.e., the protection, promotion, or
enhancement of their rights and interests
These benefits shall be separate and distinct from (Mendoza vs. Officers of Manila Water
and will be in addition to whatever benefits which Employees Union, G.R. No. 201595, January
the seafarer is entitled to under Philippine laws 25, 2016).
from SSS, OWWA, ECC, PhilHealth and Pag-IBIG
Fund. Purpose of exercise of right to self-
organization
Liabilities of the Employer
1. Collective bargaining; and
The other liabilities of the employer when the 2. Mutual aid and protection (Art. 257, Labor
seafarer dies as a result of work-related injury or Code, as amended).
illness during the term of employment are as
follows: The right to self-organization includes
the right to:
A. The employer shall pay the deceased’s a. Form unions;
beneficiary all outstanding obligations due b. Take part in its formation;
the seafarer under this Contract. c. Join a union;
d. Collectively bargain;
B. The employer shall transport the remains e. Collectively negotiate; or
and personal effects of the seafarer to the f. Engage in concerted activities for mutual
Philippines at employer’s expense, except if aid and protection (Art. 253, Labor Code,
the death occurred in a port where local as amended).
government laws or regulations do not
permit the transport of such remains. In case Two (2) broad notions of freedom of
death occurs at sea, the disposition of the association:
remains shall be handled or dealt with in 1. First, liberty or freedom, i.e., the absence
accordance with the master’s best judgment. of legal restraint, whereby an employee
In all cases, the employer/master shall may act for himself without being
communicate with the manning agency to prevented by law; and
advise for disposition of seafarer’s remains.

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2. Second, power, whereby an employee may, 3. Employees of Front-line managers,

as he pleases, join or refrain from joining an commonly known as supervisory
association. employees

It is the employee who should decide for himself Supervisory employees are those, who in the
whether he should join or not an association; and interest of the employer, effectively
should he choose to join, he himself makes up recommend such managerial actions if the
his mind as to which association he would join; exercise of such authority is not merely
and even after he has joined, he still retains the routinary or clerical in nature but requires the
liberty and the power to leave and cancel his use of independent judgment (Art. 219 [m],
membership with said organization at any time Labor Code, as amended).
(Victoriano vs. Elizalde Rope Worker’s Union, G.R. No.
L-25246, September 12, 1974). 4. Alien employees
a. He should have a valid working
Right to self-organization present on their permit issued by the DOLE; and
first day of service b. He is a national of a country which
grants the same or similar rights to
Any employee, whether employed for a definite Filipino workers or which has ratified
period or not, shall, beginning on his first day of either ILO Convention No. 87 or 98,
service, be considered as an employee for as certified by the Philippine DFA
purposes of membership in any labor union. [Art. (Chan, Bar Reviewer on Labor Law,
292(c), Labor Code, as amended] 2019, p. 380).

1. Who may join, form, or assist labor 5. Working children

organizations or workers’ associations
Working children have the same freedom
Those eligible to join, form, or assist labor as adults to join the collective bargaining
organizations or workers’ associations: union of their own choosing in accordance
with law. Under PD. No. 603, it is clearly
In the private sector provided that neither management nor any
collective bargaining union shall threaten
General Rule: All employees or coerce working children to join, continue
or withdraw as members of such union.
1. All persons employed in commercial, (Ibid.)
industrial and agricultural enterprises; and in
religious, charitable, medical or educational 6. Homeworkers
institutions, whether operating for profit or
not; (Art. 253, Labor Code, as amended) Homeworkers have the right to form, join
or assist organizations of their own
Any employee, whether employed for a choosing in accordance with law. The
definite period or not shall, beginning on his registration of homeworkers' organizations
1st day of service be considered an employee or associations following the requirements
for purposes of union membership (Art. 292 prescribed by law will vest legal personality
[c], Labor Code, as amended). thereto. (Chan, Bar Reviewer on Labor Law,
2019, p. 381)
2. Employees of government-owned and/or
controlled corporations without original 7. Employees of cooperatives; and
charters established under the Corporation
Code;
Insofar as it involves employees who are
Employees in GOCC with original charter are
not members of the cooperative
employees in the public service to be
(Cooperative Rural Bank of Davao City vs.
governed by the civil service laws (Poquiz, Calleja, G.R No. 77951, September 26, 1988).
Labor Relations and Law on Dismissal, 2018, p.
196).
Note:

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Employees who are members of the cooperative the employees to engage in bargaining with
(member-owners) have no right to form labor their employers. However, workers who have
organizations (Id). no employers with whom they can collectively
bargain are allowed to organize labor
8. Employees of legitimate contractors not with organizations or workers' associations for
the principals but with the contractors. their mutual aid and protection. These
workers include ambulant, intermittent and
other workers, the self-employed, rural
The Court requires that the agreement between workers and those without any definite
the principal and the contractor or subcontractor employers (Art. 253, Labor Code, as amended).
to assure the contractual employee’s entitlement
to all labor and occupational safety and health Security Guards
standards, free exercise of the right to self-
organization, security of tenure, and social Security guards may now freely join a labor
welfare benefits (Mago vs. Sun Power organization of the rank and file or that of the
Manufacturing, Ltd., G.R. No. 210961, January 24, supervisory union, depending on their rank
(Manila Electric Company vs. Sec. of Labor, G. R.
2018).
No. 91902, May 20, 1991).

But this right cannot be exercised and invoked Workers in Export Processing Zones
against the principal but only against the
independent contractor which employed them. Export processing zones are still part of the
(Chan, Bar Reviewer on Labor Law, 2019, p. 381).
Philippine territory which is subject to
sovereignty and laws. Therefore, the
In the public sector
Constitution that guarantees workers’ right to
organize applies to them with undiminished
All rank-and-file employees of all branches, force (Azucena, The Labor Code With Comments
subdivisions, instrumentalities, and agencies of and Cases, Vol. II-A, 2021, p. 241).
government, including government-owned
and/or controlled corporations with original
Religious objectors
charters, can form, join or assist employees’
organizations of their own choosing (Chan, Bar
Reviewer on Labor Law, 2019, p. 379-380) Members of religious sects cannot be
compelled or coerced to join labor unions
even when said unions have closed shop
Non-Employees are not entitled to join or
agreements with the employers. Free exercise
form a labor organization for purposes of
of religious belief is superior to contract rights.
collective bargaining
In case of conflict, the latter must yield to the
former (Victoriano vs. Elizalde Rope Worker’s
Persons who are not employees of a company are Union, G. R. No. L-25246, September 12, 1974).
not entitled to the constitutional right to join or
form a labor organization for purposes of
Religious objectors can form and join
collective bargaining. The question of whether their own union
employer-employee relationship exists is a
primordial consideration before extending labor
Recognition of the tenets of a sect should not
benefits under the workmen's compensation,
infringe on the basic right of self-organization
social security, Medicare, termination pay and
granted by the Constitution to workers,
labor relations law (Singer Sewing Machine Co. vs.
Drilon, G.R. No. 91307, January 24, 1991). regardless of religious affiliation (Kapatiran sa
Meat and Canning Division vs. Hon. Pura Calleja,
G. R. No. L-82914, June 20, 1988).
Workers allowed to organize labor
organizations for mutual aid and
NOTE: Religious objectors also have the right
protection and not for collective bargaining
to vote in a certification election (Reyes vs.
purposes Trajano, G. R. No. 84433, June 2, 1992).

As a general rule, labor organizations are

established principally for the purpose of allowing

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Professors of state universities who are work of employees only; they do not
not exercising managerial or highly supervise other managers.
confidential functions are rank-and-file
employees or high-level employees. They The first two above are absolutely prohibited;
can form and organize a separate but the third, being supervisors, are allowed
bargaining unit for academic and non- to organize but only among themselves (Chan,
academic employees Bar Reviewer on Labor Law, 2019, p. 384-385).

Professors who are not exercising managerial or b. Restrictions as to Supervisory

highly confidential functions are rank-and-file Employees
employees. They may organize themselves into a
separate collective bargaining unit, if so minded, Supervisory employees shall not be eligible for
considering that mutuality of interest is wanting membership in the collective bargaining unit
between the academic and non-academic of the rank-and-file employees but may join,
personnel of the university (UP vs. Ferrer-Calleja, assist or form separate collective bargaining
G. R. No. 96189, July 14, 1992).
units and/or legitimate labor organizations of
their own. The rank and file union and the
2. Restrictions as to managerial
supervisors' union operating within the same
employees, supervisory employees, establishment may join the same federation
confidential employees, employee- or national union [Art. 219(m), Labor Code,
members of cooperatives, alien as amended]
employees, and government
employees Supervisory Employee refers to an employee
who, in the interest of the employer,
effectively recommends managerial actions
a. Restrictions as to Managerial
and the exercise of such authority is not
Employees to Join any Labor
merely routinary or clerical but requires the
Organization
use of independent judgment. [Art. 219(m),
Labor Code, as amended]
Managerial employees are not eligible to join,
assist or form any labor organization (Art. 255, Function Test: Nomenclature is not
Labor Code, as amended).
controlling
Managerial Employee refers to an employee who The mere fact that an employee is designated
is vested with powers or prerogatives to lay down “manager” does not ipso facto make him one.
and execute management policies or to hire, Designation should be reconciled with the
transfer, suspend, layoff, recall, discharge, actual job description of the employee (Paper
assign or discipline employees (Art. 219[m], Labor Industries Corp. of the Philippines. vs. Laguesma,
Code, as amended). G. R. No. 101738, April 12, 2000).

There are 3 types of managerial employees: c. Restrictions as to Confidential

Employees
1. Top Management – responsible for the
overall management of the organization. It Confidential employees are those who meet
establishes operating policies and guides to the following criteria:
the organization’s interactions with its 1. They assist or act in a confidential
environment. capacity;
2. Middle Management – Direct the activities 2. To persons or officers who formulate,
of other managers and sometimes also those determine, and effectuate management
of operating employees. Their principal policies specifically in the field of labor
responsibilities are to direct the activities that relations.
implement their organization’s policies and to
balance the demands of their superiors with The two (2) criteria are cumulative and both
the capacities of their subordinates. must be met if an employee is to be
3. First-Line Management (also called considered a “confidential employee” that
supervisory level) – Direct and supervise

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would deprive him of his right to form, join or employees are included in the disqualification
assist a labor organization. The confidential found in Art. 255 of the Labor Code, as
relationship must exist between the employee amended, as if such disqualification was
and his supervisor, and the supervisor must written in the provision (Chan, Bar Reviewer on
handle the prescribed responsibilities relating to Labor Law, 2019, 386-387).
labor relations. (San Miguel Corporation Supervisors
and Exempt Union vs. Laguesma, G.R. No. No. d. Restrictions as to Employee-Member
110399, August 15, 1997) of Cooperative

Although Article 245 of the Labor Code limits the

Employees who at the same time are
eligibility to join, form, and assist any labor
members of an electric cooperative are not
organization to managerial employees,
entitled to form or join unions for purposes of
jurisprudence has extended this prohibition to
collective bargaining agreement, for certainly,
confidential employees or those who by reason
an owner cannot bargain with himself or his
of their positions or nature of work are required
co-owners (Batangas-I Electric Cooperative Labor
to assist or act in a fiduciary manner to
Union vs. Romeo A. Young, G.R. No. 62386,
managerial employees and hence, are likewise November 9, 1988).
privy to sensitive and highly confidential records
(Metrolab Industries vs. Confesor, G.R. No. 108855,
February 28, 1996). Members of cooperatives are not eligible even
though they do not participate in the actual
management of the cooperative. Irrespective
Confidential information: Must relate to
of their degree of participation, they are still
labor relations and not from a business
co-owners (Benguet Electric Cooperative vs.
standpoint
Ferrer-Calleja, G.R. No. 79025, December 29,
1989).
An employee must assist or act in a confidential
capacity and obtain confidential information
Note: Exception; Employees who withdrew
relating to labor relations policies. Exposure to
their membership from the cooperative are
internal business operations of the company is
entitled to form or join a labor union for the
not per se a ground for the exclusion in the
negotiations of a Collective Bargaining
bargaining unit (Tunay na Pagkakaisa ng
Agreement (CENECO vs. DOLE, G.R. No. 94045,
Manggagawa sa Asia Brewery vs. Asia Brewery, G.R.
September 13, 1991).
No. 162025, August 3, 2010).

Doctrine of necessary implication NOTE: Even if employee-members of a

cooperative cannot form a union, they may,
however, form an association for their mutual
The reason for ineligibility of managerial
aid and protection as employees. (Azucena,
employees to form, assist or join a labor union Labor Code 2, 2016, p. 253)
equally applies to confidential employees. While
the Labor Code singles out managerial
e. Restrictions as to alien employees
employees as ineligible to join, under the
doctrine of necessary implication, confidential
employees are similarly disqualified (National i. Aliens without valid working permits; or
Association of Trade Unions - Republic Planters Bank ii. Aliens with valid working permits but
Supervisors Chapter vs. Hon. Torres, G. R. No. 93468, are nationals of a country which do not
December 29, 1994).
allow Filipinos to exercise the right of
self-organization and to join or assist
In the collective bargaining process, managerial
employees are supposed to be on the side of the labor organizations (Art. 248, Labor Code,
employer to act as its representatives and to see as amended).
to it that its interests are well protected. The
employer is not assured of such protection if
managerial employees themselves are union
members. Collective bargaining in such a
situation can become one-sided. It is the same
reason why the positions of confidential

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f. Restrictions as to government Section 4 of E.O. No. 180 excludes members

employees of AFP, police officers, policemen, firemen,
and jail guards from unionizing for reasons of
Government employees have the right to security and safety.
self-organization but are prohibited to
strike 3. Determination of appropriate
bargaining unit (ABU), effect of
The highest law of the land guarantees to inclusion of employees outside of the
government employees the right to organize and ABU
to negotiate, but not the right to strike (Azucena,
Labor Code 2, p. 259). The right to self- “Bargaining Unit” refers to a group of
organization of government employees pertains employees sharing mutual interests within a
to all branches, subdivision, instrumentalities and given employer unit, comprised of all or less
agencies of the Government, including than all of the entire body of employees in the
government-owned or controlled corporations employer unit or any specific occupational or
(GOCCs) with original charters (E. O. No. 180). geographical grouping within such employer
unit. (Sec. 1(e), Rule I, D.O. No. 40-03 as
Government employees’ right to organize amended)
is for furtherance and protection of their
interests It may also refer to the group or cluster of
jobs or positions within the employer’s
The right of government employees to “form, join establishment that supports the labor
or assist employees’ organizations of their own organization which is applying for registration.
choosing” under E. O. No. 180 is not regarded as (Chan, Bar Reviewer on Labor Law, 2019, p. 403)
existing or available “for purposes of collective
bargaining,” but simply “for the furtherance and It is a legal collectivity for collective
protection of their interests” (Arizala vs. CA, G. R. bargaining purposes whose members have
No. L-43633-34, September 14, 1990). substantially mutual bargaining interests in
terms and conditions of employment as will
Matters that require appropriation of funds assure to all employees their collective
and exercise of management prerogatives bargaining rights. For it to be appropriate,
are not negotiable a bargaining unit must effect a grouping
of employees who have substantial,
Declared to be “not negotiable” are matters “that mutual interests in wages, hours,
require appropriation of funds” and “those that working conditions and other subjects
involve the exercise of management of collective bargaining (Id., p. 403-404,
prerogatives.” Considered negotiable are such citing Dunlop Slazenger Phils. vs. Secretary of
matters as schedule of vacation, leaves, etc. Labor and Employment, G.R. No. 131248,
(Azucena, Labor Code 2, p. 261). December 11, 1998).

NOTE:
Only terms and conditions not fixed by law may
The SC has categorically ruled that the
be the subject of negotiation by the duly
existence of a prior collective bargaining
recognized employees’ organization of
history is neither decisive nor conclusive in the
government employees and the appropriate
determination of what constitutes an
government authorities. Terms and conditions of
appropriate bargaining unit. However,
employment that are fixed by law are excluded
employees in two corporations cannot be
from negotiation (E. O. No. 180).
treated as a single bargaining unit even if the
businesses of the two corporations are
NOTE: Employees of government corporations related. (Sta. Lucia East Commercial Corporation
established under the Corporation Code shall vs. Hon. Secretary of Labor, G.R. No. 162355,
have the right to organize and to bargain August 14, 2009)
collectively (Art. 254, Labor Code, as amended). The basic test of a bargaining unit's
Members of AFP, police officers, policemen, acceptability is whether it will best
firemen, and jail guards excluded from assure to all employees the exercise of
unionizing; Exception their collective bargaining rights

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There is no hard and fast rule in determining an employment status, same duties and
appropriate bargaining unit. The basic test of a responsibilities, and substantially similar
bargaining unit's acceptability is whether it will compensation and working conditions. (Ibid.,
best assure to all employees the exercise of their citing San Miguel Corporation Employees Union-
collective bargaining rights, industrial experience PTGWO vs. Confesor, G.R. No. 111262, September
indicates that the most efficacious bargaining 19, 1996)
unit is one which is comprised of constituents
enjoying a community of interest and economic Factors in Determining Community or
or occupational unity. This community of interest Mutuality of Interest
is reflected in groups having substantial similarity
of work and duties or similarity of compensation 1. Similarity in the scale and manner of
and working conditions, among others (Id., p. determining earnings
404, citing Democratic Labor Union vs. Cebu 2. Similarity in employment benefits, hours
Stevedoring Co., G.R. No. L-10321, February 28, of work and other terms and conditions of
1958). employment.
3. Similarity in the kinds of work performed.
Determining agency of appropriate 4. Similarity in the qualifications, skills and
bargaining unit training of the employees
5. Frequency of contact or interchange
Bureau of Labor Relations and Labor Relations among the employees
Divisions in the Regional Offices of the DOLE 6. Geographic proximity
(BLR) shall have 15 calendar days to act on labor 7. Continuity or integration of production
cases before it, subject to extension by process
agreement of the parties. (Art. 232, Labor Code, as 8. Common supervision and determination
amended) of labor-relations policy
9. History of collective bargaining
The Bureau of Labor Relations enjoys a wide 10. Desires of the affected employees
discretion in determining the procedure 11. Extent of union organization (Azucena, The
necessary to ensure the fair and free choice of Labor Code with Comments and Cases Volume
bargaining representation by employees. Its I, 7th Edition, p. 461)
action “in deciding upon an appropriate unit for
collective bargaining purposes is discretionary Globe doctrine
and its judgment in this respect is entitled to
almost complete finality, unless its action is This principle is based on the will of the
arbitrary or capricious and absent and grave employees. Named after an eponymous US
abuse of discretion as to justify the Court’s ruling, according to this doctrine, in defining
intervention. (Filoil Refinery Corp. vs. Filoil the appropriate bargaining unit, that in a case
Supervisory and Confidential Employees, G.R. No. L- where the company’s production workers can
26736, August 18, 1972) be considered either as a single bargaining
unit appropriate for purposes of collective
Tests which may be used in determining bargaining or as three (3) separate and
the appropriate collective bargaining unit: distinct bargaining units, the determining
factor is the desire of the workers themselves.
1. Community or mutuality of interest doctrine; Consequently, a certification election should
2. Globe doctrine or will of the members; be held separately to choose which
3. Collective bargaining history doctrine; and representative union will be chosen by
4. Employment status doctrine. workers (Id., p. 405-406, citing Mechanical
Department Labor Union sa Philippine National
Community or mutuality of interest Railways vs. Court of Industrial Relations, G.R. No.
L-28223, August 30, 1968).
doctrine
Collective bargaining history doctrine
Under this doctrine, the employees sought to be
represented by the collective bargaining
agreement must have community or mutuality of This principle puts a premium to the prior
interest in terms of employment and working collective bargaining history and affinity of the
conditions as evinced by the type of work they employees in determining the appropriate
perform. It is characterized by similarity of bargaining unit. However, the existence of a

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prior collective bargaining history has been held B.LEGITIMATE LABOR ORGANIZATIONS
as neither decisive nor conclusive in the
determination of what constitutes an appropriate Labor organization means any union or
bargaining unit (Id., p. 406). association of employees which exists in
whole or in part for the purpose of collective
Employment status doctrine bargaining or of dealing with employers
concerning terms and conditions of
The determination of the appropriate bargaining employment [Art. 219(g), Labor Code, as
unit based on the employment status of the amended]
employees is considered an acceptable mode.
For instance, casual employees and those "Legitimate labor organization" means
employed on a day-to-day basis do not have the any labor organization duly registered with
mutuality or community of interest with regular the Department of Labor and Employment,
and permanent employees. Hence, their inclusion and includes any branch or local thereof. [Art.
in the bargaining unit composed of the latter is 219(h), Labor Code, as amended]
not justified. (Ibid.)
Two modes of creating a labor
Effect of Inclusions as Members of organization
Employees Outside the Bargaining Unit
The Labor Code provides two modes of
The inclusion as union members of employees creating or establishing a labor organization,
outside the bargaining unit shall not be ground through:
for the cancellation of the registration of the
union. Said employees are automatically deemed A. Independent registration, and
removed from the said union (Art. 256, Labor B. Chartering of local/chartered local (Chan,
Code, as amended). Bar Reviewer on Labor Law, 2019, p. 397-398)

EXCEPTION: Unless such mingling was brought 1. Registration with the DOLE
about by misrepresentation, false statement or
fraud under Article 247 (Grounds for cancellation of Requirements of Registration
Union Registration) of the Labor Code (SMCC-Super
vs. Charter Chemical and Coating Corporation, G.R. A federation, national union or industry or
No. 169717, March 16, 2011).
trade union center or an independent union
shall acquire legal personality and shall be
4. Non-interference with workers’ rights to entitled to the rights and privileges granted by
self-organization law to legitimate labor organizations upon
issuance of the certificate of registration, after
Non-Abridgement of Right to Self- filing with the Regional Office where it
Organization principally operates the following
requirements:
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere a. Name of applicant labor union, principal
with employees and workers in their exercise of address, names of officers and respective
the right to self-organization. (Art. 257, Labor addresses, approx. number of employees
Code, as amended) in the bargaining unit, with a statement
The 1987 Constitution provides that “the right of that it is not reported as a chartered local
the people, including those employed in the of a federation or union;
public and private sectors, to form unions, b. Minutes of the organizational meeting and
associations, or societies for purposes not list of participating employees;
contrary to law shall not be abridged.” Clearly, c. name of all members comprising at least
the said right guaranteed by the Constitution is 20% of the employees in the bargaining
subject to the condition that its exercise should unit;
be for purposes “not contrary to law” (United d. annual financial reports, if applicant has
Pepsi-Cola Supervisory Union vs. Laguesma, G. R. been in existence for one or more years,
No. 122226, March 25, 1998). unless it has not collected any amount

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from members, in which case a statement to such fact shall be reflected in the minutes
this effect shall be included; of the organizational meeting(s)
e. Applicant's constitution and by-laws, minutes (DOLE Dept. Order No. 40-03-A-I)
of adoption and ratification, list of members
who participated Chartering and Creation of a Local
Chapter
For federations and national unions:
a. Statement indicating the name of applicant A duly-registered federation or national union
labor union, its address, names of officers may directly create a local/chapter by issuing
and respective addresses;
a charter certificate indicating the
b. minutes of organizational meeting and list of
employees who participated establishment of the local/chapter. The
c. annual financial reports if the applicant union local/chapter shall acquire legal personality
has been in existence for one or more years, only for purposes of filing a petition for
unless it has not collected any amount from certification election from the date it was
the members, in which case a statement to issued a charter certificate. The local/chapter
this effect shall be included in the shall be entitled to all other rights and
application;
privileges of a legitimate labor organization
d. applicant union’s constitution and by-laws,
minutes of its adoption or ratification, and only upon the submission of the following
the list of the members who participated in documents in addition to its charter
it. The list of ratifying members shal be certificate:
dispensed with where the constitution and a. The names of the chapter's officers, their
by-laws was ratified or adopted during the addresses, and the principal office of the
organizational meeting; chapter; and
e. resolution of affiliation of at least ten (10) b. The chapter's constitution and by-laws:
legitimate labor organizations, whether Provided, that where the chapter's
independent unions or chartered locals, each constitution and by-laws are the same as
of which must be a duly certified or that of the federation or the national
recognized bargaining agent in the union, this fact shall be indicated
establishment where it seeks to operate; accordingly.
f. name and addresses of the companies where
the affiliates operate and the list of all the The additional supporting requirements shall
members in each company involved be certified under oath by the secretary or
treasurer of the chapter and attested by its
For workers' associations: president
a. the name of the applicant association, its
principal address, the name of its officers and (DOLE Dept. Order No. 40-03-A-I).
their respective addresses;
b. the minutes of the organizational meeting(s) It is clear that the authority to directly create
and the list of members who participated a local chapter/chartered local is vested only
therein; with the federation or national union, to the
c. the financial reports of the applicant exclusion of all others. It is only a federation
association if it has been in existence for one or a national union which is empowered to
or more years, unless it has not collected any directly issue a charter certificate indicating
amount from the members, in which case a the establishment of the local
statement to this effect shall be included in chapter/chartered local (Chan, Bar Reviewer on
the application; Labor Law, 2019, p. 398, citing Sec. 2(E), Rule III,
d. the applicant’s constitution and by-laws to D.O. No. 40-03 as amended).
which must be attached the names of Trade union centers not allowed
ratifying members, the minutes of adoption
or ratification of the constitution and bylaws Though Article 240 of the Labor Code now
and the date when ratification was made, includes “trade union center" as among the
unless ratification was done in the organizations which may register as a
organizational meeting(s), in which case legitimate labor organization, Article 241, the
provision enunciating the procedure for

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chartering of a local chapter/chartered local, in Article 247 hereof (Art. 245, Labor Code, as
does not include “trade union center" as among amended).
the labor organizations that is empowered,
besides the federation or national union, to Effect of a Petition for Cancellation of
create such local chapter/chartered local through Registration
the process of chartering.
A petition for cancellation of union registration
The SC in one case, applying the Latin maxim shall not suspend the proceedings for
expressio unius est exclusio alterius, held that certification election nor shall it prevent the
trade union centers are not allowed to charter filing of a petition for certification election.
directly a local chapter/chartered local because
the pertinent statutes and applicable In case of cancellation, nothing herein shall
implementing rules do not grant such authority restrict the right of the union to seek just and
thereto. The power granted to labor equitable remedies in the appropriate courts
organizations to directly create a local (Art. 246, Labor Code, as amended).
chapter/chartered local through chartering is
given only to a federation or national union. Cancellation, where and who may file
(Ibid., citing SMCEU-PTGWO vs. SMPPEU–PDMP, G.R.
No. 171153, September 12, 2007)
Subject to the requirements of notice and due
process, the registration of any legitimate
Action on Application
independent labor union, local/chapter and
workers’ association may be cancelled by the
The Regional Office or the Bureau, as
Regional Director upon the filing of a petition
the case may be, shall act on all applications for for cancellation of union registration, or
registration or notice of change of name, application by the organization itself for
affiliation, merger and consolidation within one voluntary dissolution.
(1) day from receipt thereof, either by:
(a) approving the application and issuing the The petition for cancellation or application for
certificate of registration/acknowledging the voluntary dissolution shall be filed in the
Regional Office which issued its certificate of
notice/report; or
registration or creation.
(b) denying the application/notice for failure of
the applicant to comply with the In the case of federations, national or industry
requirements for registration/notice. unions and trade union centers, the Bureau
(DOLE DO No. 40-03-A-I) Director may cancel the registration upon the
filing of a petition for cancellation or
Denial of Registration and Appeal application for voluntary dissolution in the
Bureau of Labor Relations (Sec. 1, Rule XIV,
The denial may be appealed to the Bureau if D.O. No. 40-03 as amended).
denial is made by the Regional Office or to the
Any party-in-interest may commence a
Secretary if denial is made by the Bureau, within
petition for cancellation of registration, except
ten (10) days from receipt of such notice, on in actions involving violations of Article 250
the ground of grave abuse of discretion or (renumbered), which can only be commenced
violation of these Rules (DO No. 40-03-A-I) by members of the labor organization
concerned (Sec. 2, Rule XIV, D.O. No. 40-03 as
2. Cancellation of registration amended).
Grounds for cancellation
Cancellation of Registration
Any of the following may constitute as
The certificate of registration of any legitimate ground/s for cancellation of registration of
labor organization, whether national or local, may labor organizations:
be canceled by the Bureau of Labor Relations, a. misrepresentation, false statement or
after due hearing, only on the grounds specified fraud in connection with the adoption or
ratification of the constitution and by-laws

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or amendments thereto, the minutes of cancellation shall continue to maintain their

ratification, the list of members who took existing affiliates regardless of the nature of
part in the ratification; the industry and the location of the affiliates.
b. misrepresentation, false statements or fraud (Art. 249, Labor Code, as amended)
in connection with the election of officers,
minutes of the election of officers, and the 3. Affiliation/disaffiliation from national
list of voters; or union or federation
c. voluntary dissolution by the members. (Art.
247, Labor Code, as amended; Sec. 3, Rule XIV, The right of the affiliate union to disaffiliate
D.O. No. 40-03 as amended) from its mother federation or national union is
a constitutionally-guaranteed right which may
For misrepresentation to be a ground for the be invoked by the former at any time (Heirs of
cancellation of the certificate of registration, it Cruz vs. CIR, G.R. No. L-23331-32, December 27,
must be done maliciously and deliberately. 1969).
Further, the mistakes appearing in the
application or attachments must be grave or refer Reasons for Affiliation
to significant matters. The details as to how the
alleged fraud was committed must also be Some common reasons for affiliation:
indubitably shown. (Samahan ng Manggagawa sa 1. Secure support or assistance especially
Hanjin Shipyard vs. Bureau of Labor Relations, G.R.
during the formative stage of unionization
No. 211145, October 14, 2015)
2. Utilize expertise in preparing and
pursuing bargaining proposals
Prohibited grounds for cancellation 3. To marshal mind and manpower in the
course of a group action such as a strike
The inclusion as union members of employees (Azucena, Labor Code 2, 2016, p. 201)
who are outside the bargaining unit shall not be
a ground to cancel the union registration. The NOTE:
ineligible employees are automatically deemed The sole essence of affiliation is to increase,
removed from the list of membership of the by collective action, the common bargaining
union. power of local unions for the effective
enhancement and protection of their interests
The affiliation of the rank-and-file and (Id. at p. 203).
supervisory unions operating within the same
establishment to the same federation or national Nature of relationship
union shall not be a ground to cancel the
registration of either union. (Sec. 6, Rule XIV, D.O. a. Between Member and Labor Union
No. 40-03 as amended)
The union may be considered the agent of its
Voluntary Cancellation of Registration members for the purpose of securing for them
fair and just wages and good working
The registration of a legitimate labor organization conditions and is subject to the obligation of
may be canceled by the organization itself: giving the members as its principals all
Provided, that at least two-thirds of its general information relevant to union and matters
membership votes, in a meeting duly called for entrusted to it (Heirs of Teodolo M. Cruz vs. Court
that purpose to dissolve the organization: of Industrial Relations, G.R. No. L-23331-32,
Provided, further, That an application to cancel December 27, 1969).
registration is thereafter submitted by the board The relationship of the members and the labor
of the organization, attested to by the president union is governed by their mutual agreement,
thereof. (Art. 248, Labor Code, as amended) the terms and conditions of which are set
forth in the union constitution and by-laws
Equity of the Incumbent and binding on the members, as well as the
organization itself, provided that it is not
All existing federations and national unions which against the law, morals, good customs, public
meet the qualifications of a legitimate labor order and public policy (Manggagawa sa Ang
organization and none of the grounds for Tibay vs. Ang Tibay, G.R. No. L-8259, December
23, 1957).

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b. Labor Union – Federation 2. The chapter shall be entitled to all other

rights and privileges of a LLO only upon
Relationship between a union and the federation the submission of the following
or national union is generally understood to be documents in addition to its charter
that of agency, where the local is the principal certificate:
and the federation is the agent. a. Names of the chapter’s officers, their
addresses, and the principal office of
The mother union (or Federation), acting for and the chapter;
in behalf of its affiliate, has the status of an agent b. Chapter’s constitution and by-laws;
while the local union remains as a principal – the c. Where the chapter’s constitution and
basic unit of the association free to serve the by- laws are the same as that of the
common interest of all its members, subject only federation or the national union, this
to restraints imposed by the constitution and by- fact shall be indicated accordingly
laws of the association (Phil. Skylanders, et. al. vs.
NLRC, et. al. G.R. No. 127374, January 21, 2002). 3. The genuineness and due execution of
the supporting requirements shall be
Local union does not lose its legal Certified under oath by the Secretary or
personality when it affiliates with a Treasurer of the local/chapter and
federation Attested to by its President (Ibid.).

A local union does not owe its existence to the Reportorial requirements in affiliation
federation with which it is affiliated. It is a
separate and distinct voluntary association owing The report of affiliation of independently
its creation to the will of its members. Mere registered labor unions with a federation or
affiliation does not divest the local union of its national union shall be accompanied by the
own personality, neither does it give the mother following documents:
federation the license to act independently of the 1. Resolution of the labor union's board of
local union (Insular Hotel Employees Union-NFL vs. directors approving the affiliation;
Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, 2. Minutes of the general membership
September 22, 2010). meeting approving the affiliation;
3. The total number of members comprising
Affiliate the labor union and the names of
members who approved the affiliation;
An affiliate refers to an independently registered 4. The certificate of affiliation issued by the
union that enters into an agreement of affiliation federation in favor of the independently
with a federation or national union; or a registered labor union; and
chartered local which applies for and is granted 5. Written notice to the employer concerned
an independent registration but does not if the affiliating union is the incumbent
disaffiliate from its mother federation or national bargaining (Sec. 7, Rule III, D.O. No. 40-03,
union, reported to the DOLE Regional Office and as amended).
the Bureau of Labor Relations in accordance with
Rule III, Sections 6 and 7 of these Rules. (Sec. Independently registered union is
1(a), Rule I, D.O. No. 40-03 as amended) required to report affiliation with the
Regional Office
How local chapter is created
A duly registered federation or national union A union affiliating with a federation or national
may directly create a local/chapter by issuing a union is required to report such affiliation to
charter certificate indicating the establishment of the Regional Office that issued its certificate
a local/chapter. (Sec. 2(E), Rule III, D.O. No. 40-03 of registration (Sec. 6, Rule III, D.O. No. 40-03,
as amended) as amended).
Consequences:

1. The chapter shall acquire legal personality

only for purposes of filing a PCE from the
date it was issued a charter certificate

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Disaffiliation of local union from the that there is no enforceable provision in the
federation federation’s constitution preventing
disaffiliation of a local union (Tropical Hut
G.R.: Employees Union vs. Tropical Hut, G.R. Nos. L-
A labor union may disaffiliate from the mother 43495-99, January 20, 1990).
union to form an independent union only during
the 60-day freedom period immediately A prohibition to disaffiliate in the Federation’s
preceding the expiration of the CBA. (National constitution and by-laws is valid. Therefore,
Union of Bank Employees vs. Philnabank Employees absent any specific provisions in the
Association, G.R. No. 174287, August 12, 2013) federation's constitution prohibiting
disaffiliation or the declaration of autonomy of
EXCEPTION: a local union, a local may dissociate with its
Even before the onset of the freedom period, parent union. (Malayang Samahan ng mga
disaffiliation may still be carried out, but such Manggagawa sa M. Greenfield vs. Hon. Ramos,
G.R. No. 113907, February 28, 2000).
disaffiliation must be effected by the majority of
the union members in the bargaining unit.
Effect of Disaffiliation
Disaffiliation must be decided by the entire
1. Union Dues – the obligation of an
membership through secret balloting in
employee to pay union dues is
accordance with Article 250(d).
coterminous with his affiliation or
membership
This happens when there is a substantial shift in 2. Existing CBA – the CBA continues to
allegiance on the part of the majority of the bind the members of the new or
members of the union. In such a case, however, disaffiliated and independent union up to
the CBA continues to bind the members of the the CBA’s expiration date based on the
new or disaffiliated and independent union to ‘substitutionary doctrine.
determine the union which shall administer the
CBA up to the CBA’s expiration date. (ANGLO-KMU
The pendency of an election protest
vs. Samahan ng Manggagawang Nagkakaisasa Manila
Bay Spinning Mills at J.P. Coats, G.R. No.118562, July does not bar the valid disaffiliation of
5, 1996) the local union which was supported by
the majority of its members.
Disaffiliation must be by majority decision
The right of a local union to disaffiliate with
Disaffiliation has to be decided by the entire the federation in the absence of any
membership through secret balloting in stipulation in the Constitution and by-laws of
accordance with Art. 250(d) of the Labor Code, the federation prohibiting disaffiliation is well
as amended. settled. Local unions remain as the basic unit
of association, free to serve their own interest
subject to the restraints imposed by the
An individual member or any number of members
Constitution and by-laws of national
may disaffiliate from the union during the 60-day
federation and are free to renounce such
“freedom period.” But disaffiliating the union
affiliation upon the terms and conditions laid
itself from the mother union must be supported
down in the agreement which brought such
by the majority of the members. (Villar vs. Inciong,
affiliation to existence. In the case at bar, no
G.R. No. L-50283-84, April 20, 1983)
imitation to disaffiliation prohibition existed under the Constitution and
by-laws of the federation. Hence, the union
may freely disaffiliate with the federation
To disaffiliate is a right, but to observe the terms (Philippine Skylanders vs. NLRC, G.R. No. 127374,
of affiliation is an obligation (Azucena, Labor Code January 31, 2002).
with Comments and Cases, Vol. II-A, 2021, p. 167).
Substitutionary Doctrine
Disaffiliation should be in accordance with the
rules and procedures stated in the Constitution
This doctrine holds that the employees cannot
and by-laws of the federation. A local union may
revoke the validly executed collective
disaffiliate with its mother federation provided
bargaining contract with their employer by the

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simple expedient of changing their bargaining sheet and the profit and loss statement,
agent. The new agent must respect the contract. within thirty (30) calendar days from the
The employees, thru their new bargaining agent, date of receipt of the request, after the
cannot renege on the collective bargaining union has been duly recognized by the
contract, except to negotiate with the employer or certified as the sole and
management for the shortening thereof (Elisco- exclusive bargaining representative of the
Elirol Labor Union vs. Noriel et al., G.R. No. L-41955, employees in the bargaining unit, or
December 29, 1977). within sixty (60) calendar days before the
expiration of the existing collective
Change of Bargaining Representative bargaining agreement, or during the
during the life of a CBA collective bargaining negotiation;
d. To own property, real or personal, for the
This refers to the substitution of the bargaining use and benefit of the labor organization
agent by a newly certified agent. As a new and its members;
bargaining agent, it is duty-bound to respect the e. To sue and be sued in its registered
existing CBA but it can renegotiate for new terms name; and
and conditions therein. f. To undertake all other activities designed
to benefit the organization and its
The “substitutionary” doctrine only provided that members, including cooperative, housing,
the employees cannot revoke the validly welfare and other projects not contrary to
executed collective bargaining contract with their law.
employer by simple expedient of changing their
bargaining agent. And it is in the light of this that Notwithstanding any provision of a general or
the phrase “said new agent would have to special law to the contrary, the income and
respect said contract” must be understood, it the properties of legitimate labor
only means that the employees, thru their new organizations, including grants, endowments,
bargaining agent, cannot renege on their gifts, donations and contributions they may
collective bargaining contract, except of course receive from fraternal and similar
to negotiate with management for the shortening organizations, local or foreign, which are
thereof (Benguet Consolidated vs. BCI Employees and actually, directly and exclusively used for their
Workers Union–PAFLU, G.R. No. L-24711, April 30, lawful purposes, shall be free from taxes,
1968). duties and other assessments. The
exemptions provided herein may be
In case of change of bargaining agent under the withdrawn only by a special law expressly
substitutionary doctrine, the new bargaining repealing this provision. (Art. 251, Labor
agent is not bound by the personal undertakings Code, as amended)
of the deposed union like the “no strike, no
lockout” clause in the CBA which is the personal Nature of the legal personality of a
undertaking of the bargaining unit which legitimate labor organization and its
negotiated it (ibid.). effects in certain circumstances

4. Rights of Legitimate Labor The labor union or workers’ association shall

Organizations be deemed registered and vested with legal
personality on the date of issuance of its
A legitimate labor organization shall have the certificate of registration or certificate of
right: creation of chartered local (Sec. 8, Rule IV, D.O.
a. To act as the representative of its members No. 40-03 as amended).
for the purpose of collective bargaining;
b. To be certified as the exclusive NOTE:
representative of all the employees in an Such legal personality may be questioned only
appropriate bargaining unit for purposes of through an independent petition for
collective bargaining; cancellation of union registration in
c. To be furnished by the employer, upon accordance with Rule XIV of these Rules, and
written request, with its annual audited not by way of collateral attack in petition for
financial statements, including the balance

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certification election proceedings under Rule 5. Rights and conditions of membership

VIII. (Ibid.) in legitimate labor organizations

1. Change in name – It shall not affect its The following are the rights and conditions of
legal personality. All the rights and membership in a labor organization:
obligations of a labor organization under its
old name shall continue to be exercised by a. No arbitrary or excessive initiation fees
the labor organization under its new name. shall be required of the members of a
(Sec. 9, Rule IV, D.O. No. 40-03 as amended) legitimate labor organization nor shall
2. Merger of labor organizations – The legal arbitrary, excessive or oppressive fine and
existence of the absorbed labor forfeiture be imposed;
organization(s) ceases, while the legal
existence of the absorbing labor organization b. The members shall be entitled to full and
subsists. All the rights, interests and detailed reports from their officers and
obligations of the absorbed labor representatives of all financial
organizations are transferred to the transactions as provided for in the
absorbing organization. (Sec. 10, Rule IV, D.O. constitution and by-laws of the
No. 40-03 as amended) organization;
3. Consolidation of labor organizations –
The legal existence of the consolidating labor c. The members shall directly elect their
organizations shall cease and a new labor officers in the local union, as well as their
organization is created. The newly created national officers in the national union or
labor organization shall acquire all the rights, federation to which they or their local
interests and obligations of the consolidating union is affiliated, by secret ballot at
labor organizations. (Ibid.) intervals of five (5) years. No qualification
requirement for candidacy to any position
Reportorial requirements of labor unions shall be imposed other than membership
and workers’ associations in good standing in subject labor
organization. The secretary or any other
It shall be the duty of every legitimate labor responsible union officer shall furnish the
unions and workers’ association to submit to the Secretary of Labor and Employment with
Regional Office or the Bureau which issued its a list of the newly-elected officers,
certificate of registration or certificate of creation together with the appointive officers or
of local/chapter, as the case may be, two (2) agents who are entrusted with the
copies of each of the following documents: handling of funds within thirty (30)
calendar days after the election of officers
a. its constitution and by-laws or amendments or from the occurrence of any change in
thereto, the minutes of adoption or the list of officers of the labor
ratification and the list of members who took organization;
part therein, within thirty (30) days from its
adoption or ratification; d. The members shall determine by secret
b. its list of elected and appointed officers and ballot, after due deliberation, any
agents entrusted with the handling of union question of major policy affecting the
funds, the minutes of election of officers, and entire membership of the organization,
the list of voters, within thirty (30) days from unless the nature of the organization or
the date of election or appointment; force majeure renders such secret ballot
c. its annual financial report within thirty (30) impractical, in which case, the board of
days after the close of every fiscal year; and directors of the organization may make
d. its list of members at least once a year or the decision in behalf of the general
whenever required by the Bureau. membership;

The fiscal year of a labor organization shall e. No labor organization shall knowingly
coincide with the calendar year unless a different admit as members or continue in
period is provided in its constitution and by-laws. membership any individual who belongs
(Sec. 1, Rule V, D.O. No. 40-03 as amended) to a subversive organization or who is

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engaged directly or indirectly in any k. The officers of any labor organization

subversive activity; shall not be paid any compensation other
than the salaries and expenses due to
f. No person who has been convicted of a crime their positions as specifically provided for
involving moral turpitude shall be eligible for in its constitution and by-laws, or in a
election as a union officer or for appointment written resolution duly authorized by a
to any position in the union; majority of all the members at a general
membership meeting duly called for the
g. No officer, agent or member of a labor purpose. The minutes of the meeting and
organization shall collect any fees, dues, or the list of participants and ballots cast
other contributions in its behalf or make any shall be subject to inspection by the
disbursement of its money or funds unless he Secretary of Labor or his duly authorized
is duly authorized pursuant to its constitution representatives. Any irregularities in the
and by-laws; approval of the resolutions shall be a
ground for impeachment or expulsion
h. Every payment of fees, dues or other from the organization;
contributions by a member shall be
evidenced by a receipt signed by the officer l. The treasurer of any labor organization
or agent making the collection and entered and every officer thereof who is
into the record of the organization to be kept responsible for the account of such
and maintained for the purpose; organization or for the collection,
i. The funds of the organization shall not be management, disbursement, custody or
applied for any purpose or object other than control of the funds, moneys and other
those expressly provided by its constitution properties of the organization, shall
and by-laws or those expressly authorized by render to the organization and to its
written resolution adopted by the majority of members a true and correct account of all
the members at a general meeting duly moneys received and paid by him since he
called for the purpose; assumed office or since the last day on
which he rendered such account, and of
j. Every income or revenue of the organization all bonds, securities and other properties
shall be evidenced by a record showing its of the organization entrusted to his
source, and every expenditure of its funds custody or under his control. The
shall be evidenced by a receipt from the rendering of such account shall be made:
person to whom the payment is made, which
shall state the date, place and purpose of 1. At least once a year within thirty (30)
such payment. Such record or receipt shall days after the close of its fiscal year;
form part of the financial records of the 2. At such other times as may be
organization. required by a resolution of the
majority of the members of the
Any action involving the funds of the organization organization; and
shall prescribe after three (3) years from the date 3. Upon vacating his office. The account
of submission of the annual financial report to the shall be duly audited and verified by
Department of Labor and Employment or from affidavit and a copy thereof shall be
the date the same should have been submitted furnished the Secretary of Labor.
as required by law, whichever comes earlier:
Provided, That this provision shall apply only to a m. The books of accounts and other records
legitimate labor organization which has of the financial activities of any labor
submitted the financial report requirements organization shall be open to inspection
under this Code: Provided, further, That failure by any officer or member thereof during
of any labor organization to comply with the office hours;
periodic financial reports required by law and
such rules and regulations promulgated n. No special assessment or other
thereunder six (6) months after the effectivity of extraordinary fees may be levied upon the
this Act shall automatically result in the members of a labor organization unless
cancellation of union registration of such labor authorized by a written resolution of a
organization; majority of all the members in a general

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membership meeting duly called for the Political rights

purpose. The secretary of the organization
shall record the minutes of the meeting It includes:
including the list of all members present, the
votes cast, the purpose of the special 1. Right to vote and be voted for as an
assessment or fees and the recipient of such officer of the union, subject to the
assessment or fees. The record shall be qualifications and disqualifications
attested to by the president. mentioned in Article 250 of the Labor
Code; and
o. Other than for mandatory activities under the 2. Right to be appointed to appointive
Code, no special assessments, attorney’s positions in the organization, subject to
fees, negotiation fees or any other the qualifications and disqualifications
extraordinary fees may be checked off from mentioned in Article 250 of the Code.
any amount due to an employee without an (Chan, Bar Reviewer on Labor Law, 2019, p.
individual written authorization duly signed 396)
by the employee. The authorization should
specifically state the amount, purpose and Right over money matters (Fiscal
beneficiary of the deduction; and Rights)

p. It shall be the duty of any labor organization Financial rights including the following:
and its officers to inform its members on the
provisions of its constitution and by-laws, 1. Right against arbitrary, oppressive or
collective bargaining agreement, the excessive fees, fines and forfeitures
prevailing labor relations system and all their 2. Right to full and detailed reports on all
rights and obligations under existing labor financial transactions in accordance with
laws. the constitution and by-laws of the union;
3. Right against unauthorized collection of
For this purpose, registered labor organizations any fees, dues or other contributions;
may assess reasonable dues to finance labor 4. Right to claim receipt for every payment
relations seminars and other labor education of fees, dues or other contributions;
activities. 5. Right to prevent funds of the organization
from being applied for any purpose or
Any violation of the above rights and conditions object other than those expressly
of membership shall be a ground for cancellation provided by the union's constitution and
of union registration or expulsion of officers from by-laws or allowed expressly by written
office, whichever is appropriate. At least thirty resolution adopted by the majority of the
percent (30%) of the members of a union or any members at a general meeting duly called
member or members specially concerned may for the purpose;
report such violation to the Bureau. The Bureau 6. Right to or require that every income or
shall have the power to hear and decide any revenue as well as every expenditure of
reported violation to mete the appropriate the union shall be recorded or receipted,
penalty. which record or receipt shall form part of
the financial records of the union;
Criminal and civil liabilities arising from violations 7. Right against unauthorized check-off for
of above rights and conditions of membership special assessments, attorney’s fees,
shall continue to be under the jurisdiction of negotiation fees or any other
ordinary courts (Art. 250, LC, as amended). extraordinary fees without an individual
authorization duly signed by the
The rights of union members under Article 250 employee;
may be summarized as follows: (PRRD) 8. Right to vote on the compensation of
union officers; and
1. Political rights 9. Right against unreasonable assessments
2. Right over money matters (fiscal rights) to finance labor relations seminars and
3. Right to information other labor education activities (Id., p.
4. Deliberative and decision-making right 395)

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Right to information 6. Check off, assessments, union

dues, and agency fees
Right to information includes the following:
CHECK-OFF
1. Right to require the treasurer and the other
officers of the union responsible for the “Check-off” means a method of deducting by
account of the union as well as for the the employer from the employee’s pay at
collection, management, disbursement, prescribed periods, any amount due for fees,
custody or control of the funds, moneys and fines or assessments (A.L. Ammen
other properties, to render a true and correct Transportation Co., Inc. vs. Bicol Transportation
account thereof, at least once a year within Employees Mutual Association, G.R. No. L-4941,
thirty (30) days after close of its fiscal year July 25, 1952).
and at such other times as may be required
by a resolution of the majority of members of It is a process or device whereby the
the union and upon vacating his office; employer, on agreement with the union
2. Right to require that the account be duly recognized as the proper bargaining
audited and verified by affidavit and a copy representative, or on prior authorization from
thereof be furnished to the DOLE Secretary; its employees, deducts union dues and
3. Right to inspect the books of accounts and assessments from the latter’s wages and
other financial records of the union and to remits them directly to the union (Gabriel vs.
require full and detailed reports from their The Hon. Secretary of Labor, G.R. No. 115949,
officers and representatives on all financial March 16, 2000).
transactions as provided for in the
constitution and by-laws of the organization; Right to check-off, available only to the
4. Right to be informed of the provisions of the SEBA
constitution and by-laws, CBA, the prevailing
labor relations system and all their rights and The minority union, not being the collective
obligations under existing labor laws through bargaining agent, has no such right. The
the medium of labor relations seminars or employer therefore is not under any legal
other labor education activities; and obligation to check-off any union dues and
5. Right to seek investigation of any irregularity assessments for the minority union. (Chan, Bar
(Ibid.) Reviewer on Labor Law, 2019, p. 452)

The Labor Code provides that it shall be unlawful Two (2) Kinds of Check-Off
for any person to make any statement, report, or
record filed or kept pursuant to the provisions of 1. Collection of union dues, special
this Code knowing such statement, report or assessments, and fees (such as attorney’s
record to be false in any material respect. (Art. fees, negotiation fees or any other
119, Labor Code, as amended) extraordinary fees) by the SEAB from its
members; and
Deliberative and decision-making right 2. Collection of agency fees from non-
members of the SEBA but covered by and
The right to participate in decision-making included in the Collective Bargaining Unit
process includes the following: who accept the benefits provided in the
CBA.
1. Right to vote by secret ballot on any question
of major policy affecting the enüe Distinction: the first kind mentioned above
membership of the organization; and requires for its validity, the execution by the
2. Right to initiate and participate in employees of individual written authorization
impeachment or expulsion proceedings which should specifically state the amount,
against an erring officer or of the union. purpose and beneficiary of the deduction; but
(Chan, Bar Reviewer on Labor Law, 2019, p. 396) the second kind does not require any such
authorization since the law itself recognizes
and allows it upon the non-SEBA member’s
acceptance of benefits resulting from the CBA

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(Holy Cross of Davao College, Inc. vs. Joaquin, G.R. Assessment for Attorney’s Fees,
No. 110007, October 18, 1996). Negotiation Fees and Similar Charges

ASSESSMENTS No such attorney’s fees, negotiation fees or

similar charges of any kind arising from the
All unions are authorized to collect reasonable negotiation or conclusion of the CBA shall be
amounts of: imposed on any individual member of the
a. Membership fees; contracting union. The attorney’s fees may be
b. Union dues; charged against union funds in an amount to
c. Assessments; be agreed upon by the parties. Any contract,
d. Fines; agreement or arrangement of any sort to the
e. Contributions for labor education and contrary is deemed null and void [Art. 241 in
research, mutual death and hospitalization relation to Art. 222(b), Labor Code, as
benefits, welfare fund, strike fund and credit amended] What is prohibited is the payment
and cooperative undertakings; and of attorney’s fees when it is effected through
f. Agency fees (Art. 259(e), Labor Code, as forced contributions from the workers from
amended). their own funds as distinguished from the
union funds (Gabriel vs. The Hon. Secretary of
Requisites for validity of union dues and Labor and Employment, G.R. No. 115949, March
special assessments 16, 2000).

No special assessment or other extraordinary Individual Written Authorization, WHEN

fees may be levied upon the members of a labor REQUIRED
organization unless;
1. Authorized by a written resolution of a The law strictly prohibits the check-off from
majority of all the members in a general any amount due an employee who is a
membership meeting duly called for the member of the union, of any union dues,
purpose. special assessment, attorney’s fees,
2. The secretary of the organization shall record negotiation fees or any other extraordinary
the minutes of the meeting including: fees other than for mandatory activities under
a. the list of all members present; the Labor Code, without the individual written
b. the votes cast, authorization duly signed by the employee.
c. the purpose of the special assessment or Such authorization must specifically state the
fees and amount, purpose and beneficiary of the
d. the recipient of such assessment or deduction (Chan, Bar Reviewer on Labor Law,
fees. 2019, p. 455).
3. The record shall be attested to by the
president. (Art. 250(n), Labor Code, as Purpose: To protect the employees from
amended) unwarranted practices which diminish their
compensation without their knowledge or
Express consent of employees is required, and consent. (Ibid.)
this consent must be obtained in accordance with
the steps outlined by law, which must be followed Individual Written Authorization, WHEN
to the letter. No shortcuts are allowed (Palacol vs. NOT REQUIRED
Ferrer-Calleja, G.R. No. 85333, February 26, 1990),. a. Assessment from non-members of the
bargaining agent of “agency fees” which
A written individual authorization duly signed by should be equivalent to the dues and
the employee concerned is a condition sine qua other fees paid by members of the
non for such deduction (Stellar Industrial Services, recognized bargaining agent, if such non-
Inc. vs. NLRC, G.R. No. 117418, January 24, 1996). members accept the benefits under the
CBA (Art. 259(e), Labor Code, as amended).
b. Deductions for fees for mandatory
activities such as labor relations seminars
and labor education activities.

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c. Deductions for withholding tax mandated principle that non-union employees may not
under the National Internal Revenue Code. unjustly enrich themselves by benefiting from
d. Deductions for withholding of wages because employment conditions negotiated by the
of employee’s debt to the employer which is bargaining union.
already due.
e. Deductions made pursuant to a judgment The bargaining agent which successfully
against the worker under circumstances negotiated the CBA with the employer is given
where the wages may be the subject of the right to collect a reasonable fee, called
attachment or execution but only for debts “agency fees” from its non-members who
incurred for food, clothing, shelter and accept the benefits under said CBA. It is called
medical attendance. agency fees because by availing of the
f. Deductions from wages ordered by the court. benefits of the CBA, they, in effect, recognize
g. Deductions authorized by law such as for and accept the bargaining union as their
premiums for PhilHealth, SSS, PAG-IBIG, “agent” as well. (Holy Cross of Davao College Inc.
employees’ compensation and the like. (Id., vs. Joaquin, G.R. No. 110007, October 18, 1996)
p. 455-456)
Requisites:
UNION DUES
a. He is a member of the bargaining unit as
Union dues are payments to meet the union’s a rank-and-file employee;
general and current obligations. The payment b. He avails of the benefits of the existing
must be regular, periodic, and uniform. CBA; and
c. He is not a member of any union.
All unions are authorized to collect reasonable
membership fees, union dues, assessments and The union’s right to a check-off of any fee,
fines and other contributions for labor education being a legal right, arises even in the absence
and research, mutual death and hospitalization of a stipulation for agency fee, provided the
benefits, welfare fund, strike fund and credit and above requisites are present. The basis of
cooperative undertakings. (Art. 292(a), Labor Code, agency fee is that non-union employees are
as amended) enjoying the benefits of the CBA, which was
obtained by the union, without providing
Every payment of fees, dues or other financial or other support to the union, since
contributions by a member shall be evidenced by they are not union members. Hence, agency
a receipt signed by the officer or agent making fee is justified as the consideration for the
the collection and entered into the record of the benefits they enjoy under the CBA (JA. Sibal,
organization to be kept and maintained for the Labor Jurisprudence and Practice, 4th Ed. p. 12).
purpose (Art. 250(h), Labor Code, as amended) A non-SEBA member has right to accept
or not the benefits of CBA
Right of union to collect dues and agency
fees despite the pendency of a There is no law that compels a non-SEBA
representation case member to accept the benefits provided in the
CBA. He has the freedom to choose between
The incumbent bargaining agent shall continue to accepting and rejecting the CBA itself or the
be entitled to check-off and collect dues and benefits flowing therefrom. Consequently, if a
agency fees despite the pendency of a non-SEBA member does not accept or refuses
representation case, other inter/intra-union to avail of the CBA-based benefits, he is not
disputes or related labor relations disputes. (Sec. under any obligation to pay the agency fees
1, Rule XIII, D.O. No. 40-03, as amended) to the SEBA since, in effect, he does not
recognize the status of the SEBA as his agent.
AGENCY FEES (Chan, Bar Reviewer on Labor Law, 2019, p. 458)

Nature of Agency Fee

It is neither contractual nor statutory, but quasi-

contractual, deriving from the established

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Limitations on the Amount of Agency fee: wages for direct remittance to the bargaining
union. (Holy Cross of Davao College Inc. vs.
The bargaining union cannot capriciously fix the Joaquin, G.R. No. 110007, October 18, 1996)
amount of agency fees it may collect from its
non-members. Article 259(e) of the Labor Code Minority Union Cannot Demand from the
expressly sets forth the limitation in fixing the Employer to Grant it the Right to Check-
amount of the agency fees, thus: off of Union Dues and Assessments from
a. It should be reasonable in amount; the Members
b. It should be equivalent to the dues and other
fees paid by members of the recognized The obligation on the part of the employer to
collective bargaining agent. (Sec. 4, Rule XXV, undertake the duty to check-off union dues
D.O. No. 40-03 as amended) and special assessments holds and applies
only to the bargaining agent and not to any
Thus, any agency fee collected in excess of this other union/s (called “Minority Union/s).
limitation is a nullity (Chan, Bar Reviewer on Labor (Chan, Bar Reviewer on Labor Law, 2019, p. 456)
Law, 2019, p. 458).
7. Union security clause
Non-members of the Certified Bargaining
Agent Need Not Become Members Thereof Union Security Clause

The employees who are not members of the Union security is a generic term, which is
certified bargaining agent which successfully applied to and comprehends 'closed shop,'
concluded the CBA are not required to become 'union shop,' 'maintenance of membership,' or
members of the latter. Their acceptance of the any other form of agreement which imposes
benefits flowing from the CBA and their act of upon employees the obligation to acquire or
paying the agency fees do not make them retain union membership as a condition
members thereof. (Ibid.) affecting employment. (Slord Development Corp
vs. Noya, G.R. No. 232687, February 4, 2019)
Accrual of Right of Bargaining Union to
Demand Check-off of Agency Fees Nothing in the Code or in any other law shall
stop the parties from requiring membership in
The right of the bargaining union to demand a recognized collective bargaining agent as a
condition for employment, except those
check-off of agency fees accrues from the
moment the non-bargaining union member employees who are already members of
another union at the time of the signing of the
accepts and receives the benefits from the CBA.
This is the operative fact that would trigger such collective bargaining agreement.” (Art. 259,
Labor Code, as amended).
liability. (Sec. 4, Rule XXV, D.O. No. 40-03 as
Purpose: To safeguard and ensure the
amended)
continued existence of the union. (BPI vs. BPI
Employees Union Davao Chapter, G.R. No. 164301,
No Individual Written Authorization by August 10, 2010)
Non-bargaining Union Members Required
to check-off
Employees Exempted From Coverage of
To effect the check-off of agency fees, no Union Security Clause
individual written authorization from the non-
bargaining union members who accept the All employees in the bargaining unit covered
benefits resulting from the CBA is necessary (Del by a Union Security Clause in their CBA with
Pilar Academy vs. Del Pilar Academy Employees Union,
the employer are subject to its terms.
G.R. No. 170112, April 30, 2008).
However, under law and established
jurisprudence, the following kinds of
Employer’s Duty to Check-off Agency Fees
employees are exempted from its coverage,
namely:
It is the duty of the employer to deduct or “check-
off” the sum equivalent to the amount of agency
fees from the non-bargaining union members’

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a. Employees who, at the time the union d. Employees expressly excluded by

security agreement takes effect, are bona- CBA stipulation (Ibid.).
fide members of a religious organization
which prohibits its members from joining 2. Union-shop Agreement – Workers
labor unions on religious grounds; under this agreement are not required
b. Employees already in the service and already to be union members when hired; but to
members of a union other than the maintain continued employment, they
bargaining agent at the time the union must continue to pay union dues and
security agreement took effect; must become union members also after
c. Confidential employees who are excluded some time (BPI vs. BPI Employees Union
from the rank-and-file or supervisory Davao Chapter, G.R. No. 164301, August 10,
bargaining unit; 2010).
d. Supervisory employees who are excluded
from becoming members of the rank-and-file 3. Maintenance of Membership
union and vice-versa; and Clause – Non-members are not
e. Employees excluded from the union security required to join the union, but those
clause by express terms of the agreement. who join must maintain their
(ibid.) membership for the duration of the
union contract under penalty of
Kinds: discharge (ibid.).

1. Closed Shop Agreement – a scheme in 4. Preferential Shop Agreement – The

which, by agreement between the employer agrees to give preference to
employer and its employees through their the members of the bargaining union in
bargaining union/agent, no person may be hiring or filling vacancies and retention
employed unless he or she is, becomes, in case of lay-off. But the employer has
and, for the duration of the agreement, the right to hire in open market if union
remains a member in good standing of the members are not available. Usually,
bargaining union (ibid.). descendants of union members are also
given preference in employment (Labor
Rationale: The requirement of employer Relations and Law on Dismissal with Notes
and Comments, Poquiz, 2018, p. 227).
for workers to become members of a union
as a condition for employment redounds to
the benefit and advantage of said 5. Agency Shop Agreement – There is
employees because by holding out to loyal no requirement for non-members of the
members a promise of employment in the bargaining agent to become its
closed shop the union yields ground members, however, they are required to
solidarity (ibid.). pay to the bargaining agent an agency
fee as a condition for their continuous
employment (ibid.).
Exceptions:
a. Employees belonging to any religious sect
which prohibit affiliation of their members 6. Hiring Agreement – Employer is
with any labor organization are not covered obliged to hire only those members of
by such agreement – the free exercise of the union (ibid.).
religious belief is superior to contract rights
(Victoriano vs. Elizalde Rope Workers, G.R. No. L- 7. Percentage Union Shop – A contract
25246, September 12, 1974); between the union and the employer
b. Members of minority unions are not whereby the latter agrees that a certain
covered by such agreement (Azucena, percentage of his employees shall
Labor Code with Comments and Cases, Vol. become union members in good
II-A, 2021, p. 297); standing (ibid.).
c. Confidential Employees are outside the
bargaining unit being represented by the An employee may not be compelled to
bargaining union (Id., p. 298); and join a union if it is based on religious
freedom. (Victoriano vs. Elizalde Rope

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Workers, G.R. No. L-25246, September 12,

1974) If the If not a If disaffiliated
employees member at from union,
8. Modified Union Shop Agreement – do not join any time, ground for
Employees, under this agreement, who are the union grounds for termination
not union members (Gonzales vs. Central after termination after due
Azucarera de Tarlac Labor Union, G.R. No. L- reasonable after due process is
38178, October 3, 1985). time, it will process is observed.
be a ground observed.
9. Exclusive Bargaining Shop Agreement for
The union is recognized as the exclusive termination
bargaining agent for all employees in the after due
bargaining unit, whether or not they are process is
members of the said union. (Azucena, Labor observed.
Code with Comments and Cases, Vol. II-A, 2021,
p. 288).
Requisites for a valid dismissal due to
violation of Union Security Clause
10. Bargaining for Members Only
a. The union security clause is applicable;
Agreement - The union which negotiated
and concluded the CBA with the b. The union is requesting for the
management is recognized as the enforcement of the union security
bargaining agent only for its own provision in the CBA; and
members. (Ibid.). c. There is sufficient evidence to support
the union’s decision to expel the
Union Shop Closed Maintenance employee from the union (Slord
Shop Shop Development Corp vs. Noya, G.R. No.
232687, February 4, 2019).

Hiring Even assuming that the union officers were

disloyal to the Federation and committed acts
inimical to its interest, such circumstance did
EEs have EE must Already a not give the Federation the prerogative to
access to become a member at the demand the union officers’ dismissal pursuant
labor member at time hiring. to the union security clause which, in the first
market. Can the time place, only the union may rightfully invoke.
be hired hiring.
even if not At most, what the Federation could do is to
union refuse to recognize the local union as its
members. affiliate and revoke the charter certificate it
issued to the latter. In fact, even if the local
union itself disaffiliated from the Federation,
Continuous employment the latter still has no right to demand the
dismissal from employment of the union
officers and members because concomitant to
After some Must be a Must maintain the union’s prerogative to affiliate with a
time, EE member all membership, federation is its right to disaffiliate therefrom.
must throughout. otherwise, it (Ergonomic Systems Philippines, Inc. vs. Enaje,
become a shall be a G.R. No. 195163 December 13, 2017)
member. ground for
termination. C. BARGAINING REPRESENTATIVE

Bargaining Representative - Refers to a

Violation of Union Security Clause group of employees sharing mutual interests
within a given employer unit, comprised of all
or less than all of the entire body of

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employees in the employer unit or any specific in such a unit for purposes of collective
occupational or geographical grouping within bargaining with the employer.
such employer unit. It may also refer to the group
or cluster of jobs or positions within the Hence, if the union is admittedly not the
employer’s establishment that supports the labor exclusive representative of the majority of the
organization which is applying for registration employees in a CBU, it could not demand from
(Sec. 1[d], Rule 1, Book V, Implementing Rules and the employer the right to bargain collectively
Regulation). in their behalf (Philippine Diamond Hotel and
Resort, Inc. vs. Manila Diamond Hotel Employees
Exclusive bargaining agent Union, G.R. No. 158075, June 30, 2006).

The term “bargaining representative” or The designation of a SEBA does not deprive
“bargaining agent” or “sole and exclusive an individual employee or group of employees
bargaining agent” or “SEBA” refers to a legitimate to exercise their right at any time to present
labor union duly certified as the sole and grievances to their employer, with or
exclusive bargaining representative or agent of without the intervention of the SEBA
all the employees in a bargaining unit. (Sec. 1[u], (Art. 267, Labor Code, as amended).
Rule 1, D.O. 40-03)
An individual employee or group of employees
Selection/Designation of an exclusive cannot be allowed to submit or refer unsettled
bargaining representative grievances for voluntary arbitration
without the participation of the SEBA. The
reason is that it is the SEBA which is a party
G.R.: The labor organization designated/selected
to the CBA which contains the provision on
by the majority of the employees in an
voluntary arbitration. Being a party thereto,
Appropriate Bargaining Unit shall be the exclusive
the SEBA cannot be disregarded when a
bargaining representative of the employees in
grievable issue will be submitted for voluntary
such unit for the purpose of collective bargaining.
arbitration.
EXCEPTIONS: In order to have legal standing, the individual
1. An individual employee or group of members should be shown to have been duly
employees shall have the right at any time to authorized to represent the SEBA (Insular Hotel
present grievances to their employer. (Art. Employees Union-NFL vs. Waterfront Insular Hotel
255, Labor Code, as amended) Davao, G.R. No. 174040-41, September 22, 2010).
2. Any provision of law to the contrary
notwithstanding, workers shall have the right 1. Modes to acquire status as Sole
to participate in policy and decision-making
and Exclusive Bargaining Agent
processes of the establishment where they
are employed insofar as said processes will
(SEBA)
directly affect their rights, benefits and
welfare. Workers and employees may also a. SEBA Certification
form labor management councils for the
same purpose. In such case, its Process where a union requests the DOLE
representatives shall be elected by a majority Regional Director to recognize and certify the
of all employees in said establishment. (Art. union as the SEBA (sole and exclusive
267, Labor Code, as amended) bargaining agent) of the bargaining unit it
purports to represent for purposes of
A non-certified union cannot collectively collective bargaining with the employer.
bargain
Voluntary recognition was repealed and
Under Art. 267 of the Labor Code, as amended, replaced by a Request for the Sole and
it is clear that only the labor organization selected Exclusive Bargaining Agent Certification (D.O.
by the majority of the employees in an No. 40-I-15 Series of 2015)
appropriate CBU through any of the proper
certification election processes can act as the SEBA Certification is proper only when there
exclusive representative or SEBA of all employees is no other legitimate labor organization
within the bargaining unit sought to be

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represented by the union. (Book 5, Rule 7, Sec. 4.1, Action on the Request
D.O. 40-I-15)
Within one (1) day from the submission of the
If there is more than one legitimate labor Request, the DOLE Regional Director should:
organization within the bargaining unit, the
proper course of action is certification 1. Determine whether the request for is
election. (Book 5, Rule 7, Secs. 5 and 6, D.O. 40-I- compliant with the documentary
15) requirements and whether the bargaining
unit sought to be represented is
Conditions: organized or not; and

1. The bargaining unit is not unionized; 2. Request a copy of the payroll for purposes
2. The requesting union is the only union in that of SEBA certification.
bargaining unit;
3. The CBU majority are members of the union If the DOLE Regional Director finds the
(Azucena, Labor Code 2, 2016, p. 475). Request deficient, he should advise the
requesting union or local to comply within 10
Documentary Requirements days from notice. Non- compliance shall be
deemed withdrawal of the request (Sec. 3,
The Request should indicate: D.O. 40-1-15, s. 2015).

1. The name and address of the requesting What are the three scenarios involving a
legitimate labor organization; request for SEBA certification?
2. The name and address of the company
where it operates; 1) Request for certification in an
3. The bargaining unit sought to be unorganized establishment with only one
represented; (1) legitimate union;
4. The approximate number of the employees
in the bargaining unit; and 2) Request for certification in unorganized
5. List of the employees covered by the establishment with more than one (1)
bargaining unit (comprising a majority) who legitimate labor organization; and
supported the request for certification;
6. Certificate of Registration (for independent 3) Request for certification in organized
unions) or Certificate of Local Chapter (for establishment (Chan, Pre-Week Notes, 2019,
local chapters); and p. 53).
7. Statement as to the existence or non-
existence of another union within the 1) Request for certification in
bargaining unit or a collective bargaining unorganized establishment with only
agreement. (Sec. 2, Rule VII, Book V, one (1) legitimate union
Implementing Rules and Regulation)
a. Validation process
The Certificate of Registration as duly certified by
the President of the requesting union or If the DOLE Regional Director finds the
certificate of creation of chartered local as duly establishment unorganized with only one
certified by the President of the Federation of the (1) legitimate labor organization in
local shall be attached to the request. (Sec. 2, D.O. existence, he/she should call a conference
40-I-15, issued September 7, 2015) within five (5) working days for the
submission of the following:
Where to file the Request
1. The names of employees in the covered
Any legitimate labor organization may file a bargaining unit who signify their support
Request in the DOLE Regional Office which for the SEBA certification, provided that
issued its certificate for registration or certificate said employees comprise at least majority
of creation of chartered local, as the case may be of the number of employees in the
(Sec. 1, D.O. 40-I-15, issued September 7, 2015). covered bargaining unit; and

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2. Certification under oath by the president of organization for purposes of challenging the
the requesting union or local that all majority status of the certified SEBA, unless a
documents submitted are true and correct CBA between the employer and the certified
based on his/her personal knowledge. SEBA has already been executed and
registered with the Regional Office (Rule 7,
The submission shall be presumed to be true and Sec. 4.2, DO 40-i-15).
correct unless contested under oath by any
member of the bargaining unit during the 2) Request for certification in
validation conference. For this purpose, the unorganized establishment with more
employer or any representative of the employer than one (1) legitimate labor
shall not be deemed a party-in-interest but only organization
as a bystander to the process of certification (Sec.
4, Rule 7, DO 40-i-15). If the DOLE Regional Director finds the
establishment unorganized with more than
NOTE: one (1) legitimate labor organization, he/she
should refer the same to the Election Officer
If the requesting union or local fails to complete for the conduct of certification election. The
the requirements for SEBA certification during certification election shall be conducted in
the conference, the Request should be referred accordance with the Rules.
to the Election Officer for the conduct of
certification election. 3) Request for certification in organized
establishment
b. Action on the submission – when Sole
and Exclusive Bargaining Agent (SEBA) If the Regional Director finds the
Certification should be issued establishment organized, he/she should refer
the same to the Mediator-Arbiter for the
If the Regional Director finds the requirements determination of the propriety of conducting
complete, he/she should issue, during the a certification election (Rule 7, Sec. 5, DO 40-i-
conference, a Certification as SEBA enjoying the 15).
rights and privileges of an exclusive bargaining
agent of all the employees in the covered Conduct of Certification Election
bargaining unit (Rule 7, Sec. 4.1, DO 40-i-15).
Under the three (3) scenarios cited above, the
The DOLE Regional Director should cause the 2nd and 3rd clearly involve the conduct of
posting of the SEBA Certification for 15 certification election. It is only in the 1st that
consecutive days in at least 2 conspicuous places the conduct of certification election is not the
(Ibid.) order of the day; there will be certification
election only when the requesting union or
c. Effect of certification local fails to complete the requirements for
SEBA certification during the conference, in
Upon the issuance of the Certification as SEBA, which event, the DOLE Regional Director shall
the certified union or local shall enjoy all the cause the raffle of the case to the Election
rights and privileges of an exclusive bargaining Officer who shall have control of the pre-
agent of all the employees in the covered CBU election conference and election proceedings
unit (Rule 7, Sec. 4.2, DO 40-i-15). (Rule 7 Sec. 1, DO 40-03).

d. Certification Year Bar Rule Effect of SEBA Certification

The issuance of the SEBA Certification bars the 1. The union becomes the certified collective
filing of a petition for certification election by any bargaining agent of the employees
labor organization for a period of one (1) year covered by the bargaining unit.
from the date of its issuance. It is only upon the 2. Filing of a petition for certification election
expiration of this 1-year period that any other is barred for a period of one (1) year from
legitimate labor organization may file a Petition the date of issuance of the SEBA
for Certification Election in the same Bargaining Certification. (Book V, Rule 7, Sec. 4.2, DO
Unit represented by the certified labor 40-I-15)

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SEBA Certification Year Bar Rule Petition for certification election

No petition for certification election shall be filed The petition may be filed by:
or entertained within one (1) year from the date
of issuance of the SEBA Certification. (Book V, Rule 1. A legitimate labor organization which
7, Sec. 4.2, DO 40-I-15) may be:
a. an independent union; or
b. Certification / Consent Election b. a national union or federation
which has already issued a charter
Certification Election - It is the process of certificate to its local chapter
determining through secret ballot the sole and participating in the certification
exclusive bargaining agent of the employees in election; or
an appropriate bargaining unit for purposes of c. a local chapter which has been
collective bargaining or negotiations with the issued a charter certificate by the
employer. A certification election is conducted national union or federation.
only upon the order of Med-Arbiter of the Bureau 2. An employer, when requested to
of Labor Relations (Book V, Rule 1, Sec 1, IRR of bargain collectively, and there is no
the Labor Code). registered CBA

● This is the most democratic and expeditious Participants in Certification Election

method by which the laborer can freely
determine the union that shall act as their General Rule:
representative in their dealings with the
establishment where they are working. It is All employees in a bargaining unit regardless
also appropriate means whereby of the period or status of their employment.
controversies and dispute on representation
may be laid to rest, by the unequivocal vote Exceptions:
of the employees themselves (Philippine
Airlines Employees’ Association vs. Calleja, 1. Managerial employees;
G.R. No. 76673, June 22, 1988). 2. Workers without employment relationship
in the establishment concerned and no
Purpose: employer–employee relationship means
no duty to bargain on either party (Allied
Free Workers Union vs. Compania Maritima,
To ascertain the majority of the employees’
G.R. Nos.L-22951 and L-22952, January 31,
choice of an appropriate bargaining unit.
1967); and
3. Employees of a cooperative who are also
● To be or not be represented by a labor
members of the same.
organization and, in the affirmative case, by
which one (DHL Philippine Corporation United
The employer can only call for a certification
Rank and file Association – Federation of Free
Workers vs. Buklod ng Manggagawa ng DHL
election, other than that, he has no other role.
Philippines Corporation, G.R. No. 152094, July 22, Employer is a stranger to the election,
2004). otherwise, it can be considered as a company
union.
Nature:
Instance when Petition for Certification
● Not a litigation but merely an investigation of Elections is proper:
a non-adversarial fact-finding character in
which the Bureau of Labor Relations plays a 1. In case representation issues exist in an
part of a disinterested investigator seeking organized establishment;
merely to ascertain the desire of the
employees as to the matter of their 2. In an unorganized establishment, even
representation. (Airline Pilots Association of the without representation issue.
Philippines vs. CIR, G.R. No. L-33705, April 15,
1977) Mere technicalities should not be allowed
to prevail over the welfare of the

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workers. What is essential is that they be file employees, but the petition for
accorded an opportunity to determine freely certification election was filed by the
and intelligently which labor organization supervisors’ union.
shall act on their behalf (DHL Philippines
Corporation United Rank and File Association - b. In an organized establishment
Federation of free Workers vs. Buklod ng
Mangagawa ng DHL Philippines Corporation, G.R. The Med-Arbiter is required to
No. 152094, July 22, 2004). automatically order the conduct of a
certification election by secret ballot in an
Procedure of filing a Petition for organized establishment as soon as the
Certification Election requisites are fully met.
a. In an unorganized establishment Requisites:
In case of a petition filed by a legitimate 1. A petition questioning the majority status
organization involving an unorganized of the incumbent bargaining agent is filed
establishment, the Med-Arbiter is required to before the DOLE within the 60-day
immediately order the conduct of a certification freedom period;
election upon filing of a petition for certification 2. Such petition was verified;
election by a legitimate labor organization. (Art. 3. That the petition is supported by the
269, Labor Code, as amended).
written consent of at least twenty-five
percent (25%) of all the employees in the
Requisites:
bargaining unit. (Bar Reviewer on Labor
Law, Chan, 2019, p. 421)
1. Motion shall be filed at any time prior to
the finality of the decision calling for a Purpose of the 25% written support
certification election (Rule 8 Sec. 9, DO 40-
03); and
The reason behind the 25% requirement is to
2. If the motion is found sufficient in form ensure that the petitioning union has a
and substance, the Med-Arbiter shall, substantial interest in the representation
within five (5) days from receipt thereof proceedings and that a considerable number
order the inclusion of the movant as one of workers desie their representation by the
of the choices, and the original decision said petitioning union for collective bargaining
shall be amended accordingly. purposes (Ibid)
The order of the Med-Arbiter resolving the 25% written consent not strictly
motion shall not be subject to reconsideration or enforced
appeal. Any motion for reconsideration or appeal
so filed shall not stop the conduct of consent The 25% written consent requirement is
election, but nevertheless shall form part of the relevant if it becomes mandatory to hold a
record of the case. certification election. In all other instances,
discretion should be ordinarily be exercised in
Unorganized Establishment favor of holding a certification election. This
means the 25% requirement may not be
An employer entity: strictly enforced. (Ibid)
1. Where there is no recognized or certified Organized vs. Unorganized
collective bargaining union or agent; Establishment
2. Where there are unions in existence
therein for as long as not one of them is
duly certified as the sole and exclusive ORGANIZED UNORGANIZED
bargaining representative of the (Art. 268, (Art. 269,
employees in the particular bargaining Labor Labor Code, as
unit it seeks to operate and represent; Code, as amended)
3. Where there is a duly recognized or amended)
certified bargaining agent for rank-and

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As to the existence of a recognized the Appropriate Rationale: Intention

or certified sole and exclusive Bargaining Unit. of law is to bring in
bargaining agent the union and to
Rationale: Law implement the policy
Has at least None. wants to know behind Art. 251 (a).
one. the intention of
the employees.

As to the petition to be filled

Consent election

Must be Need not be verified. A “consent election” refers to the process of

verified. determining through secret ballot the SEBA of
the employees in an appropriate bargaining
unit for purposes of collective bargaining and
As to the filing of the petition for negotiation. It is the election voluntarily
certificate of election agreed upon by the parties, with or without
the intervention of the Department of Labor
No petition for Not Applicable. and Employment, to determine the issue of
certification majority representation of all the workers in
election must be Freedom period is not the appropriate collective bargaining unit
filed EXCEPT applicable, thus the (Book 5, Rule 1, Sec. 1[h], IRR Labor Code).
within the 60- petition can be filed
day freedom anytime Certification Election and Consent
period before Election, distinguished
the expiration of
the collective Certification Election Consent Election
agreement.

Rationale: In A process of determining through secret ballot, the

accordance with sole and exclusive bargaining agent of the
the principle on employees in an appropriate bargaining unit for
purposes of collective bargaining or negotiation.
industrial peace
wherein there It is ordered by the Med- It is ordered by the
should be a Arbiter of the BLR, Med-Arbiter of the
period where Department of Labor and BLR, Department of
the employer Employment. Labor and
and employees Employment.
should be It is voluntarily
prevented from agreed upon by the
protesting the parties, with or
without the
CBA and respect
intervention by the
what has been Department.
agreed upon.

As to the Substantial Support Rule The Med-Arbiter no longer needs a decision

on the merits of the petition. (Ungos, The
Fundamentals of Labor Law Review, hereinafter
Must be duly Substantial support Ungos, 2021, p. 385). Instead, a pre-election
supported by rule is not necessary conference will be scheduled to discuss the
the written in “unorganized mechanics of the election (Book 5, Rule 8, Sec.
consent of at establishments.” 11, IRR of the LC, amended by D.O. 40-03).
least 25% of all
the members of Rationale: Consent Election is given primacy
and priority because it is a voluntary mode of

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settling a labor dispute – a mode that is WHEN PETITION MUST BE FILED

enshrined in the Constitution (Sec. 3, Article XIII,
1987 Constitution). Freedom Period

If the unions agree to a consent election, the This refers to the last 60 days in a CBA when
Med-Arbiter would not issue a formal order rival union representation can be entertained
calling for a Certification Election, but shall enter during the existence of a CBA. It is during this
the fact of the agreement in the minutes of the particular period when the majority status of
hearing. the incumbent bargaining agent can be
challenged (Tanduay Distillery Labor Union vs.
The election is informal because the preliminary NLRC, G.R. No. 75037, April 30, 1987).
issues concerning the election are resolved, at
least tentatively, without the need for a hearing. Rationale of prohibition of filing outside
In a consent election, the parties agree to all the freedom period: To ensure industrial
preliminary issues and agree to allow the peace between the employer and its
Regional Director to resolve any objections or employees during the existence of the CBA
challenges which occur in the election. Such (Republic Planters Bank Union vs. Laguesma, G.R.
critical issues which must be worked out in any No. 119675, November 21, 1996).
case include:
c. Bars to the holding of
1. Date, time and place for the election; Certification/Consent Election
2. The description of the appropriate bargaining
unit; General Rule:
3. The payroll eligibility date, or date upon
which a person must be employed to be In the absence of a CBA duly registered in
eligible to vote; and accordance with Article 237 of the Labor
4. The eligibility of specific employees (i.e. Code, a petition for certification election may
whether or not an employee is considered as be filed at any time.
a supervisor). (Book 5, Rule 5, Sec. 6, IRR of the
LC) Exceptions:

Effect of Consent Election (Sec. 24, Rule VIII, No certification election may be held under
D.O. No. 40-03) the following rules:

a. It is a bar to a petition for Certification 1. Statutory bar rule;

Election for 1 year from the holding of the 2. Certification year bar rule;
consent election; 3. Negotiations bar rule;
b. If appeal is filed from the results of the 4. Bargaining deadlock bar rule; or
consent election, the running of the one-year 5. Contract bar rule.
period is suspended until the decision on the
appeal has become final and executor; STATUTORY BAR RULE
c. If there is no petition for Certification Election
but the parties themselves agreed to hold a The Labor Code does not contain any
consent election with the intercession of the provision on this rule but the Rules to
Regional Office, it shall bar subsequent Implement the Labor Code embody a rule that
petition for a Certification Election. bars the filing of a PCE within a period of one
(1) year from the date of a valid conduct of a
Note: The outcome of a consent election certification, consent, run-off or re-run
cannot be rendered meaningless by a election where no appeal on the results
minority group if employees who had thereof was made. If there was such an
themselves invoked the procedure to settle appeal from the order of the Med-Arbiter, the
the dispute. Those who voted in the consent running of the one-year period is deemed
election against the labor union that was suspended until the decision on the appeal
eventually certified are bound to the results. has become final and executory (Section 3(a),
(United Restauror’s Employees & Labor Union- Rule VIII, Book V, Rules to Implement the Labor
Paflu vs. Torres, G.R. No. L-24993, December 18, Code, as amended by Department Order No. 40-
1968) 03, Series of 2003, [Feb. 17, 2003]).

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This is called the statutory bar rule. Thus, an a. When the duly certified bargaining agent
election cannot be held in any bargaining unit in has commenced and sustained
which a final and valid election was concluded negotiations in good faith with the ER,
within the preceding 12-month period. within the period of one year from the
date of a valid certification, consent, or
CERTIFICATION YEAR RULE / ONE YEAR run-off election or from the date of
BAR RULE voluntary recognition;
b. When a bargaining deadlock to which an
Under this rule, a petition for certification election incumbent is a party has been submitted
(PCE) may not be filed within one (1) year: to conciliation, arbitration, or the subject
of a valid notice of strike or lockout.
1. From the date a union is certified as SEBA by
virtue of a REQUEST FOR SEBA The employer’s continuing act of evading
CERTIFICATION; or negotiation with the certified bargaining union
2. From the date a valid certification, consent, is tantamount to a bargaining deadlock. The
run-off or re-run election has been deadlock bar rule should apply to prevent
conducted within the bargaining unit. (Bar replacing the certified bargaining union with
Reviewer on Labor Law, Chan, 2019, p. 429). whom […] the employer does not want to
negotiate (Capitol Medical Center Alliance of
If after this one-year period, the SEBA did not Concerned Employees Unified Filipino Service
commence collective bargaining with the Workers vs. Laguesma, G.R. No. 118915, February
employer, a PCE may be filed by a rival union to 4, 1997, as cited in Azucena, Labor Code 2, 2016,
challenge the majority status of the certified pp. 489-490).
SEBA. (Ibid.).
The bargaining deadlock-bar rule was not
NEGOTIATIONS BAR RULE applied here because for more than four (4)
years after the petitioner was certified as the
Under this rule, no PCE should be entertained exclusive bargaining agent of all the rank-
while the SEBA and the employer have and-file employees, it did not take any action
commenced and sustained negotiations in good to legally compel the employer to comply with
faith within the period of one (1) year from the its duty to bargain collectively, hence, no CBA
date of a valid certification, consent, run-off or was executed. Neither did it file any unfair
re-run election or from the date of voluntary labor practice suit against the employer nor
recognition. did it initiate a strike against the latter. Under
the circumstances, a certification election may
Once the CBA negotiations have commenced and be validly ordered and held (Kaisahan ng
while the parties are in the process of negotiating Manggagawang Pilipino [KAMPIL-KATIPUNAN] vs.
Trajano, G.R. No. 75810, September 9, 1991).
the terms and conditions of the CBA, no
challenging union is allowed to file a PCE that
CONTRACT BAR RULE
would disturb the process and unduly forestall
the early conclusion of the agreement (Bar
Reviewer on Labor Law, Chan, 2019, p. 431).
Under this rule, a PCE cannot be filed when a
CBA between the employer and a duly
BARGAINING DEADLOCK BAR RULE. recognized or certified bargaining agent has
been registered with the Bureau of Labor
Under this rule, a PCE may not be entertained Relations (BLR) in accordance with the Labor
when a bargaining deadlock to which an Code. Where the CBA is duly registered, a
incumbent or certified bargaining agent is a party petition for certification election may be filed
has been submitted to conciliation or arbitration only within the 60- day freedom period prior
or has become the subject of a valid notice of to its expiry.
strike or lockout.
Purpose: to ensure stability in the
A representation question may not be relationship of the workers and the employer
entertained: by preventing frequent modifications of any
CBA earlier entered into by them in good faith
and for the stipulated original period (Azucena,
Labor Code 2, 2016, p. 492).

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Exceptions to the Contract-Bar Rule (Bar written support of the members of the
Reviewer on Labor Law, Chan, 2019, p. 425-426) bargaining unit; and
4. The petition is filed not in violation of the
The contract-bar rule does not apply in the four (4) Bar Rules. (Chan, Pre-Week Notes
following cases: for Labor Law, 2019, p. 55).

1. Where there is an automatic renewal A certification election is the most appropriate

provision in the CBA but prior to the date means of ascertaining its will. It is true that
when such automatic renewal became there may be circumstances where the
effective, the employer seasonably filed a interest of the employer calls for its being
manifestation with the Bureau of Labor heard on the matter. An obvious instance is
Relations of its intention to terminate the said where it invokes the obstacle interposed by
agreement if and when it is established that the contract-bar rule. This case certainly does
the bargaining agent does not represent not fall within the exception. Sound policy
anymore the majority of the workers in the dictates that as much as possible,
bargaining unit. management is to maintain a strictly hands-
off policy. For if it does not, it may lend itself
2. Where the CBA, despite its due registration, is to the legitimate suspension that it is partial
found in appropriate proceedings that: (a) it to one of the contending unions. That is
contains provisions lower than the standards repugnant to the concept of collective
fixed by law; or (b) the documents bargaining. That is against the letter and spirit
supporting its registration are falsified, of welfare legislation intended to protect labor
fraudulent or tainted with misrepresentation. and to promote social justice. The judiciary
then should be the last to look with tolerance
3. Where the CBA does not foster industrial at such efforts of an employer to take part in
stability, such as contracts where the identity the process leading to the free and
of the representative is in doubt since the untrammeled choice of the exclusive
employer extended direct recognition to the bargaining representative of the workers
union and concluded a CBA therewith less (Eastland vs. Noriel, G.R. No. L-45528, February
than one (1) year from the time a 10, 1982).
certification election was conducted where
the “no union” vote won. This situation General Rule.: Under the Contract Bar Rule,
obtains in a case where the company entered a valid and existing collective bargaining
into a CBA with the union when its status as agreement is a bar to petition for certification
exclusive bargaining agent of the employees election. Hence an employer may successfully
has not been established yet. oppose a petition for certification election if it
violates this Rule.
4. Where the CBA was registered before or
during the last sixty (60) days of a subsisting EXCEPTIONS:
agreement or during the pendency of a
representation case. It is well-settled that the 1. If the petition is made within 60 days
60-day freedom period based on the original before the expiration of the CBA, known
CBA should not be affected by any as the “freedom period;”
amendment, extension or renewal of the CBA
for purposes of certification election. 2. If the CBA is defective or inadequate in
substance, as when it does not fulfill the
Requisites for the validity of the Petition legal requirements of providing for a
for Certification Election (PCE): grievance machinery or voluntary
arbitration; and
1. Legitimate Union;
2. In an organized establishment, petition is 3. If it has not fulfilled the formal
filed during the 60-day freedom period of a requirements for registration with Bureau
duly registered CBA; or or the Regional Office of the DOLE, which
3. In an organized establishment, the petition requirement are held to be mandatory
complied with the 25% requirement of (Asso. Trade Union vs. Trajano, G.R. No. L-
75321, June 20, 1988) in any of these

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exceptional cases, the Contract Bar Rule will waived. (Sec. 13, Rule IX, D.O. No. 40-03, as
not apply and the employer would have no amended)
ground to contest the certification election.
Grounds for denial of petition:
Protests and other questions arising from
conduct of certification election: The Med-Arbiter may dismiss the PCE on the
following grounds:
Challenging of vote – Grounds:
a. The petitioner is not listed in the
1. That there is no employer-employee Department’s registry of legitimate labor
relationship between the voter and the unions or that its legal personality has
company; been revoked or canceled with finality in
2. That the voter is not a member of the accordance with Rule XIV of these Rules;
appropriate bargaining unit which petitioner b. The petition was filed before or after the
seeks to present. freedom period of a duly registered CBA;
provided that the 60-day period based on
Procedure in the challenge of votes the original CBA shall not affected by any
amendment, extension or renewal of the
The ballot of the voter who has been properly CBA;
challenged during the pre-election conferences, c. The petition was filed within one (1) year
shall be placed in an envelope which shall be from entry of voluntary recognition or a
sealed by the Election Officer in the presence of valid certification, consent or run-off
the voter and the representatives of the election and no appeal on the results of
contending unions. The Election Officer shall the certification, consent or run-off
indicate on the envelope the voter’s name, the election is pending;
union challenging the voter, and the ground for d. A duly certified union has commenced
the challenge. and sustained negotiations, in good faith,
with the employer in accordance with
The sealed envelope shall then be signed by the Article 250 of the Labor Code within the
Election Officer and the representatives of the one (1) year period referred to in Sec.
contending unions. The Election Officer shall note 14.c of this Rule; or there exist a
all challenges in the minutes of the election bargaining deadlock to which had been
proceedings and shall have custody of all submitted to conciliation or arbitration or
envelopes containing the challenged votes. The had become the subject of a valid notice
envelopes shall be opened and the question of of strike or lockout to which an incumbent
eligibility shall be passed upon by the Mediator- or certified bargaining agent is a party;
Arbiter only if the number of segregated votes e. In case of an organized establishments,
will materially alter the results of the election. failure to submit 25% support
(Sec. 11, Rule IX, D.O. No. 40-03, as amended) requirement.(Section 14, D.O. No. 40-I-15,
as cited by Duka, Labor Laws and Social
On-the-spot question Legislations, 2019, p. 597-598)

The Election Officer shall rule on any question Two (2) Kinds of Majorities Required in
relating to and raised during the conduct of the Certification Election (DOUBLE
election. In no case, however, shall the election MAJORITY RULE)
officer rule on any of the grounds for challenge
specified in the immediately preceding section. For there to be a certification of a union, the
(Sec. 12, Rule IX, D.O. No. 40-03, as amended) following must be present:

Protest; when perfected. 1. Majority of the bargaining unit must have

voted; and
Any party-in-interest may file a protest based on 2. The winning union must have garnered
the conduct or mechanics of the election. Such majority of the valid votes cast. (National
protests shall be recorded. Protests not so raised Union of Workers In Hotels, Restaurant and
immediately after the last ballot cast are deemed Allied Industries-Manila Pavilion Hotel Chapter
vs. Secretary of Labor, G.R. No. 181531, July
31, 2009)

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Key Principles: an employer may file a petition for

certification election with the Regional
1. The pendency of a petition to cancel the
Office.
certificate of registration of a union
participating in a certification election does
In all cases, whether the petition for
not stay the conduct thereof;
certification election is filed by an
2. The pendency of an unfair labor practice case
employer or a legitimate labor
filed against a labor organization
organization, the employer shall not be
participating in certification election does not considered a party thereto with a
stay the holding thereof;
concomitant right to oppose a petition
3. Direct Certification as a method of selecting for certification election. The
the exclusive bargaining agent of the
employer’s participation in such
employees is not allowed. This is because the
proceedings shall be limited to: (1)
conduct of a certification election is still being notified or informed of petitions
necessary in order to arrive in a manner
of such nature: and (2) submitting the
definitive and certain concerning the choice list of employees during the pre-
of the labor organization to represent the
election conference should the
workers in a collective bargaining unit;
MediatorArbiter act favorably on the
4. The “No Union” vote is always one of the
petition. However, manifestation of
choices in a certification election. Where
facts that would aid the Mediator-
majority of the valid votes cast results in “No Arbiter in expeditiously resolving the
Union” obtaining the majority, the Med-
petition such as existence of a contract-
Arbiter shall declare such fact in the order; bar, one year bar or deadlock bar may
and
be considered. The contract-bar rule
5. Only persons who have direct employment
shall apply in any of the following: (1)
relationship with the employer may vote in when there exists an unexpired
the certification election, regardless of their
registered CBA; or (2) when there is no
period of employment. challenge on the representation status
of the incumbent union during the
PROCESS AND PROCEDURE (Book 5, Rule 8,
freedom period.
Omnibus Rules Implementing the Labor Code)

WHO MAY FILE? (Sec. 1) WHERE TO FILE? (Sec. 2)

Any legitimate labor organization, A petition for certification election shall

including a national union or federation be filed with the Regional Office which
that has issued a charter certificate to issued the petitioning union’s certificate
its local/chapter or the local/chapter of registration or certificate of creation
itself, may file a petition for certification of chartered local.
election.
At the option of the petitioner, a petition
A national union or federation filing a for certification election and its
petition in behalf of its local/chapter supporting documents may also be filed
shall not be required to disclose the online.
names of the local/chapter’s officers
and members, but shall attach to the The petition shall be heard and resolved
petition the charter certificate it issued by the Mediator-Arbiter.
to its local/chapter.
Where two (2) or more petitions
When requested to bargain collectively involving the same bargaining unit are
in a bargaining unit where no registered filed in one (1) Regional Office, the same
collective bargaining agreement exists, shall be automatically consolidated with
the Mediator-Arbiter who first acquired

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jurisdiction. Where the petitions are filed subject of a valid notice of strike
in different Regional Offices, the or lockout;
Regional Office in which the petition was d. when a collective bargaining
first filed shall exclude all others; in agreement between the
which case, the latter shall indorse the employer and a duly certified
petition to the former for consolidation. bargaining agent has been
registered in accordance with
Article 237(renumbered) of the
Labor Code. Where such
collective bargaining agreement
is registered, the petition may be
filed only within sixty (60) days
prior to its expiry.

WHEN TO FILE? (Sec. 3)

FORM AND CONTENTS OF
PETITION (Sec. 4)

A petition for certification election may be

filed anytime, except:
The petition shall be in writing, verified
a. when a SEBA certification has under oath by the president of
been entered or a valid petitioning labor organization. Where a
certification, consent or run-off federation or national union files a
election has been conducted petition in behalf of its local or affiliate,
within the bargaining unit within the petition shall be verified under oath
one (1) year prior to the filing of by the president or duly authorized
the petition for certification representative of the federation or
election. Where an appeal has national union. In case the employer
been filed from the Order of the filed the petition, the owner, president
Mediator-Arbiter certifying the or any corporate officer, who is
results of the election, the authorized by the board of directors,
running of the one-year period shall verify the petition. The petition
shall be suspended until the shall contain the following:
decision on the appeal has
become final and executory; a. the name of petitioner, its
b. when the duly certified union has address, and affiliation if
commenced and sustained appropriate, the date and
negotiations in good faith with number of its certificate of
the employer in accordance with registration. If the petition is filed
Article 261(renumbered) of the by a federation or national union,
Labor Code within the one-year the national president or his/her
period referred to in the duly authorized representative
immediately preceding shall certify under oath as to the
paragraph; existence of its local/chapter in
c. when a bargaining deadlock to the establishment and attaching
which an incumbent or certified thereto the charter certificate or
bargaining agent is a party had a certified true copy thereof. If
been submitted to conciliation or the petition is filed by a
arbitration or had become the local/chapter it shall attach its

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charter certificate or a certified Corp vs. Calleja, G.R. No. L-77415, June 29,
true copy thereof;
1989).
b. the name, address and nature of
employer’s business; d. Failure of election, Run-Off Election,
c. the description of the bargaining Re-run election
unit;
d. the approximate number of FAILURE OF ELECTION
employees in the bargaining
unit; A failure of election happens where the
e. the names and addresses of number of votes cast in a certification or
other legitimate labor unions in consent election is less than the majority of
the bargaining unit; the number of eligible voters and there are no
f. a statement indicating any of the material challenged votes, the Election Officer
following circumstances: shall declare a failure of election in the
1. that the bargaining unit minutes of the election proceedings. (Rule 9,
is unorganized or that Sec. 17, D.O. 40-03).
there is no registered
collective bargaining Effect of Failure of Election
agreement covering the
employees in the A failure of election shall not bar the filing of
bargaining unit; a motion for the immediate holding of another
2. if there exists a duly certification or consent election within 6
registered collective months from date of declaration of failure of
bargaining agreement, election. (Rule 9, Sec. 19, Rule, D.O. 40-03)
that the petition is filed
within the sixty-day Action on the Motion for Failure of
freedom period of such Election
agreement; or
3. if another union had Within 24 hours from receipt of the motion,
been certified in a valid the Election Officer shall immediately
certification, consent or schedule the conduct of another certification
run-off election, that the or consent election within 15 days from
petition is filed outside receipt of the motion and cause the posting of
the one-year period from the notice of certification election at least 10
date of recording of such days prior to the scheduled date of election in
SEBA certification or 2 most conspicuous places in the
conduct of certification establishment. The same guidelines and list of
or run-off election and voters shall be used in the election. (Rule 9,
no appeal is pending Sec. 19, Rule, D.O. 40-03)
thereon.
g. in an organized establishment, the Proclamation and Certification of the
signature of at least twenty-five Result of the Election
percent (25%) of all employees in
the appropriate bargaining unit shall Within twenty-four (24) hours from final
be attached to the petition at the canvass of votes, there being a valid election,
time of its filing; and the Election Officer shall transmit the records
h. other relevant facts. of the case to the Med-Arbiter who shall,
within the same period from receipt of the
minutes and results of election, issue an order
proclaiming the results of the election and
Voting day should be done on a regular working
certifying the union which obtained a majority
day. Strike or lockout is not considered as an
of the valid votes cast as the sole and
irregular business day, even if it affects the actual
exclusive bargaining agent. (Duka, Labor Laws
performance of the work of some of the
and Social Legislations, hereinafter Duka, 2016, p.
employees (Asian Design and Manufacturing 609)

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Conditions to Proclaim and Certify the Election Officer and/or affirmed by the
Result of the Election Mediator-Arbiter. (Rule I, Sec. 1, Rule, D.O. 40-
03).
a. No protest was filed or, even if one was filed,
the same was not perfected within the five Re-Run Election Takes Place in These
(5) day period for perfection of the protest; Instances:
b. No challenge or eligibility issue was raised or,
even if one was raised, the resolution of the 1. To break a tie; or
same will not materially change the results of 2. To cure a failure of election.
the elections. (Ibid.) 3. When failure has been declared by an
election officer and/or affirmed by the
RUN-OFF ELECTION Med-Arbiter. (Rule 1, Sec. 1, D.O. No. 40-I-
15)
A “run-off election” refers to an election between
the labor unions receiving the two (2) highest Re-run election shall be conducted within 10
number of votes in a certification election or days from posting of the Notice of Re-Run
consent election with three (3) or more unions in Election. (Book 5, Rule 9, Sec. 18, IRR of the LC,
contention, where such certification election or amended by D.O. 40-F-03)
consent election results in none of the
contending unions receiving the majority of the
valid votes cast; provided, that the total number RE-RUN RUN-OFF ELECTION
of votes for all contending unions, if added, is at ELECTION
least fifty percent (50%) of the number of valid
votes cast. (Rule I, Sec. 1, Rule, D.O. 40-03)
Conducted when: Conducted when:
Requisites: a. One None of the choices,
choice including the choice of
1. Election which provided for 3 or more
receives a NO UNION, receives a
choices;
plurality majority of the valid
2. None of the choices obtained a majority of of vote votes cast. There must
the valid votes cast;
and the be at least 3 choices
3. Total vote for all contending unions is at least remaining
50% of the number of vote cast; and
choices
4. No objections or challenges which, if
result in a
sustained, can materially alter the result;
tie;
(Ungos, The Fundamentals of Labor Law Review,
2021, p. 389)
b. All choices
received
Note: “No Union” shall not be a choice in the the same
run-off election. (Labor Laws and Social Legislations, number of
Duka, 2016, p. 614) votes.

When Conducted: If the above requisites are

present, the Election Officer should motu propio In both instances, An election will be
conduct a run-off election within ten (10) days NO UNION is also conducted between the
from the close of the election proceeding a choice. union receiving the
between the labor unions receiving the two highest and the second
highest number of votes. (Ibid.) highest number of valid
vote cast.
RE-RUN ELECTION

Re-run election refers to an election conducted to

break a tie between contending unions, including . Employer as a mere bystander rule
between ‘no union’ and one of the unions. It shall
likewise refer to an election conducted after a BYSTANDER RULE
failure of election has been declared by the

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The employer is generally considered as a mere certification election or from certification

by-stander, because certification election is the of a union as bargaining unit.
sole concern of workers. The employer should 6. Deadlock Bar and Contract Bar - An
maintain a hands-off policy, because if it does employer can validly oppose a petition for
not, it may lend itself to the legitimate suspicion certification election when there is a duly
that it is partial to one of the contending unions. registered CBA, or when there is a
(The Fundamentals of Labor Law Review, Ungos, bargaining deadlock that has been
2021, p. 375-376) submitted to conciliation or arbitration or
has become the subject of a valid notice
The employer’s participation shall be of strike or lockout. (The Fundamentals of
limited to: Labor Law Review, Ungos, 2021, p. 377-378)

1. being notified or informed of petitions of such D. COLLECTIVE BARGAINING

nature;
1. Duty to bargain collectively,
2. submitting the list of employees during the
pre-election conference should the Med-
bargaining in bad faith
arbiter act favorably on the petition (Art. 271,
Labor Code, as amended). Duty to Bargain Collectively – the
performance of a mutual obligation to meet
The principle of bystander shall be strictly and convene promptly and expeditiously in
observed throughout the conduct of certification good faith for the purpose of negotiating an
election. The employer shall not harass, agreement with respect to wages, hours of
intimidate, threat, or coerce employees before, work, and all other terms and conditions of
during and after elections (Sec. 1, Rule IX, Book V). employment, including proposals for
adjusting any grievances or questions arising
Exceptions to the By-Stander Principle under such agreement and executing a
contract incorporating such agreements if
1. Lack of Employer-Employee Relationship - an requested by either party but such duty does
employer can validly oppose a petition for not compel any party to agree to a proposal
certification election when the relationship of or make any concession (Art. 263, Labor Code,
employer-employee does not exist between as amended).
the company and the employees sought to
be represented by the petitioning union. Bargaining in Bad Faith / Good Faith
2. Lack of Legitimacy - An employer can validly
oppose a petition for certification election There is no per se test of good faith in
when the petitioning union is not a legitimate bargaining. Good faith or bad faith is an
labor organization because it is not listed in inference to be drawn from the facts. To some
the Registry of Legitimate Labor Unions or its degree, the question of good faith may be a
registration has been cancelled with finality. question of credibility. The effect of an
3. Inappropriate Bargaining Unit - An employer employer's or a union's actions individually is
can validly oppose a petition for certification not the test of good-faith bargaining, but the
election when the bargaining unit sought to impact of all such occasions or actions,
be represented by the petitioning union is not considered as a whole, and the inferences
an appropriate bargaining unit. fairly drawn therefrom (Hongkong and
4. Lack of 25% Consent - In an organized Shanghai Banking Corp. Employees Union vs.
establishment, an employer can validly NLRC, G.R. No. 125038, November 6, 1997).
oppose a petition for certification election
when the petition is not supported by the There is no per se test of good faith in
written consent of 25% of the employees bargaining, it was held that bad faith cannot
covered by the bargaining unit. be imputed on an employer which simply
5. Election Year Bar and Certification Year Bar - refused to negotiate over the company’s
An employer can validly oppose a petition for retirement program. It is but natural that the
certification election when the petition was management and labor adopt proposals and
filed within one(1) year from a valid counterproposals during negotiations (Union
Filipro Employees vs Nestle Philippines, G.R. Nos.
158930-31, March 3, 2008).

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Employer’s duty to bargain exists only with 2) Duty to bargain where a CBA exists
SEBA 1. 60 days before the CBA expires,
either party may notify the other in
The duty to bargain collectively does not exist writing that it desires to terminate or
when the majority status of the employees’ modify the agreement.
representative is not established. The employer 2. During the 60-day period and until a
has no such duty to bargain with the individual new agreement is reached, the CBA
workers or with the minority union (Lakas ng remains in full force and effect; the
Manggagawang Makabayan vs. Marcelo Enterprises, parties are duty-bound to keep the
G.R. No. L-38258, November 19, 1982). status quo.
3. The law therefore provides for
The duty does not compel any party to agree automatic renewal or extension of the
blindly to a proposal nor to make concession. CBA.
While the law imposes on both the employer and
the bargaining union the mutual duty to bargain DUTY TO BARGAIN
collectively, the employer is not under any legal
obligation to initiate collective bargaining
DUTY TO BARGAIN
negotiations. (Union of Filipro Employees-Drug, Food
and Allied Industries Unions-Kilusang Mayo Uno [UFE-
DFA-KMU] vs. Nestle Philippines, Inc., G.R.
Nos. 158930-31, March 3, 2008). Where there is Where a CBA exists
no CBA yet
Purpose: To stabilize the relation between labor
and management and to create a climate of
sound and stable industrial peace (Kiok Loy vs. The mutual The mutual obligation of
NLRC G.R. No. L-54334, January 22, 1986). obligation of the the employer and the
employer and the employees’ majority
It is a mutual responsibility of the employer and employees’ union to meet and
the Union and is characterized as a legal majority union to convene and,
obligation (Kiok Loy vs. NLRC G.R. No. L-54334, meet and convene. additionally, the
January 22, 1986). obligation not to
terminate or modify the
Two (2) Situations Contemplated when the CBA during its lifetime.
duty to bargain exist:
1. Duty to bargain collectively in the absence of
CBA (Art. 262, Labor Code, as amended); and
● While it is a mutual obligation of the
2. Duty to bargain collectively when there is an
parties to bargain, the employer,
existing CBA (Art. 264, Labor Code, as
amended).
however, is not under any legal duty to
initiate contract negotiation (Kiok Loy vs.
NLRC, G.R. No. L-54334, January 22,
1) Duty to bargain collectively in the
1986).
absence of CBA
● Proposal embodied in minutes do not
form part of the CBA (Samahang
The duty to bargain collectively when there Manggagawa sa Top Farm vs. NLRC, G.R. No.
has yet been no CBA in the Collective 113856, September 7, 1998).
Bargaining Unit where the SEBA seeks to ● Duty to Bargain “does not compel either
operate should be complied with in the party to agree to a proposal or require the
following order: first, in accordance with any making of a concession.” The parties’
agreement or voluntary agreement providing failure to agree did not amount to ULP for
for a more expeditious manner of collective violation of the duly to bargain (Standard
bargaining; and secondly, in its absence, in Chartered Bank Employees Union vs.
accordance with the provisions of the Labor Confesor, et al. GR No. 114974, June 16,
Code, referring to Art. 261 thereof which lays 2004).
down the procedure in collective bargaining
(Art. 262, Labor Code, as amended). Jurisdictional preconditions of collective
bargaining:

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The mechanics of collective bargaining are set in b. When there is a CBA – when
motion only when the following jurisdictional there is CBA, the duty to bargain collectively
preconditions are present: shall mean that neither party shall terminate
nor modify such agreement during its lifetime.
1. Possession of the status of majority However, either party can serve a written
representation of the employees’ notice to terminate the agreement at least 60
representative in accordance with any of the days prior to its expiration date, otherwise
means of selection or designation provided known as the Freedom Period.
for by the Labor Code;
2. Proof of majority representation; and 60-day Freedom Period
3. A demand to bargain (Kiok Loy vs. NLRC, G.R.
No. L-54334, January 22, 1986). The last sixty (60) days of the 5-year lifetime
of a CBA immediately prior to its expiration is
Procedure in Collective Bargaining: called the “freedom period”. This is the time
when the parties may terminate or modify the
a. When there is no CBA yet: terms and conditions of the CBA. (Id., p. 560)
1. In accordance with any agreement or
voluntary arrangement between the When there is an existing CBA, the parties
employer and the bargaining agent; or thereto are bound to observe the terms and
2. In the absence of any agreement, in conditions therein set forth until its expiration.
accordance with the provisions of Art. 250 Neither party is allowed to terminate or
of the Labor Code. modify such agreement during its lifetime.
The only time the parties are allowed to
Procedure under Article 261 of the Labor terminate or modify such agreement is within
Code: the 60-day freedom period (Art. 264, Labor
a. Party desiring to negotiate an agreement Code, as amended).
shall serve written notice upon the other
party with a statement of its proposals; It is also the time when the majority status of
b. Other party replies not later than 10 calendar the SEBA may be challenged by another union
days from receipt of such notice; by filing the appropriate petition for
c. If difference arises on the basis of the notice certification election (PCE) (MRR Yard Crew vs.
and reply, either party may request for a PNR, G.R. No. L-33621, July 26, 1976).
conference; Conference shall begin no later
than ten (10) calendar days from the date of Automatic Renewal Clause
request.
d. If the dispute is not settled, the NCMB shall Automatic renewal clause is deemed
intervene upon request of either or both incorporated in all CBAs.
parties or at its own initiative.
● NCMB shall immediately call parties
Pending the renewal of the CBA, the parties
to conciliation meetings.
are bound to keep the status quo and to treat
● NCMB has the power to issue subpoena
the terms and conditions embodied therein
requiring attendance of the parties.
still in full force and effect during the 60-day
● Duty of the parties to participate fully
freedom period and/or until a new agreement
and promptly in the conciliation
is negotiated and ultimately concluded and
meetings.
reached by the parties. This principle is
e. During the conciliation proceedings, parties
otherwise known as the “automatic renewal
are prohibited from doing any act which may clause” which is mandated by law and
disrupt or impede the early settlement of the therefore deemed incorporated in all CBAs.
dispute;
f. Board shall exert all efforts to settle disputes The CBA shall remain effective and
amicably and encourage the parties to enforceable even after the expiration of the
submit their case to a voluntary arbitrator. period fixed by the parties as long as no new
(Labor Laws and Social Legislations, Duka, 2016, agreement is reached by them and no petition
p. 548)
for certification is filed. (Labor Laws and Social
Legislations, Duka, 2016, p. 561).

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Kiok Loy Doctrine Essential Requisites of a CBA:

This doctrine is based on the ruling in Kiok Loy 1. Employer-employee relationship between
vs. NLRC (G.R. No. L-54334, January 22, 1986), the employer and the members of the
where the petitioner, Sweden Ice Cream Plant, bargaining unit being represented by the
refused to submit any counter-proposal to the bargaining agent;
CBA proposed by its employees’ certified 2. Bargaining agent must have the majority
bargaining agent. The High Court ruled that the support of the members of the bargaining
employer had thereby lost its right to bargain the unit;
terms and conditions of the CBA. Thus, the CBA 3. A lawful demand to bargain is made in
proposed by the union was imposed lock, stock accordance with law. (Chan, Pre-Week
and barrel on the erring company. Notes for Labor Law, 2019, p. 60).

Privileged Communication Employees entitled to a CBA:

Information and statements made at conciliation 1. Members of the bargaining union;

proceedings shall be treated as privileged 2. Non-member of the bargaining union but
communication and shall not be used as evidence members of the bargaining unit;
in the NLRC. Conciliators and similar officials shall 3. Members of minority union/s who paid
not satisfy in any court or body regarding any agency fees to the bargaining union; and
matters taken up at conciliation proceedings 4. Employees hired after the expiration of
conducted by them. (Art. 239, Labor Code, as the CBA. (Bar Reviewer on Labor Law, Chan,
amended) 2019, p. 475).

Matters which the parties may have revealed or Rationale: Extension of the benefits of a CBA
may have learned from each other during even to non-union members is to preclude
mediation and conciliation proceedings shall not undue discrimination.
be used as evidence before the proceedings in
the Labor Arbiter or the NLRC, or any Court or ● It is even conceded that a laborer can
tribunal. (Labor Laws and Social Legislations, Duka, claim benefits from a CBA entered into
2016, p. 461). between the company and the union of
which he is a member at the time of the
2. Collective bargaining agreement (CBA), conclusion of the agreement, even after
mandatory provisions he has resigned from said union
(Kapisanan Ng Mga Manggagawa ng
A CBA refers to the negotiated contract between Pinagyakap vs. Franklin Baker Co. of the
a duly certified SEBA of workers and the Phil., CIR, June 3, 1949).
employer incorporating the agreement reached ● When a collective bargaining contract is
after negotiations with respect to wages, hours entered into by the union representing
of work, and all other terms and conditions of the employees and the employer, even
employment in the appropriate bargaining unit, the non-member employees are entitled
including mandatory provisions for grievances to the benefits of the contract. To accord
and arbitration machineries. (Sec. 1(f), Rule II, its benefits only to members of the union
NCMB Revised Procedural Guidelines in the Conduct of without any valid reason would constitute
Voluntary Arbitration Proceedings, October 15, 2014) undue discrimination against non-
members (New Pacific Timber and Supply vs.
Primary Purpose NLRC, G.R. No. 124224, March 17, 2000).

The primary purpose of a CBA is the stabilization Generally, a wage increase not included in the
of labor-management relations in order to create CBA is not demandable. However, if it was
a climate of sound and stable industrial peace withheld by the employer as part of its unfair
(Kiok Loy vs. NLRC, G.R. No. L-54335, January 22, labor practice against the union members, this
1986). benefit should be granted. By granting this
increase, SC is eliminating the discrimination
against them, which was a result of an unfair
labor practice (Sonedco Workers Free Labor

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Union vs. Universal Robina Corporation, G.R. No refusal to comply with the economic
220383, July 5, 2017). provisions, the same shall not be
considered as ULP and therefore, not a
Binding effect of CBA grievable issue that is properly cognizable
under the grievance machinery of the
Ratification of the CBA by majority of all the CBA. (Bar Reviewer on Labor Law, Chan,
workers in the bargaining unit makes the same 2019, p. 475).
binding on all employees therein (Art. 237, Labor
Code, as amended). Grievance Machinery - the mechanism for
the adjustment and resolution of grievance
A CBA gives rise to valid enforceable contractual arising from the interpretation or
relations against the union members, in matters implementation of a CBA and those arising
that affect them individually, and against the from the interpretation or implementation of
union itself, in matters that affect the entire the CBA and those arising from the
membership in general (Chan, Bar Reviewer on interpretation and enforcement of company
Labor Law, 2019, p. 468). personnel policies (Art. 273, Labor Code, as
amended).
Mandatory provisions of CBA
a. Grievance Procedure The parties to a CBA shall include therein
b. Voluntary Arbitration provisions that will ensure the mutual
c. No Strike-No Lockout Clause observance of its terms and conditions. They
d. Labor Management Council shall establish a machinery for the adjustment
and resolution off grievances arising from the
a. GRIEVANCE PROCEDURE interpretation or implementation or
enforcement of company personnel policies
Grievance or Grievable Issue – any question (Ibid.)
raised by either employer or the union regarding
any of the following issues or controversies: Grievance Procedure - The internal rules of
1. Interpretation or implementation of the CBA; procedure established by the parties in their
2. Interpretation or enforcement of company CBA with voluntary arbitration as the terminal
personnel policies; step, which are intended to resolve all issues
3. Any claim by either party that the other party arising from the implementation and
is violating any provisions of the CBA or interpretation of the collective agreement.
company personnel policies (NCMB, Primer on
Grievance Settlement and Voluntary Arbitration, A grievance procedure is part of the
1990, p.3) continuous process of collective bargaining. It
intends to promote a friendly dialogue
● In order to be grievable, violations of a between labor and management as a means
Collective Bargaining Agreement, except of maintaining industrial peace (Master Iron
those which are gross in character, shall no Labor Union vs. G.R. No. 92009, February 17,
longer be treated as unfair labor practice and 1993).
shall be resolved as grievances under the
Collective Bargaining Agreement. (UST Faculty No particular grievance machinery is
Union vs. UST, G.R. No. 203957, July 30, 2014). mandated by law (Caltex Refinery Employees
Association vs. Brilliantes, G.R. No. 123782,
● Gross violation of the CBA is defined as September 16, 1997).
flagrant and/or malicious refusal by a party
thereto to comply with the economic A CBA will not be registered with the
provisions thereof. (Art. 261, LC, as amended). Department of Labor and Employment if it
does not contain a provision on grievance
● Any violation of the economic or non- procedure/machinery which is a “must”
economic provisions of the CBA, may provision required of all CBAs. In the event
constitute a grievance and is often referred that a CBA without such provision is submitted
to as “rights dispute”. However, it must be for registration, the registrar should advise
pointed out that when the violation of the the parties to include a grievance
CBA consists in the flagrant and/or malicious procedure/machinery therein before it is

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considered duly registered (Azucena, Labor Code 2, c. NO STRIKE – NO LOCKOUT CLAUSE

2016, p. 537).
A "no strike, no lock-out" provision in the CBA
b. VOLUNTARY ARBITRATION is a valid stipulation although the clause
maybe invoked by an employer only when the
Voluntary Arbitration strike is economic in nature or one which is
conducted to force wage or other concessions
The mode of settling labor-management disputes from the employer that are not mandated to
in which the parties select a competent, trained be granted by the law itself. It would be
and impartial third person who is tasked to decide inapplicable to prevent a strike which is
on the merits of the case and whose decision is grounded on unfair labor practice. (Malayang
final and executor (Section 1 [d], Rule II, NCMB Samahan ng mga Manggagawa sa Greenfield vs.
Revised Procedural Guidelines in the Conduct of Ramos, G.R. No. 113907, February 28, 2000).
Voluntary Arbitration Proceedings).
An expression of the firm commitment of the
Voluntary Arbitrator – any person accredited parties thereto that, on the part of the union,
by the Board as such or any person named or it will not mount a strike during the effectivity
designated in the CBA by the parties to acts as of CBA, and, on the part of the employer, that
their Voluntary Arbitrator, or one chosen with or it will not stage a lockout during the lifetime
without the assistance of the National thereof.
Conciliation and Mediation Board, pursuant to a
selection procedure agreed upon in the Collective When proper to invoke clause: only when the
Bargaining Agreement, or any official that may strike is economic in nature or one which is
be authorized by the Secretary of Labor and conducted to force wage or other concessions
Employment to act as Voluntary Arbitration upon from the employer that are not mandated to
the written request and agreement of the parties be granted by the law itself. It does not bar
to a labor dispute [Art. 212(n), Labor Code, as strikes grounded on unfair labor practices.
amended].
A strike may be held as invalid although the
Kinds of Voluntary Arbitrations: LU complied with strict requirements as
a. Permanent Arbitration–chosen by the provided for Art. 263 when the same is
named or designated person in the CBA by contrary to an existing agreement such as “no
the parties strike – no lockout” clause in CBA (C. Alcantara
b. Ad-Hoc Arbitration– chosen by the parties & Sons, Inc. vs. CA, G.R. No. 155109, September
in accordance with the established procedure 29, 2010)
in the CBA or one appointed by the NCMB in
case there is failure in the selection or in case d. LABOR MANAGEMENT COUNCIL
either party to the CBA refuses to submit to
voluntary arbitration. (Strikes and lockout. Since individual representation in dealing or
Bureau of Labor Relations. (n.d.). Retrieved bargaining with the employer is weak, the law
May 23, 2022, from provides another forum – the labor-
https://blr.dole.gov.ph/2014/12/11/strikes- management council aside from or instead of
and-lockout/). a union. LMC can exist where there is no
union or co-exist with a union. (Azucena, Labor
Types of labor dispute that may be Code with Comments and Cases, Vol. II-A, 2021,
submitted to Voluntary Arbitration: p. 387).

a. Right Dispute - contemplate the existence of The Department shall promote the formation
a collective bargaining agreement already of labor-management councils in organized
concluded or a situation in which no effort is and unorganized establishments to enable the
made to bring about a formal change in its workers to participate in policy and decision-
terms or create a new one. making processes in the establishment,
b. Interest Dispute – disputes over formation of insofar as said processes will directly affect
collective agreements or effort to secure their rights, benefits and welfare, except
them. those which are covered by collective

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bargaining agreements or are traditional areas of

Legal Anchor
bargaining. (Sec. 1, Rule XXI, D.O. No. 40-03 as
amended)
Art. 267, Labor Art. 273, Labor
The Department shall promote other labor- Code, as amended Code, as
management cooperation schemes and, upon its amended
own initiative or upon the request of both parties,
may assist in the formulation and development of Compulsory Provision of the CBA
programs and projects on productivity,
occupational safety and health, improvement of
quality of work life, product quality improvement, Yes Yes
and other similar scheme. (Ibid.).

Function: An LMC, since it is not a union, is Purpose

versatile and can exist where there is no union or
co-exist with a union. But an LMC CANNOT
Affording the To resolve
replace a union. An LMC can represent
workers the right disputes and
employees across the enterprise, present
to participate in grievances arising
grievances regardless of the grievant’s rank, and
policy and decision- from (1) the
proffer proposals unhindered by formalities. It
making process in interpretation or
can also handle projects and programs whoever
matters affecting implementation of
is the proponent, form committees for myriad
their rights, the CBA, or (2)
purposes, instill discipline, and improve
benefits and interpretation or
productivity. All these activities the LMC may do
welfare enforcement of
without having to face internecine strifes arising
personnel policies
from periodic inter-union contests for dominance.
In short, the LMC can deal with the employer on
matters affecting the employees’ rights, benefits,
Nature of Functions
and welfare. (Azucena, Labor Code with Comments
and Cases, Vol. II-A, 2021, p. 387)
Preventive Adjudicatory
Selection of Representatives to LMC: mechanism meant mechanism which
to prevent and is set into motion
1. Organized Establishment: nominated by the avoid disputes or only when a
exclusive bargaining agent (Sec. 2, Rule XXI, grievances dispute or
D.O. No. 40-03 as amended) grievance occurs.
2. Unorganized Establishment: elected directly
by the employees at large (Ibid.) Nature of Cognizable Issues

Labor Grievance Non-adversarial Adversarial and

Management Machinery and non- adjudicatory in
Council adjudicatory tasks character since it
as it concerns itself resolves grievable
Constitutional Origin only with policy or contentious
formulations issues
1st paragraph of 2nd paragraph of
Sec. 3, Art. XIII – Sec. 3 Art. XIII –
right of the preferential use of Kind of Establishment Required to
workers to voluntary modes be Set up
participate in policy in settling
and decision- disputes. Required to be Required only in
making processes established in all case of organized
establishments – establishments
since it is

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whether organized mandated to be not “appealable” to within seven (7)

or unorganized stipulated in the any office or calendar days
CBA authority from the date of
submission

Composition
3. Signing, posting, registration
The The
representatives of representatives Types of Bargaining
the workers may or are nominated
may not be solely by the 1. Single Enterprise Bargaining - any
nominated by the bargaining agent voluntarily recognized or certified labor
recognized or union may demand negotiations with its
certified bargaining employer for terms and conditions of
agent, depending work covering employees in the
on whether the bargaining unit concerned. (Rule 16, Sec.
establishment is 3, D.O. No. 40-03)
organized or 2. Multi-Employer Bargaining - when a
unorganized. legitimate labor union(s) and employers
may agree in writing to come together for
the purpose of collective bargaining,
Procedure provided:
a. Only legitimate labor unions who are
incumbent exclusive bargaining
Does not involve Required to follow
agents may participate and negotiate
any specific a multi-step
in multi-employer bargaining;
procedure procedure starting
b. only employers with counterpart
prescribed by law from a discussion
legitimate labor unions who are
to govern its of the grievance
incumbent bargaining agents may
proceedings between the
participate and negotiate in multi-
employee and the
employer bargaining; and
Note: RA 6971 or union steward, on
c. only those legitimate labor unions
Productivity the one hand, and
who pertain to employer units who
Incentive Act also the foreman and
consent to multi-employer bargaining
provides for Labor supervisor, on the
may participate in multi-employer
Management other, and ending
bargaining. (Rule 16, Sec. 5, D.O. No.
Committee for with the highest
40-03)
productivity decision-making
incentives. officials of the
Stages in Collective Bargaining
company,
reflecting the
1. Preliminary - sending of a written notice
hierarchy of
to bargain
command
2. Negotiation - stage when parties
responsibility
provide proposals and counter proposal.
3. Execution - signing of the agreement
Appeals
4. Publication - posting of the agreement -
two copies of the signed collective
Does not make any Any dispute or bargaining agreement shall be posted for
decisions since no grievance should at least five (5) days prior to the day of
dispute or be elevated to ratification in two(2) conspicuous areas in
grievance is voluntary each workplace of the employer units
cognizable by it, arbitration if not concerned.
hence, any policy resolved with 5. Ratification by the majority of all the
formulations are finality by the GM workers in the bargaining unit
represented in the negotiation. Said

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collective bargaining agreement shall affect concerned for at least five(5) days
only those employees in the bargaining units before its ratification; and
who ratified it. o A statement that the CBA was ratified
6. Registration - the collective bargaining by the majority of the employees in
agreement shall be registered with the the bargaining unit of the employer or
Department of Labor and Employment. employers concerned. (Rule 17, Sec. 2,
7. Administration - the implementation of the D.O. No. 40-03)
CBA provisions which shall be jointly
administered by the management and the Action on the Application for
bargaining agent for a period of five (5) Registration
years.
8. Interpretation and application - in case ● The Regional Office and the Bureau shall
of ambiguity in the interpretation, it shall be act on the application for registration of
construed in favor of labor. (Labor Laws and the CBA within five (5) days from receipt
Social Legislations, Duka, 2016, p. 553) o Either approving the application and
issuing the certificate of registration,
Posting of the CBA or
● Non-posting of the CBA is a fatal defect. o Denying the application for failure of
(Ibid.) the applicant to comply with the
● Posting of CBA is the Employer's requirements for registration. (Rule
responsibility, which can easily comply with 17, Sec. 4 D.O. No. 40-03)
the requirement through a mere mechanical
act. (Id., p. 554) Effects of Non-Registration of the CBA
● The purpose of the requirement is precisely ● A CBA that is not registered as mandated
to inform the employees in the bargaining by Art 237 remains valid and binding
unit of the contents of said agreement so between the parties, however, it may not
that they could intelligently decide whether be used to apply the contract bar rule as
to accept or not. (Ibid.) provided in Article 238 and prevent any
legitimate labor union from filing a
Registration of the CBA petition for certification election. (Duka,
Labor Laws and Social Legislations, 2016, p.
● Within thirty (30) days from execution of a
556)
collective bargaining agreement, the parties
thereto shall submit two (2) duly signed
4. Term of CBA, freedom period
copies of the agreement to the Regional
Office which issued the certificate of
registration/certificate of creation of Lifetime of the CBA
● The CBA has a lifetime of five (5) years
chartered local of the labor union-party to
the agreement. from the time of its effectivity.
● Other provisions (economic) shall be
● Where the certificate of creation of the
concerned chartered local was issued by the effective for a period of three (3) years
Bureau, the agreement shall be filed with the from its execution. (Duka, Ibid., p. 563)
● Parties may agree to suspend the CBA or
Regional Office which has jurisdiction over
the palace where it principally operates. (Rule put in abeyance the limit on the
17, Sec. 1, D.O. No. 40-03) representation period .(Rivera, et al. vs.
Espiritu, G.R. No. 135547, January 23, 2002)
Requirement for Registration
Automatic Renewal Clause
● Application for CBA Registration shall be
accompanied by the original and two (2) ● At the expiration of the freedom
period, the employer shall continue to
duplicate copies of the following documents
which must be certified under oath by the recognize the majority status of the
representative(s) of the employer(s) and incumbent bargaining agent where
no petition for certification election is
labor union(s) concerned:
o The CBA; filled. It shall be the duty of both
parties to keep the status quo and to
o A statement that the CBA was posted in
at least two (2) conspicuous places in the continue in full force and effect the
terms and conditions of the existing
establishment or establishments

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agreement during the 60-day period are related to the workers‘ right to self-
and/or until a new agreement is reached organization and to the observance of a
by the parties. (Art. 264, Labor Code, as Collective Bargaining Agreement. Without
amended) that element, the acts, no matter how unfair,
● The CBA shall remain effective and are not unfair labor practices (Philcom
enforceable even after the expiration of Employees Union vs. Philippine Global
the period fixed by the parties as long as Communications, G.R. No. 144315, July 17, 2006).
no new agreement is reached by them
and no petition for certification is filed. Not all unfair labor acts constitute ULP. While
(Duka,Labor Laws and Social Legislation, an act or decision of an employer may be
2016, p. 561) unfair, certainly not every unfair act or
decision constitute ULP as defined and
Freedom Period enumerated under Labor Code (Great Pacific
● Refers to the sixty (60) days span prior Life Employees Union vs. Great Pacific Life
to the expiration of the CBA Insurance Corp. G.R 126717, February 11, 1999).
● During the sixty (60)-day period
immediately before the date of expiry of Elements of ULP:
such five (5)-year term of the CBA, a
petition questioning the majority status 1. There must be an employer-employee
of the incumbent bargaining agent may relationship between the offender and
be entertained and a certification offended party; and
election shall be conducted by the DOLE. 2. The act complained of must be expressly
● A labor union may disaffiliate from the mentioned and defined in the Labor Code
mother union to form a local or as ULP;
independent union during the freedom 3. The act complained of as ULP must have
period. Any petition filed before or after a proximate and casual connection with
the sixty (60)-day freedom period. (Port any of the following 3 rights:
Workers Union of the Philippines vs. a. Exercise of the right to self-
Laguesma, G.R. No. 94929-30, March organization;
18, 1992) b. Exercise of the right to collective
● CBA signed prior to the expiration of the bargaining; or
Freedom Period is invalid. (Duka, Labor c. Compliance with the CBA.
Laws and Social Legislation, 2016, p.
571) EXCEPTION: The only ULP that is may or
may not be related to the exercise of the right
Disaffiliation Prior to the Freedom Period to self-organization and collective bargaining
● A Labor union may disaffiliate from the is the act described under Art. 259 (248(f))i.e.
mother union to form a local or independent to dismiss, discharge, or otherwise prejudice
union only during the sixty (60)-day freedom or discriminate against an employee for
period immediately preceding the expiration having given or being about to give testimony
of the CBA. (Id., p. 570) under the Labor Code.
● Disaffiliation may be carried out when there Aspects of ULP
is a shift of allegiance on the part of the
majority of the members of the union. Under Art. 258 of the Labor Code, as
(Alliance of Nationalist and Genuine Labor amended, ULP has two (2) aspects:
Organization vs. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay 1. Civil aspect; and 2. Criminal aspect.
Spinning Mills at J.P. Coats, G.R. No. 118562, July The civil aspect of ULP includes claims for
05, 1996) actual, moral and exemplary damages,
attorney‘s fees and other affirmative reliefs
E. UNFAIR LABOR PRACTICES(ULP) (Art. 258, LC, as amended). Generally, these
civil claims should be asserted in the labor
1. Nature and aspects of ULP case before the Labor Arbiters who have
original and exclusive jurisdiction over ULP
Unfair labor practice refers to acts that violate the cases (Art. 224, Labor Code, as amended).
workers‘ right to organize. The prohibited acts

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The civil aspect can be committed by the officers 2. Acts violative of the right to
and agents of the employers or officers and collective bargaining
agents of the labor organization. This aspect of a. Violation of the duty to bargain (Arts.
ULP is cognizable and falls within the jurisdiction 259 [248] (g), 260 [249] (c), Labor Code,
of the Labor Arbiter. The quantum of proof as amended)
required is only substantial evidence and the b. Negotiation of Attorney‘s Fees (Art.
prescriptive period is one year from the accrual 259 [248] (a), (i), Labor Code, as
of ULP (Duka, Labor Laws and Social Legislation, amended)
hereinafter Duka, 2019, p. 524). c. Violation of the CBA (Arts. 259 [248] (i),
260 [249] (f), Labor Code, as amended)
The criminal aspect, on the other hand, can be d. Failure to make a timely reply to the
committed by the agents and officers of the proposals; within ten (10) calendar
employer who participated, authorized and/or days (General Milling Corp. vs. CA, GR
ratified the act. This ULP falls within the No. 146728, February 11, 2004).
jurisdiction of the regular trial courts and the
Parties who may be liable for ULP:
quantum of proof required is beyond reasonable
doubt. The prescriptive period is within one year
from the accrual of the act of ULP. 1. Officers and agents of the company who
have actually participated in, ratified, or
The criminal proceeding is suspended once the authorized that act of ULP.
civil or administrative aspect is filed. The criminal 2. Union Officers, members of the governing
proceeding will only continue once the boards, representatives or agents or
administrative case has attained finality. The final members of labor associations or
judgment in the administrative proceeding (civil organizations who have actually
aspect) finding ULP is a prerequisite in the filing participated in or authorized or ratified
of the criminal case for ULP. However, the final the ULP.
judgment in the civil case is only a condition
precedent for the filing of the criminal case and There must be a final judgment finding that
is not binding and cannot be used as evidence in ULP was committed in the civil or
the criminal case for ULP (Id., pp. 524-525). administrative case before a criminal case can
be pursued. Such decision is not binding in the
criminal case and its findings cannot be
Kinds of ULP
considered as evidence of guilt but merely as
proof of compliance (Art. 258 (247), Labor Code,
1. Acts violative of the right of self-
as amended).
organization
a. Interference, restraint, and coercion 2. By employers
(Arts. 259 [248] (a), 260 [249] (a), 292
(g) (h), Labor Code, as amended)
ULP by employers (Art. 259 (248), Labor
b. Non-Union (or Withdrawal from)
Code, as amended)
Membership as Condition for
Employment (Art. 259 [248] (b), Labor
Code, as amended) a. Interfere, restrain or coerce employees in
c. Contracting Out to Discourage Unionism their right to self-organization;
(Art. 259 [248] (c), Labor Code, as b. Require a person not to join a union;
amended) Discourage Unionism;
d. Company Dominated Union (Art. 259 c. Contract out services or functions being
[248] (d), Labor Code, as amended) performed by union members;
e. Discriminating to encourage/ discourage d. Initiate, dominate, assist or otherwise
unionism (Arts. 259 [248] (e), 260 [249] interfere with formation or administration
(b) Labor Code, as amended) of any union;
f. Retaliation for testimony against e. Discriminate in terms and conditions of
employer (Art. 259 [248] (f) Labor Code, employment to encourage or discourage
as amended) membership in any labor organization;
g. Exaction – Featherbedding (Art. 260 f. Dismiss, discharge or discriminate an
[249] (b) Labor Code, as amended) employee for having given or being about
to give testimony under this code;

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g. Violate the duty to bargain collectively; a-vis the employer (Liberty Flour Mills Employees
h. Pay negotiation or attorney‘s fees to the vs. Liberty Flour Mills, Inc., G.R. No. 58768-70,
union or its officers or agents as part of the December 29, 1980).
settlement of any issue in collective
bargaining or any other disputes; or The purpose of a union shop or other union
i. Flagrant or gross refusal to comply with the security arrangement is to guarantee the
economic terms of CBA. continued existence of the union through
enforced membership for the benefit of the
a. Interfere, restrain or coerce workers (Bank of the Philippine Islands vs. BPI
Employees Union-Davao Chapter-Federation of
employees in their right to self-
Unions in BPI Unibank, G.R. No. 164301, August
organization; 10, 2010).

Test of Interference or Coercion: Whether Other examples of acts of interference

the employer has engaged in conduct which may
reasonably tend to interfere with the free
a. Outright and unconcealed intimidation;
exercise of employees‘ twin rights to self-
b. An employer who interfered with the right
organization and collective bargaining (Insular Life
to self-organization before a union is
Employees Association vs. Insular Life, G.R. No. L-
25291, January 30, 1971). registered can be held guilty of ULP
(Samahan ng mga Manggagawa sa Bandolino-
LMLC vs. NLRC, G.R.No. 125195, July 17,
It is the prerogative of the company to promote,
1997).
transfer, or even demote its employees to other c. When act of company president in writing
positions when the interests of the company letters to strikers urging them to return to
reasonably demand it. Unless there are work is an interference with the right to
circumstances which directly point to collective bargaining; Individual
interference by the company with the employee‘s solicitation is also interference (The Insular
right to self-organization, the transfer of an Life Assurance NATU vs. The Insular Life Co.
employee should be considered as within the Ltd, G.R. No. L‐25291, Jan. 30, 1971).
bounds allowed by law, e.g. despite transfer to a
lower position, his original rank and salary Totality of Conduct Doctrine
remained undiminished (Rubberworld Phils. vs.
NLRC, G.R. No. 75704, July 19, 1989). It states that the culpability of employer‘s
remarks is to be evaluated not only on the
Exception to ULP of Interference: Union basis of their implications, but against the
Security Agreements. background of and in conjunction with
collateral circumstances.
Nothing in the Code or in any other law shall stop
the parties from requiring membership in a Under this doctrine, expressions of opinion by
recognized collective bargaining agent as a an Employer, though innocent in themselves,
condition for employment, except those frequently were held to be ULP because of:
employees who are already members of another 1. The circumstances under which they were
union at the time of the signing of the collective uttered;
bargaining agreement. (Art. 259, Labor Code, as 2. The history of the particular Employer‘s
amended). labor relations or anti-union bias;
It is the policy of the State to promote unionism 3. Their connection with an established
to enable the workers to negotiate with collateral plan of coercion or interference
management on the same level and with more
persuasiveness than if they were to individually
Expressions of opinion by an employer which,
and independently bargain for the improvement
though innocent in themselves, frequently
of their respective conditions. It is for this reason
were held to be culpable because of the
that the law has sanctioned stipulations for the
circumstances under which they are uttered;
union shop and the closed shop as a means of
the history of the particular employer‘s
encouraging the workers to join and support the
relations or anti-union bias because of their
labor union of their own choice as their
connection with an established collateral plan
representative in the negotiation of their
of coercion or interference. An expression
demands and the protection of their interest vis-
which may be permissibly uttered by one

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employer, might, in the mouth of a more hostile 2. A promise by the employee that he will
employer, be deemed improper and not join a union; and
consequently actionable as an unfair labor 3. A promise by the employee that upon
practice. (The Insular Life Assurance NATU vs. The joining a labor organization, he will quit
Insular Life Co. Ltd, G.R. No. L‐25291, Jan. 30, 1971). his employment (Chan, Pre-Week Bar Exam
Notes on Labor Law, 2018, p. 97).
Taken individually, it will not be considered
as ULP, but if taken together and by the The act of the employer in imposing such a
totality of it, the same constitutes as ULP. condition constitutes unfair labor practice
under Article 248(b) of the Labor Code. Such
In unfair labor practice cases, it is the union stipulation in the contract is null and void.
which has the burden of proof to present
substantial evidence to support its allegations of c. Contract out services or functions
unfair labor practices committed by the being performed by union members;
employer. It is not enough that the union
believed that the employer committed acts of Subcontracting is a ULP when the
unfair labor practice when the circumstances contracting out of a job, work or service being
clearly negate prima facie showing to warrant performed by union members will interfere
such belief. (Tiu vs. NLRC, G. R. No. 123276, Aug. with, restrain or coerce employees in the
18, 1997). exercise of their right to self-organization that
it shall constitute an unfair labor practice.
The judicial dictum is that any act of interference
by the employer in the exercise by employees of Thus, it is not unfair labor practice to contract
their right to self-organization constitutes an out work for reasons of business decline,
unfair labor practice (Chan, Pre-Week Bar Exam inadequacy of facilities and equipment,
Notes on Labor Law, 2018, p. 96). reduction of cost and similar reasonable
grounds. The court usually refuses to
b. Require a person not to join a union; substitute its judgment for that of the
Discourage Unionism; business decision of the employer in
ascertaining the validity or legality of the
Yellow Dog Contract motivation for the contracting out of services
(Azucena, Labor Code 2, 2016, p. 330).
In Article 259(b), ULP is committed when an
employer requires as a condition of employment It is important to note, however, that not all
that a person or an employee shall not join a acts of the employer in contracting out the
labor organization or shall withdraw from one to work which is otherwise performed by union
which he belongs. This is known as a yellow dog members can be classified as ULP. Such
contract. contracting out becomes unfair labor practice
if and when it interferes with, restrains or
A yellow dog contract is an undertaking by the coerces the employees in the exercise of their
employees that as a condition for employment rights to self-organization (Duka, Labor Laws
they will not join, assist, form or even attempt to and Social Legislation, 2019, pp. 529-530).
foster a union for the duration of their
employment with the employer. This is a void Contracting out of services is not ULP per se.
undertaking (Duka, Labor Laws and Social It is ULP only when the following conditions
Legislation, 2019, p. 529). exist: the services contracted out are being
performed by union members and such
Common stipulations in a Yellow Dog contracting-out interferes with, restrains, or
Contract coerces employees in the exercise of their
right to self-organization (Duka, Labor Laws and
A typical yellow dog contract embodies the Social Legislation, 2019, pp. 529-530).
following stipulations:

1. A representation by the employee that he is

not a member of a labor organization;

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d. Initiate, dominate, assist or otherwise Runaway Shop - is defined as an industrial

interfere with formation or plant moved by its owners from one location
administration of any union; to another to escape union labor regulations
or state laws, but the term is also used to
It is an unfair labor practice to initiate, dominate, describe a plant removed to a new location in
assist or otherwise interfere with the formation order to discriminate against employees at the
or administration of any labor organization, old plant because of their union activities. It
including the giving of financial or other support is one wherein the employer moves its
to it or its organizers or supporters (Duka, Labor business to another location or it temporarily
Laws and Social Legislation, 2019, p. 530). closes its business for anti-union purposes. A
"runaway shop" in this sense, is a relocation
e. Discriminate in terms and conditions of motivated by anti-union animus rather than
employment to encourage or for business reasons (Complex Electronics
discourage membership in any labor Employees Association vs. NLRC, G.R. No.
organization; 121315, July 19, 1999).

Discrimination is not ULP per se, it only becomes Blue-Sky Bargaining – is the act of making
as such when it encourages/discourages exaggerated or unreasonable proposals
unionism (Azucena, Labor Code 2, 2016, p. 337). (Duka, Labor Laws and Social Legislation, 2019, p.
533).
Test of discrimination: When the discharge of
an employee was motivated by his involvement Surface Bargaining - is defined as "going
with the union. Such inference must be basedon through the motions of negotiating" without
evidence, direct or circumstantial, not upon mere any legal intent to reach an agreement. The
suspicion (Azucena, Labor Code 2, 2016, p. 342-344) resolution of surface bargaining allegations
never presents an easy issue. The
f. Dismiss, discharge or discriminate an determination of whether a party has
employee for having given or being engaged in unlawful surface bargaining is
about to give testimony under this usually a difficult one because it involves, at
code; bottom, a question of the intent of the party
Dismissal of employees after they have organized in question, and usually such intent can only
their union and about to start with the effort at be inferred from the totality of the challenged
having it certified as their SEBA (Samahan ng party’s conduct both at and away from the
Manggagawa sa Binondo-LMLC vs. NLRC, G.R. No. bargaining table. It involves the question of
126195, July 17, 1997). Consequently, to dismiss whether an employer’s conduct demonstrates
union members in order to ensure the defeat if an unwillingness to bargain in good faith or is
the union in the certification election is ULP merely hard bargaining (Standard Chartered
(Samahang Manggagawa ng Via Mare vs. Noriel, G.R. Bank vs. Confesor, G.R. No. 114974, June 16,
No. L-52169, June, 30, 1980). 2004).

Dismissal of union officers which threatens the h. Pay negotiation or attorney’s fees
existence of the union constitutes union-busting to the union or its officers or agents
of ULP (Art. 278 [c], Labor Code, as amended) as part of the settlement of any
issue in collective bargaining or any
g. Violate the duly to bargain collectively; other disputes; or i. Flagrant or
gross refusal to comply with the
To be a ULP, violation should be gross in economic terms of CBA.
character.
If an employer interferes in the selection of
The crucial question whether or not a party has the negotiators or coerces the Union to
met his statutory duty to bargain in good faith exclude from its panel of negotiators a
typically depends on the facts in the individual representative of the Union, and if it can be
case. There is no per se test of good faith in inferred that the employer adopted the said
bargaining. Good faith or bad faith is an act to yield adverse effects on the free
interference to be drawn from the facts (HSBC exercise to right to self-organization or on the
Employees Union vs. NLRC, G.R. No. 125038, right to collective bargaining of the
November 6, 1996).

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employees. ULP is committed (Standard Chartered organization has been denied or to terminate
Bank Employees Union vs. Confesor, et al., G.R. an employee on any ground other than the
No.114974, June 16, 2004) usual terms and conditions of membership or
continuation of membership is made available
It is not necessary that there be direct evidence to other members.
that an employee was in fact intimidated or
coerced by statements of threats of employer if In determining whether a discharge is
there is a reasonable inference that anti-union discriminatory, the true reason for the
conduct of the employer has an adverse effect on discharge must be established. While union
self-organization and collective bargaining (The activity is no bar to a discharge, the existence
Insular Life Assurance Co., LTD., Employees of a lawful cause for discharge is no defense
Association-NATU vs. The Insular Life Assurance Co., if the employee was actually discharged for
LTD., FGU insurance Group, G.R. No. L-25291, January
union activity (Phil. Metal Foundries vs. CIR, G.R.
30, 1971, citing Francisco, Labor Laws 1956, Vol. II, p.
No. 34948-49 May 15, 1979).
323)

4. By labor organizations c. Violate the duty or refuse to bargain

collectively with the employer;
ULP BY LABOR ORGANIZATIONS (Art. 260,
Labor Code, as amended) Requisites:
1. The union is a duly certified SEBA (Lakas
a. Restrain or coerce employees in the exercise ng Manggagawang Makabayan vs. Marcelo
of their right to self-organization; Enterprises, GR No. L-38258, November 19,
b. Cause or attempt to cause an employer to 1982); and
discriminate an employee; 2. It commits any of the following:
c. Violate the duty or refuse to bargain a. It violates the duty to bargain
collectively with the employer; collectively; or
d. An employer to pay or deliver any money or b. It refuses to bargain collectively with
other things of valve, in the nature of an the employer.
exaction, for services which are not
performed or not to be performed; Unfair Labor Practice in Collective
e. Ask for negotiation or attorney‘s fees from Bargaining
employers as part of the settlement of any
issue in collective bargaining or any other a. Bargaining in bad faith - The crucial
dispute; or question whether or not a party has met his
f. Violation of the CBA statutory duty to bargain in good faith
typically depends on the facts in the individual
a. Restrain or coerce employees in the case. There is no per se test of good faith in
exercise of their right to self- bargaining. Good faith or bad faith is an
organization interference to be drawn from the facts (HSBC
Employees Union vs. NLRC, G.R. No. 125038,
Labor organization shall have right to prescribe November 6, 1996).
its own rules with respect to the acquisition or
retention of membership. The labor organization, b. Refusal to Bargain - An employer is
its officers, agents or representatives are granted guilty of ULP in refusing to bargain with the
license by the Labor Code to interfere with the representative of a majority of his employees.
exercise by the employees‘ of their right to self- To bargain in good faith, an employer must
organization. Without such, no labor organization not only meet and confer with the union which
can be formed as the act of recruiting and represents his employees, but also must
convincing the employees is an act of inference recognize the union for the purpose of
(Chan, Pre-Week Notes on Labor Law, 2019, p. 63). collective bargaining. Additionally, he must
recognize the union as the bargaining unit,
b. Cause or attempt to cause an employer even if they are not all members of the union.
to discriminate an employee A union can also be guilty of ULP for refusing
to bargain collectively. (Azucena, Labor Code
Includes discrimination against an employee with with Comments and Cases, Vol. II-A, 2021, p.
respect to whom membership in such 325)

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c. Blue Sky Bargaining - unrealistic and Requisites:

unreasonable demands in negotiations by either
or both labor and management, where neither 1. The labor organization, its officers, agents
concedes anything and demands the or representatives have caused or
impossible.It actually is not collective bargaining attempted to cause an employer either:
at all. (Harold S. Roberts, Roberts Dictionary of
Industrial Relations (Revised Edition, 1971, p. 51, as a. To pay or agree to pay any money,
cited in Standard Chartered Bank Employees Union vs including the demand for fee for
Confesor, GR No. 114974, June 16, 2004). union negotiations; or
b. To deliver or agree to deliver any
d. Surface Bargaining - going through the things of value;
motions of negotiating without any legal intent to
reach an agreement. It involves the question of 2. Such demand for payment of money or
whether or not the employer’s conduct delivery of things of value is in the nature
demonstrates an unwillingness to bargain in of an exaction; and
good faith or is merely hard bargaining (Standard 3. The services contemplated in exchange
Chartered Bank Employees Union vs. Confesor, GR No. for the exaction are not actually
114974, June 16, 2004). performed or will not be performed.
(Chan, Pre-Week Bar Exam Notes on Labor
e. An employer to pay or deliver any money Law, 2018, p. 99).
or other things of value, in the nature of an
exaction, for services which are not f. Ask for negotiation or attorney’s fees
performed or not to be performed from employers as part of the
settlement of any issue in collective
This ULP is known as featherbedding. It is in bargaining or any other dispute;
nature of exaction, for services which are not
performed or not to be performed, as when a Under Article 260(e) [249 (e)], it is ULP for a
union demands that the employer maintain labor organization, its officers, agents or
personnel in excess of the latter’s requirements. representatives to ask for or accept
It is an unfair labor practice of the union through negotiation fees or attorney’s fees from
coercive means for exacting or attempting to employers as part of the settlement of any
exact the employers for services not rendered or issue in collective bargaining or any other
not intended to be rendered. However, there is dispute (Chan, Pre-Week Bar Exam Notes on
no featherbedding if the paid work is performed Labor Law, 2018, p. 100).
no matter how unnecessary or useless it may be
to the employer (Duka, Labor Laws and Social Sweetheart Contract A labor organization
Legislation, 2019, p. 535). asks for or accepts a negotiation or attorney’s
fees from the employer in settling a
The anti-featherbedding provision has been held bargaining issue or dispute.
not to bar a union from demanding payment for
work for which the employer has already paid The obligation to pay attorney’s fees belongs
another person. A union is not guilty of ULP in to the union and cannot be shunted to the
demanding payment for an amount equal to the individual workers as their direct
wages paid by the employer to a non-union responsibility. The law has made clear that
employee for work which the union‘s members any agreement to the contrary shall be null
were entitled. If the work is actually done by and void ab initio (EMCO Plywood Corporation, et
employees, there can be no conflict with the anti- al. vs. Abelgas, G.R. No. 148532, April 14, 2004).
featherbedding provision, regardless of whether
or not the persons receiving payment are the g. Violation of the CBA
ones who performed the work (Rabouin vs. NLRB It must be noted that under Article 261 of the
[CA2] 195 F2d 906). Labor Code, violation of the CBA is generally
considered merely a grievable issue. It
becomes unfair labor practice only if the
violation is gross in character which means
that there is flagrant and/or malicious refusal
to comply with the economic stipulations in

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the CBA (Chan, Pre-Week Bar Exam Notes on Labor

Substantial Guilt beyond
Law, 2018, p. 100).
Evidence reasonable doubt.
PARTIES LIABLE FOR UNFAIR LABOR
PRACTICE
F. PEACEFUL CONCERTED ACTIVITIES

CIVIL CASE CRIMINAL Workers shall have the right to engage in

CASE concerted activities for purposes of collective
bargaining or for their mutual benefit and
PARTIES LIABLE
protection. The right of legitimate labor
organizations to strike and picket and of
For ULP of For ULP Employer employers to lockout, consistent with the
Employer Officers Officers and agents national interest, shall continue to be
and agents of of corporations, recognized and respected. However, no labor
employer. associations, or union may strike and no employer may
partnership who declare a lockout on grounds involving inter-
may have actually union or intra-union disputes (Art. 278 [263]
(b), Labor Code, as amended).
participated the
ULP.
The term ―” concerted activities” is defined
For ULP Of Labor For ULP of Labor as the activities of two or more employees for
Organization Organization the purpose of securing benefits or changes
Officers and agents Officers, members in terms and conditions of employment, or for
of Labor of governing mutual aid or protection with respect to their
Organizations. boards, collective interest as employee.
representatives or
agents, or Forms of Concerted Activities
members of labor
associations who 1. By Labor Organizations
may have actually a. Strike
participated, b. Picket
authorized, or
ratified the ULP. 2. By Employers
a. Lockout
Who has Jurisdiction
Who may declare a strike or lockout?

Labor Arbiter MTC or RTC as the Workers shall have the right to engage in
case may be, concerted activities for purposes of collective
provided that no bargaining or for their mutual benefits and
criminal protection. The right of legitimate labor
prosecution for organizations to strike and picket and of
ULP may be employer to lockout, consistent with the
instituted without national interest, shall continue to be
first obtaining a recognized and respected. However, no labor
final judgment in union may strike and no employer may
the administrative declare a lockout on grounds involving inter-
proceedings before union and intra-union disputes.
the Labor Arbiter
that ULP has been 1. Strikes
committed.
Any temporary stoppage of work by the
Quantum of Proof Needed concerted action of the employees as a result
of an industrial or labor dispute. [Art. 219 (o),
Labor Code, as amended].

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A strike is the most powerful weapon of workers d. Unfair labor practice (ULP) or
in their struggle with management in the course political strike - one called to protest
of setting their terms and conditions of against the employer‘s unfair labor
employment. Because it is premised on the practices enumerated in Article 248
concept of economic war between labor and of the Labor Code, including gross
management, it is a weapon that can either violation of the CBA under Article 261
breathe life to or destroy the union and its and union-busting (Duka, Labor Laws
members, and one that must also necessarily and Social Legislation, 2019, p.648)..
affect management and its members (Lapanday e. Slowdown strike - one staged
Workers Union vs. NLRC, G.R. Nos. 95494-97, without the workers quitting their
September 7, 1995, 248 SCRA 95, 104-105). work but by merely slackening or
reducing their normal work output. It
a. Grounds for strike is also called “a strike on the
installment plan.” (Poquiz, Labor
Grounds for a valid strike: Relations and Law on Dismissal with
Comments and Notes, 2018, p. 367)
a. Collective bargaining deadlock (Economic
Strike); and/or Nothing in the law requires that a
b. Unfair labor practice (Political Strike). slowdown be carefully planned and
that it be participated in by a large
A strike not based on any of these two grounds number of workers. The essence of
is illegal. (Chan, Bar Reviewer on Labor Law, 2019, p. this kind of strike is that the workers
563) do not quit their work but simply
reduce the rate of work in order to
The following are not valid grounds for a strike: restrict the output or delay the
a. Violations of CBAs (except those that are production of the employer. It has
gross in character) ; been held that while a cessation of
b. Inter-union and internal union disputes; work by the concerted action of a
c. Issues brought to voluntary or compulsory large number of employees may more
arbitration; easily accomplish the object of the
d. Legislated wage orders; and work stoppage than if it is by one
e. Labor standard cases (Ibid.) person, there is, in fact no
fundamental difference in the
Forms and classification of strikes principle involved as far as the
number of persons involved is
1. As to nature: concerned, and thus, if the act is the
same, and the purpose to be
a. Legal strike - one that is staged for a accomplished is the same, there is a
valid purpose and conducted through strike, whether one or more than one
means allowed by law (Duka, Labor Laws have ceased to work(Ramirez vs.
and Social Legislation, 2019, p.649). Polyson Industries, Inc. G.R. No. 207898,
b. Illegal strike - one staged for a purpose October 19, 2016).
not recognized by law or, if for a valid f. Mass leaves - One in which workers
purpose, it is conducted through means collectively abandon or boycott
not sanctioned by law (Duka, Labor Laws regular work causing temporary
and Social Legislation, 2019, p.649). stoppage of work (Solidbank Corp. vs.
c. Economic strike - one declared to EU Gamier, G.R. No. 159460-61,
demand higher wages, overtime pay, November 15, 2010).)
holiday pay, vacation pay, etc. It is one g. Wildcat strike - one declared and
which is declared for the purpose of staged without the majority approval
forcing wage or other concessions from of the recognized bargaining agent
(Duka, Labor Laws and Social
the employer for which he is not
Legislation, 2019, p.651).
required by law to grant (Master Iron
h. Sit-down strike - one where the
Labor Union vs. NLRC, G.R. No. 92009,
February 17, 1993). workers stop working but do not
leave their place of work(Duka, Labor

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Laws and Social Legislation, 2019, p.651). 5. As to the extent of the

i. Overtime boycott – one involving the act interest of strikers:
of the workers in refusing to render
overtime work in violation of the CBA,
a. Primary strike – refers to a strike
resorted to as a means to coerce the
conducted by the workers against
employer to yield to their demands.
their employer, involving a labor
j. Boycott of products – one which
dispute directly affecting them;
involves the concerted refusal to
b. Secondary strike – refers to a strike
patronize an employer's goods or
staged by the workers of an employer
services and to persuade others to a like
involving an issue which does not
refusal.
directly concern or affect their
relationship but rather, by some
2. As to extent: circumstances affecting the workers
such as when the employer persists
a. General strike – one which covers and to deal with a third person against
extends over a whole province or whom the workers have an existing
country. grievance. Workers stage this kind of
b. Particular strike – one which covers a strike to secure the economic
particular enterprise, locality, or assistance of their employer to force
occupation; it usually involves only one the third person to yield to the union
union or only one industry (Azucena, Labor on the issues involving it and said
Code with Comments and Cases, Vol. II-A, third person; and
2021, p. 490).
c. Sympathy strike – a kind of strike
staged by the workers of one
3. As to purpose:
company to make common cause
a. Economic strike – intended to force wage
with the strikers of other companies
and other concessions from the
without demands or grievances of
employer; which he is not required by
their own against their employer. This
law to grant; or
is an illegal strike because there is no
b. Unfair labor practice strike – a strike
labor dispute between the workers
called against unfair labor practices of
who are joining the strikes and the
the employer, usually for the purpose of
latter’s employer. (Duka, Labor Laws
making him desist from further and Social Legislation, 2019, p.651).
committing such practices. (Ibid.)
Characteristics of a strike activity:
4. As to the nature of the strikers’ action:
a. Partial strike – brief and unannounced a. There must be an established relationship
temporary work stoppage, including between the strikers and the person or
slowdowns, unauthorized extension of persons against the strike is called;
rest periods, and walkouts for portions of b. The relationship must be one of employer
a shift or for entire shifts; and employee;
b. Sit-down strike – a combination of the c. The existence of a dispute between the
strike plus a refusal of the strikers to parties and the utilization by labor of the
leave the plant and machines, and a weapon of concerted refusal to work as
refusal to permit the latter to be means of persuading, or coercing
operated; and compliance with the working men‘s
c. Slowdown strike – It is a willful reduction demands;
in the rate of work by a group of d. The contention advanced by the workers
employees for the purpose of restricting that although work ceases, the
the output of the employer. (Ibid.) employment relation is deemed to
(Azucena, Labor Code 2, 2016, p. 580); continue albeit in a state of belligerent
suspension;
e. There is stoppage of work, which
stoppage is temporary;

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f. The striking group is a legitimate labor

. ULP of the
organization, and in case of bargaining
employer;
deadlock, is the employees‘ sole bargaining
a. Collective
representative (Azucena, Jr., The Labor Code
bargaining deadlock
with Comments and Cases, 8th Edition, 2013, p.
552).
(CBD).

Strike Area
SECOND A notice of strike must be
REQUISITE filed with the NCMB-
The establishment, warehouse, depots, plants or DOLE;
offices, including the sites or premises unused as
runaway shops of the employer struck against,
In bargaining deadlocks,
as well as the immediate vicinity actually used by
a notice of strike or
picketing strikers in moving to and from before
lockout shall be filed with
all points of entrance to and exit said
the regional branch of the
establishment (Art. 219(s), Labor Code, as
amended).
Board at least thirty (30)
days before the intended
Strike-breaker date thereof, a copy of
said notice having been
served on the other party
Any person who obstructs, impedes, or interferes
concerned. In cases of
with by force, violence, coercion, threats or
unfair labor practice, the
intimidation any peaceful picketing affecting
period of notice shall be
wages, hours or conditions work or in the
fifteen (15) days.
exercise of the right to self-organization or
However, in case of
collective bargaining, also called a “scab” (Art.
unfair labor practice
219(r), Labor Code, as amended).
involving dismissal from
employment of any union
When the respondent offered reinstatement and
offer duly elected in
attempted to “bribe” the strikers with
accordance with the
“comfortable cots,” “free coffee and occasional
union constitution and b-
movies,” “overtime” pay for “work performed in
laws which may
excess of eight hours,” and “arrangements” for
constitute union busting
their families, so they would abandon the strike
where the existence of
and return to work, they were guilty of strike-
the union is threatened,
breaking and/or union-busting and,
the fifteen (15) day
consequently, of unfair labor practice. It is
cooling-off period shall
equivalent to an attempt to break a strike for an
not apply and the union
employer to offer reinstatement to striking
may take action
employees individually, when they are
immediately after the
represented by a union, since the employees thus
strike vote is conducted
offered reinstatement are unable to determine
and the results thereof
what the consequences of returning to work
submitted to the
would be (Insular Life Employees Association vs.
Insular Life, G.R. No. L-25291, January 30, 1971) appropriate regional
branch of the Board
(Section 7, Rule XII, D.O.
b. Mandatory procedural requirements No. 40-03).

FIRST It must be based on any

THIRD A notice must be served
REQUISITE or both of the following
REQUISITE to the NCMB-DOLE at
two (2) exclusive
least 24 hours prior to the
grounds: taking of the strike vote
by secret balloting,
informing said office of

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the decision to conduct a requisite) should be fully

strike vote, and the date, observed in ALL cases.
place, and time thereof
and asking it to supervise
the taking of the strike
vote; All the foregoing requisites, although
procedural in nature, are mandatory and
failure of a union or employer to comply
FOURTH A strike vote must be therewith would render a strike or lockout
REQUISITE taken where a majority of illegal. (Chan, Bar Reviewer on Labor Law,
the members of the union 2019, p. 562)
approve a strike,
obtained by secret ballot The 7-day waiting period or strike ban is a
in a meeting called for distinct and separate requirement from the
the purpose; cooling-off period. The latter cannot be
substituted for the former and vice-versa.
Both must be complied with separately and
A decision to declare a
distinctly from each other. In the event the
strike must be approved
by a majority of the total result of the strike/lockout vote ballot is filed
within the cooling-off period, the 7-day
union membership in the
bargaining unit requirement shall be counted from the day
following the expiration of the cooling-off
concerned, obtained by
period (NCMB Primer on Strike, Picketing and
secret ballot in meetings
or referenda called for Lockout 2nd Edition, December 1995).
that purpose (Article 278
[263] (f), Labor Code). A legal strike can be changed into an illegal
strike when a ULP occurs (Consolidated Labor
Assn. of the Phils vs. Marsman, G.R. No. L-17038,
July 31, 1964).
FIFTH A strike vote report
REQUISITE should be submitted to There is non-conversion between strike or
the NCMB-DOLE at least lockout or vice-versa because it is different
7 days before the from each other. It can however, happen at
intended date of the the same time (Rizal Cement vs. CIR, G.R. No. L-
strike or lockout, subject 18442, November 30, 1962).
to the cooling-off period
(Capitol Medical Center,
c. Legal strike vs. illegal strike
Inc. vs. NLRC, G.R. No.
147080, April 26, 2005);
VALID STRIKE INVALID STRIKE

SIXTH Except in cases of union It is a strike that A strike staged for a

REQUISITE busting, observance of is staged for a purpose not
the cooling-off period of valid purpose and recognized by law,
15 days, in case of ULP of conducted or, if for a valid
the employer or, 30 days, through means purpose, conducted
in case of CBD, reckoned allowed by law. violative of the law.
from the filing of the
notice of strike; and
Since strikes affect not only the relationship
between labor and management but also the
SEVENTH The 7-day waiting period general peace and progress of the
REQUISITE or strike ban reckoned community, the law has provided limitations
after the submission of on the right to strike. Procedurally, for a strike
the strike vote report to to be valid, it must comply with Article 278 of
the NCMB-DOLE (per 5th the Labor Code. These requirements are

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mandatory, and the unions failure to comply to perform. In other words, they "work on
renders the strike illegal (Piñero vs. NLRC, G.R. No. their own terms (Ilaw at Buklod ng Manggagawa
149610, August 20, 2004. vs. NLRC, G.R. No. 125561, June 27, 1998).

Examples of Illegal Strikes d. Prohibited acts during strike

a. Sit-Down Strike – one where the workers
stop working but do not leave their place of 1. By anyone. No person shall obstruct,
work(Duka, Labor Laws and Social impede, or interfere with, by force, violence,
Legislation, 2019, p.651). coercion, threats, or intimidation, any
peaceful picketing by employees [Art.279(b),
b. Wildcat Strike – one declared and staged Labor Code, as amended];
without the majority approval of the ● Blocking the free ingress to/ egress from
recognized bargaining agent (Duka, Labor work premises for lawful purposes
Laws and Social Legislation, 2019, p.651). ● Obstruction of public thoroughfares
● Threatening, coercing and intimidating
c. Sympathetic Strike – a kind of strike non-striking employees, officers,
staged by the workers of one company to suppliers and customers
make common cause with the strikers of ● Resistance and defiance of assumption of
other companies without demands or jurisdiction by the Labor Secretary or an
grievances of their own against their injunction
employer. This is an illegal strike because ● Acts of violence (Association of
there is no labor dispute between the Independent Unions in the Philippines
workers who are joining the strikes and the (AIUP), et. al. vs. NLRC, G.R. No. 120505,
latter’s employer (Duka, Labor Laws and Social March, 25, 1999).
Legislation, 2019, p.651).
The violence must be pervasive and
d. Secondary Strikes – occurs when a group widespread, consistently and deliberately
of employees refuse in concert to remain at resorted to as a matter of policy [Shell Oil
work for an employer, not because of any Workers vs. Shell Company of the Phil., 39
complaint over their labor standards under SCRA 276 (1971)] (if violence was resorted to
him, but because he persists in dealing with by both sides, such violence cannot be a
a third person against whom they have a ground for declaring the strike as illegal)
grievance (Azucena, Labor Code with Comments (Malayang Samahan ng Manggagawa sa M.
and Cases, Vol. II-A, 2021, p. 491) Greenfield vs. Ramos, G.R. No. 113907, February
28, 2000)
e. Welgang Bayan – Work stoppage affecting 2. By employer. No employer shall use or
numerous (if not all) employers, including a employ any strike-breaker, nor shall any
particular employer who has no dispute with person be employed as a strike-breaker.
his employees regarding their terms and [Art. 279(c), Labor Code, as amended)
conditions of employment. (Id., at p. 494) 3. By public official or police force. No
public official or employee, including
f. Slow Down – it is considered to be a strike officers and personnel of the New Armed
on “installment plan.” There is a slowdown Forces of the Philippines or the Integrated
when the workers, without a complete National Police, or armed person, shall
stoppage of work, retard production or their bring in, introduce or escort in any
performance of duties and functions to manner, any individual who seeks to
compel management to grant their demands. replace strikers in entering or leaving the
(Poquiz, Labor Relations and Law on Dismissal premises of a strike area, or work in place
with Comments and Notes, 2018, p. 367) of the strikers. [Art. 279(d), Labor Code,
as amended]
A slowdown is inherently illicit and unjustifiable,
because while the employees "continue to work
and remain at their positions and accept the
wages paid to them," they at the same time
select what part of their allotted tasks they care

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e. Liability of union officers and members illegal act in the course of the strike, be it legal
for illegal strike and illegal acts during or illegal, his employment can be validly
strike terminated. (Chan, Bar Reviewer on Labor Law,
2019, p. 585)
PARTICIPATION IN LAWFUL STRIKES
“Illegal Acts”
An employee who participates in a lawful strike is
not deemed to have abandoned his employment. The term “illegal acts” under Article 264(a)
Such participation should not constitute sufficient may encompass a number of acts that violate
ground for the termination of his employment existing labor or criminal laws, such as the
even if a replacement has already been hired by following:
the employer during such lawful strike. (Chan,Bar
Reviewer on Labor Law, 2019, p. 582) 1. Violation of Article 264(e) of the Labor
Code which provides that “[n]o person
PARTICIPATION IN ILLEGAL STRIKES engaged in picketing shall commit any act
of violence, coercion or intimidation or
Article 279(a) of the Labor Code as amended obstruct the free ingress to or egress from
makes a distinction between ordinary union the employer’s premises for lawful
members and officers as far as the effect of illegal purposes, or obstruct public
strike on their employment status is concerned. thoroughfares.”
(Id., p. 583) 2. Commission of crimes and other unlawful
acts in carrying out the strike.
Liability for participation in Illegal Strike 3. Violation of any order, prohibition, or
injunction issued by the DOLE Secretary
a. By union officers or NLRC in connection with the
assumption of jurisdiction or certification
The mere declaration of illegality of the strike will order under Article 263(g) of the Labor
result in the termination of all union officers who Code
knowingly participated in the illegal strike
(Lapanday Workers Union vs. NLRC, G.R. No. 95494- This enumeration is not exclusive as
97, September 07, 1995). jurisprudence abounds where the term “illegal
acts” has been interpreted and construed to
Unlike ordinary members, it is not required, for cover other breaches of existing laws.
purposes of termination, that the officers should
be proven to have committed illegal acts during
the strike in order to be held liable (Phimco
Industries, Inc. vs. Phimco Industries Labor
Association, G. R. No. 178030, August 11, 2010).
2. Picketing
b. By ordinary union members
Picketing
Mere participation in an illegal strike is not a
sufficient ground to terminate their employment. Refers to outside patrolling and marching to
It must be shown by substantial evidence that he and fro of the strikers at the company‘s
has knowingly participated in the commission of premises usually accompanied by the display
illegal acts during the strike (Fadriquelan vs. of placards and other signs making known the
Monterey Foods Corp., G. R. No. 178409 & 178434,
facts involved in a labor dispute (IBM vs. NLRC,
June 08, 2011).
G.R. No. 91980, June 27, 1991).
LIABILITY FOR COMMISSION OF ILLEGAL
Requisites for lawful picketing
ACTS
a. The picket should be peacefully carried
As far as liability for commission of illegal acts out;
during the strike is concerned, the issue of
legality or illegality of the strike is irrelevant. As
long as the union officer or member commits an

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b. There should be no act of violence, coercion

(Sec. 3, Art. XIII, 1987
or intimidation attendant thereto;
Constitution)
c. The ingress to or egress from the company
premises should not be obstructed; and
d. Public thoroughfares should not be
impeded.

Elements:

a. There must be a labor issue; What is definitive of whether the action

b. It must be a concerted activity of the union; staged by petitioner is a strike and not merely
and a picket is the totality of the circumstances
c. Characterized by the peaceful marching to surrounding the situation (Santa Rosa Coca-Cola
and from at the employee’s premises with Plant Employees Union vs. Coca-Cola Bottlers
placards to appraise the employer and the Phils., Inc., G.R. Nos. 164302-03, January 24,
public of their demands. 2007).

Innocent third-party rule in picketing

STRIKE PICKETING
An innocent third party shall not be adversely
affected by the picketing. The lawful ingress
To withhold or to Picketing outside of
and egress of passage of an innocent third
stop work by the the company
party cannot be blocked.
concerted action of compound usually
employees as a accompanies the work
3. Lockout
result of an stoppage
industrial or labor
dispute The temporary refusal of an employer to
furnish work as a result of an industrial or
Focuses on the Focuses on publicizing labor dispute. (Art. 219(p), Labor Code, as
stoppage of work the labor dispute and amended)
its incidents to inform
the public of what is a. Grounds for lockout
happening in the A lockout must be based on any or both of
company the following two (2) exclusive grounds:
a. Unfair Labor Practice (political); ;
b. Collective bargaining deadlock
(economic). (Sec. 5, Rule XXII, D.O. No. 40-
Refers to the actual Simply means marching 03, as amended)
stoppage of work to and fro in front of the
employer‘s premises,
b. Mandatory procedural requirements
usually accompanied by
the display of placards
FIRST It must be based on any
and other signs;
REQUISITE or both of the following
separate and different
two (2) exclusive
from the actual
grounds:
stoppage of work

. ULP of the
employer;
Guaranteed under Right to picket a. Collective
the Constitutional guaranteed under the bargaining deadlock
provision on the freedom of speech and (CBD). (Chan, Bar
right of workers to of expression and to Reviewer on Labor Law,
conduct peaceful peaceably assemble 2019, p. 598)
concerted activities (Sec. 4, Art. III, 1987
Constitution)

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SECOND A notice of strike must be the decision to conduct a

REQUISITE filed with the NCMB- strike vote, and the date,
DOLE; place, and time thereof
and asking it to supervise
In bargaining the taking of the strike
deadlocks, a notice of vote (Chan, Bar Reviewer
strike or lockout shall on Labor Law, 2019, p.
be filed with the 598);
regional branch of the
Board at least thirty
(30) days before the FOURTH A strike vote must be
intended date REQUISITE taken where a majority of
thereof, a copy of the members of the union
said notice having obtained by secret ballot
been served on the in a meeting called for
other party the purpose must
concerned. In cases approve it;
of unfair labor
practice, the period of A decision to declare a
notice shall be fifteen strike must be approved
(15) days. However, by a majority of the total
in case of unfair labor union membership in the
practice involving bargaining unit
dismissal from concerned, obtained by
employment of any secret ballot in meetings
union offer duly or referenda called for
elected in accordance that purpose (Article 278
with the union [263] (f), Labor Code).
constitution and b-
laws which may
constitute union FIFTH A strike vote report
busting where the REQUISITE should be submitted to
existence of the union the NCMB-DOLE at least
is threatened, the 7 days before the
fifteen (15) day intended date of the
cooling-off period strike or lockout, subject
shall not apply and to the cooling-off period
the union may take (Capitol Medical Center,
action immediately Inc. vs. NLRC, G.R. No.
after the strike vote is 147080, April 26, 2005);
conducted and the
results thereof
submitted to the SIXTH Except in cases of union
appropriate regional REQUISITE busting, observance of
branch of the Board the cooling-off period of
(Section 7, Rule XII, 15 days, in case of ULP of
D.O. No. 40-03). the employer or, 30 days,
in case of CBD, reckoned
from the filing of the
THIRD A notice must be served notice of strike; and
REQUISITE to the NCMB-DOLE at
least 24 hours prior to the
taking of the strike vote SEVENTH The 7-day waiting period
by secret balloting, REQUISITE or strike ban reckoned
informing said office of after the submission of

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b. Certify the same to the NLRC for

the strike vote report to
compulsory arbitration, in which case it
the NCMB-DOLE (per 5th
will be the NLRC which shall hear and
requisite) should be fully
decide it (Article 278(g), Labor Code, as
observed in ALL cases
amended).
(Chan, Bar Reviewer on
Labor Law, 2019, p. 598). The following industries/services are hereby
recognized as deemed indispensable to the
national interest:
If an injunction is subsequently ordered, lockout a. Hospital Sector;
must cease. b. Electric Power Industry;
c. Water Supply Services, to exclude small
Effect of illegal lockout water supply services such as Bottling and
Refilling Refilling Stations;
Any worker whose employment has been d. Air Traffic Control; and
terminated as a consequence of an unlawful e. Such other industries as maybe
lockout shall be entitled to reinstatement with full recommended by the National Tripartite
back wages (Art. 279(a), Labor Code, as amended). Industrial Peace Council (NTIPC). (Sec. 16,
Rule XXII, D.O. No. 40-03 as amended)
When the parties are in pari delicto
In the instant case, stoppage of work in the
firm will be hurtful not only to both the
If both parties are in pari delicto, in that the employer and the employees, more
employer is guilty of illegal lockout and the union particularly, it is the national economy that
is culpable for illegal strike, such situation will suffer because of the resultant reduction
warrants the restoration of the status quo ante in export earnings and dollar reserves, not to
and bringing the parties back to the respective mention possible cancellation of the contracts
positions before the illegal strike and illegal of the company with foreign importers. It was
lockout. (Chan, Bar Reviewer on Labor Law, 2019, p. particularly for the purpose of avoiding such a
598-599)
development that the labor dispute was
certified to the NLRC, with the return-to-work
4. Assumption of jurisdiction by the DOLE
order following as a matter of course under
Secretary the law (Asian Transmission, Corporation vs.
NLRC, G.R. No. 75271-73, GR L-77567, June 27,
a. Industries Indispensable to National 1988).
Interest
Power of the President Over National
The determination of specific industries Interest Cases
indispensable to the national interest is left to the
discretion of the DOLE Secretary. Notwithstanding the power granted to the
DOLE Secretary to assume jurisdiction over
Under Article 278 (g) of the Labor Code, when in national interest labor disputes or to certify
the opinion of the DOLE Secretary, the labor them to the NLRC for compulsory arbitration,
dispute causes or will likely cause in a strike or the President of the Philippines shall not be
lockout in an industry indispensable to the precluded from doing any of the following:
national interest The power of assumption of
jurisdiction or certification by the Secretary of a. To determine the industries that, in his
Labor is in the NATURE OF A POLICE POWER opinion, are indispensable to the national
MEASURE. interest; or
b. To intervene at any time and assume
The Secretary of Labor is empowered to do either jurisdiction over any such labor dispute in
of the following: order to settle or terminate it (Article 278
[g], Labor Code).
a. Assume jurisdiction over the labor dispute
and decide it himself; or

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b. Effects of Assumption of Jurisdiction: to-work order is interlocutory in nature, and is

merely meant to maintain status quo while
1. Automatically enjoins the intended or the main issue is being threshed out in the
impending strike or lockout as specified in proper forum. In contrast, an order of
the assumption or certification order; reinstatement is a judgment on the merits
2. If one has already commenced at the time of handed down by the Labor Arbiter pursuant
assumption or certification, automatically to the original and exclusive jurisdiction
prohibits its continuation; and provided for under Article 224(a) of the Labor
3. The mere issuance of an assumption or Code (Manggagawa ng Komunikasyon sa Pilipinas
certification order automatically carries with vs. Philippine Long Distance Telephone Company
it a return-to-work order which is compulsory incorporated, G.R. No. 190389, April 19, 2017).
and immediately executor;
4. The employer shall immediately resume Nature of Assumption Order or
operations and re-admit all workers under Certification Order
the same terms and conditions prevailing
before the strike or lockout. (Article 278 [g], The secretary’s assumption and certification
Labor Code). orders being executory in character are to be
strictly complied with by the parties even
Principles on the Assumption/Certification during the pendency of any petition
Power of the DOLE Secretary: questioning their validity for this extraordinary
authority given by law to the Secretary of
1. Prior notice and hearing are not required in Labor is aimed at arriving at peaceful and
the issuance of assumption or certification speedy solution to labor dispute, without
order. jeopardizing national interest. (Philtread tire &
Rubber Corp vs. NLRC, GR No. 102185, February
2. The DOLE Secretary may seek the assistance
15, 1993).
of law enforcement agencies like the
Philippine National Police to ensure Police Power Measure
compliance with the provision thereof as well
as with such orders he may issue to enforce
The power to issue assumption or certification
the same (Chan, Pre-Week Bar Exam Notes on
Labor Law, 2018, p. 107). orders is an extraordinary authority granted
to the President and his alter ego, the DOLE
Return-to-Work Order Secretary, the exercise of which should be
strictly limited to national interest cases. This
is done in promotion of the common good
Always a part of the Assumption or Certification
considering that a prolonged strike or lockout
Order even if not expressly stated therein. The
can be inimical to the national economy (Chan,
return-to-work order is compulsory and
Pre-Week Bar Exam Notes on Labor Law, 2018, p.
immediately executory (Chan, Pre-Week Bar Exam 108).
Notes on Labor Law, 2018, pp. 107-108)..
Defiance of assumption or certification
Assumption of jurisdiction over a labor dispute, orders shall be considered as an illegal
always coexist with an order for workers to return act
to work immediately and for employers to
readmit all workers under the same terms and Non-compliance with the certification order of
conditions prevailing before the strike or lockout the Secretary of Labor and Employment shall
(Trans-Asia Shipping Line Inc. – Unlicensed Crew
be considered as an illegal act committed in
Employees Union of Appeals, et al., GR No. 145428,
July 7, 2004). the course of the strike or lockout, and shall
authorize the NLRC to enforce the same under
The Secretary of Labor may also exercise such the pain of immediate disciplinary action,
power to assume jurisdiction in labor dispute including dismissal or loss of employment
adversely affecting the continued operation of status or payment by the locking-out
such hospitals, clinics, or medical institutions. employer of backwages, damages and/or
other affirmative relief, even criminal
Return-to-work and reinstatement orders are prosecution against the liable parties (Sec. 4,
both immediately executory; however, a return- Rule VIII, 2005 NLRC Revised Rules of Procedure).

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Justifications: Relations and Law on Dismissal, p. 407, 2018;

Rothenberg Labor Relations, pp 573-574).
1. A strike that is undertaken after the issuance b. Where the business has passed to a
by the DOLE Secretary of an assumption or transferee in good faith (Insular Sugar
certification order becomes a prohibited Refining Corp. vs. CIR, GR No. L-19247, May
activity and thus illegal. The defiant striking 31, 1963).
union officers and members, as a result, are c. Where the employer has suffered serious
deemed to have lost their employment status economic reverses and the need for the
for having knowingly participated in an illegal services of the strikers has already ceased
strike. to exist (Union of PECO Employees vs. PECO,
GR No. L-7161, May 19, 1955).
2. From the moment the worker defies a return-
d. Where strikers have found substantially
to-work order, he is deemed to have
equivalent and regular employment
abandoned his job.
(Cromwell Commercial Employees and
3. By so defying, the workers have forfeited Laborers Union vs. CIR, GR No. L-19778,
their right to be readmitted to work (Chan, September 30, 1964).
Pre-Week Bar Exam Notes on Labor Law, 2018, p. e. Where strikers were not actually working
108). at the time of the strike. (Sta. Cecilia
Sawmill, Inc. vs. CIR, G.R. Nos. L-24235-36,
Not a violation of right against involuntary April 18, 1967)
servitude f. Where reinstatement of illegally
dismissed strikers has become impossible
So imperative is the order in fact that it is not (Coronel vs. CIR, GR Nos. L-22359 & L-22524-
even considered violative of the right against 25, August 30, 1968)
involuntary servitude, as this Court held in g. Where they are officers of the union that
Kaisahan ng Mga Manggagawa sa Kahoy vs. staged an illegal strike (San Juan De Dops
Gotamco Sawmills. The worker can of course give Hospital Employees Union vs. San Juan De
up his work, thus severing his ties with the Dios Hospital, GR No. 144302, May 27, 2004).
company, if he does not want to obey the order, h. Where employee-striker knowingly
but the order must be obeyed if he wants to participates in the commission of illegal
retain his work even if his inclination is to strike acts during the strike such as violence,
(Asian Transmission Corp. vs. NLRC, G.R. No. 88725, coercion, intimidation and the like (Chua
November 22, 1989). vs. NLRC, G.R. No. 105775, February 8, 1993).

Employees engaged in Strike are generally When the order of reinstatement is

entitled to reinstatement immediately executory, the employer
may comply by:
In Economic Strike:
- Employees engaged in economic strike are 1. Actual reinstatement-admitting the
entitled to reinstatement provided the dismissed employee back to work under
employer has not yet hired permanent the same terms and conditions prevailing
replacements. (Consolidated Labor Association prior to his dismissal or separation or a to
vs. Marsman, GR No. L-17038, July 31, 1964). a substantially equivalent position of the
former position is already filled up; or
In ULP strike: 2. Payroll reinstatement-reinstating the
- Employees engaged in ULP Strike are entitled employee merely in the payroll in lieu of
to reinstatement even if the employer may actual reinstatement when special
have already hired replacements. (Cromwell circumstances exist that render the actual
Employees Union vs. CIR, GR No. L-19778, reinstatement impracticable or not
September 30, 1964). conducive to attaining the purposes of the
law (University of Sto. Tomas vs. NLRC, G.R.
Reinstatement of strikers may be denied No. 89920, October 18, 1990).

Reinstatement of strikers may be denied in the Burden of Economic Loss

following instances:
a. Where the employee concerned was In a strike, the strikers and company shall
found to have committed serious misconduct bear its own economic loss (Each side will
prejudicial to the employer (Poquiz, Labor

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bear its own loss) (Cromwell Commercial Employees refused to accept the offer (Ibid.). The
vs. CIR, G.R. No. L-19778, September 30, 1964). company’s refusal would have resulted in
the strikers’ economic loss (PBTC vs. PBTC
However, in case the ULP is on the part of the Employees Union, GR No. L-39598, January
employees, the economic loss cannot be given to 13, 1976).
them, for the reason that the law should protect
the labor. On the other hand, if the ULP is on the Liability of union officers and ordinary
part of the management, the management workers/union members
should bear its own economic loss (SSS vs. SSS
Supervisors‘ Union, G.R. No. L-31832, October 23,
1982).
Union Officers Union Members
Arrest or Detention of Union Members or
Union Organizers for Union Activities:
Participation in Legal Strikes
GENERAL RULE: A police officer cannot arrest
or detain a union member for union activities Not deemed to Not deemed to
without previous consultations with the Secretary have abandoned have abandoned
of Labor. his employment; his employment;
not a ground for not a ground for
EXCEPTION: On the grounds of national his dismissal even his dismissal even
security, public peace, or commission of crime if a replacement if a replacement
(Article 281, Labor Code, as amended). has already been has already been
hired hired
General Rule: No-work no-pay principle
applied in strike Participation in Illegal Strikes

In an economic strike, the strikers are not

entitled to backwages, since the employer should Termination of all For an ordinary
get the equivalent day’s work for what he pays union officers who union member to
his employees. (Consolidated Labor Association of knowingly suffer termination,
the Phils. vs. Marsman and Co. Inc., GR No. L-17038, participated in the it must be shown
July 31, 1964). illegal strike. by clear evidence
that he has
On the other hand, even after the labor tribunal Reason for the committed illegal
has made a finding of an unfair labor practice, it Distinction: acts during the
shall have the discretion to determine whether or Union officers have strike.
not to grant backwages. (Consolidated Labor the duty to guide
Association of the Phils. vs. Marsman and Co. Inc., their members to
supra).
respect the law. If
instead of doing
The stoppage of their work was not the direct
so, the officers
consequence of the company’s unfair labor
urged the
practice. Hence, their economic loss should not
members to violate
be shifted to the employer. (Cromwell Commercial
Employees and Laborers Union vs. CIR, GR No. L- the law and defy
19778, September 30, 1964). duly constituted
authorities, their
Exceptions; backwages may be given: dismissal from the
a. Discriminatorily dismissed employees must service is just
receive backwages from the act of penalty or sanction
discrimination, that is from the day of their for their unlawful
discharge (Ibid.); act.
b. The strikers did not strike but were practically
illegally locked out (Ibid.);
c. The strikers voluntarily and unconditionally
offered to return to work, but the employer

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Participation in the commission of illegal by the union has been converted into a
acts during a strike: preventive mediation case. Having so been
converted, a strike can no longer be staged
Legality or Illegality of the strike is immaterial; as based on said notice. Upon such conversion,
long as the union officer or member commits an the legal effect is that there is no more notice
illegal act during a strike, his employment may of strike to speak of (San Miguel Corporation vs.
be validly terminated (Chan, Pre-Week Bar Exam NLRC, G.R. No. 119293, June 10, 2003).
Notes on Labor Law, 2018, p. 110).
Injunction in Picketing Cases
Liability for illegal acts should be determined on
an individual basis – the individual identity of the GENERAL RULE: Injunction cannot be
union members who participated in the illegal issued against the conduct of picketing of
acts may be proved through affidavits and workers. As guaranteed by the Constitution,
photographs, and the specific illegal acts they picketing is considered a part of the Freedom
committed should be described with particularity of Speech.
(Chan, Pre-Week Bar Exam Notes on Labor Law, 2018,
p. 110). EXCEPTIONS: NLRC may enjoin the
picketing under the following circumstances:
c. Liability of Employers
1. Where picketing is carried out through the
Any worker whose employment has been use of illegal means;
terminated as a consequence of an unlawful 2. Where picketing involves the use of
lockout shall be entitled to reinstatement with full violence and other illegal acts;
backwages. (Article 279, Labor Code, as amended). 3. Where picketing affects the rights of third
parties and injunction becomes necessary
d. Waiver of Illegality of Strike to protect such rights. (Chan, Bar Reviewer
on Labor Law, 2019, p. 618-619)
Voluntary Reinstatement - The act of an
employer in inviting the workers to return to their Requisites for labor injunctions
posts without making any reference to the
pending case involving the issue of illegality of Restraining orders and injunctions are not
the strike or imposing any condition or alteration issued ex parte but only upon compliance with
of the terms of their employment was deemed a the following requisites:
waiver of its right to consider the strikers as
wrongdoers. More so in this case when such 1. Hearing held after due and personal
invitation was accepted by the strikers. By said notice to parties affected;
act, the parties may be said to have both 2. Reception of evidence and the
abandoned their original positions and come to a opportunity of cross examination;
virtual compromise to resume unconditionally 3. Findings of fact by the Commission that:
their former relations. (Citizens Labor Union vs. a. Prohibited or unlawful acts have been
Standard Vacuum Oil Co., G.R. No. L-7478, May threatened and committed and will be
6, 1955) continued until restrained;
b. Substantial or irreparable injury to
5. Injunctions complainant‘s property will follow;
c. That as to each item of relief to be
Injunction in Strikes and Lockouts granted, greater injury will be
inflicted by the denial;
GENERAL RULE: Strikes and lockouts that are d. Complainant has no other remedy in
validly declared enjoy the protection of the law law; or Public officials charged with
and cannot be enjoined unless illegal acts are duty to protect complainant‘s
committed or threatened to be committed in the property are unable or unwilling to
course thereof. furnish adequate protection. (Sec. 1,
Rule X, 2011 NLRC Rules of Procedure as
EXCEPTION: Injunction may be issued not only amended)
against the commission of illegal acts but against
the strike itself because the notice of strike filed

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Innocent Bystander Rule Employment is a property right

Under the “Innocent Bystander Rule,” the third- Employment is not merely a contractual
party employers or “innocent bystanders” who relationship; it has assumed the nature of
have no employer-employee relationship with the property right. It may spell the difference
whether or not a family will have food on their
picketing strikers, may apply for injunction with
table, roof over their heads and education for
the regular courts to enjoin the conduct of the their children. It is for this reason that the
picket. Because of the absence of such employer- State has taken up measures to protect
employee relationship, the NLRC cannot employees from unjustified dismissals. It is
entertain such application for injunction from also because of this that the right to security
innocent bystanders. (Chan, Bar Reviewer on Labor of tenure is not only a statutory right but,
Law, 2019, p. 619) more so, a constitutional right (Gonzales vs.
NLRC, G.R. No. 15735, August 26, 1999).
The right to picket is not absolute. The courts can
Security of tenure would imply at the very
confine or localize the sphere of communication
least that where a penalty less punitive would
or the demonstration to the parties to the labor
suffice, whatever missteps may be committed
dispute, including those with related interest, and
by labor ought not to be visited with a
to insulate establishments or persons with no
consequence so severe. It is not only because
industrial connection or having interest totally
of the law's concern for the workingman.
foreign to the context of the dispute. (PAFLU vs.
Cloribel, GR No. L-25878, March 28, 1969).
There is, in addition, his family to consider.
Unemployment brings untold hardships and
sorrows on those dependent on the wage-
In one case the Court upheld a trial court's
earner (Almira vs. B.R. Goodrich Phils., Inc. G.R.
injunction prohibiting the union from blocking the No. L-34974 July 25, 1974).
entrance to a feed mill located within the
compound of a flour mill with which the union Security of tenure does not mean
had a dispute. Although sustained on a different perpetual employment
ground, no connection was found between the
While it is true that security of tenure is a
two mills owned by two different corporations
constitutionally guaranteed right of the
other than their being situated in the same employee. It does not, however, mean
premises. It is to be noted that in the instances perpetual employment for the employee (Phil.
cited, peaceful picketing has not been totally Village Hotel vs. NLRC, G.R. No. 115033, February
banned but merely regulated. (Republic Flour Mills 28, 1994).
Workers Association vs. Reyes, GR No. L-21378,
An employer cannot be compelled to continue
November 28, 1966).
in his employ an employee whose continued
stay is inimical and detrimental to his interest.
VI. TERMINATION OF EMPLOYMENT
Otherwise, that would be destruction of the
capital which the law is also bound to protect
Termination implies a complete severance (Poquiz, Labor Relations and Law on Dismissal with
of employer-employee relationship (Poquiz, Notes and Comments, p. 434).
Labor Relations and Law on Dismissal with Notes and
Comments, p. 429). Consequences Of The Violation Of A
Worker’s Security Of Tenure
1. Reinstatement without loss of seniority
A. Security Of Tenure rights and other privileges;
2. Full backwages, inclusive of allowances
Security of tenure is the right not to be removed and other benefits or their monetary
from one’s job without valid cause and valid equivalent computed from the time his
procedure. It extends to regular as well as non- compensation was withheld from him up
regular employment. (Kiamco vs. NLRC, PNOC and to the time of his actual reinstatement;
PNOC-EDS. G.R.No. 129449, June 29, 1999. Bellosillo,
and
J.)
3. Recovery of moral and exemplary
damages and attorney‘s fees (Azucena,

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The Labor Code with Comments and Cases, regular employee with respect to the activity
Volume II, 2021). in which he is employed and his employment
shall continue while such activity exists. (par.
2, Art. 280, Labor Code; (Claret School of Quezon
1. Categories of Employment as to City vs. Sinday. G.R. No. 226358, October 9, 2019)
Tenure
c. Probationary
a. Regular
Regular Employees Probationary Employment
Regular employees refer to those who Probationary employment exists where the
have been engaged to perform activities employee, upon his engagement, is made to
which are usually necessary or desirable undergo a trial period during which the
in the usual business or trade of the employer determines his fitness to qualify for
employer (Art. 295, Labor Code, as regular employment based on reasonable
amended). standards made known to him at the time of
his engagement (Labor Code, Art. 296, as
amended).
Two Kinds of Regular Employees; Test of
Regularity
Probationary employment must have
been expressly agreed upon. If there is no
1. By nature of work - when the employee
such agreement, the employment is
has been engaged to perform activities which
considered regular (Sampaguita Auto Transport
are usually necessary or desirable in the
Corp. vs. NLRC, G.R. No. 197384, January 30,
usual business or trade of the employer. 2013).
2. By years of service - when the employee
is allowed to work beyond the agreed period Probationary employee is one who is on
of probationary, project, seasonal, casual, or trial by an employer during which the
fixed-term employment, irrespective of employer determines whether or not he is
whether it is just one day or more after the qualified for permanent employment
lapse of such period. (University of Santo (International Catholic Migration Comm. vs. NLRC,
Tomas vs. Samahang Manggagawa ng UST, et al. G. R. No. 72222, January 30, 1989).
G.R. No. 184262, April 24, 2017. Perlas-Bernabe,
J.) General Rule: Six-month Probationary
Right To Security Of Tenure Period
The employer may not terminate the services of Probationary employment shall not exceed 6
a regular employee except for a just cause or months from the date the employee started
when authorized under the Labor Code (Art. 279, working (Art. 296, Labor Code, as amended).
Labor Code, as amended).
Renewal of Contract After the Lapse of
b. Casual Probationary Period, Employee
Becomes a Regular Employee
Casual Employment
When an employer renews a contract of
An employment is deemed to be casual where an employment after the lapse of the six-month
employee is engaged to work on an activity that probationary period, the employee thereby
is not usually necessary or desirable in the usual becomes a regular employee. No employer is
business, or trade of the employer (Art. 295, Labor allowed to determine indefinitely the fitness of
Code, as amended).
its employees (Malicdem and Flores vs. Marulas
Industrial Corporation and Mancilla. GR No.
Casual Employees who rendered at least 204406, February 26, 2014).
one (1) year of service deemed to be
regular employees Note: In the absence of any evaluation or
valid extension, the employee had become a
Any employee who has rendered at least one regular employee (Dusit Hotel Nikko vs.
year of service, whether such service is Gatbonton. G.R. 161654, May 5, 2006).
continuous or broken, shall be considered a

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Exceptions to the Six-month Probationary Leogardo, G.R. No. 74246, 1989)

Period:
The evil sought to be prevented is to
1. The employer and the employee mutually discourage scheming employers from
agree on a shorter or longer period using the system of double or successive
(Mariwasa Manufacturing, Inc. and Dazo vs. probation to circumvent the mandate of the
Leogardo, J.R. and Dequila. G.R. No. 74246, law on regularization and make it easier for
1989); them to dismiss their employees. (Holiday Inn
2. The nature of work requires a longer period; Manila, et al. vs. NLRC and Honasan. G.R. No.
3. A longer period is required and established 109114, September 14, 1993)
by company policy (Buiser, et al. vs.
Leogardo, J.r., et. al., G.R. No. L63316, July Standards Must Be Made Known To
31, 1984); Employee
4. Covered by an Apprenticeship or Learnership
agreement stipulating a different period (Art. In all cases of probationary employment, the
296, Labor Code, as amended); employer shall make known to the employee
5. Voluntary agreement of parties; the standards under which he will qualify as a
Note: By voluntarily agreeing to such an regular employee at the time of his
extension, the Employee waived any benefit engagement. Where no standards are made
attaching to the completion of the period if known to the employee at that time, he shall
he still failed to make the grade during the be deemed a regular employee. (Aberdeen
period of extension (Mariwasa Manufacturing, Court, Inc. and Ng vs. Agustin, J.R. G.R. No.
Inc. and Dazo vs. Leogardo, J.R. and Dequila. G.R. 149371, April 13, 2005; IRR Labor Code, Sec. 6[d],
No. 74246, 1989. Narvasa, J.); Rule I, Book V)
6. The Employer gives the Employee a second
chance to pass the standards set; (Ibid.) Exceptions:
7. When the same is required by the nature of A. When the job is self-descriptive in nature
the work, e.g. the probationary period set for such as in the case of maids, cooks,
professors, instructors and teachers is 3 drivers, or messengers.
consecutive years of satisfactory service B. Probationary managerial employee. A
pursuant to DOLE Manual of Regulations for managerial role essentially connotes an
Private Schools. (Ibid) exercise of discretion, the quality of
effective management can only be
If not one of the exceptional circumstances determined through subsequent
above is proven, the employee whose assessment.
employment exceeds 6 months is undoubtedly a C. The case of probationary employees
regular employee. (San Miguel vs. Del Rosario, G.R. whose tasks involve the application of
No. 168194 & 168693, 2005) discretion and intellect, such as lawyers,
artists, and journalists (Abbott Laboratories,
Elements Of A Valid Probationary Philippines, et al. vs. Alcaraz, GR No. 192571
Employment: MR, April 22, 2014).
1. Employee is made to undergo a trial period;
2. Reasonable standard must be communicated Termination Of Probationary
to the employee; and Employment
3. Employer must make such communication at
the time of the Probationary Employee’s Within the 6-month probationary period,
engagement. (Section 6 (d) of the Implementing probationary employees are entitled to
Rules of Book VI, Rule I of the Labor Code.) security of tenure notwithstanding their
limited tenure and non-permanent status.
Extension Of Probation; During their probationary employment, they
Double/Successive Probation Not Allowed cannot be dismissed except under any of the
following grounds:
The employer and employee may extend by 1. For a just or authorized cause as provided
agreement the probationary period of by law or under the employment contract
employment beyond 6 months, but it cannot be (Phil Federation of Credit Cooperatives, Inc.
ad infinitum. (Mariwasa Manufacturing vs. and Jayoma vs. NLRC and Abril. G.R. No.
121071, December 11, 1998).

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2. For failure to qualify as a regular employee the probation. (Canagian Opportunities Unlimited
in accordance with reasonable standards vs. Dalangin, J.r. G.R. No. 172223, February 6,
made known by the employer to the 2012)
employee at the time of engagement.
(Robinsons Galleria/Robinsons Supermarket Limitations To Termination Of Probation
Corporation vs. Sanchez, G.R. No. 177937, 1. It must be exercised in accordance with
January 19, 2011) the specific requirements of the contract;
2. If a particular time is prescribed, the
In the case of No. 1, procedural due process is termination must be within such time and
required in the termination of probationary if formal notice is required, then that form
employment. must be used;
3. The employer’s dissatisfaction must be
In the case of No. 2, the following requisites real and in good faith, not feigned so as
must be present: to circumvent the contract or the law;
i. The employer must communicate to the 4. There must be no unlawful discrimination
employee that he is being hired on a in the dismissal. (Manila Hotel Corporation
probationary basis; vs. NLRC and Cruz, G.R. No. 53453, January
ii. The employer must convey to the 22, 1986)
probationary employee the reasonable
standards to qualify for regularization; Due Process Prior To Termination
iii. The probationary status of the newly-hired
employee must be communicated to him Probationary employees are entitled to
prior to the commencement of his procedural due process prior to dismissal from
employment; service. Due process consists of making the
iv. The employer must convey this reasonable reasonable standards excepted of the
standard at the start of the probationary employee during his probationary period
employee‘s engagement and not in the known to him at the time of his probationary
course thereof or towards its end; employment. (Philippine Daily Inquirer, Inc. vs.
otherwise he becomes a regular employee Magtibay, J.r. and PDIEU. G.R. No. 164532, July
from day one of his employment. 24, 2007)
v. The employer must evaluate the
performance of the probationary employee Acquisition Of Permanent Employment
in relation to the duly communicated For Private School Teachers
reasonable standards; and
vi. The employee fails to comply with these The legal requirements for acquisition of
reasonable standards before the permanent employment, are as follows:
completion of the probationary period. ● The teacher is a full-time teacher;
(Tiamson‘s Enterprises, Inc. et al. vs. CA and ● The teacher must have rendered three
Sy, G.R. No. 192881, November 16, 2011) consecutive years of service; and
● such service must have been satisfactory.
Termination must be done prior to the lapse of (UST vs. NLRC, G.R. No. 85519, February 15,
the probationary period. Termination a few days 1990; applying the MORPS)
after the lapse of probationary period cannot be
done without due process as he has already d. Project
become a regular employee by that time. (Ibid.)
Project Employees Refer To Those
Probationary employee may be dismissed before Whose Employment:
the end of the probationary period. Termination, a) has been fixed for a specific project or
to be valid, must be done before the lapse of the undertaking, the completion or
probationary period. (Pasamba vs. NLRC, et al. G.R. termination of which has been
No. 168421, June 8, 2007; Meralco vs. NLRC and determined at the time of the
Meris, G.R. No. 83751, September 29, 1989). engagement of the employee or
b) where the work or service to be
Conversely, once the employer finds the performed is seasonal in nature and the
employee qualified, the employer may extend to employment is for the duration of the
him regular employment even before the end of season (Art. 295, Labor Code, as amended).

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Note: Absence of a definite duration of the Two (2) Types of Employees In The
project, the employee is deemed to be regular Construction Industry
(Violeta and Baltazar vs. NLRC, G.R. No. 119523, 1. Project Employees - those employed in
October 10, 1997). connection with a particular construction
Litmus Test project;
The litmus test to determine whether an 2. Non-project Employees - those
individual is a project employee lies in setting a employed by a construction company
fixed period of employment involving a specific without reference to a particular project.
undertaking which completion or termination has (Fernandez vs. NLRC and D.M. Consunji, Inc.,
been determined at the time of the particular G.R. No. 106090, February 28, 1994)
employee’s engagement (Leyte Geothermal Power
Progressive Employees Union-ALU-TUCP vs. PNOC- Note: The length of service or the rehiring of
EDC, G.R. No. 170351, March 30, 2011). construction workers on a project-to-project
basis does not confer regular employment
Continuous rehiring of the employee a status, since their hiring is only a natural
badge of regular employment consequence of the fact that experienced
construction workers are preferred (Grandspan
Continuous rehiring of the employee may serve Development Corporation vs. Bernardo, G.R. No.
as a a badge of regular employment when the 141464).
activities performed by the purported “project”
employee are necessary and indispensable to the Indicators of Project Employment:
usual business or trade of the employer (Tomas A. The duration of the specific/identified
Lao Construction vs. NLRC, G.R. No. 116781, undertaking for which the worker is
September 5, 1997). engaged is reasonably determinable;
B. Such duration, as well as the specific
Once a project or work-pool employee who has work/service to be performed, is defined
been (1) continuously, as opposed to in an employment agreement and is made
intermittently, re-hired by the same employer for clear to the employee at the time of
the same tasks or nature of tasks; and (2) these hiring;
tasks are vital, necessary and indispensable to C. The work/service performed by the
the usual business or trade of the employer, then employee is in connection with the
the employee must be deemed a regular particular project/undertaking for which
employee (Maraguinot, J.r. and Enero vs. NLRC, he is engaged;
G.R. 120969, January 22, 1998). D. The employee, while not employed and
awaiting engagement, is free to offer his
Two (2) Types Of Project Activities: service to any other employer;
E. The termination of his employment in the
1. A particular job or undertaking that is within particular project/undertaking is reported
the regular or usual business of the employer to the DOLE Regional office having
company, but which is distinct and separate, jurisdiction over the workplace within 30
and identifiable as such, from the other days following the date of his separation
undertaking of the company; and from work, using the prescribed form on
2. A particular job or undertaking that is not employees’ terminations/
within the regular business of the dismissals/suspensions;
corporation, such a job or undertaking must F. An undertaking in the employment
also be identifiably separate and distinct from contract by the employer to pay
the ordinary or regular business operations completion bonus to the project employee
of the employer. (ABS CBN Broadcasting as practiced by most construction
Corporation vs. Nazareno, G.R. No. 164156, companies. (Section 2.2 of Department
September 26, 2006)
Order No. 19-93)
The services of project employees are
Right To Security Of Tenure
coterminous with the project and may be
terminated upon the end or completion of that
Project employees are entitled to security of
project for which they were hired. (Ibid.)
tenure at least for the duration of the project.
(Ibid)

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e. Seasonal Requisites Of A Valid Fixed-Term

Employment:
Seasonal Employees 1. The employee must have willfully and
voluntarily entered into the fixed-term
Seasonal Employees are those whose work or employment contract without any duress,
service to be performed is seasonal in nature and force, intimidation, or undue influence
the employment is for the duration of the season from the employer; and
(Southern Cotabato Development and Construction, 2. The employer and the employee must
Inc., vs. NLRC, G.R. No. 121582, October 16, 1997). have bargained on equal footing on the
terms and conditions of employment.
Regular Seasonal Employment (Ibid.)

A seasonal employee may be considered a g. Work-Pool Employees

regular employee. Regular seasonal employees
are those called to work from time to time. The Work-Pool Employees
nature of their relationship with the employer is
such that during the off season, they are Work-Pool employees are those who belong
temporarily laid off; but reemployed during the to a “work pool” from which a company
summer season or when their services may be chooses persons to be given specific
needed. They are in regular employment because assignments at its discretion. (Raycor Aircontrol
of the nature of their job, and not because of the Systems, Inc. vs. NLRC and Yala, G.R. No. 114290,
length of time they have worked (Gapayao vs. September 9, 1996)
Fulo, G.R. No. 193493, June 13, 2013.).
A project employee or a member of a
Note: Regular seasonal employment requires at work pool may acquire the status of a
least two (2) seasons to make a seasonal regular employee when the following
employee into a regular seasonal employee. concur:
(Universal Robina Sugar Milling Corporation and Cabati 1. There is a continuous rehiring of project
vs. Acibo, G.R. No. 186439, January 15, 2014) employees even after cessation of a
project; and
Requisites For Regular Seasonal 2. The tasks performed by the alleged
Employment "project employee" are vital, necessary
1. Seasonal employee should perform work or and indispensable to the usual business or
services that are seasonal in nature; and trade of the employer. However, the
2. They must have also been employed for length of time during which the employee
more than one (1) season. was continuously re-hired is not
controlling, but merely serves as a badge
Both requisites should concur in order that the of regular employment (Maraguinot, J.R.
employee may be classified as a regular seasonal and Enero vs. NLRC, G.R. No. 120969, January
employee (Hacienda Fatima, vs. National Federation 22, 1998).
of Sugarcane Workers-Foods and General Trade, G.R.
No. 149440, January 28, 2003). 2. Legitimate Sub-Contracting vs.
Labor-Only Contracting
f. Fixed-Term
A. Elements; Comparative Chart
Fixed-Term Employment
Department (DOLE) Order No. 174,
A fixed-term employment is allowable under the Series of 2017
Labor Code only if the term was voluntarily and LEGITIMATE LABOR-ONLY
knowingly entered into by the parties who must SUBCONTRACTIN CONTRACTING
have dealt with each other on equal terms not
G (JOB
one exercising moral dominance over the other.
(Samonte vs. La Salle Greenhills, Inc. and Oca, G.R. CONTRACTING)
No.199683, February 10, 2016) STATUS
Allowed in the Prohibited in the
Philippines Philippines

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undertakes equipment,
REASON to perform machinerie
It is an attempt to the job or s,
work on its supervision,
evade the
own work
obligations of an responsibilit premises,
employer. The y, and
employer is using a according 3. The
front, a person who to its own workers
poses as employer manner and recruited
although he is not. method; and placed
2. Has are
The scheme evades
substantial performing
the employer's capital or activities
obligations to carry out which are
respect the the job directly
employees' right to farmed out related to
unionize, the right by the the
to employment principal on principal
his account, business or
standards, including
manner and operations
SSS-EC method, of the
membership, and investment employer in
the right to security in the form which
of tenure. of tools, workers are
DEFINITION equipment, habitually
machinery employed,
An arrangement An arrangement
and or
whereby a principal where the supervision 4. Does not
agrees to farm out contractor or ; exercise the
to a contractor the subcontractor 3. Is free from right to
performance or merely recruits, the control control
completion of a supplies or places and/or over the
direction of performanc
specific job or work workers to perform
the e of the
within a definite or a job or work for a
principal in work of
predetermined principal. all matters the contrac
period, regardless connected tual employ
of whether such job with the ee.
or work is to be performanc
performed or e of the
work
completed within or
except as to
outside the the result;
premises of the 4. The Service
principal. Agreement
ELEMENTS ensures
The contractor or 1. No compliance
substanti with all the
subcontractor:
al capital, rights and
1. Is engaged benefits fir
in a distinct or
2. No all the
and employees
independen investment
s in the of the
t business contractor
and form of
tools, or

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subcontract B. Trilateral Relationship

or under
the labor Trilateral Relationship In Contracting
laws; Arrangements
5. Is verified In legitimate contracting, there exists a
by and trilateral relationship under which there is a
registered contract for a specific job, work or service
with the between the principal and the contractor or
DOLE. subcontractor, and a contract of employment
EMPLOYER-EMPLOYEE between the contractor or subcontractor and
RELATIONSHIPS its workers, Hence, there are three parties
involved in these arrangement, the principal
Exists between the Between the
which decides to farm out a job or service to
job contractor and workers and the
a contractor or subcontractor, the contractor
the people he hires. enterprise to which or subcontractor which has the capacity to
they are supplied independently undertake the performance of
(principal). the job, work or service, and the contractual
workers engaged by the contractor or
Substantial Capital subcontractor to accomplish the job, work or
service (Sec. 3, D.O. No. 18 s. 2002).
Substantial capital or investment refers to capital
stocks and subscribed capitalization in the case Parties Involved
of corporation, tools, equipment, implements, 1. Principal who decides to farm out a job,
machineries and work premises, actually and work or service to a contractor.
directly used by the contractor or subcontractor 2. Contractor who has the capacity to
in the performance or completion of the job, work independently undertake the
or service contracted out (Par. 5, Sec. 5, D.O. No. performance of the job, work or service.
18 s. 2002). 3. Contractual workers engaged by the
contractor to accomplish the job, work or
It is a paid-up capital stock/shares at least service. (Department Circular No. 01 s.
P5,000,000.00 in the case of corporations, 2017)
partnership, and cooperatives; in the case of
single proprietorship, a net worth of at least Relationships That Exist In Legitimate
P5,000,000.00. The law does not require both Contracting Or Subcontracting:
substantial capital and investment in the form of a. An employer-employee relationship
tools, equipment, machineries, etc. This is clear between the contractor and the
from the use of the conjunction "or". Once employees it engaged to perform the
substantial capital is established it is no longer specific job, work or service being
necessary for the contractor to show evidence contracted; and
that it has investment in the form of tools. (Neri, b. A contractual relationship between the
et al. vs. NLRC, G.R. Nos. 97008-09, July 23, principal and the contractor as governed
1993). by the provisions of the Civil Code. (Par. 1,
Sec. 5, D.O. No. 18- A s. 2011)
Right To Control
Governing Laws
The right reserved to the person for whom the a. Between the principal and the contractor
service of the contractual workers are performed the major laws applicable to their work
to determine not only the end to be achieved, but relationship are the Civil Code and
also the manner and means to be used in pertinent commercial laws.
reaching that end (Par. 6, Sec. 5, D.O. No. 18 s. b. Between the contractor and his
2002). employees the major laws applicable to
their work relationship are the Civil Code
and special labor laws.
c. Between the principal and the
contractor’s employees, no employer-
employee relationship exists, because the

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contractor himself is the employer. (Azucena, relationship between the employer and the
The Labor Code with Comments and Cases employees of the labor-only contractor. The
Volume I, 306, 2021) statute establishes this relationship for a
comprehensive purpose: to prevent a
Rights Of Contractor’s Employees circumvention of labor laws. The contractor is
considered merely an agent of the principal
All contractor’s/subcontractor's employees, shall employer and the latter is responsible to the
be entitled to security of tenure and all the rights employees of the labor-only contractor as if
and privileges as provided for in the Labor Code, such employees had been directly employed
as amended, to include the following: by the principal employer. (Aliviado, et al vs.
A. Safe and healthful working conditions; b. Procter and Gamble Philippines., Inc., G. R.
Labor standards such as but not limited No. 160506, March 9, 2010)
to service incentive leave, rest days,
overtime pay, holiday pay, 13th month B. TERMINATION BY EMPLOYER
pay, and separation pay as may be
provided in the Service Agreement or 1. Substantive Due Process
under the Labor Code;
B. Retirement benefits under the SSS or Substantive due process requires that the
retirement plans of the contractor, if dismissal must be for a valid or authorized
there is any; cause as provided by law (San Miguel Corp vs.
C. Social security and welfare benefits; NLRC, G.R No. 78277, May 12, 1989).
D. Self-organization, collective bargaining
and peaceful concerted activities, a. Just Causes
including the right to strike. (Sec. 10,
D.O. No. 174 s. 2017) An employer may terminate an employment
for any of the following causes:
C. Solidary Liability i. Serious misconduct or willful
disobedience by the employee of the
When Employer Shall Be Jointly And lawful orders of his employer or
Severally Liable With His Contractor Or representative in connection with his
Subcontractor work;
ii. Gross and habitual neglect by the
In the event that the contractor or subcontractor employee of his duties;
fails to pay the wages of his employees in iii. Fraud or willful breach by the
accordance with this Code, the employer shall employee of the trust reposed in him
be jointly and severally liable with his by his employer or duly authorized
contractor or subcontractor to such representative;
employees to the extent of the work performed iv. Commission of a crime or offense by
under the contract, in the same manner and the employee against the person of
extent that he is liable to employees directly his employer or any immediate
employed by him. (Art. 106, Labor Code, as member of his family or his duly
amended) authorized representatives; and
v. Other causes analogous to the
Effects Of Labor-Only Contracting foregoing (Article 297, Labor Code, as
1. the creation of an employer-employee amended).
relationship between the principal and the
employees of the contractor or sub- i. Serious Misconduct; Elements:
contractor; and a) It must be of such grave, serious and
2. the solidary liability of the principal and the aggravated character;
contractor to the employees in the event of b) It must relate to the performance of the
any violation of the Labor Code (Digital employee’s duties;
Telecom vs. Digitel. G.R. Nos. 184903, c) It must show that the employee has
October 10, 2012). become unfit to continue working for
the employer (Coffee Bean and Tea Leaf
Where labor-only contracting exists, the Labor vs. Arenas, G.R. No. 208908, March 11,
Code itself establishes an employer-employee 2015).

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Spur-Of-The-Moment Outburst of care. It evinces a thoughtless disregard of

The admittedly insulting and unbecoming consequences without exerting any effort to
language [Siguro na abnormal ang utak mo] avoid them (Citibank vs. Gatchalian, G.R. No.
uttered by the employee to the HR Manager on 111222, January 18, 1995).
April 3, 2009 should be viewed with reasonable
leniency in light of the fact that it was committed GROSS HABITUAL FRAUD
under an emotionally charged state. (Maula vs. NEGLIGENCE NEGLECT AND
Ximex Delivery Express, G.R. No. 207838, January 25, WILLFU
2017) L
NEGLEC
Immoral Conduct T
It is the conduct which is so willful, flagrant, or Connotes Implies Implies
shameless as to show indifference to the opinion
want of care repeated bad faith
of good and respectable members of the
community. Furthermore, such conduct must not in the failure to on part
only be immoral, but grossly immoral. It must be performance perform one’s of the
so corrupt as to constitute a criminal act, or so of one’s duties duties over a employe
unprincipled as to be reprehensible to a high (St. Luke’s period of time, e in
degree or committed under such scandalous or Medical depending failing to
revolting circumstances as to shock the common
Center, Inc. upon the perform
sense of decency (Narag vs. Narag. A.C. No. 3405,
June 29, 1998). and Kuan vs. circumstances his job to
Notario, G.R. . (Ibid.) the
Willful Disobedience Requires The No. 152166, detrimen
Concurrence Of The Following Requisites: October 20, t of the
1. There must be disobedience or 2010). employe
insubordination
r and the
2. Disobedience or insubordination must be
willful or intentional characterized by latter’s
wrongful or perverse attitude business
3. The order violated must be reasonable, (Jumuad
lawful, and made known to the employee vs. Hi-
4. The order must pertain to the duties which Flyer
he has been engaged to discharge Food,
(D.O. No. 147-15)
Inc.,
ii. Habitual Neglect of Duties G.R. No.
187887,
The degree of skill, care, diligence and attention Septemb
imposed by the implied possession of er 7,
competency, knowledge, skillfulness, etc., of the 2011).
employee is that of ordinary and reasonable skill,
care and diligence. He cannot be discharged on
the ground of incompetency, negligence, etc.,
Forms of Neglect of Duty:
MERELY BECAUSE he fails to employ the
● Abandonment
highest degree of skillfulness and care known in
● Tardiness and Absenteeism
the trade, UNLESS
● Poor Performance (Japos vs. First Agrarian
● the contract of employment expressly
Reform Multi-Purpose Cooperative and/or
stipulates for such degree of skill and care; Bagares. G.R. No. 208000, July 26, 2017)
● the employee represents that he possesses
such. (St. Luke’s Medican Center, Inc. and Kuan “Attitude Problem” Is A Just Cause
vs. Notario. G.R. No. 152166, October 20, 2010)
An employee who cannot get along with his
co-employees is detrimental to the company
Gross Negligence
for he can upset and strain the working
The want or absence of or failure to exercise
environment. Without the necessary
slight care or negligence, or the entire absence
teamwork and synergy, the organization

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cannot function well. Thus, management has the Mere such as when the
prerogative to take the necessary action to uncorroborated employer has
correct the situation and protect its organization. assertion and
reasonable ground
When personal differences between employees
accusations by theto believe that the
and management affect the work environment,
the peace of the company is affected. (Heavylift employer will not employee
Manila vs. CA, G.R. No. 154410, October 20. 2005) be sufficient.
concerned is
(Bravo vs. Urios responsible for the
iii. Dishonesty and Loss Of Confidence College, G.R. purported
No.198066, June misconduct, and
The fraud must be committed against the
7, 2017) the nature of his
employer or representative in connection with
the employee’s work. Thus, the fraud committed participation
against third persons not in connection with his therein renders
work, and which does not in any way involve his him unworthy of
employer, is not a ground for the dismissal. the trust and
confidence
Furthermore, since fraud implies willfulness or demanded by his
wrongful act intent, the innocent nondisclosure
position. (Ibid.)
of facts by the employee to the employer will not
constitute a just cause for the dismissal. “Pecuniary Gain” Not A Necessary
(Bookmedia Press, Inc. and Brizuela vs. Sinajon and Element Of Termination On Account Of
Abenir, G.R. No. 213009, July 17, 2019) Loss Of Trust

Dishonesty Even the return of misappropriated funds will

The disposition to lie, cheat, deceive or defraud; not negate valid dismissal for breach of trust.
unworthiness; lack of integrity; lack of honesty, This Court has held that misappropriation of
probity, or integrity in principle; lack of fairness company funds, although the shortages had
and straightforwardness; disposition to defraud, been fully restituted, is a valid ground to
deceive or betray (Philippine Amusement and terminate the services of an employee of the
Gaming Corp. vs. Rilloraza, G.R. No. 141141, June 25, company for loss of trust and confidence
2001). (Santos vs. San Miguel Corp., G. R. No. 149416,
March 14, 2003).
Loss Of Confidence
Loss of trust and confidence, be it a principal or Guidelines for Applying The Doctrine Of
an analogous ground for dismissal, is not justified Loss Of Confidence
if it exists in vacuum. As a just cause, it requires 1. Loss of confidence should not be
an underlying act, deed or conduct from which a simulated.
reasonable belief of untrustworthiness might be 2. Should not be used as a subterfuge for
inferred (PNOC Development and Management Corp causes which are improper, illegal or
vs. Gomez, G.R. Nos. 220526-27, July 29, 2019). unjustified.
3. It may not be arbitrarily asserted in the
Loss of Confidence with respect to Rank- face of overwhelming evidence to the
and-File Personnel and Managerial contrary.
Employee: 4. It must be genuine, not a mere
afterthought to justify earlier action taken
RANK-AND-FILE MANAGERIAL in bad faith.
PERSONNEL EMPLOYEE 5. The employee involved holds a position of
As ground for valid Proof of beyond trust and confidence (Casco vs. NLRC, G.R.
No. 200571, February 19, 2018; San Miguel
dismissal, requires reasonable doubt Corporation vs. Gomez, G.R. No. 200815, 24
proof of is NOT required, it August 2020).
involvement in the being sufficient
alleged events in that there is some
question. basis for such loss
of confidence,

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iv. Commission of a Crime or Offense i. Installation of Labor-Saving Devices

Elements: Elements:
1. There must be an act or omission 1. There must be introduction of machinery,
punishable/prohibited by law; equipment or other devices;
2. The act or omission was committed by the 2. Such introduction must be done in good
employee against the person of his faith;
employer, against any immediate member of 3. The purpose for such introduction must
the employer’s family, against the employer's be valid (e.g., to save on cost; enhance
duly authorized representative. (DOLE No. efficiency; other justifiable economic
147 s. 2015) reasons;
4. There is no other option available to the
Immediate Family Members employer than the introduction of
The immediate members of the family referred to machinery, equipment or device and the
are limited to spouse, ascendants, descendants, consequent termination of employment of
or legitimate, natural, or adopted brothers or those affected thereby;
sisters of the employer or of his relative by 5. There must be fair and reasonable criteria
affinity in the same degrees, and those by in selecting employees to be terminated.
consanguinity within the fourth civil degree. (DOLE Order No. 147-15)
(Subsection 2, Art. 11, RPC)
The right to reduce personnel should, of
v. Analogous Causes course, not be abused. It should not be made
The determination of whether the cause for a pretext for easing out laborers on account
terminating employment’s analogous to any of of their union activities. But neither should it
those enumerated in Art. 296 of the Labor Code be denied when it is shows that they are not
will depend on the circumstances of each case. discharging their duties in a manner
To be considered analogous to the just causes consistent with good discipline and the
enumerated, however, a cause must be due to efficient operation of an industrial enterprise
the voluntary and/or willful act or omission of the (Philippine Sheet Metal Workers’ Union vs. CIR,
employee (Nadura vs. Benguet Consolidated, Inc., G.R. No. L-2028, April 28, 1949).
G.R. No. L-17780, August 24, 1962).
ii. Redundancy
Must the Analogous Causes be anticipated
in company regulations? Elements:
No act or omission shall be considered as 1. There must be superfluous positions or
analogous cause unless expressly specified in the services of employees;
company rules and regulations or policies. (DOLE 2. The positions or services are in excess of
Order No. 147-15) what is reasonably demanded by the
actual requirements of the enterprise to
B. Authorized Causes operate in an economical and efficient
manner;
The Employer May Terminate the 3. There must be good faith in abolishing
Employment Of Any Employee Due To: redundant positions;
i. Installation of Labor-Saving Devices 4. There must be fair and reasonable criteria
ii. Redundancy in selecting the employees to be
iii. Retrenchment or Downsizing to prevent terminated;
losses or the closing or cessation of operation 5. There must be an adequate proof of
of the establishment redundancy such as but not limited to the
iv. Closures or Cessation of Operations of new staffing pattern, feasibility
establishment or undertaking not due to studies/proposal, on the viability of the
serious business losses or financial reverses newly created positions, job description
(Art. 298, Labor Code, as amended) and the approval by the management of
v. Disease and whose continued employment is the restructuring. (DOLE Order No. 147-
prohibited by law or is prejudicial to his 15)
health as well as to the health of his co-
employee (Art. 299, Labor Code, as amended)

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Redundancy means an excess position. It is not 2. The losses, if already incurred, are not
the way to remove an unwanted occupant. If the merely de minimis, but substantial,
functions of the position are still needed but the serious, actual and real, or if only
position-holder needs to be removed, the cause expected, are reasonably imminent;
of the removal should be valid and the proper 3. The expected of actual losses must be
procedure should be observed (Manggawa ng proved by sufficient and convincing
Komunikasyon sa Pilipinas vs. PLDT, Inc., G.R. No. evidence;
190389, April 19, 2017). 4. The retrenchment must be in good faith
for the advancement of its interest and
Selection Criteria but Not Limited to: not to defeat or circumvent the
● Less Preferred Status (e.g., temporary employees’ right to security of tenure;
employee) 5. There must be fair and reasonable criteria
● Efficiency in ascertaining who would be dismissed
● Seniority (Golden Thread Knitting Industries, Inc. and who would be retained among the
vs. NLRC, G.R. No. 119157, March 11, 1999) employees, such as status, efficiency,
seniority, physical fitness, age and
The determination of the continuing necessity of financial hardship for certain workers.
a particular officer or position in a business (DOLE Order No. 147-15)
corporation is a management prerogative, and
the courts will not interfere unless arbitrary or The idea of rightsizing is to reduce the
malicious action on the part of management is number of workers and related functions and
shown. It is also within the exclusive prerogative trim clown, streamline, or simplify the
of management to determine the qualification structure of the organization to the level of
and fitness of an employee for hiring and firing, utmost efficiency and productivity in order to
promotion or reassignment. Indeed, an employer realize profit and survive (Caba Obas, et al. vs.
has no legal obligation to keep more employees Pepsi-Cola Products Phil., Inc., G.R. No. 176908,
than are necessary for the operation of its March 25, 2015).
business (Lowe, Inc. vs. IAC and Mutuc. G.R. Nos.
164813 and 174590, August 14, 2009). Causes of Retrenchment
● Lack of Work - Protection of labor does
Garden Leave not mean oppression or self-destruction
The practice of the employer directing an of capital. Where the continuation of the
employee not to attend work during the period of men in the service is patently inimical to
notice of resignation or termination of the the interest of the employer, there is no
employment (Mejila vs. Wrigley Philippines, Inc., G.R. alternative but for the court to authorize
No. 199469, September 11, 2019). the employer to lay off such number of
workers as the circumstances may
Evidence Of Good Faith To Arrest Losses warrant. But the court may impose the
Before Terminating The Employees: condition that the employer shall not
1. Engaging an independent consulting firm to admit any new laborer in case of available
conduct manpower audit and OD work in the future before the laid-off men
(organization development) who are able, willing and available to do
2. Instituting of cost-saving programs the same shall have been recalled to work
3. Termination of probationary employees (Mayon Engineering Workers’ Union vs. Mayon
4. Retrenchment of some managers Engineering and Machine Shop, G.R. No. 150-
5. Efforts to find jobs in other firms where V, October 28, 1948).
employees to be retrenched may be ● Business Recession - Where the
employed. (Manila Polo Club Employees Union management found it unnecessary to
vs. Manila Polo Club, Inc., G.R. No. 172846, July continue employing some of its laborers
24, 2013) because of a business recession, lack of
materials to work on due to government
iii. Retrenchment or Downsizing control, or due to lack of demand for its
products, the Court upheld
Elements: management’s right to dismiss its
1. The retrenchment must be reasonably laborers, especially when the dismissal
necessary and likely to prevent business was only temporary. (Arte Español vs.
losses; Pedret, 53 O.G. 3753)

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Requisites of a Valid Retrenchment an actual locking- down on costs of

1. The retrenchment must be reasonably up of the doors of operations in terms
necessary and likely to prevent losses and establishment, of salaries and
such losses are proven;
usually due to wages to prevent
2. Losses, if already incurred, are not merely de
minimis but substantial, serious, actual and financial losses. bankruptcy of the
real; or if only expected, are reasonably Closure of company. (Ibid.)
imminent; business as an
3. Expected or actual losses must be proved by authorized cause
sufficient and convincing evidence; for termination of
4. Retrenchment must be in good faith; employment aims
5. Fair and reasonable criteria who would be
to prevent further
retained and who would be dismissed (eg.
status, efficiency, seniority, age, etc) financial drain
(D.O. No. 147-15) (JAT General
Services vs. NLRC,
G.R. No. 148340,
Last-In, First-Out Rule January 26, 2004).
This rule applies only to cases of labor-saving
devices, redundancy and retrenchment. XPN:
when an employee volunteers to be separated
from employment (Maya Farms Employees Partial Closure
Organization vs. NLRC, G.R. No. 106256, December The Court had occasion to reiterate
28, 1994). management’s prerogative to close or abolish
a department or section of the employer’s
iv. Closure Or Cessation Of Operation establishment for economic reasons. The
Court reasoned out that since the greater
Elements: right to close the entire establishment and
1. There must be a decision to close or cease cease operations due to adverse economic
operation of the enterprise by the conditions is granted an employer, the closure
management; of a part thereof to minimize expenses and
2. The decision was made in good faith; reduce capitalization should also be
3. There is no other option available to the recognized (Dangan vs. NLRC, G.R. No. 63127-
employer except to close or cease 28, February 20, 1984).
operations. (D.O. No. 147-15)
No Separation Pay in Case of Closure
Right to Close Whether Losing or Not Because of Serious Business Losses
If the business is not losing but its owner, for
reasons of his own, wants to get out of the The closure of business establishments due to
business, he in good faith can lawfully do so serious losses or financial reverses negates
anytime. Just as no law forces anyone to go into the grant of separation pay to employees
business, no law compels anybody to stay in whose services are terminated. It is only when
business. But the employees should be paid the the closure is for reasons other than business
severance pay (Mac Adams Metal Engineering reverses or losses that separated personnel
Workers Union vs. Mac Adams, etc., G.R. No. 141615, are entitled to separation pay, which is
October 24, 2003). computed to one month or ½ month pay for
every year of service whichever is higher
Closure of Business vs. Retrenchment (Mendoza vs. NLRC, G.R. No. 11079,
September 27, 1993).
CLOSURE OF RETRENCHMENT
BUSINESS Summary Of Rules On Closure
1. Closure or cessation operations of
complete Reduction of
establishment or undertaking may either
cessation of personnel usually be partial or total.
business due to financial 2. Closure or cessation operations of
operations and/or returns so as to cut establishment or undertaking may or may

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not be due to serious business losses or Change of Corporate name is not an

financial reverses. However, in both authorized cause of employment termination.
instances, proof must be shown that: Under the Corporate Code, amendment of the
● It was done in good faith to advance the articles of incorporation is not one of the
employer’s interest and not for the modes of dissolving a corporation. The
purpose of defeating or circumventing change of name was not a change of the
the rights if employees under the law or corporate being. Since the change does not
a valid agreement; create a new corporation, the renamed
● A written notice on the affected corporation remains liable for illegal dismissal
employees and the DOLE is served at committed under the old name (Zuellig Freight
least one month before the intended Cargo vs. NLRC, G.R. No. 157900, July 22, 2013).
date of termination of employment.
3. The employer can lawfully close shop even if Merger
not due to serious business losses or financial Succession of employment rights and
reverses but separation pay, which is obligations occurs between the absorbing
equivalent to at least one month pay as corporation and the employees of the
provided for by Art 283 [now 298] of the absorbed corporation. Not only must the
Labor Code, as amended, must be given to absorbing corporation retain the employees;
all the affected employees. it should likewise recognize the length of
4. If the closure or cessation is due to serious service in the previous employer (BPI vs. BPI
business losses or financial reverses, the Employees Union-Davao Chapter, G.R. No.
employer must prove such allegations in 164301, August 10, 2010).
order to avoid the payment of separation
pay. Otherwise, the affected employees are I. Disease
entitled to separation pay. Elements:
5. The burden of proving compliance with all 1. The employee must be suffering from any
the above-stated falls upon the employer disease;
(Art. 283, Labor Code, as amended; Manila Polo 2. The continued employment of the
Club Employees’ Union vs. Manila Polo Club, Inc. employee is prohibited by law or
G.R. No. 172846, July 24, 2013). prejudicial to his/her health as well as to
the health of his/her co-employees;
Sale Of Business In Good Faith 3. There must be certification by a
No law prohibits bona fide sale of a going competent public health authority that
enterprise. When that happens, the purchaser, the disease is incurable within a period of
unless he agrees to do so, has no legal obligation six months even with proper medical
to continue employing the employees of the treatment. (D.O. No. 147-15)
seller. The seller, as employer, is obliged to pay
his employees separation pay and other benefits Medical Certificate
founded on law, policy, or contract. The A medical certificate issued by the company’s
transferee may, but is not obliged to, give own physician is not a certificate by
employment preference to the former “competent public health authority.” (Cebu
employees; if hired, they may be required to pass Royal Plant [San Miguel Corporation] vs. Deputy
probation (SME Bank, Inc. vs. De Guzman, G.R. No. Minister of Labor, G.R. No. 58639, August 12,
184517, October 8, 2013). 1987).

Successor-Employer Doctrine Separation Pay

This doctrine involves a transfer of ownership of The employee is entitled to his separation pay
the business to a new employer. Where the equivalent to at least one (1) month salary or
change of ownership is in bad faith or is used to to one-half (1/2) month salary for every year
defeat the rights of labor, the successor- of service, whichever is greater, a fraction of
employer is deemed to have absorbed the at least six (6) months being considered as
employees and is held liable for the one (1) whole year. (Art. 299, Labor Code, as
transgressions of his or her predecessor (PAL, Inc. amended).
vs. NLRC, G.R. No. 125792, November 9, 1998).
Change of Name Just Causes vs. Authorized Causes

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JUST CAUSES AUTHORIZED a. Twin-Notice Rule

CAUSES
Provisions under the Labor Code For Termination Of Employment Based
On Just Causes As Defined In Article 282
Article 297 Article 298 and
Of The Labor Code:
299 1. A written notice served on the employee
Removal of the Employee is Called specifying the: (a) ground/s for
Dismissal or Separation termination, and (b) giving to said
discharge employee reasonable opportunity within
which to explain his side.
Refer to
2. hearing or conference during which the
Faults and Business or employee concerned, with the assistance
misdeed of the economic reasons of counsel if the employee so desires, is
employee given an opportunity to respond to the
Employer’s Liability charge, present his evidence or rebut the
Not liable for Required by law to evidence presented against him.
3. A written notice of termination served on
employee’s provide separation
the employee indicating that upon due
separation pay. pay to the consideration of all the circumstances,
employee. grounds have been established to justify
XPN: based on his termination.
compassion XPN: closure or
financial cessation of The twin requirements of notice AND hearing
assistance may be operation due to constitute essential elements of due
process in cases of employee dismissal:
given to a serious business
the requirement of notice is intended to
deserving losses duly proved. inform the employee concerned of the
dismissed employer's intent to dismiss and the reason
employee. for the proposed dismissal; upon the other
Procedural Due Process hand, the requirement of hearing affords the
Twin-Notice Rule Written notice to employee an opportunity to answer his
employer's charges against him accordingly to
(First notice, DOLE and the
defend himself therefrom before dismissal is
informing alleged employee at least effected (Kwikway Engineering Works vs. NLRC,
acts/omissions; 30 days before the G.R. No. 85014, March 22, 1991).
Second notice, employee’s
stating the separation. GUIDING PRINCIPLES in connection with
decision to dismiss the hearing requirement in dismissal cases:
● "ample opportunity to be heard" means
employment and
any meaningful opportunity (verbal or
findings) written) given to the employee to answer
Effectivity Date the charges against him and submit
Determined by the At least 30 days evidence in support of his defense,
employer after after the employee whether in a hearing, conference or some
compliance with AND DOLE is other fair, just and reasonable way.
● a formal hearing or conference becomes
due process notified.
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.
● the "ample opportunity to be heard"
standard in the Labor Code prevails over
the "hearing or conference" requirement
in the implementing rules and regulations
2. Procedural Due Process (Perez vs. Philippine Telegraph and

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Telephone, Co., G.R. No. 152048, April 7, 2009). Reliefs Available for Illegal Dismissal:

Right To Counsel a. Reinstatement

The right to counsel and the assistance of one in
investigations involving termination cases is Reinstatement is a restoration to a state
neither indispensable nor mandatory, except from which one has been removed or
when the employee himself requests for one or separated. Reinstatement restores the
that he manifests that he wants a formal hearing employee who was unjustly dismissed to
on the charges against him. (Lopez vs. Alturas the position from which he was removed,
Group. G.R. No. 191008, April 11, 2008). that is, to his status quo ante dismissal
(Tomas Claudio Memorial College, Inc. vs. CA,
When Hearing Not Required G.R. No. 152568, February 16, 2004). An
● If the employee has admitted his guilt. employee who is unjustly dismissed from
● Termination which is justified by any of the work shall be entitled to reinstatement
authorized causes under Art. 298. without loss of seniority and other
● Termination initiated by the employee (Art. privileges (Art. 294 Labor Code, as
300, Labor Code, as amended). amended).
● Termination of the probationary period of
employment. (Art. 281, Labor Code as b. Backwages
amended).
● Suspension of employment relationship The payment of backwages is a form of
resulting from bona fide suspension of relief that restores the income that was
operation (Art. 301, Labor Code as lost by reason of the unlawful dismissal
amended). (Advan Motor, Inc. vs. Veneracion, G.R. No.
● In case of project employment, termination 190944, December 13, 2017).
upon completion of the project or phase
thereof for which the employee is hired. An employee who is unjustly dismissed
(Dizon vs. NLRC, G.R. No. 79554, December 14, from work shall be entitled to his full
1989) backwages, inclusive of allowances, and
to his other benefits or their monetary
Preventive Suspension equivalent computed from the time his
The employer may place the worker concerned compensation was withheld from him up
under preventive suspension if his continued to the time of his actual reinstatement
employment poses a serious and imminent threat (Art. 294 Labor Code, as amended).
to life or property of the employer or of his co-
workers. (Book V, Rule XXIII, as amended by D.O. The payment of backwages is generally
No. 09-97) granted on the ground of equity. It is a
form of relief that restores the income
3. Illegal Dismissal, Reliefs Therefrom that was lost by reason of the unlawful
dismissal; the grant thereof is intended to
There is Illegal Dismissal When: restore the earnings that would have
1. The dismissal is without just cause under Art. accrued to the dismissed employee during
282 of the Labor Code; the period of dismissal until it is
2. The dismissal is for not for an authorized determined that the termination of
cause under Art. 283 of the Labor Code. employment is for a just cause. It is not
private compensation or damages but is
Note: An employee's removal for just or awarded in furtherance and effectuation
authorized cause but without complying with the of the public objective of the Labor Code.
proper procedure, on the other hand, does not Nor is it a redress of a private right but
invalidate the dismissal. It obligates the erring rather in the nature of a command to the
employer to pay nominal damages to the employer to make public reparation for
employee, as penalty for not complying with the dismissing an employee either due to the
procedural requirements of due process. former’s unlawful act or bad faith. The
(Distribution and Control Products, Inc. vs. Santos., award of backwages is not conditioned on
G.R. No. 212616, July 10, 2017) the employee's ability or inability to, in the
interim, earn any income (Tomas Claudio
Memorial College, Inc. vs. CA, supra.).

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Note: Backwages And Reinstatement higher

are Separate And Distinct Reliefs C. Incurable disease- equivalent to
at least one (1) month pay or
Backwages and reinstatement are separate one-half (1/2) month pay for
and distinct reliefs given to an illegally every year of service, whichever
dismissed employee in order to alleviate the is greater. (Art. 283, Labor Code, as
economic damage brought about by the amended)
employee's dismissal. "Reinstatement is a
restoration to a state from which one has Award Of Separation Pay As An
been removed or separated" while "the Alternative Relief In Lieu Of
payment of backwages is a form of relief that Reinstatement
restores the income that was lost by reason
of the unlawful dismissal." Therefore, the Under the law and prevailing
award of one does not bar the other. (Reyes jurisprudence, an illegally dismissed
vs. RP Guardians Security Agency, Inc., G.R. No. employee is entitled to reinstatement as
193756, April 10, 2013) a matter of right. The award of
separation pay is a mere exception to
The two forms of relief are distinct and the rule. It is made an alternative relief in
separate, one from the other. Though the lieu of reinstatement in certain
grant of reinstatement commonly carries circumstances, like:
with it an award of backwages, the A. when reinstatement can no longer be
inappropriateness or non-availability of one effected in view of the passage of a
does not carry with it the inappropriateness long period of time or because of the
or non-availability of the other (Tomas Claudio realities of the situation;
Memorial College, Inc. vs. CA, supra.). B. reinstatement is inimical to the
employer's interest;
c. Separation Pay, Doctrine of Strained C. reinstatement is no longer feasible;
Relations D. reinstatement does not serve the best
interests of the parties involved;
Separation Pay E. the employer is prejudiced by the
workers' continued employment;
Separation pay is the amount given to an F. facts that make execution unjust or
employee who has been terminated from inequitable have supervened; or
service for authorized causes, which could be a. strained relations between the
either of the two: business closure (Art. 283, employer and employee.
Labor Code, as amended) or disease (Fernandez Jr. vs. MERALCO, G.R.
contracted by the employee that could be No. 226002 June 25, 2018)
prejudicial to their health as well as the
health of their co-workers (Art. 284, Labor Doctrine Of Strained Relations
Code, as amended).
Under the doctrine of strained relations,
Amount Of Separation Pay: How the payment of separation pay is
Computed considered an acceptable alternative to
reinstatement when the latter option is no
The amount given to the employee depends longer desirable or viable. On one hand,
on the specific authorized cause for their such payment liberates the employee
termination, which could be any of the from what could be a highly oppressive
following: work environment. On the other hand, it
A. Installation of labor-saving devices or releases the employer from the grossly
redundancy- equivalent of at least one unpalatable obligation of maintaining in
(1) month pay or one (1) month for its employ a worker it could no longer
every year of service, whichever is higher trust (Nippon Express Philippines Corporation
B. Retrenchment, closure or cessation of vs. Daguiso, G.R. No. 217970, June 17, 2020).
business- equivalent of at least one (1)
month pay or one-half (1/2) month pay
for every year of service, whichever is

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Strained Relations Must Be Corporation vs. Teodosio, G.R. No.163033,

Demonstrated As A Fact October 2, 2009)

The implementation of the doctrine of 2. Exemplary Damages

strained relationship must be supplemented
by the rule that the existence of a strained Exemplary damages may be awarded if the
relationship is for the employer to clearly dismissal was effected:
establish and prove in the manner it is called i. in a wanton, oppressive or malevolent
upon to prove the existence of a just cause; manner;
the degree of hostility attendant to a ii. If moral damages was awarded,
litigation is not, by itself, sufficient proof of exemplary damages may be awarded as
the existence of strained relations that would well (Ganancial vs. Cubagao, G.R. No.
rule out the possibility of reinstatement. 203348, July 06, 2020).
(Advan Motor, Inc. vs. Veneracion, G.R. No.
190944, December 13, 2017) e. Attorneys’ Fees

The doctrine of strained relations should not In labor cases, attorneys’ fees partake of the
be used recklessly or applied loosely nor be nature of an extraordinary award granted to
based on impression alone" so as to deprive the victorious party as an indemnity for
an illegally dismissed employee of his means damages. As a general rule, it is payable to
of livelihood and deny him reinstatement. the client, not his counsel, unless the former
Since the application of this doctrine will agreed to give the amount to the latter as an
result in the deprivation of employment addition or part of the counsel’s compensation
despite the absence of just cause. (Advan (Alva vs. High Capacity Security Force Inc. G.R.
Motor, Inc. vs. Veneracion, supra) No.203328 November 8, 2017).

d. Damages Notably, Article 111 of the Labor Code

sanctions the award of attorney's foes in
Damages refers to the sum of money which the cases of the unlawful withholding of wages,
law awards or imposes as a pecuniary wherein the culpable party may be assessed
compensation, a recompense, or satisfaction for attorney's fees equivalent to ten percent
an injury done or a wrong sustained as a (10%) of the amount of wages recovered.
consequence either of a breach of a contractual The amount of attorney's fees shall not
obligation or a tortious act. (MEA Builders, Inc. vs. exceed ten percent (10%) of the total
CA, G.R. No. 121484, January 31, 2005) monetary award, and the fees may be
deducted from the amount due the winning
Damages Which May Be Awarded In party (Ibid.).
Relation With Illegal Dismissal
To recapitulate, both the Labor Code and
1. Moral Damages the Civil Code provide that attorney's fees
may be recovered in the following instances,
Moral damages awarded in illegal termination namely:
cases when the employer acted in: i. in cases involving the unlawful withholding of
wages;
i. bad faith or fraud (Note: Bad faith must
ii. where the defendant's act or omission has
be proven through clear and convincing
compelled the plaintiff to litigate with third
evidence) persons or the plaintiff incurred expenses to
ii. a manner oppressive to labor protect his interest;
iii. a manner contrary to moral, good iii. in actions for the recovery of wages of
customs or public policy. (Daguinod vs. household helpers, laborers and skilled
Southgate Foods Inc., G.R. No. 227795 workers;
February 20, 2019) iv. in actions for indemnity under workmen's
compensation and employer's liability laws;
Moral damages are recoverable where the and
dismissal of the employee was attended by bad v. in cases where the court deems it just and
faith or fraud or constituted an act oppressive to equitable that attorney's fees and
labor, or was done in a manner contrary to moral, expenses of litigation should be recovered
good customs or public policy. (San Miguel (Ibid).

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Exception To The Declared Policy Of Strict 2. When the director or officer has
Construction In The Award Of Attorney’s consented to the issuance of watered
Fees stock or who, having knowledge thereof,
did not forthwith file with the corporate
Article III is an exception to the declared policy secretary his written objection thereto.
of strict construction in the award of attorney's 3. When a director, trustee or officer has
fees." In fact, the general rule that attorney's contractually agreed or stipulated to hold
fees may only be awarded upon proof of bad faith himself personally and solidarily liable
takes a different turn when it comes to labor with the corporation. (Ibid.)
cases. The established rule in labor law is that 4. When a director, trustee or officer is
the withholding of wages need not be coupled made, by specific provision of law,
with malice or bad faith to warrant the grant of personally liable for his corporate action
attorney's fees under Article III of the Labor (MAM Realty Development Corporation vs.
Code. All that is required is that the lawful wages National Labor Relations Commission, G.R. No.
were not paid without justification, thereby 114787, June 2, 1995).
compelling the employee to litigate (Ibid). 5. The general rule is grounded on the
theory that a corporation has a legal
The Availment Of Free Legal Services Does personality separate and distinct from the
Not Foreclose An Award Of Attorney's Fees persons comprising it. To warrant the
piercing of the veil of corporate fiction,
Employees are entitled to attorney's fees, the officer’s bad faith or wrongdoing must
notwithstanding their availment of the free legal be established clearly and convincingly as
services offered by the PAO. The Court ruled that bad faith is never presumed (Harpoon
the amount of attorney's fees shall be awarded Marine Services, Inc. vs. Francisco, G.R. No.
167751, March 2, 2011).
to the PAO as a token recompense to them for
their provision of free legal services to litigants
g. Burden of Proof
who have no means of hiring a private lawyer
(Our Haus Realty Development Corporation vs.
Alexander Parian, G.R. No. 204651, August 6, 2014). In illegal dismissal cases, the burden of proof
is on the employer in proving the validity of
f. Liabilities of Corporate Officers the dismissal. However, if the fact of dismissal
is disputed, it must be duly proven by the
Corporate Officers Generally Not Liable for complainant (Italkarat 18, Inc. vs. Gerasmio, G.R.
Illegal Dismissal No. 221411, September 28, 2020).

Obligations incurred by [corporate officers], It is true that in constructive dismissal cases,

acting as such corporate agents, are not theirs the employer is charged with the burden of
but the direct accountabilities of the corporation proving that its conduct and action or the
they represent.” As such, they should not be transfer of an employee are for valid and
generally held jointly and solidarily liable with the legitimate grounds such as genuine business
corporation (Harpoon Marine Services, Inc. vs. necessity. However, it is likewise true that in
Francisco, G.R. No. 167751, March 2, 2011). constructive dismissal cases, the employee
has the burden to prove first the fact of
Solidary liabilities may be imposed when: dismissal by substantial evidence. Only then
1. Directors and trustees or, in appropriate when the dismissal is established that the
cases, the officers of a corporation burden shifts to the employer to prove that
a. vote for or assent to [patently] unlawful the dismissal was for just and/or authorized
acts of the corporation; cause. The logic is simple — if there is no
b. act in bad faith or with gross negligence in dismissal, there can be no question as to its
directing the corporate affairs; legality or illegality. (Ibid.)
c. are guilty of conflict of interest to the
prejudice of the corporation, its Fact Of Dismissal Must Be Proven By
stockholders or members, and other Substantial Evidence
persons (Sec. 31, Revised Corporation Code of
the Philippines; Heirs of Uy vs. International Before the employer must bear the burden of
Exchange Bank, G.R. No. 166282, February 13, proving that the dismissal was legal, the
2013). employee must first establish by substantial

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evidence the fact of his dismissal from service.

Resignation is the Constructive Dismissal
Bare allegations of constructive dismissal, when
voluntary act of an is a quitting because
uncorroborated by the evidence on record,
employee who is in continued
cannot be given credence. (Ibid.)
a situation where employment is
one believes that rendered impossible,
C. TERMINATION BY EMPLOYEE
personal reasons unreasonable or
cannot be unlikely, as an offer
1. With notice to the employer
sacrificed in favor involving a demotion
of the exigency of in rank and diminution
An employee may terminate without just
the service, and in pay (Mobile
cause the employer-employee
one has no other Protective and
relationship:
choice but to Detective Agency
a. By serving a written notice on the
dissociate oneself and/or Aguilar vs.
employer at least one (1) month in
from employment Ompad, G.R. No.
advance
(Pascua v. Bank 159195, May 9,
b. The employer upon whom no such
Wise, Inc. and 2005).
notice was served may hold the
Philippine Veterans
employee liable for damages (Art.
Bank, G.R. No. Resignation is
300, Labor Code, as amended).
191460-4, January constructive
31, 2018). dismissal when
Note: Notice is required when
resignation "was
termination is without just cause. Written
In order to prove made under
notice to resign must be submitted one
that resignation is compulsion or under
(1) month in advance (Ibid.).
voluntary, "the circumstances
acts of the approximating
2. Without notice to the employer
employee before compulsion, such as
and after the when an employee's
An employee may put an end to the
alleged resignation act of handing in his
relationship without serving any notice
must be [or her] resignation
on the employer for any of the following
considered in was a reaction to
requirements:
determining circumstances leaving
a. Serious insult by the employer or his
whether he or she, him [or her] no
representative on the honor and
in fact, intended to alternative but to
person of the employee;
sever his or her resign. (Metro Transit
b. Inhuman and unbearable treatment
employment Organization, Inc. vs.
accorded the employee by the NLRC and Garcia, G.R.
(Nationwide
employer or his representative; No. 122046, January 16,
Security and Allied
c. Commission of a crime or offense by 1998).
Services, Inc. vs.
the employer or his representative
Valderama. G.R.
against the person of the employee
No. 186614,
or any of the immediate members of
February 23,
his family; and
2011).
d. Other causes analogous to any of the
foregoing (Ibid.).
Resignation
Note: Notice is NOT required when termination is
with just cause (Ibid.) Resignation is the voluntary act of an
employee who finds himself in a situation
1. Resignation vs. Constructive Dismissal where he believes that personal reasons
cannot be sacrificed in favor of the exigency
Resignation vs. Constructive Dismissal of the service, then he has no other choice but
to disassociate himself from his employment
(Dosch vs. NLRC and Northwest Airlines, Inc., G.R.
RESIGNATION CONSTRUCTIVE No. 51182, July 5, 1983).
DISMISSAL

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Resignation is a formal pronouncement or In a case where the company regulations

relinquishment of an office, and must be made require a 30-day resignation notice, the
with the intention of relinquishing the office Court ruled that dismissal was too harsh a
accompanied by the act of relinquishment. A penalty for an employee who gave a 15-day
resignation must be conditional and with the notice only. But although such dismissal was
intent to operate as such (Fortuny illegal, the employee cannot be awarded
Garments/Johnny Co. vs. Castro. G.R. No. 150668, separation pay under Article 298 because the
December 15, 2005). article refers to termination due to
redundancy, retrenchment, or business
The employer has no control over resignations closure. Instead of that, the employee may be
and so, the notification requirement was devised awarded resignation pay under
in order to ensure that no disruption of work Company’s policy which grants 40% of
would be involved by reason of the resignation. one month’s pay for every year of
This practice has been recognized because every service in case of voluntary resignation.
business enterprise endeavors to increase its (Ibid)
profits by adopting a device or means designed
towards that goal (San Miguel Brewery Sales When Resignation Is Withdrawable
Force Union (PTGWO) vs. Ople and San Miguel
Corporation, G.R. No. 53615, February 8, 1989). Resignation is withdrawable even if the
employee has called it “irrevocable”. But after
Elements of Valid Resignation it is accepted or approved by the employer,
its withdrawal needs the employer’s consent.
1. The formal act of resignation; and (Custodio vs. The Honorable Minister, Ministry of
2. The intent to resign (Mobile Protective and Labor and Employment and Milling and Marketing
Detective Agency and/or Aguilar vs. Ompad. G.R. Cooperative Association, Inc. G.R. No. 64374, July
No. 159195, May 9, 2005). 19, 1990).

Grounds Considered Just Causes For Resignation Is Complete Once Accepted

Immediate Resignation by the Employer; Employee no longer
has any right to the job
1. Serious insult by the employer or his
representative on the honor and person of Once an employee resigns and his resignation
the employee; is accepted, he no longer has any right to the
2. Inhuman and unbearable treatment job. If the employee later changes his mind,
accorded the employee by the employer or he must ask for approval of the withdrawal of
his representative; his resignation from his employer, as if he
3. Commission of a crime or offense by the were re-applying for the job. It will then be up
employer or his representative against the to the employer to determine whether or not
person of the employee or any of the his service would be continued. If the
immediate members of his family; and employer accepts said withdrawal, the
4. Other causes analogous to any of the employee retains his job. If the employer does
foregoing (Art. 285, Labor Code, as not, as in this case, the employee cannot
amended). claim illegal dismissal for the employer has the
right to determine who his employees will be
Completion of 30-Day Period – (Intertrod Maritime, Inc. and Toodos Shipping Co.
Discretionary vs. NLRC and De La Cruz, G.R. No. 81087, June 19,
1991).
The rule of requiring an employee to stay or
complete the 30-day period prior to the effectivity The resignation is complete upon acceptance
of his resignation becomes discretionary on the by the employer. An employee must
part of management as an employee who intends therefore be careful and circumspect in filing
to resign may be allowed a shorter period before his resignation because if he changes his
his resignation becomes effective (Phimco mind, he needs to re-apply for the job
Industries, Inc. vs. NLRC and Carpio, G.R. No. 118041, (Intertrod Maritime, Inc. and Toodos Shipping Co.
June 11, 1997). vs. NLRC and De La Cruz. G.R. No. 81087, June 19,
1991).

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Resignation Pay
employee or any of given;
the immediate (2) that the
The general rule is that an employee who
members of his threatened act be
voluntarily resigns from employment is not
family; and unjust or unlawful;
entitled to separation pay unless, however, there
(4) Other causes (3) that the threat be
is a stipulation for payment of such in the
analogous to any of real or serious, there
employment contract or CBA, or payment of the
the foregoing (Article being evident
amount is sanctioned by established employer
285(b), Labor Code, disproportion
practice or policy (CJC Trading, Inc. and/or Carlos
vs. NLRC, G.R. No. 115884, July 20, 1995).
as amended; Section between the evil and
11, Rule I, Book VI, the resistance which
Involuntary Resignation vs. Forced Rules to Implement all men can offer,
Resignation the Labor Code). leading to the choice
of doing the act which
Unlike resignation is forced on the
INVOLUNTARY FORCED without just cause person to do as the
RESIGNATION RESIGNATION under the same lesser evil; and
paragraph (a), Article (4) that it produces a
The termination There is forced 285 of the Labor Code well-grounded fear
initiated by the resignation where the where the law from the fact that the
employee based on employee is made to requires prior written person from whom it
the just causes do or perform an notice, the employee comes has the
described and involuntary act - may terminate his necessary means or
enumerated in submission or tender employment without ability to inflict the
paragraph (b), Article of resignation - meant serving any notice to threatened injury to
285 of the Labor Code to validate the action the employer if such is his person or property
is in the nature of of management in occasioned by any of (De Leon vs. CA and De
involuntary inveigling, luring or the just causes Leon, G.R. No. 80965,
resignation. influencing or mentioned above. June 6, 1990).
practically forcing the
JUST CAUSES employee to Employee who alleges NO FORCED
Thus, an employee effectuate the that he was coerced RESIGNATION
may put an end to the termination of or intimidated into Mere allegations of
employment employment, instead resigning has the threat or force do not
relationship without of doing the burden to prove such constitute evidence to
need of serving any termination himself a claim. (Gan vs. support a finding of
notice on the (SHS Perforated Galderma Philippines, forced resignation or
employer for any of Materials, Inc., Inc. and Veneracion, constructive dismissal
the following just Hartmanshenn, and G.R. No. 177167, (Mandapat vs. Add
causes: Schumacher vs. Diaz. January 17, 2013) Force Personnel
(1) Serious insult by G.R. No. 185814, Services, Inc., G.R.
the employer or his October 13, 2010). No. 180285, July 6,
representative on the 2010).
honor and person of REQUISITES
the employee; Mere allegations of A threat to sue the
(2) Inhumane and threat or force do not employee is not unjust
unbearable treatment constitute evidence to and will not amount to
accorded the support a finding of forced resignation or
employee by the forced resignation. constructive dismissal.
employer or his For instance, a threat
representative; REQUISITES FOR to file an estafa case,
(3) Commission of a INTIMIDATION TO not being an unjust
crime or offense by VITIATE CONSENT act, but rather a valid
the employer or his (1) that the and legal act to
representative against intimidation caused enforce a claim,
the person of the the consent to be cannot at all be

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basis, and must be dismissed for want of

considered as
cause of action (The University of the
intimidation. A threat
Immaculate Conception. NLRC and Axalan.
to enforce one’s claim
G.R. No. 181146, January 26, 2011).
through competent
authority, if the claim
Constructive Dismissal Contemplates
is just or legal, does
Any of The Following Situations:
not vitiate consent
(Callanta vs. NLRC
A. An involuntary resignation resorted to
and Distilleria
when continued employment is rendered
Limtuaco, Co., and/or
impossible, unreasonable or unlikely;
Limpe. G.R. No.
B. A demotion in rank and/or a diminution
105083, August 20,
in pay; or
1993).
C. A clear discrimination, insensibility or
COMMON DENOMINATOR disdain by an employer which becomes
Both involuntary and forced resignations are unbearable to the employee that it could
embraced within the concept of constructive foreclose any choice by him except to
forego his continued employment
dismissal. The common character pervading
(Diamond Taxi and/or Ong vs. Llamas, J.R.
involuntary or forced resignation or
G.R. No. 190724, March 12, 2014).
constructive dismissal is the act of “quitting” Test of Constructive Dismissal
from employment by the employee because of
the attendant just causes, acts, facts or The test of constructive dismissal is whether
circumstances which render the continued a reasonable person in the employee's
employment impossible, unreasonable or position would have felt compelled to give up
unlikely (Mobile Protective and Detective his position under the circumstances (Ibid).
Agency and/or Aguilar vs. Ompad. G.R. No.
159195, May 9, 2005). Thus, if there is no It is an act amounting to dismissal but made
cessation of work, there can be no to appear as if it were not. In fact, the
constructive dismissal (The University of the employee who is constructively dismissed
Immaculate Conception, et al. vs. NLRC and may be allowed to keep on coming to work.
Axalan. G.R. No. 181146, January 26, 2011). Constructive dismissal is therefore a dismissal
in disguise. The law recognizes and resolves
Constructive Dismissal this situation in favor of employees in order to
protect their rights and interests from the
Constructive dismissal occurs when there is coercive acts of the employer (Aguilar vs.
cessation of work because continued Burger Machine Holdings Corp., G.R. No. 172062,
employment is rendered impossible, October 30, 2006).
unreasonable, or unlikely as when there is a
demotion in rank or diminution in pay or when a Agabon Doctrine
clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee The Agabon doctrine enunciated the rule that
leaving the latter with no other option but to quit if the dismissal was for just cause but
(The University of the Immaculate Conception vs. procedural due process was not observed, the
NLRC, G.R. No. 181146, January 26, 2011). dismissal should be upheld.

Termination by reason of a bonafide suspension 1. If the dismissal is based on a just cause

of operation of a business or undertaking that under Article 282 but the employer failed
exceeds six months. Otherwise stated, if the to comply with the notice requirement,
employee was forced to remain without work or the sanction to be imposed upon him
assignment for a period exceeding six months, should be tempered because the
then he is in effect constructively dismissed (Art. dismissal process was, in effect, initiated
286, Labor Code, as amended). by an act imputable to the employee; and

A complaint for constructive dismissal filed prior

to the employee's resumption of work has no 2. If the dismissal is based on an authorized

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cause under Article 283 but the employer Inc. and CA. G.R. No. 180285, July 6, 2010).
failed to comply with the notice requirement,
the sanction should be stiffer because the The Facts of the Case Should Be
dismissal process was initiated by the Considered to Determine If There Is
employer’s exercise of his management Constructive Dismissal
prerogative (Agabon and Agabon vs. NLRC,
Riviera Home Improvements, Inc., G.R. No. The filing of a complaint for illegal dismissal
158693, November 17, 2004). should be taken into account together with
the surrounding circumstances of a certain
Constructive Dismissal Even Without case. The substantial evidence proffered by
Quitting; Preventive Suspension Beyond the employer that it had not, in the first place,
30 Days Amounts To Constructive terminated the employee, should not simply
Dismissal be ignored on the pretext that the employee
would not have filed the complaint for illegal
The evidence as it stands shows that after the dismissal if he had not really been dismissed.
lapse of the 30-day suspension period, "This is clearly a non-sequitur reasoning that
respondent reported for work but he was not can never validly take the place of the
allowed to resume his duties as a taxi driver. To evidence of both the employer and the
reiterate, from the time that the 30-day employee." (Arc-Men Food Industries
suspension period had expired, respondents can Corporation and Mendoza vs. NLRC, G.R. No.
be already deemed as constructively dismissed. 127086. August 22, 2002),
The strict adherence by the NLRC to the
definition of constructive dismissal is erroneous. While the Constitution is committed to the
Apparently, the NLRC ruled out constructive policy of social justice and the protection of
dismissal in this case mainly because according the working class, it should not be supposed
to it "constructive dismissal consists in the act of that every labor dispute will be automatically
quitting because continued employment is decided in favor of labor. Management also
rendered impossible, unreasonable or unlikely as has its rights which are entitled to respect and
in the case of an offer involving demotion in rank enforcement in the interest of simple fair play
and a diminution in pay". Based on this definition, (Philippine Rural Reconstruction Movement [PRRM]
the NLRC concluded that since respondent vs. Pulgar, G.R. No. 169227, July 5, 2010).
neither resigned nor abandoned his job and the
fact that respondent pursued his reinstatement Instances Of Constructive Dismissal or
negates constructive dismissal. What makes this Forced Resignation
conclusion tenuous is the fact that constructive
dismissal does not always involve forthright ● Denying the workers entry to their work
dismissal or diminution in rank, compensation, area and placing them on shifts “not by
benefit and privileges (Masagana Concrete weeks but almost by month” by reducing
Products, Kingstone Concrete Products and Chua vs. their workweek to three days. (Pasig
NLRC and Marias, G.R. No. 106916, September 3, Cylinder Mfg., Corpo. vs. Rollo, G.R. No.
1999). 173631, September 8, 2010).

There may be constructive dismissal if an act of ● Barring the employees from entering the
clear discrimination, insensibility, or disdain by an premises whenever they would report for
employer becomes so unbearable on the part of work in the morning without any
the employee that it could foreclose any choice justifiable reason, and they were made to
by him except to forego his continued wait for a certain employee who would
employment (Hyatt Taxi Services, Inc. vs. Catinoy, arrive in the office at around noon, after
G.R. No. 143204, June 26, 2001). they had waited for a long time and had
left (New Ever Marketing, Inc. vs. CA and
Ylanan, G.R. No. 140555, July 14, 2005).
● Instructing the employee to go on
Option Between Resignation And indefinite leave and asking him to return
Investigation to work only after more than three (3)
Giving the employee the choice or option years from the time he was instructed to
between resignation and investigation is not go on indefinite leave during which period
illegal (Mandapat vs. Add Force Personnel Services, his salaries were withheld (Dynamic

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Signmaker Outdoor Advertising Services, Inc. vs. Davao Workers Union [RMCFU-DWU] vs.
Potongan, G.R. No. 156589, June 27, 2005). NLRC, G.R. No. 59012-13, October 12, 1989).

● Implementing a rotation plan for reasons ● Asking the employee to file a resignation
other than business necessity (Unicorn Safety on the condition or promise that she
Glass, Inc. vs. Basarte, G.R. No. 154689, would be given priority for re-
November 25, 2004). employment and in consideration of
immediately paying her two (2) months’
● Sending to an employee a notice of indefinite vacation which she desperately needed
suspension which is tantamount to dismissal then because she was ill. The employer’s
(Oriental Mindoro Electric Cooperative, Inc. vs. refusal in bad faith to reemploy her
NLRC, G.R. No. 111905, July 31, 1995).
despite its promise to do so amounted to
● Demoting a worker or re-assigning him illegal dismissal (Reyes vs. NLRC and Kong
Hua School, G.R. No. 78997, August 31,
involves a demotion in rank or diminution of
1989).
salaries, benefits and other privileges. (Oscar
Ledesma and Company and Ledesma vs. NLRC ● Changing the employee’s status from
and Ondon. G.R. No. 110930, July 13, 1995).
regular to casual constitutes constructive
dismissal (Sy vs. NLRC, G.R. No. 85365, June
● Reducing the employee’s functions which 21, 1989).
were originally supervisory in nature and
such reduction is not grounded on valid ● Offer made by a labor contractor to
grounds such as genuine business necessity reassign its employees to another
(Globe Telecoms, Inc., Lazaro, J.R., and Galang company but with no guaranteed working
vs. Florendo-Flores, G.R. No. 150092, Sept. 27, hours and payment of only the minimum
2002).
wage. The terms of the redeployment
● Imposing indefinite preventive suspension thus became unacceptable for said
without actually conducting any employees and foreclosed any choice but
investigation. It was only after almost one (1) to reject the employer’s offer, involving as
year that the employer made known the it does a demotion in status and
findings in its investigation which was diminution in pay (R.P. Dinglasan
Construction, Inc. vs, Atienza, G.R. No.
conducted ex parte (C. Alcantara and Sons, Inc.
156104, June 29, 2004).
vs. NLRC, G.R. No. 73521, January 5, 1994).
● Preventing the employee from reporting
● Threatening a sickly employee with dismissal
for work by ordering the guards not to let
if he will not retire and promising
her in. This is a clear notice of dismissal.
employment to his son and daughter. The
(Litonjua Group of Companies vs. Vigan, G.R.
employee retired and signed two (2) No. 143723, June 28, 2001).
quitclaims entitled “Receipt and Release” in
favor of the company (Zurbano, S.R., vs. NLRC ● Transfer of respondent employee from
and San Miguel Corporation and Honasan, G.R. Credit and Collection Manager to
No. 103679, December 17, 1993). Marketing Assistant which resulted in
● Forcing the employee to resign with the demotion as it reduced his duties and
threat that if he will not resign, he will file responsibilities although there was no
charges against him that would adversely corresponding diminution in his salary. In
affect his chances for new employment holding that there was constructive
(Guatson International Travel and Tours, Inc. vs.
dismissal, the court took note of the fact
NLRC, G.R. No. 100322, March 9, 1994).
that the former position is managerial
● Asking the employee to choose whether to while the latter is clerical in nature (Norkis
continue as a faculty member or to withdraw Trading, Co., Inc. and/or Albos, J.R. vs. Gnilo,
G.R. No. 159730, February 11, 2008).
as a lawyer against the mayor with whom the
former owes certain favors, makes the ● Reducing the number of trips of the
cessation from employment of said employee drivers and shortening their workdays
not voluntary. Such an act is in the nature of which resulted in the diminution of their
a contrivance to effect a dismissal without pay (Sapitan vs. JB Line Bicol Express, Inc.,
cause (Rizal-Memorial Colleges Faculty Union- G.R. No. 163775, October 19, 2007).

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● Forcing the employee to tender her in King of Kings Transport, Inc., Dela
resignation letter in exchange for her 13th Fuente and Lim vs. Mamac (G.R. No.
month pay, the reason being that the 166208, June 29, 2007), the standards to
employee was found by the employer to have be observed by employers in complying
violated its no-employment-for-relatives- with the service of notices prior to
within-the-third-degree-policy, she having termination which require compliance
been impregnated by a married co-employee with the reasonable period of at least five
(Star Paper Corporation, Ongsitc vs. Simbol, G.R. (5) calendar days from receipt of the
No. 164774, April 12, 2006). notice within which to explain his side.
2. Tuason vs. Bank of Commerce, De
Cases Where Facts Proved Constructive Mera and Padilla (G.R. No. 192076,
Dismissal: November 21, 2012), the Supreme Court
ruled that the petitioner was forced to
1. Cosare vs. Broadcom Asia, Inc. and resign. Pressure was exerted on her to
Arevalo (G.R. No. 201298, February 5, resign from her work. The Court has in
2014) Even before Cosare was required to fact examined the exchange of
present his side on the charges of serious communications between petitioner and
misconduct and willful breach of trust, he the respondent officers of respondent
was summoned to his superior’s office and bank before it arrived at its ruling that
was asked to tender his immediate petitioner was constructively dismissed. It
resignation in exchange for financial was proved, among others, that the
assistance. The employer’s refusal to accept petitioner was replaced in her position
the explanation which Cosare tried to tender while she was on leave. Like Tuason, any
on April 2, 2009 evidenced their resolve to reasonable person similarly situated
deny Cosare of the opportunity to be heard would have felt compelled to give up her
prior to any decision on the termination of his post as she was, in fact, stripped of it
employment. They allegedly refused considering that someone else was
acceptance of the explanation as it was filed already discharging her functions and
beyond the mere 48-hour period which they occupying her office.
granted to Cosare under the memo dated
March 30, 2009. However, even this
limitation was a flaw. The Court emphasized

Voluntary Resignation vs. Constructive Dismissal

VOLUNTARY RESIGNATION CONSTRUCTIVE DISMISSAL

Voluntary resignation is likewise distinct from It is deemed indicative of constructive dismissal

constructive dismissal. when an employee, worked as Operations
Manager for about three (3) months with the
An employee who tendered her voluntary employer but he was not paid his salaries
resignation and signed the quitclaim after corresponding thereto, prompting him to tender
receiving all the benefits due her for her his resignation letter. While it was the employee
separation cannot claim that she was who tendered his resignation, it was due to the
constructively dismissed. The fact of her transfer employer’s acts that he was constrained to
due to a new secretarial staffing pattern which resign. The employer cannot expect the
she objected to, or the alleged hostility on the employee to tolerate working for them without
part of her employer, cannot render nugatory the any compensation. It is impossible, unreasonable
voluntary nature of her resignation. She was not or unlikely that any employee would continue
eased out much less was forced to resign working for an employer who does not pay him
(Concrete Aggregates Corporation vs. NLRC and his salaries (Dreamland Hotel Resort and Prentice vs.
Lopez, G.R. No. 82458, September 7, 1989). Johnson, G.R. No. 191455, March 12, 2014).

The transfer of the location of an employee’s

office from under the steps of the stairs to the

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kitchen which allegedly caused her mental

torture which forced her to resign does not
amount to constructive dismissal but a case of
voluntary resignation. It was not shown that her
transfer was prompted by ill will of management.
It merely involved a change in location of the
office and not a change of her position (Admiral
Realty Company, Inc. [Admiral Hotel] vs. NLRC,
G.R. No. 112043, May 18, 1999).

An indication that the resignation was voluntary

and does not constitute constructive dismissal is
the act of the employee who resigned and took a
leave of absence on the date of effectivity of his
resignation and while on leave, he worked for the
release of his clearance and the payment of his
13th month pay and leave pay benefits. In doing
so, he, in fact, performed all that an employee
normally does after he resigns. If indeed he was
forced into resigning, he would not have sought
to be cleared by his employer and to be paid the
monies due him. The voluntary nature of his acts
has manifested itself clearly and belied his claim
of constructive dismissal (Go vs. CA and Moldex
Products, Inc. G.R. No. 158922, May 28, 2004).

Voluntary resignation is different from

constructive dismissal. An employee who
tendered her voluntary resignation and signed
the quitclaim after receiving all the benefits due
her for her separation cannot claim that she was
constructively dismissed (Concrete Aggregates
Corporation vs. NLRC, G.R. No. 82458,
September 7, 1989).

ILLEGAL CONSTRUCTIVE employer in illegal dismissal, there

DISMISSAL DISMISSAL dismissal cases would being no express
normally defend and dismissal to speak
“Illegal dismissal” is “Constructive justify the of, the employer
readily shown by the dismissal” being termination. would normally
act of the employer in dismissal in contend that there
openly and expressly disguise, is not was no termination
seeking the readily indicated at all.
termination of by any similar act
employment of an of the employer In terms of evidence, In constructive
employee. that would openly in illegal dismissal dismissal, the
and expressly cases, documentary, employer, who
show its desire and testimonial and other normally denies
intent to terminate forms of evidence are the termination,
the employment adduced by the would advance
relationship. employer to secure arguments against
affirmation from the the circumstantial
More concretely, the In constructive court of the validity of evidence being

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employment by the employer. (Protective

the termination. presented by the
Maximum Security Agency, Inc. vs. Fuentes,
employee to prove
G.R. No. 169303, February 11, 2015).
his constructive
dismissal.
Elements For A Valid Finding Of
Abandonment
As far as the reliefs under Article 279 of the
Labor Code are concerned, the same are 1. The failure to report for work or absence
available to both illegal and constructive without valid or justifiable reason; and
dismissal. (New Ever Marketing, Inc. vs. CA, 2. A clear intention to sever employer-
Ylanan and Bilasa. G.R. No. 140555, July 14, employee relationship, with the second as
2005) the more determinative factor which is
manifested by overt acts from which it
may be deduced that the employees has
An employee may be constructively [sic] no more intention to work. (Uniwide
dismissed and at the same time legally Sales Warehouse Club and Apduhan vs.
dismissed NLRC and Kawada. G.R. No. 154503,
February 29, 2008)
In a case, the Petitioner (Acting District Manager
of Respondent) was constructively dismissed The employer has the burden of proof to show
because, while still employed with the the employee's deliberate and unjustified
respondent, he was compelled to resign and refusal to resume his employment without
forced to go on leave. After being confronted any intention of returning. Mere absence is
with the complaint for sexual abuse lodged by a not sufficient. There must be an unequivocal
subordinate female employee and before being intent on the part of the employee to
required to explain his side, petitioner was no discontinue his employment. (Northwest
longer allowed to participate in the activities of Tourism Corporation “Asiaworld resort Hotel
respondent company. His salary was no longer Palawan” vs. CA, G.R. No. 150591, June 27, 2005)
remitted to him. His subordinates were directed
not to report to him and the company directed Elements Of Abandonment As A Just
one of its district managers to take over his Cause For Dismissal:
position and do his functions without prior notice 1. Absence without justifiable reason; and
to him. He was required to explain his side on the 2. A clear intention, as manifested by some
issue of sexual abuse as well as the charge of overt act, to sever the employer-
insubordination only after these things have employee relationship. (Far East
already been done to him. However, his dismissal Agricultural Supply, Inc. and/or Uy vs.
was considered legal because there was a just Lebatique and CA. G.R. No. 162813, February
cause for his dismissal from the service consisting 12, 2007)
of his sexual abuse of a subordinate female
employee which, although not cited in the Notice Whether An Employee Abandoned His
of Termination served on him when he was Job Or Was Illegally Dismissed Are
terminated, was duly proved during the trial of Questions Of Fact Better Left To Quasi-
the case before the Labor Arbiter. Since the Judicial Agencies To Determine
dismissal, although for a valid cause, was done
without due process of law, the employer was The burden of proof that there was
ordered to indemnify the petitioner with nominal abandonment lies with the employer. Where
damages in the amount of P30,000.00. the employee takes steps to protest his layoff,
(Formantes vs. Duncan Pharmaceuticals it cannot be said that he has abandoned his
Philippines, Inc. G.R. No. 170661, December 4, work because a charge of abandonment is
2009) totally inconsistent with the immediate filing
of a complaint for illegal dismissal, more so
2. Abandonment when it includes a prayer for reinstatement.
(Stamford Marketing Corporation, et al. vs. Julian,
et al. G.R. No. 145496, February 24, 2004)
Abandonment is the deliberate and unjustified
refusal of an employee to resume his
employment. It is a form of neglect of duty,
hence, a just cause for termination of

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D. Preventive Suspension NLRC, G.R. No. 108891, July 17, 1995] or

P3,000.00 [Pepsi-Cola Distributors vs. NLRC, G.R.
Preventive Suspension No. 106831, May 6, 1997). Thus, the extension
Preventive suspension is imposed on an will not give rise to constructive dismissal.
employee under investigation if he poses a The preventive suspension beyond 30 days
serious threat to the life and property of the shall be upheld provided the employee's
employer and of his co-workers. (Gatbonton vs. wages and benefits are paid in the interim.
NLRC, G.R. No. 146779, January 23, 2006) The rule (Genesis Transport Service, Inc. vs. Unyon ng
on preventive suspension is found in Secs. 8 and Malayang Manggagawa ng Genesis Transport, G.R.
No. 182114, April 5, 2010.)
9, Rule XXIII, DO 19, June 21, 1997.
Employee who was preventively
Payment of Wages During Preventive
suspended pending an investigation is
Suspension
treated like an employee on approved
vacation leave without pay
General Rule: The employee is not entitled to
wages during the period of a valid preventive
An employee who was preventively
suspension (Maricalum Mining Corp. vs. Decorion,
suspended pending an investigation is treated
G.R. NO. 158637, April 12, 2006).
like an employee on approved vacation leave
Exception: If preventive suspension is found to without pay. The period of preventive
be without basis, the employer is required to pay suspension shall effectively interrupt the
the illegally suspended employee his back wages continuity of his government service. (The
Board of Trustees of the Government Service
for the period of his suspension. (Maricalum Mining
Insurance System, et al. vs. Albert M. Velasco, et
Corp. vs. Decorion, G.R. No. 158637, April 12, 2006).
al., G.R. No. 170463, February 2, 2011.)

Preventive Suspension Pending Preventive Suspension Is Not

Investigation Is Not A Penalty Termination Of Employment
It is a measure intended to enable the disciplining Imposition of preventive suspension does not
authority to investigate charges against amount to termination of employment.
respondents by preventing the latter from Preventive suspension is justified where the
intimidating or in any way influencing witnesses employee's continued employment poses a
against him (Mandapat vs. Add Force Personnel serious and imminent threat to life or property
Services, Inc., G.R. No. 180285, July 6, 2010).
or of the employee's co-workers, and does not
amount to illegal dismissal (Jose P. Artificio vs.
If the investigation is not finished and a decision
NLRC, et al., G.R. No. 172988, July 26, 2010).
is not rendered within that period, the suspension
will be lifted and the respondent will E. Floating Status
automatically be reinstated (The Board of Trustees
of the Government Service Insurance System, et al. vs.
Floating Status
Albert M. Velasco, et al., G.R. No. 170463, February 2,
2011).
Floating status, also known as temporary lay-
Preventive Suspension May Become off,
Constructive Dismissal After A Period Of 30 temporary off-detail or temporary
Days retrenchment, does not really expressly
appear in the Philippine Labor Code. It is
Preventive suspension lasts only for a period of considered as a valid management action but
30 days, and beyond this period, such suspension subject to compliance with Article 301 of the
may amount to constructive dismissal. (Maricalum Labor Code. Since the lay-off is only
Mining Corp. vs. Decorion, supra.) temporary, the employment status of the
employee is not deemed terminated, but
Payment of Indemnity merely suspended. Thus, he remains an
employee of the company (Dela Cruz vs. NLRC,
There are cases where a violation of the 30-day G.R. No. 119536, February 17, 1997).
suspension period may entail payment of
indemnity of P1,000.00. (JRS Business Corp. vs.

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Floating status is the period of time when security assigned to it even for want of cause, the
guards are in between assignments or when they replaced security guard may be placed on
are made to wait after being relieved from a temporary "off-detail" if there are no available
previous post until they are transferred to a new posts under respondent’s existing contracts
one. It takes place when the security agency's (Sentinel Security Agency, Inc. vs. NLRC, et al.,
clients decide not to renew their contracts with G.R. No. 122468, September 3, 1998).
the agency, resulting in a situation where the
available posts under its existing contracts are When a security guard is placed on a "floating
less than the number of guards in its roster. It status," he does not receive any salary or
also happens in instances where contracts for financial benefit provided by law (Agro
security services stipulate that the client may Commercial Security Services Agency, Inc. vs.
request the agency for the replacement of the NLRC, et al. G.R. Nos. 82823-24, July 31, 1989).
guards assigned to it even for want of cause.
(Salvaloza vs. NLRC, Gulf Pacific Security Agency, Due to the grim economic consequences to
Inc. and Quizon. G.R. No. 182086, November 24, the employee, the employer should bear the
2010) burden of proving that there are no posts
available to which the employee temporarily
When Floating Status Amounts To out of work can be assigned (Pido vs. NLRC, et
Constructive Dismissal al. G.R. No. 169812, February 23, 2007).

An employee who was placed on temporary “off- F. Retirement

detail” on the ground of poor performance and
inefficiency, allegations of which were never Retirement
made known to him, and instead was given to Retirement is the result of a bilateral act of
various assignments amounts to constructive the parties, a voluntary agreement between
dismissal. Assignment to different posts despite the employer and the employee whereby the
repeated errors and poor performance is latter, after reaching a certain age, agrees to
considered condonation, which the employer sever his or her employment with the former.
cannot invoke to justify placing the employee on R.A. No. 7641 pegs the age for compulsory
temporary “off-detail”. (Ibid.) retirement at 65 years, while the minimum
age for optional retirement is set at 60 years.
Dire Exigency Of Suspension Of Business An employer is, however, free to impose a
Operation retirement age earlier than the foregoing
mandates. (Cercado vs. Uniprom, Inc. G.R. No.
Article 286 applies only when there is a bona fide 188154, October 13, 2010)
suspension of the employer's operation of a
business or undertaking for a period not Retirement laws are liberally construed in
exceeding six (6) months. In such a case, there favor of the persons intended to be benefited.
is no termination of employment but only a HOWEVER, when the employer’s retirement
temporary displacement of employees, albeit the plan precludes employees, whose services
displacement should not exceed six (6) months. were terminated for cause, from availing
The paramount consideration should be the dire retirement benefits, such cannot be granted
exigency of the business of the employer that for lack of consensual and statutory basis for
compels it to put some of its employees the grant of retirement benefits (Divina S.
temporarily out of work. In security services, the Lopez vs. National Steel Corporation. G.R. No.
149674, Feb. 16, 2004).
temporary "off-detail" of guards takes place
when the security agency's clients decide not to
Kinds Of Retirement Schemes (as
renew their contracts with the security agency,
amended by RA 7641, Dec. 9. 1992)
resulting in a situation where the available posts
A. Retire under existing CBA; in
under its existing contracts are less than the
absence thereof:
number of guards in its roster (Pido vs. NLRC, et
B. Retire under law
al., G.R. No. 169812, February 23, 2007).
a. SERVICE: Rendered at least 5 years,
Also, in instances when contracts for security and reaching the OPTIONAL or
services stipulate that the client may request the COMPULSORY age of retirement
agency for the replacement of the guards b. OPTIONAL: Age 60 years old
c. COMPULSORY: Age 65 years old.

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RA 7641 or the Retirement Pay Law shall

Voluntary Acceptance of retirement below apply to all employees in the private sector,
the ages provided by law regardless of their position, designation or
status and irrespective of the method by
A retirement plan giving the employer the option which their wages are paid. They shall
to retire its employees below the ages provided include part-time employees, employees of
by law must be assented to and accepted by the service and other job contractors and
latter, without which, the exercise of such option domestic helpers or persons in the personal
will amount to deprivation of property without service of another. (Labor Advisory on
due process of law. (Cercado vs. Uniprom, Inc. G.R. Retirement Pay Law, October 24, 1996.)
No. 188154, October 13, 2010)
Determination of Retirement Age
Note: Implied knowledge of the existence of the
retirement plan does not amount to voluntary The retirement age is primarily determined by
acceptance of all the provisions set forth therein. the:
The law demands more than a passive 1. Agreement
acquiescence on the part of the employees, a. Existing agreement; or
considering that an employer's early retirement b. Employment contract
age option involves a concession of the former's 2. By Law - Absent an agreement,
constitutional right to security of tenure. (Ibid.) retirement age shall be fixed by law at the
age of 65 years, while the minimum age
REQUISITES OF VOLUNTARY ACCEPTANCE for optional retirement is set at 60 years.
1. Explicit; Article 287 of the Labor Code applies only
2. Voluntary; to a situation where (1) there is no CBA
3. Free; and or other applicable employment contract
4. Uncompelled (Ibid.) providing for retirement benefits; or there
is a CBA or other applicable employment
Mutually Instituted Early Retirement Plan contract providing for retirement benefits,
but it is below the requirement set by law.
While an employer may unilaterally retire an The rationale is to prevent the absurd
employee earlier than the legally permissible situation where an employee is denied
ages under the Labor Code, this prerogative must retirement benefits through the nefarious
be exercised pursuant to a mutually instituted scheme of employers to deprive
early retirement plan. Otherwise stated, only the employees of the benefits due them
implementation and execution of the option may under existing labor laws. (Obusan vs.
be unilateral, but certainly not the adoption and Philippine National Bank. G.R. No. 181178,
institution of the retirement plan containing such July 26, 2010)
option. Without the voluntary and explicit assent
of at least the majority of its employees, the Due Process – Notice
option to unilaterally retire an employee is not
valid. (Ibid.) The company retirement plans must not only
comply with the standards set by existing
Optional Retirement labor laws, but they should also be accepted
by the employees to be commensurate with
An employee's claim under the Early Retirement their faithful service to the employer within
Program of a corporation is mooted when he the requisite period. Due process only
avails of the optional retirement under Article 287 requires that notice of the employer's decision
of the Labor Code, and accepts the benefits. to retire an employee be given to the
Acceptance of said benefits means that the employee. (Ibid.)
employee opted to retire under Article 287
(Korean Air Co., Ltd. and Suk Kyoo Kim vs. Yuson. G.R. Financial Burden Not Imposed On
No. 170369, June 16, 2010). Employees

Coverage Of Retirement Pay Law (R.A. No. Unlike in the case of Jaculbe, the retirement
7641) plan of PNB was solely and exclusively funded
by PNB, and no financial burden was imposed

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on the employees for their retirement benefits. Retirement Less Than 65 Years Old
(Ibid.) An employer is free to impose a retirement
age less than 65 for as long as it has the
Presumption Of Retirement Pay employees’ consent (Jaculbe vs. Silliman
University, G.R. No. 156934, March 16, 2007).
Retirement pay, on the other hand, presupposes
that the employee entitled to it has reached the Retirement Under R.A. No 1616 – At
compulsory retirement age or has rendered the Least 20 Years Of Government Service
required number of years as provided for in the
CBA, the employment contract or company An employee who has rendered at least 20
policy, or in the absence thereof, in Republic Act years of service may retire under R.A. No
No. 7641 or the Retirement Law. (Motorola 1616, and receive a retirement gratuity of 1
Philippines, Inc. and/or SCG Philippines, Inc., et al. vs. month salary for every year of service. MC
Ambrosio, et al. G.R. No. 173279, March 30, 2009) No. 26-96, on the other hand, provides for the
computation of the separation benefit
Receipt Of Retirement Benefits Does Not applicable to permanent officials who are not
Bar Retiree From Receiving Separation Pay qualified to retire under any existing law and
those who are qualified to retire. Those who
General Rule: Separation pay is a statutory are not qualified, as long as they served for
right designed to provide the employee with the more than a year, may avail of the gratuity
wherewithal during the period that he/she is corresponding to their length of service. As
looking for another employment. On the other for those employees who are qualified to
hand, retirement benefits are intended to help retire, they may only receive a separation pay
the employee enjoy the remaining years of his equivalent to the difference between the
life, lessening the burden of worrying about his incentive package and the retirement benefit
financial support, and are a form of reward for under any existing law (Metropolitan
his loyalty and service to the employer. (Santos Waterworks and Sewerage System [MWSS] vs.
vs. Servier Philippines, Inc. and NLRC. G.R. No. Advincula, et al., G.R. No. 179217, February 2,
166377, November 28, 2008.) 2011).

Exception: When the Retirement Plan of the Separated Employees After

employer bars the employee from claiming Privatization
additional benefits on top of that provided for in
the Plan. (Ibid.) General Rule: When its personality as a
government-owned corporation ceased, and
Retirement Pay Law Only Applies In A all the employees therein are deemed retired.
Situation Where: The separated employees are entitled to all
1. There is no collective bargaining agreement the benefits accruing to them, after PNB
or other applicable employment contract; or cleared them of any accountability, absent
2. There is a CBA or other applicable PNB's findings of pending administrative case
employment contract, but it is below the against them. (Ang vs. Philippine National Bank.
requirements set for by law. (Oxales vs. United G.R. No. 178762, June 16, 2010)
Laboratories, Inc. G.R. No. 152991, July 21, 2008.
Reyes, R.T., J.) Exception: Employees who were offered
appointments and absorbed by the private
Essential Requisites In Order That R.A. concessionaires after privatization are never
7641 May Be Given Retroactive Effect: separated from service by virtue of the
1. The claimant for retirement benefits was still reorganization pursuant to RA 8041.
in the employ of the employer at the time the (Metropolitan Waterworks and Sewerage System
statute took effect; and [MWSS] vs. Advincula, et al. G.R. No. 179217,
2. The claimant had complied with the February 2, 2011)
requirements for eligibility for such
retirement benefits under the statute Note: In both cases, some employees were
(Universal Robina Sugar Milling Corporation absorbed by the company after privatization
[URSUMCO] and/or Cabati vs. Caballeda and took effect. However, these two cases
Cadalin. G.R. No. 156644, July 28, 2008). treated the subsequent appointment of the
employees concerned differently, in that, one

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considered the absorbed employees as retired 1. Fifteen (15) days salary of the
from government service and entitled to employee based on his latest salary
retirement benefits, whereas the other treated rate. As used herein, the term “salary”
the absorbed employees as never separated, includes all remunerations paid by an
their service uninterrupted. employer to his employees for services
rendered during normal working days and
Absence Of Any Retirement Plan In The hours, whether such payments are fixed
Private Sector Establishment or ascertained on a time, task, piece or
commission basis, or other method of
Republic Act No. 7641 amended Article 287 of the calculating the same, and includes the fair
Labor Code by providing for retirement pay to and reasonable value, as determined by
qualified private sector employees in the absence the Secretary of Labor and Employment,
of any retirement plan in the establishment. of food, lodging or other facilities
Even a bus conductor paid on commission basis customarily furnished by the employer to
falls within the coverage of RA 7641 if no his employees. The term does not include
retirement scheme was adopted in the cost of living allowances, profit-sharing
establishment he is working for. Thus, his payments and other monetary benefits
retirement pay should include the cash which are not considered as part of or
equivalent of the 5-day service incentive leave integrated into the regular salary of the
and 1/12 of the 13th month pay. (Serrano vs. employees;
Severino Santos Transit and/or Santos. G.R. No. a. The cash equivalent of not more than
187698, August 9, 2010) five (5) days of service incentive
leave;
Exclusions From Coverage b. One twelfth of the 13th month pay
due the employee;
The law does not cover employees of retail, c. All other benefits that the employer
service and agricultural establishments or and employee may agree upon
operations employing not more than (10) should be included in the
employees or workers and employees of the compensation of the employee’s
National Government and its political retirement pay.
subdivisions, including Government-owned (Cash equivalent of 22.5 days, DOLE
and/or –controlled corporations, if they are Statutory Monetary Benefits
covered by the Civil Service Law and its Handbook)
regulations. (Labor Advisory on Retirement Pay Law, 2. One-half month salary of employees
supra; Sec. 2, Rules Implementing the New Retirement who are paid by results. — For covered
Law) workers who are paid by results and do
not have a fixed monthly rate, the basis
Components Of Retirement Pay (Benefits for determination of the salary for fifteen
Under Sec. 5, IRR) days shall be their average daily salary
(ADS), subject to the provisions of Rule
In the absence of an applicable agreement or VII-A, Book III of the Rules Implementing
retirement plan, an employee who retires the Labor code on the payment of wages
pursuant to the Act shall be entitled to retirement of workers who are paid by results. The
pay equivalent to at least one-half (1/2) month ADS is the average salary for the last
salary for every year of service, a fraction of at twelve (12) months reckoned from the
least six (6) months being considered as one date of their retirement, divided by the
whole year. number of actual working days in that
particular period. (Labor Advisory on
Components of One-half (1/2) Month Retirement Pay Law, supra; Sec. 5, Rules
Salary Implementing the New Retirement Law)

For the purpose of determining the minimum

retirement pay due an employee under this Rule, RULES ON SEPARATION PAY
the term “one-half month salary” shall include all RETIREMENT UNDER ART. 283,
the following: LABOR CODE

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If there is no prohibition in the CBA/retirement employees or workers are exempted from the
plan against double recovery of both the coverage of this provision.
retirement pay and separation pay under the
law - the employee can get both. (Aquino, et al. Violation of this provision is hereby declared
vs. NLRC and Otis Elevator Company. G.R. No. unlawful and subject to the penal provisions
87653, February 11, 1992. 206 SCRA 118. Cruz, J.) under Article 288 of this Code.

Otherwise, the employee can only get either.

Santos vs. Servier Philippines, Inc. and NLRC. SEC. 12-B, SSS LAWS
G.R. No. 166377, November 28, 2008. Nachura,
J.) A. A member who has paid at least one
hundred twenty (120) monthly contributions
prior to the semester of retirement; and
RETIREMENT BENEFITS who (1) has reached the age of sixty (60)
years and is already separated from
employment or has ceased to be self-
RA 7641 ART. 287, LABOR CODE employed (2) has reached the age of sixty
(65) years, shall be entitled for as long as
Retirement. Any employee may be retired upon he lives to the monthly pension: Provided,
reaching the retirement age established in the That he shall have the option to receive his
collective bargaining agreement or other first eighteen (18) monthly pensions in lump
applicable employment contract. sum discounted at the preferential rate of
interest to be determined by the SSS.
In case of retirement, the employee shall be
entitled to receive such retirement benefits as B. A covered member who is sixty (60) years
he may have earned under existing laws and old at retirement and who does not qualify
any collective bargaining agreement and other for pension benefits under paragraph (a)
agreements: Provided, however, That an above, shall be entitled to a lump sum
employee’s retirement benefits under any benefit equal to the total contributions paid
collective bargaining and other agreements shall by him and on his behalf: Provided, That he
not be less than those provided therein. is separated from employment and is not
continuing payment of contributions to the
In the absence of a retirement plan or SSS on his own.
agreement providing for retirement benefits of
employees in the establishment, an employee C. The monthly pension shall be suspended
upon reaching the age of sixty (60) years or upon the re-employment or resumption of
more, but not beyond sixty-five (65) years self-employment of a retired employee who
which is hereby declared the compulsory is less than sixty-five (65) years old. He
retirement age, who has served at least five (5) shall again be subject to Section Eighteen
years in the said establishment, may retire and and his employer to Section Nineteen of this
shall be entitled to retirement pay equivalent to Act.
at least one-half (1/2) month salary for every
year of service, a fraction of at least six (6) D. Upon the death of the retired member, his
months being considered as one whole year. primary beneficiaries as of the date of his
retirement shall be entitled to receive the
Unless the parties provide for broader monthly pension: Provided, That if he has
inclusions, the term ‘one-half (1/2) month no primary beneficiaries and he dies within
salary’ shall mean fifteen (15) days plus one- sixty (60) months from the start of his
twelfth (1/12) of the 13th month pay and the monthly pension, his secondary
cash equivalent of not more than five (5) days beneficiaries shall be entitled to a lump sum
of service incentive leaves. benefit equivalent to the total monthly
pensions corresponding to the balance of
Retail, service and agricultural establishments or the five-year-guaranteed period, excluding
operations employing not more than ten (10) the dependents’ pension.

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2. If CBA/Retirement Plan contains no

E. The monthly pension of a member who
prohibition, grant both. (Aquino, et al. vs.
retires after reaching sixty (60) shall be the
NLRC and Otis Elevator Company. G.R.
higher of either: (1) the monthly pension
No. 87653, February 11, 1992)
computed at the earliest time he could have
3. Same is true with retirement plans vis-a-
retired had he been separated from
vis CBA. (Ibid)
employment or ceased to be self-employed
4. If CBA does not require payment of
plus all adjustments thereto; or (2) the
retirement pay “in addition” to
monthly pension computed at the time
retrenchment pay, then no double
when he actually retires.
recovery. (Ibid)

SEC. 13, AND SEC. 13-A, GSIS LAWS Retirement Under The CBA — Impressed
With Public Interest
A. Retirement benefits shall be:
a. LUMP SUM PAYMENT as defined Retirement under the CBA is subject to judicial
in this Act payable at the time of review and nullification. A CBA, as a labor
retirement plus an old-age pension contract, is not merely contractual in nature
but impressed with public interest. It can be
benefit equal to the basic monthly
pension payable monthly for life, nullified for being contrary to law, public
starting upon expiration of the five- morals, or public policy. (Cainta Catholic
year (5) guaranteed period covered School and Balbago vs. Cainta Catholic School
by the lump sum; or Employees Union (CCSEU). G.R. No. 151021,
b. CASH PAYMENT equivalent to May 4, 2006)
eighteen (18) months of his basic
monthly pension plus monthly Clearance
pension for life payable immediately
with no five-year (5) guarantee. A clearance is a certification clearing an
B. Unless the service is extended by employee of any liabilities or accountabilities
appropriate authorities, retirement shall from the employer and is usually issued upon
the retirement or voluntary severance of
be compulsory for an employee at sixty-
five (65) years of age with at least employee from his employment. A clearance
fifteen (15) years of service: Provided, is the final statement of an employee's
That if he has less than fifteen (15) receivables and/or liabilities as the case may
years of service, he may be allowed to be (Tiu and/or The Rough Riders vs. Pasaol, S.R.,
NLRC [Fourth Division]. G.R. No. 139876, April 30,
continue in the service in accordance 2003.)
with existing civil service rules and
regulations.
VII. MANAGEMENT PREROGATIVE
Conditions for Entitlement. — A member who
retires from the service shall be entitled to the
Employer has the Inherent right to
retirement benefits enumerated in paragraph
regulate all aspects of employment
(a) of Section 13 hereof: Provided, That:
1. He has rendered at least fifteen (15) years
Under the doctrine of management
of service;
prerogative, every employer has the inherent
2. He is at least sixty (60) years of age at the
right to regulate, according to his own
time of retirement; and
discretion and judgment, all aspects of
3. He is not receiving a monthly pension
employment, including:
benefit from permanent total disability.
● Hiring;
● Work assignments;
RULES ON DOUBLE RECOVERY ● Working methods;
1. If CBA/Retirement Plan prohibits double ● Time, place and manner of work;
recovery of separation pay and retirement ● Tools to be used;
benefit – then grant only one benefit, ● Processes to be followed;
whichever is greater (Art. 283, Labor Code). ● Supervision of workers;
● Working regulations;

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● Transfer of employees; Suspension for three months is a valid and

● Work supervision; reasonable exercise of management
● Lay-off workers; and prerogative since mishandling the delivery of
● Discipline, dismissal and recall of work. (San highly flammable petroleum products could
Miguel Brewery Sales Force Union [PTGWO] result in enormous damage to properties and
vs. Ople, G.R. No. 53515, February 8, 1989; loss of lives at the terminal and surrounding
Deles, Jr. vs. NLRC, G.R. No. 121348, March areas (Deles, Jr. vs. NLRC, G.R. No. 121348,
9, 2000). March 9, 2000).
Discipline Must be Fair and Reasonable
Rights of an employer in the exercise of
management prerogative: The policies, rules and regulations on work-
related activities of the employees must
● Right to discipline; always be fair and reasonable and the
● Right to dismiss; corresponding penalties, when prescribed,
● Right to promulgate rules and regulations; commensurate to the offense involved and to
● Right to impose penalty; proportionality rule; the degree of the infraction. (Consolidated Food
● Right to determine who to punish; Corporation vs. NRLC, G.R. No. 118647 September
● Right to choose which penalty to impose; and 23, 1999; St. Michael’s Institute vs. Santos, G.R.
● Right to impose heavier penalty than what No. 145280 December 4, 2001).
the company rules prescribe (Chan, Bar
Reviewer on Labor Law, 2019, p. 797) Quantum of Proof Required to Impose
Disciplinary Action
Courts often decline to interfere in
legitimate business decisions of employers Substantial proof is a sufficient basis for the
imposition of any disciplinary action upon the
Management should not be hampered in the employee. The standard of substantial
operations of its business (Manila Electric Company evidence is satisfied where the employer has
vs. Quisumbing, G.R. No. 127598, February 22, 2000). reasonable ground to believe that the
employee is responsible for the misconduct
Even jurisprudence recognizes the exercise of that renders the latter unworthy of the trust
management prerogatives. Courts often decline and confidence demanded by his or her
to interfere in legitimate business decisions of position (Ruiz vs. Wendel Osaka Realty Corp., G.R.
employers. Labor laws discourage interference in No. 189082, July 11, 2012).
employers’ judgment concerning the conduct of
their business. The law must protect not only the B. TRANSFER OF EMPLOYEES
welfare of employees, but also the rights of
employers (Mendoza vs. Rural Bank of Lucban, G.R. Transferring employees is a valid
No. 155421, July 7, 2004). exercise of management prerogative

A. DISCIPLINE Transferring employees, to the extent that it

is done fairly and in good faith, is a valid
Management has the prerogative to discipline its exercise of management prerogative and will
employees and to impose appropriate penalties not, in and of itself, sustain a charge of
on erring workers pursuant to company rules and constructive dismissal (Manalo vs. Ateneo de
regulations (Artificio vs. NLRC, G.R. No. 172988, July Naga University, G.R. No. 151309, October 15,
26, 2010). 2008).

Among the employer’s management prerogatives The right of employees to security of tenure
is the right to prescribe reasonable rules and does not give them vested rights to their
regulations necessary or proper for the conduct positions to the extent of depriving
of its business or concern, to provide certain management of its inherent prerogative to
disciplinary measures to implement said rules change their assignments or to transfer them
(Mendoza vs. Rural Bank of Lucban, G.R. No.
and to assure that the same would be complied
155421, July 7, 2004).
with (St. Luke’s Medical Center, Inc. vs. Sanchez, G.R.
212054, March 11, 2015).
Even if the employee has been performing his
duties well, it does not mean that the

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employer’s hands are tied up that they can no Tecson was transferred to another sales area
longer reassign employees to another territory by Glaxo, a pharmaceutical company with
(Pharmacia and Upjohn, Inc. vs. Albayda, Jr., G.R. No. trade secrets, when the former married an
172724, August 23, 2010). employee of the competitor company, in
accordance with the policy which prohibits the
It is the employer’s prerogative, based on its same. Considering that Glaxo has trade
assessment and perception of its employee’s secrets to protect from competitor company,
qualifications, aptitudes, and competence, to the transfer of Tecson should not be
move them around in the various areas of its considered as a constructive dismissal (Duncan
business operations in order to ascertain where Association of Detailman-PTGWO vs. Glaxo
they will function with maximum benefit to the Wellcome Philippines, Inc., G.R. No. 162994,
company (Pharmacia and Upjohn, Inc. vs. Albayda, September 17, 2004).
Jr., G.R. No. 172724, August 23, 2010).
c. Reassignments pending investigation
Transfer Must Not Result to
Demotion/Diminution Reassignments made pending investigation of
irregularities allegedly committed by an
Provided there is no demotion in rank or employee fall within the ambit of
diminution of salary, benefits and other privileges management prerogative. The transfer, while
and not motivated by discrimination or made in incidental to the pending charges, was not
bad faith or effected as a form of punishment or meant to be a penalty, but rather a preventive
demotion without sufficient cause (Pharmacia and measure to avoid further damage to the
Upjohn, Inc. vs. Albayda, Jr., G.R. No. 172724, August company (Duldulao vs. CA, G.R. No. 164893,
23, 2010). March 1, 2007).

2 Kinds of Transfer: d. Transfer due to business transition or

corporate reorganization
1. A transfer from one position to another of
equivalent rank, level or salary, without a The transfer was valid since the
break in the service; or integration and transfer was a necessary
2. A transfer from one office to another within consequence of the business transition or
the same business establishment (Chan, Bar corporation reorganization that had been
Reviewer on Labor Law, 2019, p. 800). undertaken, which had the characteristics
of a corporate spin-off. The spin-off and
Instances of a Valid Transfer: the attendant transfer of employees are
legitimate business interests. The
a. Consensual transfer anywhere in the transfer/absorption of employees from
Philippines one company to another, as successor
employer, was valid as long as the
The employee consented to be transferred transferor was not in bad faith and the
anywhere in the Philippines in his employee’s employees absorbed by a successor-
employment application and contract of employer enjoy the continuity of their
employment. This consent is binding to him. employment status and their rights and
Thus, the transfer is valid (Pharmacia and Upjohn, privileges with their former employer
Inc. vs. Albayda, Jr., G.R. No. 172724, August 23, (Marsman & Company, Inc. vs. Sta. Rita, G.R.
2010). No. 194765, April 23, 2018).

An employee has no valid reason to disobey the e. In cases when an employee’s position is
order of transfer when he had tacitly given his abolished due to corporate restructuring
consent when he acceded to the policy of hiring
sales staff who are willing to be assigned The employee’s transfer from her old
anywhere in the Philippines, which is demanded position to the new one is a valid
by petitioner’s business (Abbott Laboratories [Phils], management prerogative exercised in the
Inc. vs. NLRC, G.R. No. L-76959, October 12, 1987). exigency of service since there is no
significant disparity between the former
b. Transfer to avoid conflict of interest position to that of the new one that
amounts to a demotion (Benguet Electric

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Cooperative vs. Fianza, G.R. No. 158606, March 9, Burden of proof

2004).
Employer has to prove that employee’s
f. Transfer as a standard practice transfer is not tantamount to constructive
dismissal (Pharmacia and Upjohn, Inc. vs.
Change of assignment by rotation from one Albayda, Jr., G.R. No. 172724, August 23, 2010).
shift to another as a standard practice is a
valid transfer especially if it is adopted The employer’s unexplained failure and delay
precisely to avoid any discrimination among in the submission of evidence before the
the employees (Castillo vs. CIR, G.R. No. L- Labor Arbiter is intolerable and cannot be
26124, May 29, 1971). permitted. Thus, it failed to sufficiently
support that the transfer was for a legitimate
The transfer of employees to other theaters purpose (Misamis Oriental II Electric Service
was routine in nature and part of the Cooperation [MORESCO II] vs. Cagalawan, G.R.
company’s policy to avoid connivance among No. 175170, September 5, 2012).
the employees and thus, valid (Cinema, Stage
& Radio Entertainment Free Workers vs. CIR, G.R. Instances wherein transfer may be
No. L-19879, December 17, 1966). validly refused:

g. Transfer based on breach of trust and a. If the transfer is consequential to a

confidence promotion

Breach of trust and confidence as a ground No law compels an employee to accept a

for reassignment must be related to the promotion (Dosch vs. NLRC, G.R. No. L-
performance of the duties of the employee 51182, July 5, 1983).
such as would show him to be thereby unfit
to discharge the same task. The employee Such refusal cannot be the basis for the
having lost the employer’s trust and respondents’ dismissal from service (Echo
confidence, the company had the right to 2000 Commercial Corporation vs. Obrero
transfer the former to ensure that she would Filipino-Echo 2000 Chapter-CLO).
no longer have access to the company’s
confidential files (Ruiz vs. Wendel Osaka Realty b. If the transfer is an overseas assignment
Corp., G.R. No. 189082, July 11, 2012).
The transfer of an employee to an
Refusal to obey a valid transfer order overseas post cannot be likened to a
constitutes willful disobedience of a lawful transfer from one city to another (Allied
order of an employer Banking Corporation vs. CA, G.R. No. 144412,
November 18, 2003).
Refusal to obey a valid transfer order constitutes
willful disobedience of a lawful order of an C. PRODUCTIVITY STANDARDS
employer. Refusal to comply with such orders on
the ground of parental obligations, additional An employer is entitled to impose
expenses, and the anguish he would suffer is productivity standards
assigned away from his family is invalid (Allied
Banking Corporation vs. CA, G.R. No. 144412, The employer has the prerogative to prescribe
November 18, 2003). the standards of productivity which may be
used as:
However, this management prerogative cannot
be used as a subterfuge by the employer to rid 1. Incentive scheme - Employees who
himself of an undesirable worker (Yuco Chemical surpass the productivity standards or
Industries, Inc. vs. Ministry of Labor and Employment, quota are usually given additional
G.R. No. 75656, May 28, 1990) benefits; and
2. Disciplinary scheme - Employees may be
The employer must be able to show that such sanctioned or dismissed for failure to
transfer is not tantamount to constructive meet the productivity standards or quota
dismissal (Blue Dairy Corporation vs. NLRC, G.R. No. (Chan, Bar Reviewer on Labor Law, 2019,
129843, September 14, 1999). p. 807).

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Failure to observe prescribed standards The employee’s failure to observe simple

may constitute just cause for dismissal procedure resulted in delays in the delivery of
output, client dissatisfaction and additional
Failure to observe prescribed standards of work cost on the part of the company. Thus,
or to fulfill reasonable work assignments due to dismissal is valid (Realda vs. New Age
inefficiency may constitute just cause for Graphics, Inc., G.R. No. 192190, April 25, 2012).
dismissal. Such efficiency is understood to mean The employees’ failure to meet the sales
failure to attain work goals or work quotas, either quota assigned to each of them constitute a
by failing to complete the same within the just cause of their dismissal, regardless of the
allotted reasonable period, or by producing permanent or probationary status of their
unsatisfactory results (Realda vs. New Age Graphics, employment. This management prerogative
Inc., G.R. No. 192190, April 25, 2012). of requiring standards may be availed of so
long as they are exercised in good faith for
An employer is entitled to impose productivity the advancement of the employer’s interest
standards for its workers, and in fact, non- (Buiser vs. Leogardo, Jr., G.R. No. L-63316, July
compliance may be visited with a penalty even 31, 1984).
more severe than demotion. This management
prerogative of requiring standards may be DOLE may intervene to establish
availed of so long as they are exercised in good productivity standards
faith for the advancement of the employer’s
interest (Leonardo vs. NLRC, G.R. No. 125303, June In appropriate cases such as in the case of
16, 2000). workers paid by results who are considered
“non-time” workers and in the case of
Gross inefficiency warrants the dismissal of an homeworkers, DOLE intervenes, motu proprio
employee. It is the prerogative of the school to or upon the initiative of any interested party,
set high standards of efficiency for its teachers to establish productivity standards (Chan, Bar
since quality education is a mandate of the Reviewer on Labor Law, 2019, p. 808).
Constitution. As long as the standards fixed are
reasonable and not arbitrary, courts are not at Determination of productivity standards
liberty to set them aside. Several pieces of
evidence, in this case, point to numerous The standard output rates or piece rates shall
instances when the teacher failed to observe the be determined through any of the following
prescribed standards of performance set by the procedures:
school in several areas of concern, especially in
her Filipino classes. Thus, the school validly 1. Time and motion studies;
terminated her employment (International School 2. An individual/collective agreement
Manila vs. International School Alliance of Educators, between the employer and its workers as
G.R. No. 167286, February 5, 2014). approved by the DOLE Secretary or his
authorized representative; or
The CHR Director, on two occasions, gave wrong 3. Consultation with representatives of
information regarding issues on leave and employers’ and workers’ organization in a
holiday pay which generated confusion among tripartite conference called by the DOLE
employees in the computation of salaries and Secretary (Chan, Bar Reviewer on Labor Law,
wages. Due to the nature of her functions, she is 2019, p. 809).
expected to have strong working knowledge of
labor laws and regulations. She also received a Time and motion study is the more scientific
less than par performance in her performance and preferred method. The basis for the
evaluation, receiving deficient marks and low establishment of rates for piece, output or
ratings on areas of problem solving and decision contract work is the performance of an
making, interpersonal relationships, planning and ordinary worker of minimum skill or ability
organization, project management and integrity (Section 5(b), Rule VII-A, Book III, Rules to
notwithstanding an overall passing grade. Thus, Implement the Labor Code, as amended).
the company has sufficient and valid reasons in
terminating her services (Reyes-Rayel vs. Philippine D. BONUS
Luen Thai Holdings, Corporation/L&T International
Group Philippines, Inc., G.R. No. 174893, July 11, Bonus is a gratuity or act of liberality of the
2012). giver. It is something given in addition to what

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is ordinarily received by or strictly due the served during said period (Liberation
recipient (Protado vs. Laya Mananghaya & Co., G.R. Steamship Co. vs. CIR, G.R. No. L-25389, June
No. 16854, March 25, 2009). 27, 1968).

It is an amount granted and paid to an employee After the acceptance of a promise by an

for his industry and loyalty which contributed to employer to pay the bonus, the same
the success of the employer’s business and made cannot be withdrawn but may be
possible for the realization of profits. (Producer’s enforced by the employee (Liberation
Bank of the Philippines vs. NLRC, G.R. No. 100701, Steamship Co. vs. CIR, supra).
March 28, 2001).
b. When it is given on account of company
Bonus is NOT a demandable and policy or practice;
enforceable obligation
To be considered “regular practice,” the
The granting of bonus is basically a management giving of the bonus should have been
prerogative which cannot be forced upon the done over a long period of time and must
employer who may not be obliged to assume the be shown to have been consistent and
onerous burden of granting bonuses or other deliberate. The test or rationale of this
benefits aside from the employees’ basic salaries rule on long practice requires an
or wages (Protado vs. Laya Mananghaya & Co., G.R. indubitable showing that the employer
No. 16854, March 25, 2009). agreed to continue giving the benefits
knowing fully well that said employees are
When the employer had consistently maintained not covered by the law requiring payment
from the start that its employee was not entitled thereof (Manila Electric Company vs.
to the bonus as a matter of right, the payment of Secretary of Labor, G.R. No. 127598, January
the year-end lump sum bonus based upon the 27, 1999).
firm’s productivity or the individual performance
of its employees was well within the employer's Records show that MERALCO, aside from
prerogative. Thus, the employer was also complying further with the regular 13th
justified in declining to give bonus to its month bonus, has further been giving its
employee on account of the latter’s employees an additional Christmas bonus
unsatisfactory performance (Protado vs. Laya at the tail-end of the year since 1988.
Mananghaya & Co., supra). While the special bonuses differed in
amount and bore different titles, it cannot
Exception to the general rule; when bonus be denied that these were given
becomes demandable: voluntarily and continuously on or about
Christmas time. The considerable length
a. When it emanates from a contract or CBA of time indicates a unilateral and
voluntary act on its part, to continue
Bonus may be given to the employee if a giving said benefits knowing that such act
certain condition is met. There is nothing in was not required by law. Indeed, a
the contract to indicate that bonus should be company practice favorable to the
subject to approval by the board of directors employees has been established and the
of the company. If the condition specified in payments made by MERALCO pursuant
the contract is met, the obligation to pay the thereto ripened into benefits enjoyed by
bonus cannot be eluded. Thus, it ceased to the employees (In Manila Electric Company
be a unilateral act and it became contractual vs. Secretary of Labor, G.R. No. 127598,
(Grey vs. Insular Lumber Co., G.R. No. L-535, January 27, 1999).
September 28, 1935).
Where the employer freely, voluntarily
If one enters into a contract of employment and continuously included in the
under an agreement that he shall be paid a computation of its employees’ 13th month
certain salary by the week or some other pay, the payments for sick, vacation and
stated period, and, in addition, a bonus, in maternity leaves, premiums for work
case he serves for a specified length of time, done on rest days and special holidays
there is no reason for refusing to enforce and pay for regular holidays. Thus, such
such agreement if the employee has actually bonus is demandable (Davao Fruits Corp.

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vs. Associated Labor Unions (ALU), G.R. No. losses (Clarapols vs. Court of Industrial
85073, August 24, 1993). Relations, G.R. No. L-30822, July 31, 1975).

The giving of signing bonus cannot be d. When the grant is mandated by law
deemed as an established practice (Ungos III, Labor Law 3: The Fundamentals
considering that the same was given only of Labor Law Review, 2021, p. 175-176).
once during the 1997 CBA negotiation (In
Philippine Appliance Corporation The 13th month pay is a form of monetary
[PHILACOR] vs. CA, G.R. No. 149434, June benefit equivalent to the monthly basic
3, 2004). compensation received by an employee,
computed pro rata according to the
c. When it is made part of the wages; if given number of months within a year that the
without any condition, whether or not profits employee has rendered service to the
are realized (Metro Transit Organizations, Inc. employer. All employers are required to
vs. NLRC, G.R. No. 116008, July 11, 1995); pay their rank-and-file employees the
13th month pay not later than December
When the employer promises and agrees to 24 of every year (Revised Guidelines on the
give bonus without any conditions imposed Implementation of the 13th Month Pay Law,
for its payment, such as success of business dated November 16, 1987)
or greater production or output, it becomes
part of the wage. However, if the bonus is Exception to the exception:
paid only if profits are realized or a certain
amount of productivity achieved, it cannot be Bonus is not demandable when
considered part of wages (Philippine employer can no longer afford to pay
Duplicators vs. NLRC, G.R. No. 110068, February
15, 1995). An employer cannot be forced to distribute
bonuses which it can no longer afford to pay.
When considered as part of the To hold otherwise would be to penalize the
compensation and thus, demandable and employer for his past generosity (Producer’s
enforceable, the amount is usually fixed. Bank of the Philippines vs. NLRC, G.R. No. 100701,
However, if the amount would be contingent March 28, 2001).
upon the realization of profits, the bonus is
also not demandable and enforceable No company should be compelled to act
(Protado vs. Laya Mananghaya & Co., G.R. No. liberally and confer upon its employees’
16854, March 25, 2009). additional benefits over and above those
mandated by law when it is plagued by
If the bonus is paid only if profits are realized economic difficulties and financial losses
or a certain amount of productivity achieved, (Manila Banking Corporation vs. NLRC, G.R. No.
it cannot be considered part of the wage. 83588, September 27, 1997).
Where it is not payable to all but only to some
employees and only when their labor Productivity Bonus vs. Sales
becomes more efficient or more productive, Commission
it is only an inducement for efficiency and not
a part of the wage (Metro Transit Organizations, Productivity Sales
Inc. vs. NLRC, supra). Bonus Commission
Bonus for a given year earmarked as a
matter of tradition for distribution to Generally tied to the Intimately related
employees has formed part of their productivity or profit to or directly
recoverable wages from the company. generation of the proportional to the
Moreover, with greater reason should employer extent or energy of
recovery of bonuses as part of backwages be corporation an employee’s
observed since the company, in the light of endeavors
the very admission of the company
accountant, distributed bonuses to its
employees even if the company suffered

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prerogative is exercised in good faith and not

Not directly Commissions are for the purpose of defeating or circumventing
dependent on the paid upon the the rights of the employees (Union Carbide
Labor Union vs. Union Carbide, G.R. No. L-41314,
extent an individual specific results
November 13, 1992).
employee exerts achieved by the
himself salesman- In a case, Section 1, Article IV of the collective
employee bargaining agreement provides for a 7-hour
work schedule from Mondays to Saturdays;
and Section 2, Article XI provides that the
Something extra for It is a percentage of
employer has the prerogative to change the
which no specific the sales closed by
existing methods and their scheduled working
additional services a salesman and
hours. In accordance with such provision, the
are rendered by any operate as an
employer changed the working hours of the
particular employee integral part of such
monthly-paid employees from 9:00am-
salesman’s basic
5:00pm to 1:00pm-8:00pm every Tuesday
pay/wage
and Thursday, when horse races are held. In
rationalizing such change, the employer
Not legally Legally demandable argued that when the CBA was signed, the
demandable, absent horse races started at 10:00am. When the
a contractual schedule was moved to a later time, the
undertaking to pay it employer was left with no choice but to also
change the working hours of its employees.
Thus, the Court held that such exercise of
Bonus is forfeited when employee is guilty management prerogative is justified (Manila
of serious misconduct or administrative Jockey Club Employees Labor Union — PTGWO vs.
charge Manila Jockey Club, Inc., G.R. No. 167760, March
7, 2007).
Employers may not be compelled to award a
bonus to private respondents whom it found F. BONA FIDE OCCUPATIONAL
guilty of serious misconduct (Philippine National QUALIFICATIONS (BFOQ)
Construction Corporation vs. NLRC, G.R. No. 128345,
May 18, 1999). BFOQ refers to the standard which employers
are allowed to consider in making decisions
In consonance with existing company policy, the about hiring or retention of employees (Ungos
1988 bonus should be forfeited in favor of the III, Labor Law 3: The Fundamentals of Labor Law
Bank when records show that in 1988, the Review, 2021, p. 490).
employee was found guilty of an administrative
charge. (Republic Planters Bank (now known as PNB- General rule: Employment in particular jobs
Republic Bank) vs. NLRC, G.R. No. 117460, January 6, may not be limited to persons of a particular
1997). sex, religion or national origin.

E. CHANGE OF WORKING HOURS Exception: BFOQ. Employment may be

limited to a particular class if the employer can
Employers have the prerogative to change show that sex, religion or national origin is an
working hours actual qualification for performing the job
(Yrasuegui vs. Philippine Airlines, Inc., G.R. No.
Employers have the freedom and prerogative, 168081, October 17, 2008).
according to their discretion and best judgment,
to regulate and control the time when workers Reasonable Necessity Rule
should report for work and perform their
respective functions (Philippine Airlines, Inc. vs. In order to justify a BFOQ, the employer must
NLRC, G.R. No. 115785, August 4, 2000). show that:

It is a management prerogative, whenever 1. The employment qualification is

exigencies of the service require, to change the reasonably related to the essential
working hours of its employees as long as such operation of the job involved; and

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2. There is factual basis for believing that all or cramped cabin area. (Yrasuegui vs.
substantially all persons meeting the Philippine Airlines, Inc., G.R. No. 168081,
qualification would be unable to properly October 17, 2008).
perform the duties of the job (Star Paper f. On account of civil status
Corporation, et. al. vs. Simbol, et. al., G.R. No.
164774, 2006). A company policy which prohibits its
employees from marrying employees of a
Meiorin Test rival company. The company policy is
reasonable considering that its purpose is
The following conditions must be complied with the protection of the interests of the
to justify a BFOQ: company against possible competitor
infiltration on its trade secrets and
1. The employer must show that it adopted the procedures. The company has a right to
standard for a purpose rationally connected guard its trade secrets and marital or
to the performance of the job; personal relationships might compromise
2. The employer must establish that the the interests of said company. (Duncan
standard is reasonably necessary to the Association of Detailman-PTGWTO vs. Glaxo
accomplishment of that work-related Wellcome Philippines, Inc., G.R. No. 162994,
purpose; and September 17, 2004).
3. The employer must establish that the
standard is reasonably necessary in order to Instances of an invalid exercise of
accomplish the legitimate work-related BFOQ:
purpose (Yrasuegui vs. Philippine Airlines, Inc.,
G.R. No. 168081, October 17, 2008). a. On account of civil status

Instances of a valid exercise of BFOQ: It shall be unlawful for an employer to

require as a condition of employment or
a. Mandatory retirement ages for bus drivers continuation of employment that a
and airplane pilots for safety reasons; woman employee shall not get married,
b. Churches requiring members of its clergy to or to stipulate expressly or tacitly that
be of a certain denomination and may upon getting married, a woman employee
lawfully bar from employment anyone who is shall be deemed resigned or separated, or
not a member; to dismiss, discharge, discriminate or
c. Use of models and actors for the purpose of otherwise prejudice a woman employee
authenticity or genuineness; merely by reason of her marriage (Art.
d. Requirement of emergency personnel to be 134, Labor Code, as amended).
bilingual, judged on the language
competency (Chan, Bar Reviewer on Labor In Star Paper Corporation vs. Simbol, G.R.
Law, 2019, p.813). No. 164774, April 12, 2006, the Court
e. On account of physical appearance. held that petitioners’ sole contention that
“the company did not just want to have
The weight standards of PAL show its effort two (2) or more of its employees related
to comply with the exacting obligations between the third degree by affinity
imposed upon it by law as a common carrier. and/or consanguinity” is unjustified. The
The primary objective of PAL in the policy is premised on the mere fear that
imposition of the weight standards for cabin employees married to each other will be
crew is flight safety. Truly, airlines need less efficient. If we uphold the questioned
cabin attendants who have the necessary rule without valid justification, the
strength to open emergency doors, the employer can create policies based on an
agility to attend to passengers in cramped unproven presumption of a perceived
working conditions and the stamina to danger at the expense of an employee’s
withstand grueling flight schedules. Given right to security of tenure. The failure to
the cramped cabin space and narrow aisles prove a legitimate business concern in
and emergency exit doors of the airplane, imposing the questioned policy cannot
any overweight cabin attendant would prejudice the employee’s right to be free
certainly have difficulty navigating the from arbitrary discrimination based upon

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stereotypes of married persons working 5. Inventions Assignment Clause

together in one company. (Intellectual Property Clause) (Chan, Bar
Reviewer on Labor Law, 2019, p. 822).
In Capin-Cadiz vs. Brent Hospital and
Colleges, Inc., G.R. No. 187417, February 24, A post-retirement competitive employment
2016, the employer imposed on Cadiz the restriction is designed to protect the employer
condition that she should subsequently against competition by former employees who
contract marriage with her then boyfriend for may retire and obtain retirement or pension
her to be reinstated. According to the benefits and, at the same time, engage in
employer, this is “in consonance with the competitive employment (Rivera vs. Solidbank,
policy against encouraging illicit or common- G.R. No. 163269, April 19, 2006).
law relations that would subvert the
sacrament of marriage.” Such condition is In Rivera vs Solidbank (supra), petitioner
coercive, oppressive and discriminatory. retired under the Special Retirement Program
There is no rhyme or reason for it. It forces and received ₱963,619.28 from respondent.
Capiz to marry for economic reasons and However, petitioner is not proscribed, by
deprives her of the freedom to choose her waiver or estoppel, from assailing the post-
status, which is a privilege that inheres in her retirement competitive employment ban since
as an intangible and inalienable right. under Article 1409 of the New Civil Code,
those contracts whose cause, object or
b. On account of age purpose is contrary to law, morals, good
customs, public order or public policy are
The prerogative to choose whom to hire is inexistent or void from the beginning.
subject to the limitations imposed by the Respondent, as employer, is burdened to
Anti-Age Discrimination in Employment Act establish that a restrictive covenant barring an
which forbids employers from placing a job employee from accepting a competitive
advertisement which suggests age employment after retirement or resignation is
preference, or declining an applicant for not an unreasonable or oppressive, or in
employment simply because of age, among undue or unreasonable restraint of trade,
others. However, employers can validly set thus, unenforceable for being repugnant to
age limitations when age is a bona fide public policy.
occupational qualification (Ungos III, Labor
Law 3: The Fundamentals of Labor Law Review, Non-Compete or Non-Involvement
2021, p. 490). Clause

No employer shall discriminate against any The employer and the employee are free to
person in respect to terms and conditions of stipulate in an employment contract
employment on account of his age (Art. 138, prohibiting the employee within a certain
R.A. No. 9231). period from and after the termination of his
employment, from:
G. POST-EMPLOYMENT RESTRICTIONS a. Starting a similar business, profession or
trade; or
The employer may insist on an agreement with b. Working in an entity that is engaged in a
the employee, for certain restrictions to take similar business that might compete with
effect after the termination of the employer- the employer.
employee relationship.
A non-compete clause is not necessarily void
The following stipulations in an employment for being in restraint of trade as long as there
contract are illustrative of the prohibitions are reasonable limitations as to time, place
normally agreed upon by the employer and the and trade (Chan, Bar Reviewer on Labor Law,
employee: 2019, p. 822).
1. Non-Compete Clause;
2. Confidentiality and Non-Disclosure Clause;
3. Non-Solicitation Clause;
4. Non-Recruitment or Anti-Piracy Clause; and

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Confidentiality and Non-Disclosure Clause (1) The injury to the public by being deprived
of the restricted party’s industry; and
It reflects the commitment of the employee that (2) The injury to the party himself by being
he shall not, either during the period of his precluded from pursuing his occupation,
employment with the employer or at any time and thus being prevented from
thereafter, use or disclose to any person, firm or supporting himself and his family (Rivera
corporation any information concerning the vs. Solidbank, G.R. No. 163269, April 19,
business or affairs of his employment, for his own 2006).
benefit or to the detriment of the employer. This
clause may also cover Former Employer Factors to be considered by the trial
Information and Third-Party Information (Chan, court in determining whether the
Bar Reviewer on Labor Law, 2019, p. 822). contract is reasonable or not
(a) Whether the covenant protects a
Non-Solicitation Clause legitimate business interest of the
employer;
A non-solicitation agreement restricts someone (b) Whether the covenant creates an undue
from soliciting or approaching employees or burden on the employee;
customers of a business to protect the business (c) Whether the covenant is injurious to the
interests of the employer. If the restriction is on public welfare;
recruiting employees, it may be denominated as (d) hether the time and territorial limitations
a “non-poaching agreement” or “non-recruitment contained in the covenant are reasonable;
clause” (Chan, Bar Reviewer on Labor Law, 2019, p. and
822). (e) Whether the restraint is reasonable from
the standpoint of public policy (Rivera vs.
Non-Recruitment or Anti-Piracy Clause Solidbank, supra).

It prohibits the recruitment by the employee of H. CLEARANCE PROCEDURE

personnel or employees of the employer for a
certain period after his termination of Clearance as a condition before the
employment, either on his own account or in release of last payment to the employee
conjunction with or on behalf of any other person
(Chan, Bar Reviewer on Labor Law, 2019, p. 822). Requiring clearance before the release of last
payments to the employee is a standard
Inventions Assignment Clause procedure among employers, whether public
(Intellectual Property Clause) or private. Clearance procedures are
instituted to ensure that the properties, real
It requires the employee, within a certain period, or personal, belonging to the employer but
in confidence to the employer and its subsidiaries are in the possession of the separated
and to assign all inventions, improvement, employee, are returned to the employer
design, original works of authorship, formulas, before the employee’s departure (Milan vs.
processes, compositions of matter, computer NLRC, G.R. No. 202961, February 4, 2015).
software programs, databases, mass works and
trade secrets, whether or not patentable, As a general rule, employers are prohibited
copyrightable or protectable as trade secrets from withholding wages as provided under
(collectively the “Inventions”), which the Article 116 of the Labor Code. Article 100 also
employee may solely or jointly conceive or prohibits elimination or diminution of benefits.
develop or reduce to practice, or cause to be As a general rule, employers are prohibited
conceived or developed or reduced to practice, from withholding wages from employees. The
during the period of his employment with the Labor Code also prohibits the elimination or
employer (Chan, Bar Reviewer on Labor Law, 2019, diminution of benefits. However, our law
p. 822). supports the employers’ institution of
clearance procedures before the release of
Two principal grounds on which the wages (Milan vs. NLRC, supra).
doctrine is founded that a contract in
restraint of trade is void as against public The law does not sanction a situation where
policy employees who do not even assert any claim

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over the employer’s property are allowed to take The only criterion to guide the exercise of its
all the benefits out of their employment while management prerogative is that the policies,
they simultaneously withhold possession of their rules and regulations on work-related
employer’s property for no rightful reason. activities of the employees must always be
Withholding of payment by the employer does fair and reasonable and the corresponding
not mean that the employer may renege on its penalties, when prescribed, commensurate to
obligation to pay employees their wages, the offense involved and to the degree of the
termination payments, and due benefits. The infraction (St. Michael’s Institute vs. Santos, G.R.
employees’ benefits are also not being reduced. No. 145280, December 4, 2001).
It is only subjected to the condition that the So long as company’s management
employees return properties properly belonging prerogatives are exercised in good faith for
to the employer. This is only consistent with the the advancement of the employer’s interest
equitable principle that “no one shall be unjustly and not for the purpose of defeating or
enriched or benefited at the expense of another” circumventing the rights of the employees
(Milan vs. NLRC, supra). under special laws or under valid agreements,
the Court will uphold them (San Miguel Brewery
Final pay shall be released within 30 days Sales Force Union [PTGWO] vs. Ople, G.R. No.
from date of separation or termination of 53515, February 8, 1989).
employment
While management is free to regulate,
To effectively harmonize the management according to its own discretion and judgment,
prerogative of the employee and the right of the all aspects of employment, the exercise of
employee, the final pay shall be released within management prerogative is not absolute and
30 days from date of separation or termination of must be in good faith and with due regard to
employment, unless there is a more favorable the rights of labor (Alamo Transport Leasing, Inc.
company policy, individual or collective and/or Clavano vs. Pacia, G.R. No. 199857,
agreement thereto (Labor Advisory No. 06, Series of February 20, 2019).
2020).
While it may be conceded that management
The employer shall issue Certificate of is in the best position to know its operational
employment within three (3) days from the time needs, the exercise of management
of the request by the employee (Labor Advisory No. prerogative cannot be utilized to circumvent
06, Series of 2020). the law and public policy on labor and social
justice. That prerogative accorded
I. LIMITATIONS OF MANAGEMENT management could not defeat the very
PREROGATIVE purpose for which our labor laws exist: to
balance the conflicting interests of labor and
The following are the limitations of managerial management, not to tilt the scale in favor of
prerogative: one over the other, but to guaranty that labor
(1) Limitations imposed by the following: and management stand on equal footing
(a) Law; when bargaining in good faith with each other
(b) Collective Bargaining Agreement (Philippine Airlines, Inc. vs. Pascua, G.R. No.
(CBA); 143258, August 15, 2003).
(c) Employment contract;
(d) Employer policy; The employer’s inherent right to discipline is
(e) Employer practice; and subject to reasonable regulation by the State
(f) General principles of fair play and in the exercise of its police power (Associated
justice Labor Unions-TUCP vs. NLRC, G.R. No. 120450,
February 10, 1999; PLDT vs. NLRC, G.R. No.
(2) It is subject to police power.
111933, July 23, 1997).
(3) Its exercise should be without abuse of
discretion. A contract of employment is impressed with
(4) It should be done in good faith and with
public interest. For this reason, provisions of
due regard to the rights of the labor (Chan, applicable statutes are deemed written into
Bar Reviewer on Labor Law, 2019, p. 797).
the contract. Hence, the “parties are not at
liberty to insulate themselves and their
relationships from the impact of labor laws

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and regulations by simply contracting with each Labor Code, as amended; Azucena, The Labor
other.” Moreover, in case of doubt, the terms of Code with Comments and Cases Vol. II, 2021,
a contract should be construed in favor of labor p. 18).
(Innodata Philippines, Inc. vs. Quejada-Lopez, G.R.
No. 162839, October 12, 2006). Reliefs in Labor Disputes [C5RIM-JA3G]
1. Conciliation
Reasonable Proportionality Rule 2. Compromise agreement
3. Certification to NLRC
Infractions committed by an employer should 4. Compliance order or enforcement
merit only the corresponding penalty demanded 5. Certification of bargaining
by the circumstances. The penalty must be 6. Review by court
commensurate with the act, conduct or omission 7. Injunction
imputed by the employee (Holmium Philippines, 8. Mediation
Inc. vs. Obra, G.R. No. 220998, August 8, 2016). 9. Judicial Action
10. Arbitration (Voluntary or Compulsory)
In the case of Felix vs. NLRC, G.R. No. 148256, 11. Assumption of jurisdiction
November 17, 2004, even if all the allegations 12. Appeal
against the employee in this case are true, they 13. Grievance Procedure (Azucena, The Labor
are not of such nature which merit the penalty of Code with Comments and Cases Vol. II, 2021,
dismissal. Dismissal is unduly harsh and grossly pp. 20-22).
disproportionate to the charges. The rule on
proportionality — that the penalty imposed A. MANDATORY CONCILIATION-
should be commensurate to the gravity of his MEDIATION, SENA
offense — has been observed in a number of
cases. Mandatory Conciliation-Mediation
All issues arising from labor and employment
VIII. JURISDICTION AND RELIEFS shall be subject to mandatory conciliation-
mediation (Art. 234, Labor Code, as amended).
Existence of Employer-Employee (Er-Ee)
Relationship is a Jurisdictional Requisite Exceptions:
● Grievance Machinery and
The existence of Er-Ee relationship between the ● Voluntary Arbitration, in which case, their
parties-litigants, or a reasonable causal agreement will govern.
connection to such relationship, is a jurisdictional ● As may be excepted by DOLE Secretary.
requisite for the exercise of jurisdiction over a (Ibid.).
labor dispute by the LA or any other labor
tribunals. (Chan, Bar Reviewer on Labor Law, 2019, Endorsement of Cases
p. 830). The Labor Arbiter or the appropriate DOLE
agency or office that has jurisdiction over the
Under the reasonable causal connection rule, if dispute shall entertain only endorsed or
there is a reasonable causal connection between referred cases by the duly authorized officer
the claim asserted and the Er-Ee relationship, (Ibid.).
then the case is within the jurisdiction of labor
courts; in the absence of such nexus, it is the Pre-termination of Proceedings
regular courts that have jurisdiction. (PAL vs. Any or both parties involved in the dispute
Airline Pilots Association of the Philippines, G.R. No. may pre-terminate the conciliation-mediation
200088, February 26, 2018). proceedings and request referral or
endorsement to the appropriate DOLE agency
Test of Criteria of Labor Dispute or office which has jurisdiction over the
1. As to Nature: Whether the dispute arises dispute, or if both parties so agree, refer the
from Er-Ee relationship, although the unresolved issues to voluntary arbitration
disputants need not be proximately (Ibid.).
“employee” or “employer" of the other.
2. As to subject matter: Whether it involves Nature of Proceedings
or concerns terms, conditions of Conciliation and mediation is non-
employment, or representation (Art. 219 [1], litigious/non-adversarial, less expensive, and

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expeditious. Under this informal set-up, the (RFA) in the Regional Offices where the
parties find it more expedient to fully ventilate employer principally operates.
their respective positions without running around
with legal technicalities and, in the course In case of a union or federation representing
thereof, afford them a wider latitude of possible a local chapter, the request shall be made at
approaches to the problem (From the Regional/Provincial/District office where
http://co.nmcb.ph/conciliation-mediation/. the union or local chapter is registered.
Retrieved May 6, 2022) SEADO (Sena Desk Officer) to issue
Referral
Single-Entry Approach (SENA) - No settlement is reached within the 30-
DOLE Dept. Order No. 151-16 day timeframe;
- Non-appearance of the responding party
An administrative approach to provide an in 2 consecutive conferences despite
accessible, speedy, impartial, and inexpensive notice
settlement procedure of all labor and - Noncompliance with the agreement
employment issues through a 30-day mandatory
conciliation-mediation. Jurisdiction

The objective is to effect amicable settlement of The National Conciliation and Mediation Board
the dispute among differing parties, wherein a (NCMB) is an agency attached to the DOLE,
neutral party, the SEnA Desk Officer (SEA), principally in-charge of the settlement of labor
assists the parties by giving advice or offering disputes through conciliation, mediation, and
solutions and alternatives. voluntary arbitration. It is also charged with
the promotion of voluntary approaches to
Settlement Agreements reached are final and labor dispute prevention and settlement (Sec.
executory, and binding on all DOLE offices and 1(15), Rule III, NCMB Manual of Procedures for
attached agencies, except when found to be Conciliation and Preventive Mediation Cases).
contrary to law, morals, public order, and public
policy NCMB is not a quasi-judicial agency exercising
quasi-judicial functions but merely a
Labor Disputes NOT covered by SENA conciliatory body for the purpose of
[DOLE DO 151-16] facilitating settlement of disputes between
GR: All issues arising from labor and employment parties. Its decisions or that of its authorized
shall be subject to the 30-day mandatory officer cannot be appealed either through a
conciliation-mediation petition for review under Rule 43 or under
Rule 65 of the Revised Rules of Court (Tabigue
XPNs: et. al. vs. International Copra Export Corporation,
1. Notices of strike/lockout or preventive G.R. No. 183335, December 23, 2009).
mediation cases (should be NCMB)
2. Issues from interpretation/implementation of Arbitration
CBA and personnel policies (should be
Grievance Mechanism) The submission of a dispute to an impartial
3. Applications for exemption from Wage person for determination, based on the
Orders (should be NWPC) evidence and arguments of the parties. The
4. Issues involving violations of permits, arbiter’s decision or award is enforceable
licenses, or registrations issued by upon the disputants. It may be voluntary, by
DOLE/attached agencies agreement, or compulsory which is required
5. Violations of POEA Rules & Regulations by statutory provision (Luzon Development
6. Issues on occupational safety and health Bank vs. Association of Luzon Development
standards involving imminent danger Bank Employees, G.R. No. 120319, October 6,
situation 1995).
Alternative Modes of Settlement of
Filing a Request for Assistance (RFA) Labor Disputes
Any aggrieved worker, union, group of workers,
or employer may file a Request for Assistance - Voluntary Arbitration
- Conciliation

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- Mediation Conciliator is given Mediator is not

more power and empowered to
Conciliation vs. Mediation authority. He may impose his will on
actually make a the parties.
Conciliation Mediation binding opinion
based on the facts Facilitative
and the law involved Mediation- mediator
Definition in the controversy. does not make or
The nature of the offer any opinion
decision may be
A mild form of A mild intervention
temporary. Evaluative
intervention by a by a neutral third
Mediation- mediator
neutral third party, party, the
offers an opinion
the Conciliator- Conciliator-
which is not binding
Mediator, relying on Mediator, whereby
on the parties.
his persuasive he starts advising
expertise, who takes the parties or (Conciliation-mediation. National Conciliation and
an active role in offering solutions Mediation Board. (n.d.). Retrieved May 8, 2022,
assisting parties by or alternatives to from https://ncmb.gov.ph/services/conciliation-
mediation/])
trying to keep the problems with
Conciliator-Mediator
disputants the end in view of
An official of the NCMB whose principal
talking, assisting them
function is to settle and dispose of potential
facilitating other towards voluntarily
and actual labor disputes, through conciliation
procedural reaching their own
and preventive mediation, including the
niceties, carrying mutually acceptable
promotion and encouragement of voluntary
messages back settlement of the
approaches to labor disputes prevention and
and forth dispute.
settlement (Sec. 1, Rule III, NCMB Manual of
between the
Procedure for Conciliation and Preventive
parties, and Mediation Cases)
generally being a
good fellow who Persons who can avail of Conciliation
tries to keep things and Mediation services of the NCMB
calm and forward- (Conciliation-mediation. National Conciliation
looking in a tense and Mediation Board. [n.d.]. Retrieved May 8,
situation. 2022, from
https://ncmb.gov.ph/services/conciliation-
Rule in the Philippines mediation/)

Any party to a labor dispute, either the union

In the NCMB, the or management, may seek the assistance of
hearing officer is the NCMB or any of its Regional Branches by
called Conciliator- means of formal request for conciliation and
Mediator. preventive mediation.
Other Jurisdictions Depending on the nature of the problem, a
request may be filed in the form of
consultation, notice of preventive mediation,
or notice of strike/lockout.

Where to file a Request for Conciliation

and Mediation
An informal or formal request for Conciliation
and Mediation service may be filed at the
NCMB Central Office or any of its Regional
Branches [Conciliation-mediation. National
Conciliation and Mediation Board. (n.d.).

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Retrieved May 8, 2022, from Filing of Notice or Request for

https://ncmb.gov.ph/services/conciliation- Preventive Mediation cannot be filed by
mediation/] the Federation
The Notice or Request for Preventive
Parties are bound by the Agreement Mediation cannot be filed by the Federation
entered into on behalf of its local chapter; a local union
Parties are bound to honor any agreement does not owe its existence to the federation
entered into by them, as it is the result of the with which it is affiliated.
painstaking efforts made by the union,
management, and the Conciliator-Mediator Mere affiliation does not divest the local union
(Conciliation-mediation. National Conciliation and of its own personality, neither does it give the
Mediation Board. (n.d.). Retrieved May 8, 2022, mother federation the license to act
from https://ncmb.gov.ph/services/conciliation- independently of the union (Insular Hotel
mediation/). Employees Union-NFL vs. Waterfront Insular Hotel
Davao, G.R. Nos. 174040-41, September 22,
Preventive Mediation 2010).
Covers potential labor disputes that are the
subject of a formal or informal request for Conciliation and Mediation service still
conciliation and mediation assistance, sought by possible during actual Strike or Lockout
either or both parties or upon the initiative of the It is possible to subject an actual strike or
NCMB, to avoid the occurrence of an actual labor lockout to continuing conciliation and
dispute. mediation services It is at this critical
To remedy, contain, or prevent its degeneration stage that such conciliation and
into a full-blown dispute through amicable mediation services be fully given a
settlement (Sec. 1[20], Rule III, NCMB Manual) chance to work out possible solutions to
How to Initiate Preventive Mediation the labor dispute (Conciliation-mediation.
● By Filing a Notice or Request of Preventive National Conciliation and Mediation Board. (n.d.).
Retrieved May 8, 2022, from
Mediation, as distinguished from a Notice of
https://ncmb.gov.ph/services/conciliation-
Strike/Lockout; or mediation/).
● By Conversion of the Notice of Strike or
Lockout into a Preventive Mediation case Persons who may file a Notice for
(Chan, Bar Reviewer on Labor Law, 4th Revised
Preventive Mediation
Edition, 2019, p. 939).
Any certified or duly recognized bargaining
Cases when the NCMB has the authority to representative may file a Notice or declare a
convert a Notice of Strike/Lockout into a strike or request for Preventive Mediation in
Preventive Mediation case cases of bargaining deadlocks an ULPs
● Issues raised in the Notice of Strike/Lockout
are not strikable; The Employer, also, may file a Notice or
● The party which filed the Notice voluntarily declare a Lockout or request for Preventive
asks for the conversion Mediation
● Both parties to a labor dispute mutually
agree to have it subjected to Preventive
In the absence of a certified or duly
Mediation (Chan, Bar Reviewer on Labor Law,
4th Revised Edition, 2019, p. 940).
recognized bargaining representative, any
LLO in the establishment may file a Notice,
Effect of Conversion request Preventive Mediation, or declare a
Notice is deemed dropped from the dockets as if Strike, but only on the grounds of ULP (NCMB
no notice has been filed. Manual of Procedure, Rule IV, Sec. 3)

Any strike/lockout subsequently staged after the

B. LABOR ARBITER
said conversion is deemed illegal, since it does
not comply with the requirements of a valid
Labor Arbiters have Original and Exclusive
strike/lockout.
Jurisdiction to hear and decide the following

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cases involving all workers, whether 2. Certified Cases

agricultural/non-agricultural: When the NLRC exercises its power of
Compulsory Arbitration over cases
1. Under the Labor Code: involving national interest, certified to
it by the DOLE Secretary. (Art.
a. Unfair Labor Practice (ULP); 278[g], Labor Code, as amended)
b. Termination disputes;
c. Cases that workers may file involving 3. Cases arising from the Collective
wages, rates of pay, hours of work Bargaining Agreement
and other terms and conditions of When cases arise from the
employment, if accompanied with a interpretation or implementation of
claim for reinstatement; CBAs, and from the interpretation or
d. Claims for actual, moral, exemplary enforcement of company personnel
and other forms of damages arising policies, these shall be disposed of by
from Employer-Employee Relations; the LA by referring the same to the
e. Cases arising from violation of Art. grievance machinery and voluntary
279, including questions involving the arbitration, as provided. (Par. c, Art.
legality of strikes and lockouts; 224, Sec. 1, Rule V, 2011 NLRC Rules
f. All other claims arising from of Procedure)
Employer-Employee Relations,
including those of persons in domestic 4. Cases submitted for Voluntary
service, involving an amount Arbitration
exceeding P5000, regardless if When the parties agree to submit the
accompanied with a claim for case to voluntary arbitration, before a
reinstatement, EXCEPT claims for Voluntary Arbitrator or a Panel of
Employees Compensation, Social Voluntary Arbitrators, such are
Security, Medicare and Maternity possessed of original and exclusive
Benefits; [Art. 224] jurisdiction to hear and decide cases
g. Money claims arising out of Employer- mutually submitted by the parties.
Employee Relationship or by virtue of (UST Faculty Union vs. UST, G.R. No.
any law or contract, including damages 203957, July 30, 2014)
and employment termination under the
amended Migrant Workers and Regional Director vs. Labor Arbiter
Overseas Filipino Act;
h. Wage distortion disputes in Regional Labor
unorganized establishments Director Arbiter
unsettled voluntarily by the parties; [Art.
124] As to Regional Labor Arbiter
i. Enforcement of Compromise Jurisdiction Directors exercises
Agreements when there is non- have original and
compliance by any of the parties (Art. jurisdiction exclusive
233) over money jurisdiction in
j. Other cases as may be provided by claims if: cases
law involving:
- Arising out
Exceptions to the Jurisdiction of Labor of Er-Ee 1. ULP;
Arbiters Relationsh
3. 2.Terminatio
ip; n disputes;
1. Assumed Cases - Not 4. Wages;
When the DOLE Secretary or the accompanied5. Rates of pay;
President exercises his power to assume by a claim for
6. Hours of
jurisdiction over cases involving national reinstatement work;
interest, and decides upon such. (Art. ; and 7. Other terms
278[g], Labor Code, as amended) - Does not of
exceed employment,
P5000, claims for

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4. Proceedings before the Labor Arbiter are

whether damages
non-litigious (FAQs, National Labor
arising arising from
Relations Commission. (n.d.). Retrieved
from Er-Ee Employer-
May 21, 2022, from
Relations- Employee
https://nlrc.dole.gov.ph/FAQS/)
hip Relationship,
legality of Requirements for Perfection of Appeal
strikes and to the NLRC
*Money lockouts
Claims 8. 7. All other 1. Period
claims arising - Decisions, awards, or Orders of the
from Labor Arbiter shall be final and
Employer- executory unless appealed to the
Employee NLRC by any or both parties, within
Relationship 10 calendar days from receipt thereof
involving an (Art. 229, as amended)
amount 2. Grounds (Ibid.)
exceeding a. If there is prima facie evidence of
P5000 abuse of discretion on the part of the
Labor Arbiter or Regional Director;
As to Initiated by Labor Arbiter b. If the Decision, Resolution, or
Handling of sworn decides a Order was secured through fraud
cases statements case within or coercion, including graft and
filed by any 30 calendar corruption;
interested days after c. If made purely on questions of law;
party submission of or
the case by d. If serious errors in the findings of
the parties fact are raised, which if not corrected,
for decision would cause grave or irreparable injury
to the appellant
Appeals Appealable to the NLRC 3. When Appeal is Perfected
a. An appeal by the employer may be
perfected only upon posting of a cash
Procedure and Nature of Proceedings or surety bond, issued by a reputable
1. All cases where Labor Arbiters have authority bonding company duly accredited by
to hear and decide may be filed with the the NLRC, in the amount equivalent to
Regional Arbitration Branch (RAB) having the monetary award in the judgment
jurisdiction over the complainant’s workplace appealed from (Ibid,)
(Sec. 1, Rule IV, 2011 NLRC Rules of b. Appeals must be verified and certified
Procedure) against forum shopping by the parties
themselves (Antonio B. Salenga, et al. vs.
For field employees, their workplace is where CA, G.R. No. 174941, February 1, 2012).
they are regularly assigned or where they 4. Memorandum of Appeal
regularly receive their salaries and wages, or a. In all cases, the appellant shall furnish
work instructions from (Sec. 1, Rule IV, 2011 a copy of the Memorandum of Appeal
NLRC Rules of Procedure) to the other party, who shall file an
2. The Labor Arbiter shall use all reasonable answer not later than 10 calendar days
means to ascertain the facts in each case from receipt thereof (Ibid.).
speedily and objectively (Art. 227, Labor Code,
as amended) Reinstatement and/or Execution
3. Labor Arbiters are not bound by the technical Pending Appeal
rules of procedure (FAQs, National Labor 1. Reinstatement Pending Appeal
Relations Commission. (n.d.). Retrieved May a. In any event, the decision of the
21, 2022, from Labor Arbiter reinstating a dismissed
https://nlrc.dole.gov.ph/FAQS/) or separated employee insofar as the
reinstatement is concerned, shall

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immediately be executory, even pending b. The Chairman and the 7 remaining

appeal members shall come from the public
b. Unless there is a restraining order, it is sector, with the latter to be chosen
ministerial upon the LA to implement the preferably from among the
Order of Reinstatement, and mandatory incumbent labor arbiters
on the part of the employer to comply c. Upon assumption into office, the
therewith (Garcia vs. PAL, G.R. No. members nominated by the workers
164856, January 20, 2009] and Employers organization shall
c. The employee shall either be: divest themselves of any affiliation
i. Admitted back to work under the with or interest in the federation or
same terms and conditions association to which they belong.
prevailing prior to his dismissal or (Art. 220, Labor Code, as amended)
separation; or
ii. At the option of the employer, Note: There is no need for the
merely reinstated in the payroll Commission on Appointments to
d. Posting of a bond by the employer shall confirm the positions in the NLRC.
not stay the execution for reinstatement Such a requirement has no
(Ibid.). constitutional basis. (Calderon vs.
Carale, G.R. No. 91636, April 23, 1992)
2. Reversal of the Order of Reinstatement Powers and Functions
of the Labor Arbiter
a. Throughout the period of appeal until its 1. En Banc
reversal by a higher court, it is obligatory a. Has no adjudicatory power
on the part of the employer to: b. The NLRC does not sit en banc to
i. Reinstate; and hear and decide cases
ii. Pay the wages of the dismissed c. Promulgating rules and regulations,
employee and governing the hearings and
b. If the employee has been reinstated during disposition of cases before any of its
the appeal period, and such reinstatement divisions and regional branches;
order is reversed with finality, he/she is NOT d. Formulating policies affecting its
required to reimburse whatever salary administration and operations;
he/she received. He/She is entitled to such e. On temporary or emergency basis, to
especially if he/she actually rendered allow cases within the jurisdiction of
services during that period (Garcia vs. any division to be heard and decided
Philippine Airlines Inc., G.R. No. 164856, by any other division, whose docket
January 20, 2009). allows the additional workload and
such transfer will not expose litigants
C. NATIONAL LABOR RELATIONS to unnecessary additional expense
COMMISSION (Ibid.)

It is an administrative body with quasi- 2. Division (8 Divisions with 3

judicial functions, and the principal members)
government agency that hears and decides a. Each division shall have 1
labor-management disputes. It is attached to representative from the Employer’s
the DOLE solely for program and policy sector, Employee’s sector, and public
coordination only. (Art. 220, Labor Code, as sector
amended) b. The representative from the public
Composition of the NLRC sector will act as the Presiding
Commissioner
1. 1 Chairman c. Adjudicatory
2. 23 Members, called “Commissioners” d. All other powers, functions, and
a. 8 Members each of whom shall be duties
chosen only from among the nominees e. Has exclusive appellate
of the workers and Employer’s jurisdiction over cases within their
organization respectively respective territorial jurisdiction
(Ibid.).

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Individual Commissioner does not have performed therewith, may cause

Adjudicatory Power grave or irreparable damage to any
The Commission shall exercise its adjudicatory party; [Art. 225(e), Labor Code, as
and all other powers, functions, and duties amended]
through its divisions. (Art. 220, Labor Code, as c. Injunction in strikes or lockouts under
amended) Art. 279 of the Labor Code;
d. Petition for extraordinary remedies
Qualifications of the Chairman and the from orders or resolutions of Labor
Commissioners Arbiters (including those issued
1. Member of the Philippine Bar; during execution proceedings). (Rule
2. Engaged in the practice of law in the XII, Sec. 1, 2011 NLRC Rules of
Philippines for at least 15 years; Procedure, as amended by En Banc
3. At least 5 years of experience or exposure in Resolution No. 07-14, Series of 2014;
handling labor management relations; En Banc Resolution No. 01-17, Series
4. Preferably a resident of the region where he of 2017)
is to hold office. (Art. 222, Labor Code, as
amended) 2. Exclusive Appellate Jurisdiction
Qualifications of an Executive Labor Arbiter over:
1. Member of the Philippine Bar; a. All cases decided by the LA under Art.
2. Engaged in the practice of law in the 224 of the Labor Code, as amended
Philippines for at least 10 years; and Sec. 10 of R.A. No. 8042 (Migrant
3. At least 5 years of experience or exposure in Worker’s Act);
handling labor management relations. b. Cases decided by the Regional Offices
(Ibid.). of the DOLE, in the exercise of its
adjudicatory function over monetary
claims of workers, amounting to not
Terms of Office of the Chairman, more than P5000 and not
Commissioners, and Labor Arbiters accompanied by a claim for
reinstatement;
They shall hold office during good behavior until Contempt cases decided by the LA.
they reach the age of 65, unless removed for
causes as provided by law or become 3. No Appellate Jurisdiction over
incapacitated to discharge the function of his Decisions rendered by:
office. (Ibid.). a. Voluntary Arbitrator;
b. Secretary of DOLE;
c. BLR Director, on cases appealed from
Provided however, that the President of the the DOLE Regional Offices
Philippines may extend the services of the
Commissioners and LAs up to a maximum age of Jurisdiction of Labor Arbiter vs. NLRC
70 years upon the recommendation of the
Basis Labor NLRC
Commission En Banc. (Ibid.).
Arbiter
Jurisdiction of NLRC:
1. Exclusive Original Jurisdiction over: Jurisdictio Can hear and NLRC
a. Certified labor disputes causing or likely n resolve cases reviews
to cause a strike or lockout in an industry under Art. 224 the
indispensable to national interest, of the Labor decisions
certified by the Secretary of DOLE or the Code, money rendered
President of the Philippines for claims under by the LA;
compulsory arbitration; [Art. 278(g), Sec. 7 of RA decisions
Labor Code, as amended] 10022; and or orders
b. Injunction in ordinary labor disputes to referred wage rendered
enjoin or restrain any actual or distortion by the
threatened commission of any or all disputes in Regional
prohibited or unlawful acts, or to require unorganized Directors
performance of a particular act in any establishments under Art.
labor dispute which, if not restrained or

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, as well as the 129 of the 2. Power to issue compulsory processes

(administer oaths, summon parties, issue
enforcement Labor
of compromise Code; and subpoenas)
3. Power to investigate matters and hear
agreements conducts
disputes within its jurisdiction
pursuant to compulsor
(adjudication power – original and
the 2011 NLRC y
appellate jurisdiction over cases)
Rules of arbitration
Procedure, as in certified 4. Contempt power
5. Ocular inspection
amended cases
6. Power to issue injunctions and restraining
Issuance Cannot issue Can issue orders (Art. 225, Labor Code, as
of Labor an injunctive an amended)
Injunction Writ injunctive
Effect of NLRC reversal on Labor
Writ
Arbiter’s Order of Reinstatement

Adjudication of cases by the NLRC 1. If the employee was actually

1. The NLRC adjudicates cases by division, reinstated
where a concurrence of 2 votes is needed for
a valid judgment. (Art. 220, Labor Code, as Bergonio Doctrine: After reversal of the Labor
amended). Arbiter‘s decision, the employer‘s duty to
reinstate the dismissed employee in the actual
Whenever the required membership in a service or in the payroll is effectively
division is not complete and the concurrence terminated. The employee, in turn, is not
of the Commissioners to arrive at a judgment required to return the wages that he had
or resolution cannot be obtained, the received prior to the reversal of the LA‘s
Chairman shall designate such number of decision (Bergonio, Jr. vs. South East Asian
additional Commissioners from the other Airlines, G.R. No. 195227, April 21, 2014).
divisions as may be necessary.
2. It shall be mandatory for the division to meet 2. If there was only payroll
for purposes of consultation reinstatement

The conclusion of a division on any case Wenphil Rule: The period for computing the
submitted to it for decision should be backwages due to the dismissed employees
reached in consultation before the case is during the period of appeal should end on the
assigned to a member for the writing of the date that a higher court reversed the labor
opinion. arbitration ruling of illegal dismissal (Wenphil
Corporation vs. Abing, G.R. No. 207983, April 7,
2014).
3. A certification that a consultation has been
conducted, signed by the presiding 3. If employee was neither reinstated
commissioner of the division, shall be issued to his former position nor in the
(copy attached to the record of the case and payroll
served upon the parties) (Art. 220, Labor Code,
as amended) Roquero Doctrine: When an employee is
ordered reinstated by the LA and the
Powers of the NLRC
employer fails or refuses to obey the
reinstatement order but initiates an appeal,
1. Rule-Making Power Promulgation of rules
the employer‘s success in having the decision
and regulations:
of the LA reversed on appeal will not
a. Governing disposition of cases before
exculpate him from the liability to pay the
any of its division/regional offices;
reinstatement wages of the employee from
b. Pertaining to its internal functions;
the time he was reinstated until the date of
c. As may be necessary to carry out the
reversal on appeal (Roquero vs. PAL, G.R. No.
purposes of the Labor Code
152329, April 22 2003).

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Garcia Doctrine: The test to determine the for, and with a statement of the
liability of the ER (who did not reinstate the EE date the appellant received the
pending appeal) to pay the wages of the appealed decision, resolution or
dismissed EE covering the period from the time order;
he was ordered reinstated by the LA to the iv. In three (3) legibly typewritten or
reversal of the LA‘s decision is two-fold: printed copies; and
1. There must be actual delay or the fact that v. Accompanied by:
the order of reinstatement pending appeal 1. Proof of payment of the
was not executed prior to its reversal; required appeal fee;
2. Delay must not be due to the EE‘s unjustified 2. Posting of a cash or surety
act or omission (Garcia vs. PAL, G.R. No. bond as provided in Sec. 6 of
164856, January 20, 2009); the NLRC Rules;
3. Proof of service upon the
other parties
Roquero Doctrine was reaffirmed but with the
modification that ― after the LA‘s decision is b. A mere Notice of Appeal, without
reversed by a higher tribunal, the employee may complying with the other
be barred from collecting the accrued wages, if it requisites aforestated shall not
is shown that the delay in enforcing the stop the running of the period for
reinstatement pending appeal was without fault perfecting an appeal
on the part of the employer (Roquero vs. PAL, c. The appellee may file with the
G.R. No. 152329, April 22, 2003). Regional Arbitration Branch or
Reckoning Period for Computation of the Regional Office where the appeal was
Amount of accrued Reinstatement Wages filed, his answer or reply to appellant’s
memorandum of appeal, not later than
From the time the ER received a copy of the 10 calendar days from receipt thereof
decision of the Labor Arbiter declaring the EE‘s
termination illegal and ordering their Failure on the part of the appellee who was
reinstatement up to the date of the NLRC properly furnished with a copy of the appeal
resolution overturning that of the Labor Arbiter. to file his answer or reply within the said
(ISLRIZ Trading/Victor Hugo Lu vs. Efren period may be construed as a waiver on his
Capada, et. al, G.R. No. 168501, January 31, part to file the same.
2011). d. Subject to the provisions of Art. 225
of the Labor Code, once the appeal is
Remedies perfected in accordance with these
1. Appeal Rules, the Commission shall limit
itself to reviewing and deciding only
Judicial Review of the NLRC’s decision is available the specific issues that were elevated
through a Petition for Certiorari under Rule 65, on appeal
which should be initially filed with the CA in strict
observance of the Doctrine of Hierarchy of Courts Extraordinary Remedies
as the appropriate forum for the relief desired (St. Extraordinary remedies are found under Rule
Martin Funeral Home vs. NLRC, G.R. No. 130866, Sep. XII of the 2011 NLRC Rules of Procedure.
16, 1998) These are not provided under the Labor Code
2. Requisites for Perfection of Appeal to or other special laws
the CA (Rule VI, 2011 NLRC Rules of
Procedure) It is not equivalent to nor a substitute for
a. Appeal shall be: appeal. It is directed against “orders” or
i. Filed within the reglementary period; “resolution” issued by the Labor Arbiter in the
ii. Verified by the appellant himself in course of the proceedings before him where
accordance with Sec. 4, Rule 7 of the the remedy of appeal is not available.
Rules of Court;
iii. In the form of a memorandum of Grounds for the exercise of
appeal which shall state the grounds Extraordinary Remedies
relied upon and the arguments in 1. There is prima facie evidence of abuse of
support thereof, the relief prayed discretion on the part of the LA;

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2. Serious errors in the findings of fact are Such assumption or certification shall have
raised which, if not corrected, would cause the effect of automatically enjoining the
grave or irreparable damage or injury to the intended or impending strike or lockout as
petitioner; specified in the assumption or certification
3. A party has been prevented from taking an order. (Art. 278[g], Labor Code, as amended)
appeal due to fraud, accident, mistake, or
excusable negligence (FAME) Effects of Certification
4. Made purely on questions of law; and 1. The intended or impending Strike or
5. Order or resolution will cause injustice if not Lockout is automatically enjoined
rectified. (Rule XII, Sec. 2, 2011 NLRC Rules of (Azucena, Labor Code 2, 2016, p. 637).
Procedure, as amended by En Banc Resolution No. 2. All striking or locked out employees shall
05-14, Series of 2014). immediately return to work and the
employer shall immediately resume
Verified Petition operations and readmit ALL workers
1. A party aggrieved by any order or resolution under the same terms and conditions
of the Labor Arbiter, including a writ of prevailing before the Strike or Lockout.
execution and others issued during execution (Rule VIII, Sec. 3, 2011 NLRC Rules of
proceedings, may file a verified petition to Procedure).
annul or modify the same 3. All cases between the parties shall be
2. The petition may be accompanied by an considered subsumed or absorbed by the
application for the issuance of a temporary certified case and shall be decided by the
restraining order and/or writ of preliminary appropriate Division of the
or permanent injunction: Commission.Ibid.).
a. To enjoin the Labor Arbiter, or any 4. Parties of cases, relative or incident to the
person acting under his/her authority certified case, pending before the
b. To desist from enforcing said resolution, Regional Arbitrational branches and
order or writ (Sec. 1, Rule XII, 2011 Voluntary Arbitrators shall inform the
NLRC Rules of Procedure, as amended by Division thereof.Ibid.).
En Banc Resolution No. 07-14) 5. The division having territorial jurisdiction
over the principal office of the company
Certified Cases shall acquire jurisdiction over the certified
1. Certified labor disputes are national interest case whenever a certified labor dispute
cases certified by the DOLE Secretary to the involves a business entity with several
Commission (NLRC) for compulsory workplaces. Ibid.).
arbitration under Art. 278(g) of the Labor
Code (Sec. 2, The 2011 NLRC Rules and Note: These effects are also applicable
Procedures) when the Secretary of DOLE directly
2. Certified labor disputes causing or assumes jurisdiction and decides over a
likely to cause a strike or lockout in an labor dispute affecting industries imbued
industry indispensable to the national with national interest.
interest certified to the NLRC by the
SOLE for compulsory arbitration Effects of Defiance

Non-compliance with the Certification order of

Power of the Secretary of Labor to Certify the Secretary of DOLE shall:
Cases a. Be considered as an illegal act committed
1. When, in his opinion, there exists a labor in the course of the strike or lockout; and
dispute causing or likely to cause a strike or b. Authorize the Commission to enforce the
lockout in an industry indispensable to the same under pain of immediate disciplinary
national interest, the Secretary of Labor and action, including:
Employment may: i. Dismissal or loss of employment
a. Assume jurisdiction over the dispute; status; or
and ii. Payment by the locking-out
b. Decide it or certify the same to the employer of backwages, damages;
Commission for Compulsory Arbitration and/or
iii. Other affirmative relief, even
criminal prosecution against the

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liable parties (Sec. 4, Rule VIII, NLRC Under Rule 65

2011 Rules)
c. The Commission may also seek the 1. General Rule: Decisions of the DOLE
assistance of law enforcement agencies to Secretary, NLRC and BLR, in its appellate
ensure compliance and enforcement of its jurisdiction are NOT APPEALABLE to
orders and resolutions (Ibid.) the CA; however, their decisions may be
elevated to the CA via a Petition for
Procedure in Certified Cases Certiorari under Rule 65
1. When there is no need to conduct a 2. Exception: Rule 43 of the Rules of Court
clarificatory hearing, the Commission shall - Orders or Awards of the
resolve all certified cases within 30 calendar Voluntary Arbitrator (VA) may be
days from receipt by the assigned appealed to the CA via a Petition
Commissioner of the complete records, for Review under Rule 43
which shall include the position papers of the
parties and the order of the SOLE denying Petition for Certiorari
the motion for reconsideration of the 1. A person may file a verified petition in the
certification order, if any (Sec. 5, Rule VIII, proper court, alleging the facts with
2011 NLRC Rules and Procedures) certainty and praying that judgment be
2. Where a clarificatory hearing is needed, the rendered annulling or modifying the
Commission shall, within 5 calendar days proceedings of any tribunal, board or
from receipt of the records, issue a notice to officer exercising judicial or quasi-judicial
be served on the parties through the fastest functions, and granting such incidental
means available, requiring them to appear reliefs as law and justice may require:
and submit additional evidence, if any. All a. When such tribunal, board or officer
certified cases shall be resolved by the has acted:
Commission within 60 calendar days from i. Without or in excess its or his
receipt of the complete records by the jurisdiction, or
assigned Commissioner. (Ibid.). ii. With grave abuse of discretion
amounting to lack or excess of
jurisdiction; AND
Note: No Motion for Extension or b. When there is no appeal, or any plain,
Postponement shall be entertained (Sec. 5, speedy, and adequate remedy in the
Rule VIII, 2011 NLRC Rules and Procedures) ordinary course of law
Execution of Judgment
2. Petition shall be accompanied by:
Upon issuance of the entry of judgment, the
a. A certified true copy of the judgment,
Commission motu proprio or upon motion by the
order or resolution subject thereof;
proper party, may cause the execution of the
b. Copies of all pleadings and
judgment in the certified case (Sec. 5, Rule VIII,
2011 NLRC Rules and Procedures) documents relevant and pertinent
thereto; and
D. JUDICIAL REVIEW OF LABOR RULINGS c. A sworn certification of non-forum
shopping as provided in the third
Court of Appeals (CA) paragraph of Sec. 3, Rule 46
A Judicial Review of NLRC’s decisions is available
Petition for Prohibition
through a Petition for Certiorari under Rule 65,
1. A person may file a verified petition in the
which should initially be filed with the CA, in strict
proper court, alleging the facts with
observance of the doctrine of Hierarchy of
certainty and praying that judgment be
Courts, as the appropriate forum for the relief
rendered commanding the any tribunal,
desired. The CA is procedurally equipped to
corporation, board, officer or person,
resolve unclear or ambiguous factual findings,
whether exercising judicial, quasi-judicial
aside from the increased number of its
or ministerial functions to desist from
component divisions (St. Martin Funeral Home
further proceedings in the action or
vs. NLRC, G.R. No. 130866, Sep. 16, 1998)
matter specified therein, or otherwise
granting such incidental reliefs as law and
justice may require:

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a. When the proceedings of such tribunal, Under Rule 45

corporation, board, officer or person are:
i. Without or in excess of its or his 1. A party desiring to appeal by certiorari
jurisdiction; or from a judgment or final order or
ii. With grave abuse of discretion resolution of the Court of Appeals, the
amounting to lack or excess of Sandiganbayan, the Regional Trial Court
jurisdiction, AND or other courts whenever authorized by
b. When there is no appeal or any other law, may file with the Supreme Court a
plain, speedy, and adequate remedy in verified petition for review on certiorari.
the ordinary course of law The petition shall raise only questions of
2. Petition shall be accompanied by: law which must be distinctly set forth
a. A certified true copy of the judgment, (Sec. 1, Rule 45, Revised Rules of Court)
order or resolution subject thereof; a. Within 15 days from Notice of
b. Copies of all pleadings and documents the Judgment, Final Order, or
relevant and pertinent thereto; and Resolution appealed from
c. A sworn certification of non-forum 2. Since the Court of Appeals had
shopping as provided in the third jurisdiction over the petition under Rule
paragraph of Sec. 3, Rule 46. 65, any alleged errors committed by it in
the exercise of its jurisdiction would be
Petition for Mandamus errors of judgment which are reviewable
A person may file a verified petition in the proper by timely appeal, and not by a special civil
court, alleging the facts with certainty and action
praying that judgment be rendered commanding 3. If the aggrieved party fails to do so within
any tribunal, corporation, board, officer or the reglementary period, and the decision
person, immediately or at some other time to be accordingly becomes final and executory,
specified by the court, to do the act required to he cannot avail himself of the writ of
be done to protect the rights of the petitioner, certiorari, his predicament being the
and to pay the damages sustained by the effect of his deliberate inaction (Tirazona
petitioner by reason of the wrongful acts of the vs. Phil EDS Techno-Service Inc., G.R. No.
respondent: 169712, January 20, 2009)
1. When any tribunal, corporation, board,
officer or person: Review of Decisions
a. Unlawfully neglects the performance of Review of decisions of the NLRC shall be done
an act which the law specifically enjoins through (in order):
as a duty resulting from an office, trust, a. Motion for Reconsideration
or station; or b. Rule 65 to the CA
b. Unlawfully excludes another from the c. Rule 45 to the SC
use and enjoyment of a right or office to Supreme Court policy as to Appeals in
which such other is entitled; AND Labor Cases
2. When there is no other plain, speedy and The Supreme Court is very strict regarding
adequate remedy in the ordinary course of appeals filed outside the reglementary period
law for filing the same. To extend the period of
Supreme Court (SC) the appeal is to delay the case, a circumstance
All references in the amended Sec. 9 of B.P. No. which could give the employer the chance to
129 to supposed appeals from the NLRC to the wear out the efforts and meager resources of
Supreme Court are interpreted and hereby the worker that the latter is constrained to
declared to mean and refer to petitions for give up for less than what is due him (Firestone
Tire and Rubber Co. of the Philippines vs. Firestone
certiorari under Rule 65.
Tire and Rubber Co. Employees Union, G.R. No.
Consequently, all such petitions should 75363, August 4, 1992)
henceforth be initially filed in the Court of Fresh Period Rule
Appeals, in strict observance of the doctrine on The Neypes Doctrine applies from denial of
the hierarchy of courts, as the appropriate forum Motion for Reconsideration (Gagui vs. Dejero,
for the relief desired (St. Martin Funeral Home vs. G.R. No. 196036, October 23, 2013)
NLRC, G.R. No. 130866, September 16, 1998).

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E. BUREAU OF LABOR RELATIONS g. Violations of or disagreements over any

provision in the constitution and by-laws
Definition of a union or workers’ association;
The Bureau of Labor relations and the Labor h. Disagreements over chartering or
Relations Divisions in the regional offices of the registration of labor organizations and
Department of Labor shall have original and collective bargaining agreements;
exclusive authority to act, at their own initiative i. Violations of the rights and conditions of
or upon request of either or both parties, on all membership in a union or workers’
inter-union and intra-union conflicts, and all association;
disputes, grievances or problems arising from or j. Violations of the rights of legitimate labor
affecting labor-management relations in all organizations, except interpretation of
workplaces, whether agricultural or non- CBAs;
agricultural, except those arising from k. Validity/invalidity of
implementation or interpretation of collective impeachment/expulsion/suspension or
bargaining agreements which shall be the subject any disciplinary action noted against any
of grievance procedure and/or voluntary officer and member, including those
arbitration (Article 232, Labor Code, as arising from non-compliance with
amended). reportorial requirement; and
l. Such other disputes or conflicts involving
Med Arbiter - an officer in the DOLE Regional the rights to self-organization, union
Office or in the BLR authorized to hear and decide membership and collective bargaining
representation cases, inter-union or intra-union between and among legitimate labor
disputes and other related labor relations organizations. (Ibid.).
disputes (Sec. 1[ii], Rule 1, Book V, Rules to
Implement the Labor Code, as amended). 2. Intra-union disputes or internal
union disputes — refer to disputes or
grievances arising form any violation of or
Original and Exclusive Jurisdiction of Med - disagreement over any provision of the
Arbiter constitution and by-laws of the union,
1. Inter-union disputes or representation including any violation of the rights and
disputes conditions of union membership provided
for in the Labor Code
Inter-union disputes include:
a. Validity/invalidity of SEBA, certification 3. Other related labor relations
election, consent election, run-off election or disputes
re-run election;
b. Such other disputes or conflicts involving the Related Labor Relations Dispute pertains
rights to self-organization, union to any conflict between a labor union and
membership and collective bargaining the employer or any individuals, entity or
between and among legitimate labor group that is not a labor union or workers’
organizations (D.O 40-03 series 2003; D.O 40-1- association. It covers the following:
15, series of 2015). a. any conflict between a labor union
and the employer or any individual,
Intra-union disputes include: entity or group that is not a labor
a. Conduct or nullification of election of officers organization or worker’s association;
of union and workers’ associate; b. cancellation of registration of unions
b. Audit or accounts examination of union or and workers associations; and
workers’ association funds; c. a petition for interpleader (Sec. 2, Rule
c. Deregistration of collective bargaining XI, D.O. No. 40-03)
agreements;
d. validity /invalidity of union affiliation or 4. Injunction cases; and
disaffiliation; 5. Contempt cases.
e. Validity/invalidity of acceptance/non-
acceptance for union membership;
f. Opposition to application for union or CBA
registration;

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BLR’s Director has Original and Exclusive Rule on Appeal

Jurisdiction over: On revocation or
1. Complaints and petitions involving the On denial of
cancellation of
registration of cancellation of registration of application for
union
federations, national unions, industry unions, union registration
registration
trade union centers and their local chapters,
affiliates and members of organization; Denial is made by the Decision of the RD in
2. Request for examinations of books of Regional office in the cases which he
accounts of said labor organizations under cases involving has original
Art 250 of the Labor Code; application for jurisdiction —
3. Intra-union disputes involving said labor registration of appealable to the
organizations; independent unions, BLR Director by any
4. Registration of multi-employer CBAs or local chapters and of the parties within
petitions for deregistration; and workers’ associations 10 days from receipt
5. Contempt cases — appealable to the thereof
BLR Director
BLR Director has Exclusive Appellate
Jurisdiction over: Denial is made by the Decision of the BLR
1. All decisions of the Med-Arbiter in (1) intra-
BLR Director in case Director in the
union disputes, and (2) other related labor involving federations, exercise of his
relation disputes (Sec. 1[1], Rule III, NCMB national unions, original jurisdiction
Manual of Procedures for Conciliation and industry unions and — appealable to the
Preventive Mediation Cases). trade union centers — DOLE Secretary by
2. Decisions by the DOLE Regional Directors in appealable to the any party within the
the following cases relevant and related to DOLE Secretary period of 10 days
labor relations:

a. Visitorial cases under Art. 289 [274], Rules on appeal on CBA registration
involving examination of books of Single-enterprise Multi-employer
accounts of independent unions, local CBAs — denial by the CBAs —denial of the
chapters/chartered local and workers’ Regional Director may BLR Director may be
associations (Rule II, Rules of Procedure on be appealed to the appealed to the
Mediation-Arbitration)
BLR Director within 10 DOLE Secretary
b. Union registration-related cases such as
days from receipt of within 10 days from
denial of application under Art. 243 [236]
the notice of denial receipt of notice of
(Labor Code), and revocation or
denial
cancellation (Art. 245 [238], Labor Code)
of registration of said unions
c. Notice of merger, consolidation, Appeal to the BLR
affiliation, and change of name of said 1. The decision of the Med-Arbiter and
unions and or petition for denial thereof Regional Director may be appealed to the
(Sec. 5, Rule IV, Book V, Rules to Implement BLR by any of the parties within 10 days
the labor Code, as amended) from receipt thereof. (Sec. 16, Rule XI, Book
V, D.O. 40-F-03, Series of 2003).
Rule on Appeal on Unorganized 2. The decision of the Bureau Director in the
Establishments exercise of his original jurisdiction may be
appealed to the office of the DOLE
Appeal may only be made to the DOLE Secretary Secretary by any party within the same
in case of denial of the petition within 10 days period (Ibid.).
from the receipt of the decision of denial (D.O.
40-F-03, Series of 2008). F. NATIONAL CONCILIATION AND
MEDIATION BOARD

NCMB or The Board

The agency attached to the Department of
Labor and Employment principally in-charge
of the settlement of labor disputes through

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conciliation, mediation and of the promotion of collected from workers and violation of
voluntary approaches to labor dispute prevention the condition for the issuance of license
and settlement (Sec. 1 [15], Rule III, NCMB Manual to recruit workers.
of Procedures for Conciliation and Preventive
Mediation Cases). 2. Disciplinary action cases and other
special cases which are administrative
Preventive Mediation in character, involving employers,
Covers potential labor disputes that are the principals, contracting partners and
subject of a formal or informal request for Filipino migrant workers.
conciliation and mediation assistance sought
either or both parties or upon the initiative of the NOTE: POEA ceased to have any
NCMB to avoid the occurrence of actual labor jurisdiction over money claims of OFWs,
disputes and in order to remedy, contain or or those arising out of an employer-
prevent its degeneration into a full-blown dispute employee relationship or by virtue of any
(Rule III, NCMB Manual). law or contract involving Filipino workers
for overseas deployment including claims
How to initiate preventive mediation: for actual, moral, exemplary and other
1. by filing a notice or request of preventive forms of damages.
mediation, as distinguished from a notice of
strike/lockout; or H. DOLE REGIONAL DIRECTORS
2. by conversion of the notice of strike/lockout
into a preventive mediation case. Regional Directors - They are duly
authorized representatives of the DOLE
Authority to convert a notice of Secretary in the DOLE regional offices. They
strike/lockout into a preventive mediation are in charge of the administration and
case: enforcement of labor standards within their
1. When the issues raised in the notice of respective territorial jurisdictions.
strike/lockout are not strikeable in character
2. When the party which filed the notice of Original and Exclusive Jurisdiction over
strike/lockout voluntarily asks for the the following cases:
conversion 1. Visitorial cases under Article 289 [274],
3. When both parties to a labor dispute involving examination of books of
mutually agree to have it subjected to accounts of independent unions, local
preventive mediation proceeding chapters/chartered locals and workers’
associations;
G. POEA 2. Union registration-related cases:
a. Applications for union registration of
Original and Exclusive Jurisdiction independent unions, local chapters
1. All cases which are administrative in and workers’ associations (Section 3,
character, involving or arising out of Rule III of the Mediation-Arbitration
violations of recruitment rules and Rules)
regulations: b. Petition for denial of application for
a. refund of fees collected from OFWs registration for said unions (Sec. 243
b. any violation of the conditions for the [238}, Labor Code, as amended)
issuance of the license to recruit OFWs c. Petitions for revocation or
2. Disciplinary action cases against OFWs and cancellation of registration of said
principals/employers unions (Sec. 245 [236], Labor Code, as
amended)
Appeals from decisions of POEA 3. Denial of registration of single-enterprise
1. Recruitment violations and other CBAs or petitions for deregistration
related cases — all cases which are thereof
administrative in character, involving or 4. Request for SEBA certification when made
arising out of violation of rules and in an unorganized establishment with only
regulations relating to licensing and 1 legitimate union
registration of recruit and employment 5. Visitorial cases under Article 37 of the
agencies or entities, including refund of fees Labor Code referring to the inspection of

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the premises, books of account and records policies which remain unresolved after
of any person or entity covered by the Title I exhaustion of the grievance procedure;
of the same code; 3. Cases referred to them by the DOLE
6. Visitorial and enforcement cases under Secretary under the DOLE’s
Article 128, either routine or initiated Administrative Intervention for Dispute
through a complaint; Avoidance (AIDA) initiative (under DOLE
7. Occupational safety and health violations Circular No. 1,m Series of 2006); and
(Sec. 6[a], Rule VI, Rules on the Disposition 4. Upon agreement of the parties, any other
of Labor Standards Cases in the Regional labor dispute may be submitted to the
Offices); EVAs for voluntary arbitration.
8. Small money claim cases arising from labor
standards violations in an amount not I. DOLE SECRETARY
exceeding P5,000.00 and not accompanied
with a claim for reinstatement (Art. 129, Original Jurisdiction of DOLE Secretary
Labor Code, as amended) 1. Petition to assume jurisdiction over labor
9. Cases related to private recruitment and disputes affecting industries
placement agencies (PRPAs) for local indispensable to the national interest
employment, such as: (par. (g), Art. 278 [263], Labor Code)
a. Applications for license or denial; (Sec. 8, 2. Petition to certify national interest cases
DO 141-14, Series of 2014) to the NLRC for compulsory arbitration
b. Complaints for suspension or (par. (g), Art. 278 [263], Labor Code, as
cancellation of license by reason of amended)
administrative offenses; (Sec. 54, in 3. Petition to suspend effects of termination
relation to Sec. 51, DO 141-14, Series of (par. (b), Art 292 [277], Labor Code, as
2014) amended)
c. Complaints for illegal
recruitment; 4. Administrative Intervention for Dispute
(Sec.45, DO 141-14, Series of 2014) and Avoidance (AIDA) cases (DOLE Circular
d. Petition for closure of agency (Sec. 47, No 1, Series of 2006)
DO 141-14, Series of 2014) - This is a new form of dispute
10. Cases submitted for voluntary arbitration in settlement introduced by the DOLE
their capacity as Ex-Officio Voluntary Secretary under DOLE Circular No. 1,
Arbitrators (EVAs) (Department Order No. Series of 2006, issued on August 11,
83-07, Series of 2007) 2006 by former DOLE Secretary
11. Notice of merger, consolidation, affiliation Arturo D. Brion, later a distinguished
and change of name of said unions and or member of the Highest Court.
petition for denial thereof (Sec. 5, Rule IV, - This was issued in line with the
Book V, IRR, as amended by DO 40-03, objectives of R.A. No. 9285,
Series of 2003) otherwise known as the “Alternative
Dispute Resolution Act of 2004”
Original Jurisdiction [approved on April 2, 2004],
1. Cases involving inspection of establishment Executive Order No. 523 dated April
to determine compliance with labor 07, 2006 and the mandate of the
standards (Visitorial Power); and DOLE to promote industrial peace.
2. Cases involving issuance of compliance 5. Voluntary arbitration cases (DOLE Circular
orders and writs of execution (Enforcement No 1, Series of 2006)
Power). (Sec. 128, Labor Code, as 6. Contempt cases (Art 231 [255])
amended). - Art 231 [255]. Contempt powers of
the Secretary of Labor. In the
Jurisdiction of Regional Directors and exercise of his powers under this
Assistant Regional Directors for Voluntary Code, the secretary of Labor may
Arbitration in their capacity as Ex-Officio hold any person in direct or indirect
Voluntary Arbitrators: contempt and impose the appropriate
1. All grievances arising from the interpretation penalties therefor
or implementation of the CBA
2. All grievances arising from the interpretation Powers of DOLE Secretary
or enforcement of company personnel 1. Visitorial and enforcement powers

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a. 3 Kinds of Power Under Article 128 iii. Appellate power or power of

- Article 128 of the Labor Code, as review - this is the only one
amended, enunciates the three kinds of exercised by the DOLE Secretary
power which the DOLE Secretary and/or in respect to any decision, order,
Regional Directors, his duly authorized or award issued by the DOLE
representatives, may exercise in Regional Directors
connection with the administration and
enforcement of the labor standards Requisites for the valid exercise of this power
provisions of the Labor Code and of any 1. The employer-employee relationship
labor law, wage order or rules and should still exist;
regulations issued pursuant thereto. 2. The findings in question were made in the
course of inspection by the labor
i. Visitorial Power inspectors; and
1. Access to employer‘s records 3. The employees have not yet initiated any
and premises at any time of the claim or complaint with the DOLE
day or night, whenever work is Regional Director under Article 129, or the
being undertaken; Labor Arbiter under Article 224.
2. To copy from said records b. Nature of Visitorial and enforcement
3. Question any employee and powers: Quasi-judicial in nature
investigate any fact, condition, c. Exercise the Visitorial and
or matter which may be Enforcement Powers
necessary to determine i. In the instances under
violations or which may aid in Articles 37, 128, and 274, the
the enforcement of the Labor Regional Directors as the
Code and of any wage order, duly authorized
rules, and regulations issued representatives of the DOLE
pursuant thereto. Secretary, have the Original
Jurisdiction;
ii. Enforcement Power
1. Issue compliance orders ii. Role of DOLE Secretary in the
2. Issue writs of execution for the enforcement exercise of this power is
of their orders, except in cases where the appellate in nature;
Employer contests the findings of the labor
officer and raise issues supported by iii. DOLE Secretary is confined to the
documentary proof which were not exercise of his appellate
considered in the course of inspection jurisdiction over the decisions,
3. Order stoppage of work or suspension of orders, and awards of the DOLE
operation when non-compliance with the law Regional Directors in cases
or implementing rules and regulations poses brought before them for
grave and imminent danger to health and adjudication under Articles 128
safety of workers in the workplace. and 274.
4. Require Employers to keep and maintain 2. Power to suspend the effects of
such employment records as may be termination
necessary in aid to the visitorial and a. Grounds - The DOLE Sec may
enforcement powers. suspend the effects of termination
5. Conduct hearings within 24 hours to pending resolution of the dispute in
determine whether: the event of a prima facie finding by
a. An order for stoppage of work or the appropriate official of the DOLE
suspension of operations shall be lifter or before whom the dispute is pending
not; and that:
b. Employer shall pay the concerned i. The termination may cause a
Employees their salaries in case the serious labor dispute; and/or
violation is attributable to his fault (As ii. The termination is in
amended by RA 7730); (Guico vs. implementation of a mass lay-off.
Secretary, G.R. No. 131750, November 16, b. Rationale
1998).

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- To bring parties to the status quo iii. Third, the “serious labor dispute”
ante litem (state of relationship contemplated under the former
before termination) may or may not involve a strike
- workers will be litigating the issue of or lockout; while the labor
the validity or legality of their dispute referred to in the latter
termination on more or less equal will cause or likely to cause a
footing with the employer since they strike or lockout.
will be immediately reinstated and iv. Fourth, the former may be
accordingly not be deprived of their exercised in cases of termination
wages while the litigation is on- of employment for as long as any
going; of the two (2) grounds mentioned
in Article 277(b) exists,
c. Suspension of the effects of termination irrespective of the nature of the
will necessarily result in the immediate business of the employer; while
reinstatement of the terminated the latter may only be exercised
employees. An order of reinstatement in industries indispensable to the
pending resolution of the case may thus national interest.
be issued by the DOLE Secretary v. Fifth, the remedy under the
pursuant to this power; former is immediate
reinstatement pending resolution
d. Power of the DOLE Secretary granted of the termination case; while in
under Article 277(b) distinguished from the latter, the remedy is the
his power to assume or certify labor automatic return to work of the
disputes involving industries strikers or locked-out employees,
indispensable to the national interest if the strike or lock-out is on-
under Article 263(g) going at the time of the issuance
i. First, the exercise of the power to of the assumption/certification
suspend the effects of termination order or the enjoining of the
involves only the issue of termination strike or lockout, if one has not
of employment which may cause a taken place, pending the
serious labor dispute or is in resolution of the issues raised in
implementation of a mass lay-off; the notice of strike or lockout.
while the power to assume or certify 3. Assumption of Jurisdiction
labor disputes is applicable to all - The DOLE Secretary is granted the
labor disputes, irrespective of the extraordinary police power of assuming
grounds therefor, provided such jurisdiction over a labor dispute which, in
labor disputes will cause or likely to his opinion, will cause or likely to cause
cause strikes or lockouts in industries a strike or lockout in an industry
indispensable to the national indispensable to the national interest, or
interest. the so-called “national interest”
ii. Second, the former requires the cases. (Art. 263(g), Labor Code, as
conduct of preliminary determination amended)
of the existence of prima facie - Alternatively, he may certify the labor
evidence that the termination may dispute to the NLRC for compulsory
cause a serious labor dispute or is in arbitration.
implementation of a mass lay-off to - The powers given to the DOLE Secretary
be conducted by the appropriate under Article 263 (g) is an exercise of
official of the DOLE before whom the police power with the aim of promoting
termination dispute is pending; while public good. (Trans-Asia Shipping Lines,
the latter does not require such Inc.-Unlicensed Crews Employees Union-
preliminary prima facie Associated Labor Union [TASLI- ALU] vs.
determination. In fact, prior notice Court of Appeals, G.R. No. 145428, July
and hearing are not required before 7, 2004).
the DOLE Secretary may issue an - The scope of the powers is limited to an
assumption or certification order. industry indispensable to the national

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interest as determined by the DOLE accompanied with a claim for

Secretary. reinstatement under Article
4. Appellate Jurisdiction 129 (appealable to the NLRC)
a. Offices from which appeals may originate 2. Decisions in cases submitted to
i. DOLE Regional Directors DOLE Regional Directors for
ii. Med-Arbiters voluntary arbitration in their
iii. Director of the Bureau of Labor capacity as Ex-Officio Voluntary
Relations (BLR) Arbitrators (EVAs) under
iv. Philippine Overseas Employment Department Order No. 83-07,
Administration (POEA) Series of 2007 (appealable to
b. Cases Not Appealable to the DOLE the CA)
Secretary - This is so because the DOLE
i. Those rendered by Labor Arbiters Regional Directors, in so
that are appealable to the deciding, are acting as
Commission (NLRC) which has Voluntary Arbitrators; hence,
exclusive appellate jurisdiction what should apply are the rules
thereover; on appeal applicable to
ii. Those rendered by the voluntary arbitration.
Commission (NLRC) since they can d. Appeals from Decisions of Med-
be elevated directly to the CA by Arbiters and BLR Directors
way of a Rule 65 certiorari petition; - In the case of decisions rendered
iii. Those rendered by the BLR by the BLR Director in his
Director in the exercise of his appellate jurisdiction, they can no
appellate jurisdiction since they longer be appealed to the DOLE
can be brought directly to the CA Secretary because another
under Rule 65 certiorari petition; appeal to the DOLE Secretary is
iv. Those rendered by DOLE Regional not tenable anymore, the BLR
Directors under Article 129 of the Director’s decisions thereon
Labor Code since they are having already become final and
appealable to the NLRC; executory. (Abbott Laboratories
v. Those issued by DOLE Regional Philippines, Inc. vs. Abbott
Directors in their capacity as Ex- Laboratories Employees Union, G.R.
Officio Voluntary Arbitrators No. 131374, January 26, 2000)
(EVAs) since they can be brought e. Appeals from POEA
directly to the CA under Rule 43 of i. Cases Appealable (Sec 28, RA
the Rules of Court; and 8042)
vi. Those rendered by Voluntary 1. Recruitment violations
Arbitrators which are appealable and other related cases. -
directly to the CA under Rule 43 of All cases which are
the Rules of Court. administrative in character,
c. Appeals from the DOLE Regional involving or arising out of
Directors violation of rules and
i. Cases Appealable regulations relating to
1. Labor standards enforcement licensing and registration of
cases under Article 128; recruitment and employment
2. Occupational safety and health agencies or entities, including
violations; and refund of fees collected from
3. Complaints against private workers and violation of the
recruitment and placement conditions for the issuance of
agencies (PRPAs) for local license to recruit workers.
employment. Disciplinary action cases
ii. Cases Not Appealable and other special cases
1. Decisions in small money claims which are administrative in
cases arising from labor standards character, involving
violations in the amount not employers, principals,
exceeding P5,000.00 and not

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contracting partners and Filipino CBA. (Voluntary Arbitration and Grievance

migrant workers. Machinery - DOLE)
ii. Not appealable (transferred to NLRC
– Sec. 10, R.A. No. 8042, as K. VOLUNTARY ARBITRATOR
amended)
1. Money Claims of OFWs, or those Voluntary Arbitration
arising out of an employer- - A mode of settling labor-management
employee relationship or by disputes in which the parties select a
virtue of any law or contract competent, trained and impartial third
involving Filipino workers for person who is tasked to decide on the
overseas deployment including merits of the case and whose decision is
claims for actual, moral, final and executory. (Grievance Machinery
exemplary and other forms of and Voluntary Arbitration - DOLE)
damages.
5. Voluntary arbitration powers (will be Who is a Voluntary Arbitrator (Revised
discussed later under K. Voluntary Arbitrator) Provisional Guidelines in the Conduct of
Voluntary Arbitration Proceedings)
J. GRIEVANCE MACHINERY
1. Any person who has been accredited by
Definition the National Conciliation and Mediation
A “grievance” or “grievable issue” is any question Board (“NCMB” or “Board”) as such or;
raised by either the employer or the union 2. Any person named or designated in the
regarding any of the following issues or CBA by the parties as their Voluntary
controversies: Arbitrator; or
1. The interpretation or application of the CBA; 3. A person chosen by the parties with or
2. The interpretation or enforcement of without the assistance of the NCMB,
company personnel policies; or pursuant to a voluntary arbitration
3. Violation of any provisions of the CBA or 4. One appointed by the NCMB in case either
company personnel policies. (Rule II, of the parties to the CBA refuses to submit
Procedural Guidelines in the Conduct of VA to voluntary arbitration.
Proceedings).
- Generally, the arbitrator is expected to
Elevation of Grievance to Voluntary decide only those questions expressly
Arbitration delineated by the submission
agreement. Nevertheless, the
1. Unresolved Grievances arbitrator can assume that he has the
- All grievances submitted to the grievance necessary power to make a final
machinery which are not settled within seven settlement since arbitration is the final
(7) calendar days from the date of their resort for the adjudication of the
submission for resolution should disputes. (Ludo and Luym Corp. vs.
automatically be referred to voluntary Saornido, G.R.No. 140960, January
arbitration prescribed in the CBA. (Art. 273, 20, 2003).
Labor Code).
- The 7-calendar day period is usually Minimum Requirements to be
reckoned from the date of their submission accredited as a Voluntary Arbitrator
for resolution to the last step of the internal (I.B.1. NCMB Revised Guidelines in the
grievance machinery. After the expiration of Accreditation and De-listing of
such period, the unsettled grievances should Voluntary Arbitrators)
automatically be referred to voluntary 1. Filipino citizen residing in the PH;
arbitration (Poquiz, Labor Relations and Law 2. Bachelor‘s degree holder;
on Dismissal, pp 337-338, 2018). 3. At least 5 years of experience in the field
- Only after exhausting all the internal of Industrial Relations;
procedures and only after the lapse of this 4. NO pending criminal case involving moral
period that unsettled or unadjusted turpitude;
grievances should automatically be referred 5. Completion of training on voluntary
to voluntary arbitration enunciated in the arbitration by the NCMB.

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Powers of Voluntary Arbitrators Productivity Incentive Programs

1. Adjudicatory power - power to hold hearings, under R.A. No. 6971.
receive evidence and take whatever action is
necessary to resolve the issues subject of the ● Rights Disputes
dispute (No. 64, NCMB Primer on Grievance - Unresolved grievances arising from
on Settlement and Voluntary Arbitration); the interpretation or implementation
2. Compulsory Power - power to compel the of the CBA, unresolved grievances
attendance of witnesses in a hearing called arising from interpretation or
for the purpose. They can issue subpoena ad enforcement of company personnel
testificandum or duces tecum (No. 80, ibid); policies, as well Violations of the CBA
3. Power to conciliate and mediate - the which are not gross in character are
Voluntary Arbitrator should exert his best called ―” rights disputes”
efforts to conciliate or mediate in order to aid - These disputes contemplate the
the parties in reaching a voluntary settlement existence of a CBA already concluded
of the dispute (No. 65, ibid); or a situation in which no effort is
4. Power to encourage the parties to enter into made to bring about a formal change
a stipulation of facts (Sec. 2, Rule V, NCMB in its terms or to create a new one.
Revised Procedural Guidelines in the Conduct - The dispute relates either to the
of Voluntary Arbitration Proceedings) meaning or proper application of a
particular provision therein with
Voluntary Arbitrator in Quasi-judicial reference to a specific situation or to
Capacity an omitted case.
- Although not a part of a government unit or ● Interest Disputes
personnel of the Department of Labor and - Bargaining deadlocks are often called
Employment, a Voluntary Arbitrator, by the interest disputes
nature of his functions, acts in a quasi- - Disputes over the formation of
judicial capacity. He is a means by which collective agreements or efforts to
government acts, or by which a certain secure them.
government act or function is performed. He - They arise where there is no such
performs a state function pursuant to a agreement or where it is sought to
governmental power delegated to him under change the terms of one and
the Labor Code (Luzon Development Bank vs. therefore the issue is not whether an
Association of Luzon Development Bank existing agreement controls the
Employees, G.R. No. 120319, October 6, 1995). controversy
2. Jurisdiction over other Labor Disputes
Jurisdiction - The Voluntary Arbitrator of panel of
Voluntary Arbitrators may also hear
1. Original and Exclusive Jurisdiction and decide all other labor disputes,
a. Unresolved grievances arising from the including unfair labor practices, and
interpretation or implementation of the bargaining deadlocks (Art. 275, Labor
CBA. Code, as amended).
b. Unresolved grievances arising from the - That is why before or at any stage of
interpretation or enforcement of the compulsory arbitration process,
company personnel policies. parties to a labor dispute may agree
c. Violations of the CBA which are not gross to submit their case to voluntary
in character. arbitration.
d. Other labor disputes, including unfair 3. Jurisdiction over National Interest Cases
labor practices and bargaining - SOLE‘s power of assumption of
deadlocks, upon agreement of the jurisdiction or certification to the
parties. NLRC of labor disputes affecting
e. National interest cases. industries indispensable to the
f. Wage distortion issues arising from the national interest provides that before
application of any wage orders in or at any stage of the compulsory
organized establishments. arbitration process, the parties may
g. Unresolved grievances arising from the opt to submit their dispute to
interpretation and implementation of the voluntary arbitration (Art. 278, Labor

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Code, as amended). grievance machinery and if the grievance

- This means that even if the case has is unsettled in that level, it shall
already been assumed by the DOLE automatically be referred to the voluntary
Secretary or certified to the NLRC for arbitrators designated in advance by
compulsory arbitration, or even during parties to a CBA. Consequently, only
its pendency therewith, the parties disputes involving the union and the
thereto may still withdraw the case from company shall be referred to the
the SOLE or NLRC, as the case may be, grievance machinery or voluntary
and submit it to a Voluntary Arbitrator for arbitrators.”
voluntary arbitration purposes.
4. Jurisdiction over Wage Distortion Cases Remedies that may be granted by
- In organized establishments, the Voluntary Arbitrators (Art 279, Labor
employer and the union are required to Code)
negotiate to correct the wage distortion.
Any dispute arising from such wage 1. Additional Remedies on Illegal Dismissal
distortion should be resolved through the Cases
grievance procedure under the CBA and a. Actual reinstatement
if it remains unresolved, through b. Separation pay in lieu of
voluntary arbitration (Art 124, Labor reinstatement, in case reinstatement
Code, as amended). becomes impossible, non-feasible, or
- In unorganized establishments, impractical
where there are no CBAs or recognized c. Full backwages
or certified collective bargaining unions, d. Moral and exemplary damages; and
the jurisdiction is with the Labor Arbiter e. Attorney’s fees
(Art 124, Labor Code, as amended). 2. Monetary awards in Monetary Claims
Cases
Some Principles - Decision should specify the amount
granted and the formula used in the
- Cases cognizable by Voluntary Arbitrators in computation thereof.
their original jurisdiction but ERRONEOUSLY
filed with Labor Arbiters, DOLE Regional Decision of Voluntary Arbitrator is
Offices or NCMB should be disposed of by Appealable
referring them to the Voluntary Arbitrators or
panel of Voluntary Arbitrators mutually - The mode of appeal from the Voluntary
chosen by the parties. Arbitrator to the Court of Appeals is
- Cases cognizable by Voluntary Arbitrators but governed by Rule 43 of the Rules of Court
filed with regular courts should be dismissed. (Samahan ng Manggagawa sa Hyatt vs.
- The well-entrenched rule is that when a case Buenaventura, G.R. No. 164939, June 6,
does not involve the parties to a CBA 2011).
(referring to the employer and the bargaining - In the case of Coca-Coca Bottlers, Inc.
union), it is not subject to voluntary Sales Force Union vs. Coca-Cola Bottlers,
arbitration. While individual or group of Inc., the Court held that the period of
employees, without the participation of the appeal is ten (10) days, not fifteen (15)
union, are granted the right to bring days. The 10-day period to appeal under
grievances directly to the employer, they the Labor Code being a substantive right,
cannot submit the same grievance, if this period cannot be diminished,
unresolved by the employer, for voluntary increased, or modified through the Rules
arbitration without the union’s approval and of Court because the Rules of Court are
participation. It is the union which is the subordinate to the statute (Coca-Coca
party to the CBA, and not the individual or Bottlers, Inc. Sales Force Union vs. Coca-
group of employees (Tabigue vs. International Cola Bottlers, Inc., G.R. No. 155651, July
Copra Export Corporation, G.R. No. 183335,
December 23, 2009).
- Pursuant to Article 260 of the Labor Code,
the parties to a CBA shall name or designate
their respective representatives to the

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28, 2005)
Recruitment
FLOW OF VOLUNTARY ARBITRATION
(20 years for
economic
sabotage)

SSS 20 years SSS

from the
time the
delinquency
is known or
the
assessment
is made by
the SSS, or
from the
time the
benefit
accrues, as
the case may
be

Employee’s 3 years ECC

Compensation
L. PRESCRIPTION OF ACTIONS

General Rule: Criminal offenses penalized

Cause of Prescriptive Where to under the Labor Code and its implementing
Action Period initiate rules and regulations prescribe in three (3)
years from the date of commission of the
Money claims 3 years from Labor
violation or from discovery thereof. It may be
accrual of Arbiter
reckoned from the institution of judicial
cause of
investigation and punishment (People vs
action Duque, GR No. 100285, August 13, 1992).
Illegal 4 years from Labor
Exception: ULP prescribe in one (1) year
Dismissal accrual of Arbiter
form the date of commission; otherwise, they
cause of
shall be forever barred. However, the running
action Regional
of the one-year period is interrupted during
Director of
the pendency of the labor case (Art. 305,
DOLE
Labor Code).
(<P
5,000)
1. Money claims
- The prescriptive period of money
Unfair Labor 1 year from Labor
claims and benefits arising from
Practice the time the Arbiter
employer- employee relationship is
acts RTC
three (3) years, reckoned from the
complained (criminal)
time the cause of action accrued;
of were
otherwise, they shall forever be
committed
barred (Sec. 1, Rule II, Book VII,
Other 3 years Labor Rules to Implement the Labor Code).
Offenses in Arbiter - Money claims under Art. 306 of the
the Labor Labor Code, as amended, include
Code those arising from:
- Laws
Illegal 5 years RTC - Incremental proceeds from
tuition

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- increases - Interruption of prescriptive

- Overseas employment of OFWS. period of offenses - As far as
Exception ULP cases are concerned, the
- The prescriptive period would be counted running of the one (1) year
from the date of last promise to pay under prescriptive period is interrupted
the Doctrine of Promissory Estoppel. during the pendency of the labor
- Promissory Estoppel which may arise from proceeding.
the making of a promise even though without
consideration, if it was intended that the 4. Offenses under the Labor Code
promise should be relied upon. If in fact it - Three (3) years from the time of
was relied on, a refusal to enforce it would the commission thereof,
virtually sanction the perpetration of fraud or otherwise, it shall be forever
would result in other injustice. It barred (Art. 305, Labor Code, as
presupposes the existence of a promise on amended).
the part of one against whom estoppel is
claimed. The promise must be plain and 5. Illegal recruitment
unambiguous and sufficiently specific so that - Simple illegal recruitment
the court can understand the obligation cases. – The prescriptive period
assumed and enforce the promise according is five (5) years. (Sec. 12, R.A.
to its terms (Accessories Specialist, Inc. vs. No. 8042).
Alabanza, G.R. No. 168985, July 23, 2008). - Illegal recruitment cases
- In order to make out a claim of promissory involving economic sabotage.
estoppel, a party bears the burden of –
establishing the following elements: (1) a - The prescriptive period is twenty
promise was reasonably expected to induce (20) years. (Sec. 12, R.A. No.
action or forbearance; (2) such promise did, 8042.
in fact, induce such action or forbearance;
and (3) the party suffered detriment as a
result (Id.).

2. Illegal dismissal
- The prescriptive period of illegal
dismissal is four (4) years. The legal
basis is not Art. 306 of the Labor
Code, as amended, but Art. 114 of
the Civil Code (Callanta vs. Carnation
Philippines, G.R. No. 70615, February 29,
1986).

3. Unfair labor practice

- The prescriptive period of illegal
dismissal is four (4) years. The legal
basis is not Art. 306 of the Labor
Code, as amended, but Art. 114 of
the Civil Code (Callanta vs. Carnation
Philippines, G.R. No. 70615, February 29,
1986).

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JURISDICTION TABLE

LABOR ARBITER DOLE REGIONAL NLRC

DIRECTORS

1. ULP 1. Visitorial power. (Art. 128, ORIGINAL JURISDICTION

2. Termination disputes Labor Code, as amended)
3. Claims for wages, rates of 1. Injunction in ordinary labor
pay, hours of work and other 2. Simple Money Claims not disputes to enjoin or restrain
terms and conditions of exceeding Php 5,000. (Art. any actual or threatened
employment – if 129, Labor Code, as amended) commission of any or all
accompanied with a claim for prohibited or unlawful acts or
reinstatement 3. Violation of the constitution to require the performance of
4. Claims for actual, moral, & by–laws and rights & a particular act in any labor
exemplary and other forms conditions membership. (Sec dispute which, if not restrained
of damages arising from 1, Rule VIII, Book V, Rules to or performed forthwith, may
employer-employee (ER-EE) Implement the Labor Code). cause grave or irreparable
relationship damage to any party.
5. Cases arising from prohibited 4. Inter-union and intra-union 2. Injunctions in strikes or
activities during strikes, disputes and all disputes lockouts under Art. 279.
including questions involving arising from or affecting 3. Certified labor dispute
the legality of strikes and labor-management relations casing or likely to cause a strike
lockouts in all workplaces, except or lockout in an industry
6. All other claims arising from those arising from the indispensable to the national
ER-EE relationship involving implementation or interest, certified to it by the
an amount exceeding P5000 interpretation of CBAs. DOLE Secretary for compulsory
(Poquiz, Labor Relations and
regardless of whether arbitration.
Law on Dismissal, p. 96, 2018).
accompanied by a claim for
reinstatement except claims EXCLUSIVE APPELLATE
for ECC, SSS, Medicare, & JURISDICTION
maternity benefits 1. All cases decided by the LAs,
7. Wage distortion cases in including contempt cases
unorganized establishments 2. Cases decided by the DOLE
8. All monetary claims of OFWs Regional Directors or his duly
arising from EER or by virtue authorized hearing officers
of any law or contract involving recovery of wages,
involving Filipino workers for simple money claims and other
overseas deployment, benefits not exceeding Php
including claims for actual, 5,000 and not accompanied by
moral, exemplary and other a claim for reinstatement.
forms of damages (R.A.
8042)
9. Enforcement of compromise
agreements when there is
non-compliance by any of
the parties pursuant to Art.
233 of the Code (Sec. 1, Rule
V, 2005 NLRC Rules)

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NCMB BUREAU OF LABOR VOLUNTARY

RELATIONS ARBITRATORS

1. Conciliation 1. Inter-union and intra-union 1. Grievances arising from the

2. Mediation conflicts implementation or
3. Voluntary arbitration 2. All disputes, grievances or interpretation of CBAs
problems arising from or Note: Grievances must be
affecting labor-management processed through grievance
relations in all workplaces machinery; only unresolved
EXCEPT those arising from the grievances go to the VA.
implementation or interpretation 2. Arising from interpretation
of the CBA which shall be the or enforcement of company
subject of grievance procedure personnel policies
and/or voluntary arbitration 3. Wage distortion issues
3. Complaint involving arising from the application of
federations, national unions, any wage orders in organized
industry unions, its officers or establishments
member organizations 4. Arising from interpretation
4. Appellate jurisdiction over and implementation of the
inter/intra union disputes productivity incentive
involving company level unions, programs under R.A. 6971
originally decided by Regional 5. Any other labor disputes
Office. upon agreement by the
parties.

DOLE SECRETARY COURT OF APPEALS SUPREME COURT

Art. 128. Visitorial and VIA RULE 65 Appeal from CA to SC should

Enforcement Power. The only mode by which a labor be under Rule 45 (Petition for
Power of the Sec. of Labor case decided by any of the Review on Certiorari) and not
or his duly authorized following labor Rule 65 (Special Civil Action for
representative, including authorities/tribunals may reach Certiorari). (Sea Power Shipping
labor regulation officers to: the Court of Appeals is through a Enterprises, Inc. vs. CA, G.R. No.
1. Have access to Rule 65 petition for certiorari. 138270, June 28, 2001)
employer’s records and 1. DOLE Secretary;
premises at any time of the 2. Commission (NLRC); and
day or night whenever work 3. Director of the Bureau of
is being undertaken therein Labor Relations (BLR) in cases
2. Right to copy records decided by him in his appellate
3. To question any jurisdiction (as distinguished
employee from those he decides in his
4. Investigate any fact, original jurisdiction which are
condition, or matter which appealable to the DOLE
may be necessary to Secretary).
determine violations or
which may be necessary to EXCEPTION: RULE 43
aid in enforcement of the Decisions, orders or awards
Labor Code or any labor law issued by the Voluntary
or order Arbitrator or panel of Voluntary
5. Issue compliance orders Arbitrators
to give effect to labor
legislation based on the
findings of employment and
enforcement officers or
industrial safety engineers

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made in the course of

inspection
6. Issue writs of execution
to the appropriate authority
for the enforcement of their
orders, EXCEPT in cases
where the employer
contests the findings of the
labor employment and
enforcement officer and
raises issues supported by
documentary proofs which
were not considered in the
course of inspection – in the
latter case, the case will
have to be forwarded to a
Labor Arbiter.

HAIL TO THE CHIEFS!!!

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