LABOR LAW

P U R P L E N O T E S
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 PURPLE NOTES 2024 – LABOR LAW

I. FUNDAMENTAL PRINCIPLES AND CONCEPTS --------------------------------- 1

A. Sources of Labor Laws ---------------------------------------------------------- 1
B. State Policies --------------------------------------------------------------------- 7
II. RECRUITMENT AND PLACEMENT OF WORKERS ----------------------------- 13
A. Recruitment and Placement of Local and Migrant Workers -------------- 13
B. Employment of Non-Resident Aliens ----------------------------------------- 30
III. EMPLOYER-EMPLOYEE RELATIONSHIP --------------------------------------- 35
A. Employer-Employee Relationship ----------------------------------------------35
B. Legitimate Contracting vs. Labor-Only Contracting ------------------------ 45
IV. LABOR STANDARDS -------------------------------------------------------------------49
A. Conditions of Employment ----------------------------------------------------- 49
B. Wages ---------------------------------------------------------------------------- 64
C. Leaves ---------------------------------------------------------------------------- 74
D. Special Groups of Employees -------------------------------------------------- 82
E. Sexual Harassment in the Work Environment ------------------------------- 98
F. Discriminatory Practices ------------------------------------------------------- 101
V. SOCIAL WELFARE BENEFITS ------------------------------------------------------ 108
A. SSS Law -------------------------------------------------------------------------- 108
B. GSIS Law ------------------------------------------------------------------------- 116
C. Limited Portability Law --------------------------------------------------------- 123
D. Disability and Death Benefits; Labor Code and Civil Code ----------------- 124
E. Claims of Seafarers -------------------------------------------------------------- 129
VI. MANAGEMENT PREROGATIVE ----------------------------------------------------- 142
A. Occupational Qualifications ---------------------------------------------------- 143
B. Productivity Standards ---------------------------------------------------------- 145
C. Change of Working Hours ------------------------------------------------------ 146
D. Transfer of Employees ---------------------------------------------------------- 147
E. Discipline of Employees --------------------------------------------------------- 150
F. Grant of Bonuses and Other Benefits ----------------------------------------- 151
G. Clearance Process --------------------------------------------------------------- 152
H. Post-Employment Restrictions ------------------------------------------------- 153
VII. POST-EMPLOYMENT ------------------------------------------------------------------ 154
A. Termination of Employment by Employer ----------------------------------- 154
B. Preventive Suspension --------------------------------------------------------- 166
C. Reliefs from Illegal Dismissal-------------------------------------------------- 167
D. Retirement ----------------------------------------------------------------------- 174
VIII. LABOR RELATIONS ------------------------------------------------------------------- 177
A. Right to Self-Organization ----------------------------------------------------- 177
B. Rights of Legitimate Labor Organizations ----------------------------------- 192
C. Unfair Labor Practices ---------------------------------------------------------- 213
D. Peaceful Concerted Activities -------------------------------------------------- 221
IX. JURISDICTION AND REMEDIES ---------------------------------------------------232
A. Labor Arbiter --------------------------------------------------------------------- 232
B. National Labor Relations Commission---------------------------------------- 236
C. Court of Appeals; Requisites -------------------------------------------------- 241
D. Supreme Court; Requisites ---------------------------------------------------- 242
E. Bureau of Labor Relations; Jurisdiction and Procedure ------------------- 243
F. National Conciliation and Mediation Board --------------------------------- 245
G. DOLE Regional Directors; Jurisdiction --------------------------------------- 247
H. DOLE Secretary ----------------------------------------------------------------- 250
I. Voluntary Arbitrator; Jurisdiction and Procedure--------------------------- 253

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J. Prescription of Actions ------------------------------------------------------- 256

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fall in the area of labor relations.

I. FUNDAMENTAL PRINCIPLES (Ibid)
AND CONCEPTS
A. Sources of Labor Laws
Labor Law includes all the rules of law 1. 1987 Constitution
governing the conditions which persons may
work under the control of other persons Basic Rights of Workers as
called employers. Poquiz, Labor Standards Guaranteed by the Constitution
and Social Legislation with Notes and Labor Standards. Labor Relations;
Comments, 2018, р.1). Rights to [TWSH] Right to [COPE]
• a branch of law that governs and a. Security of a. Conduct
regulates the relationship between Tenure. bargaining or
employers and employees. (Ungos & b. Receive a Living negotiation with
Ungos, Labor Law 2 - The Law on Wage. management
Labor Relations, 2020, p. 2) c. A just Share in b. Organize
the fruits of themselves.
Classifications of Labor Law production; and c. Participate in
d. Work under policy and
Labor Standards prescribes the terms and Humane decision-making
conditions of employment as affecting wages conditions (Sec. processes; and
or monetary benefits, hours of work, cost of 3, Art. XIII, 1987 d. Engage in
living allowances, and occupational health, Constitution). peaceful
safety and welfare of the workers. concerted
• Sets out the minimum terms, activities
conditions and benefits of including strike
employment that employers must (Ibid)
provide or comply with and to which
employees are entitled as a matter of Our laws on labor, foremost of which is the
legal right. The laws on wages and Labor Code, are pieces of social legislation.
work hours, safety and health of They have been adopted pursuant to the
employees, employment benefits constitutional recognition of "labor as a
such as paid leaves and medical primary social economic force" and to the
services for work-connected injuries - constitutional mandates for the state to
these are examples of labor "protect the rights of workers and promote
standards laws. (Azucena, Everyone's their welfare" and for Congress to "give
Labor Code, 2021, p.11) highest priority to the enactment of measures
that protect and enhance the right of all the
Labor Relations is used to denote all people to human dignity, [and] reduce social,
matters arising out of employer-employee economic, and political inequalities. (Wahing
relationship involving the concerned action v. Spouses Daguio, G.R. No. 219755, April
on the part of the workers which is usually 18, 2022)
related with right to self-organization,
collective bargaining, and negotiation Article II - Declaration of Principles
process. and State Policies
• Define the status, rights and duties,
as well as the institutional a. The State shall promote a just and
mechanisms that govern the dynamic social order that will ensure
individual and collective interactions the prosperity and independence of
between employers, employees and the nation, and free the people from
their representatives. Unionization, poverty through policies that provide
negotiation, and dispute settlements adequate social service, promote full
employment, a rising standard of

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living, and an improved quality of life defend himself. (Jeffrey Nacague v.

for all (Sec. 9); Sulpicio Lines, Inc., G.R. No. 172589,
b. The State shall promote social justice August 8, 2010)
in all phases of national development
(Sec.10); Procedural: an opportunity to be heard and
c. The State recognizes the role of to defend oneself must be observed before
women in nation-building, and shall an employee may be dismissed. (Metro Eye
ensure the fundamental equality Security v. Salsona, G.R. No. 167367,
before the law of women and men September 28, 2007)
(Sec. 14);
d. The State affirms labor as a primary The right of a person to his labor is deemed
social to be his property within the mantle of
economic force. It shall protect the constitutional protection. That is his means of
rights the workers and promote their livelihood. He cannot be deprived of his labor
welfare (Sec. 18); and or work without due process of law. (Philips
e. The State recognizes the Semiconductors (Phils.) Inc. v. Fadriquela,
indispensable role of the private G.R. No. 141717, April 14, 2004)
sector, encourages private enterprise
and incentives to needed investments 2. No law shall be passed abridging the
(Sec. 20). freedom of speech, of expression, or of
the press, or the right of the people to
Note: Article II is merely a statement of peaceably assemble and petition the
principles and state policies. Its provisions government for redress of grievances.
are not self-executing. They do not embody (Sec. 4)
judicially enforceable constitutional rights but
guidelines for legislation. These broad Picketing peacefully carried out is not illegal
principles need legislative enactments to even in the absence of employer-employee
implement them. The disregard of these relationship, for peaceful picketing is a part
provisions cannot give rise to a cause of of the freedom of speech guaranteed by the
action in the courts. Consequently, no case Constitution. (De Leon, et al. vs. National
can be filed based on these principles. There Labor Union, et al., G.R. No. L-7586, January
must be enabling laws to implement them. 30, 1957)
(Kilosbayan, Inc. vs. Morato, G.R. No.
118910, November 16, 1995). 3. The right of the people including those
employed in the public and private
Article III - Bill of Rights sectors, to form unions, association, or
societies for purposes not contrary to
1. No person shall be deprived of life, law shall not be abridged. (Sec. 8)
liberty or property without due process
of law, nor shall any person be denied The right to form, join, or assist a union is
the equal protection of the laws (Sec. 1); specifically protected by Art. XIII, Section 3
of the Constitution and such right, according
Two-fold requirement: Under the Labor to Art. III, Sec. 8 of the Constitution and Art.
Code, the requirements for the lawful 246 of the Labor Code, shall not be abridged.
dismissal of an employee by his employer are (S.S.
two-fold: the substantive and the Ventures International, Inc. vs. S.S. Ventures
procedural. Labor Union, G.R. No. 161690, July 23, 2008)

Substantive: two requisites must concur: 4. No law impairing the obligation of

1. the dismissal must be for a just or contracts shall be passed. (Sec. 10)
authorized cause; and
2. the employee must be afforded an The constitutional guaranty of non-
opportunity to be heard and to impairment of contract is limited by the

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exercise of the police power of the State in

the interest of public health, safety, morals, Article XII - National Economy and
and general welfare. (Philamlife Insurance Patrimony
Co. vs. The Auditor General, G.R. No. L-
19225, January 18, 1968) The goals of the national economy are a more
equitable distribution of opportunities,
5. All persons shall have the right to a income, and wealth; a sustained increase in
speedy disposition of their cases before the amount of goods and services produced
all judicial, quasi-judicial, or by the nation for the benefit of the people;
administrative bodies (Sec.16); and and an expanding productivity as the key to
raising the quality of life for all, especially the
The right to a speedy disposition of cases is underprivileged. (Sec. 9)
guaranteed by the Constitution. The concept
of speedy disposition is flexible. The fact that The State shall promote industrialization and
it took the CSC six years to resolve the appeal full employment based on sound agricultural
of petitioner does not, by itself, automatically development and agrarian reform, through
prove that he was denied his right to the industries that make full and efficient use of
speedy disposition of his case. After all, a human and natural resources, and which are
mere mathematical reckoning of the time competitive in both domestic and foreign
involved is not sufficient, as the facts and markets. However, the State shall protect
circumstances peculiar to the case must also Filipino enterprises against unfair foreign
be considered. (Barcelona v. Lim, G.R. No. competition and trade practices.
189171, June 3, 2014)
In the pursuit of these goals, all sectors of
The right to a speedy trial, as well as other the economy and all regions of the country
rights conferred by the Constitution or shall be given optimum opportunity to
statute, may be waived except when develop. Private enterprises, including
otherwise expressly provided by law. One's corporations, cooperatives, and similar
right to the speedy disposition of his case collective organizations, shall be encouraged
must therefore be asserted. (Ibid) to broaden the base of their ownership.

6. No involuntary servitude in any form The use of property bears a social function,
shall exist except as punishment for a and all economic agents shall contribute to
crime whereof the party shall have been the common good. Individuals and private
duly convicted (Sec. 18[2]). groups, including corporations, cooperatives,
and similar collective organizations, shall
The notion of involuntary servitude connotes have the right to own, establish, and operate
the presence of force, threats, intimidation or economic enterprises, subject to the duty of
other similar means of coercion and the State to promote distributive justice and
compulsion. (Spouses Imbong v. Ochoa, Jr., to intervene when the common good so
G.R. Nos. 204819, April 8, 2014) demands. (Sec. 6)

An individual employee can, at any time, in a The State shall promote the preferential use
consensual and in personam employment of Filipino labor, domestic materials and
contract, walk away from it, subject only to locally produced goods, and adopt measures
the adjustment of the obligations he has that help make them competitive. (Sec. 12)
incurred under the contractual relationship
that binds him; a contrary rule would violate Article XIII - Social Justice and Human
the involuntary service provision of the Rights
Constitution. (Bank of the Philippine Islands
vs. BPI Employees Union-Davao Chapter- The Congress shall give highest priority to the
Federation of Unions in BPI Unibank, G.R. No. enactment of measures that protect and
164301, August 10, 2010) enhance the right of all the people to human

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dignity, reduce social, economic, and political

inequalities, and remove cultural inequities The measures embedded in our legal system
by equitably diffusing wealth and political which accord specific protection to labor
power for the common good. stems from the reality that normally, the
laborer stands on unequal footing as opposed
To this end, the State shall regulate the to an employer. Indeed, the labor force is a
acquisition, ownership, use, and disposition special class that is constitutionally protected
of property and its increments. (Sec. 1) because of the inequality between capital and
labor. (Reyes vs. Rural Bank of San Rafael,
The promotion of social justice shall include G.R. No. 230597, March 23, 2022, Per J.
the commitment to create economic Hernando)
opportunities based on freedom of initiative
and self-reliance (Sec. 2); The State shall establish a special agency for
disabled persons for their rehabilitation, self-
Article XIII - Labor development and self-reliance, and their
integration into the mainstream of society
The State shall afford full protection to labor, (Sec. 13); and
local and overseas, organized and
unorganized, and promote full employment The intent is to balance the scale of justice;
and equality of employment opportunities for to put the two parties on relatively equal
all. positions. There may be cases where the
circumstance warrants favoring labor over
It shall guarantee the rights of all workers to the interest of management but never
self-organization, collective bargaining and injustice to the employer (Abad,
negotiations, and peaceful concerted Compendium on Labor Law, 2015, p.8)
activities, including the right to strike in
accordance with law. They shall be entitled to 2. Civil Code
security of tenure, humane conditions of
work, and a living wage. They shall also a. The relations between capital and labor
participate in policy and decision-making are not merely contractual. They are so
processes affecting their rights and benefits impressed with public interest that labor
as may be provided by law. contracts must yield to the common
good.
The State shall promote the principle of
shared responsibility between workers and Therefore, such contracts are subject to
employers and the preferential use of the special laws on labor unions,
voluntary modes in settling disputes, collective bargaining, strikes and
including conciliation, and shall enforce their lockouts, closed shop, wages, working
mutual compliance therewith to foster conditions, hours of labor and similar
industrial peace. subjects. (Art. 1700, Civil Code)

The State shall regulate the relations The supremacy of the law over the
between workers and employers, recognizing nomenclature of the contract and its pacts
the right of labor to its just share in the fruits and conditions is to bring life to the policy
of production and the right of enterprises to enshrined in the Constitution to afford full
reasonable returns on investments, and to protection to labor. Thus, labor contracts are
expansion and growth. (Sec. 3) placed on a higher plane than ordinary
contracts since these are imbued with public
NOTE: Sec. 3, Article XIII of the 1987 interest and, therefore, subject to the police
Constitution is also known as the power of the State. (Dynamig Multi-
PROTECTION-TO-LABOR CLAUSE. Resources, Inc. V. Genon, G.R. No. 239349,
June 28, 2021)
Constitutional Basis for Right to Strike

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However, when parties enter into contracts biased that it does not find a middle ground
voluntarily, without force, duress or acts to give each their due (Milan vs. NLRC, G.R.
tending to vitiate the workers' consent, there No. 202961, February 4, 2015).
is no reason not to honor and give effect to
the terms and conditions stipulated therein c. In case of doubt, all labor legislation and
(Leyte Geothermal Power Progressive all labor contracts shall be construed in
Employees Union - ALU-TUCP vs. Philippine favor of the safety and decent living for
National Oil Company Energy Development the laborer (Art. 1702)
Corporation, G.R. No. 170351, March 30,
2011). This Civil Code provision pertains to
construction of labor contracts and labor
The contracts referred to in Article 1700 may legislation, in contrast to Article 4 of the
either be (1) employment contract, or (2) Labor Code which mandates construction of
Collective Bargaining Agreement (CBA). Labor Laws and Social Legislation (Dealco
Farms vs. NLRC, GR No. 153192, January 30,
CBA, as a labor contract within the 2009).
contemplation of Article 1700 of the Civil
Code, is not merely contractual in nature but d. No contract which practically amounts to
impressed with public interest, thus, it must involuntary servitude, under any guise
yield to the common good. (Davao whatsoever, shall be valid. (Art. 1703)
Integrated Port Stevedoring Services vs.
Abarquez, G.R. No. 102132, March 19, 1993) 2. Labor Code

In the interpretation of contracts, obscure Declaration of basic policy. - The State shall
words and provisions shall not favor the party afford protection to labor, promote full
that caused the obscurity. Consequently, the employment, ensure equal work
terms of the contract of employment should opportunities regardless of sex, race or creed
be construed strictly against the petitioner, and regulate the relations between workers
which prepared it. Indeed, a contract of and employers. The State shall assure the
employment is impressed with public rights of workers to self-organization,
interest. For this reason, provisions of collective bargaining, security of tenure, and
applicable statutes are deemed written into just and humane conditions of work. (Art. 3)
the contract. Hence, the "parties are not at
liberty to insulate themselves and their Construction in favor of labor. - All doubts in
relationships from the impact of labor laws the implementation and interpretation of the
and regulations by simply contracting with provisions of this Code, including its
each other." Moreover, in case of doubt, the implementing rules and regulations, shall be
terms of a contract should be construed in resolved in favor of labor. (Art. 4)
favor of labor. (Innodata Philippines Inc. vs.
Quejada-Lopez, G.R. No, 162839, October Rules and regulations. - The Department of
12, 2006) Labor and other government agencies
charged with the administration and
b. Neither capital nor labor shall act enforcement of this Code or any of its parts
oppressively against the other, or impair shall promulgate the necessary implementing
the interest or convenience of the public rules and regulations. Such rules and
(Art. 1701, Civil Code) regulations shall become effective fifteen
(15) days after announcement of their
The preferential treatment given by our law adoption in newspapers of general
to labor is not a license for abuse; it is not a circulation.
signal to commit acts of unfairness that will
unreasonably infringe on the property rights ART. 6. Applicability. - All rights and benefits
of the company. Both labor and employer granted to workers under this Code shall,
have social utility, and the law is not so except as may otherwise be provided herein,

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apply alike to all workers, whether including conciliation, and shall enforce their
agricultural or non-agricultural. mutual compliance therewith to foster
industrial peace. (Section 3, Article XIII, 1987
Labor Code – defined as the “charter of Constitution)
human rights and a bill of obligations” for
every working man (Poquiz, Labor Standards The State shall regulate the relations
and Social Legislation with Notes and between workers and employers, recognizing
Comments, 2018, p.3). The Labor Code is a the right of labor to its just share in the fruits
social legislation primarily intended to help of production and the right of enterprises to
the employees in conformity with social reasonable returns on investments, and to
justice which is guaranteed in the expansion and growth. (Ibid)
Constitution (Cristobal vs. ECC, et al., G.R.
No. L-49280, April 30, 1980). Applicability of Indeed, industrial peace cannot be achieved
the Labor Code General rule: All rights and if the employees are denied their just
benefits granted to workers under the Labor participation in the discussion of matters
Code shall apply alike to all workers whether affecting their rights. Thus, even before
agricultural or non-agricultural (Art. 6, Labor Article 211 of the Labor Code (P.D. 442) was
Code) Exceptions: 1. Government amended by Republic Act No. 6715, it was
employees; 2. Employees of government- already declared a policy of the State: “(d) To
owned and controlled corporations with promote the enlightenment of workers
original charter or created by special laws; concerning their rights and obligations . . . as
(Azucena, Everyone’s Labor Code, 2021, employees.” This was, of course, amplified by
p.19) Rights of family drivers are governed Republic Act No. 6715 when it decreed the
by the Civil Code and not by the Labor Code. “participation of workers in decision and
(Atienza v. Saluta G.R. No. 233413, June 17, policy making processes affecting their
2019) Note: The Labor Code may apply even rights, duties and welfare.” (PAL vs. NLRC
if the parties are not employers or employees and PALEA, G.R. No. 85985, August 13,
of each other. It is not correct to say that 1993)
employment relationship is a precondition to
the applicability of the Code. (Ibid) On Aliens 3. Department Of Labor and
Employed in the Philippines Aliens are Employment (DOLE) Issuances
required to secure work permits before their
employment to claim employee’s benefits THE DOLE: ITS RESPONSIBILITY
under the Philippine labor laws. (WPP
Marketing Communications, Inc. et. al. vs. The Administrative Code mandates DOLE to
Jocelyn M. Galera et al / Jocelyn M. Galera vs. assume “primary responsibility” for:
WPP, G.R. No. 169207/G.R. No. 169239, a) The promotion of gainful employment
March 25, 2010) No alien seeking opportunities and the optimization of the
employment, whether as a resident or non- development and utilization of the country’s
resident, may enter the Philippines without manpower resources;
first securing an employment permit from the b) The advancement of worker’s welfare by
Ministry. If an alien enters the country under providing for just and humane working
a non-working visa and wishes to be conditions and terms of employment;
employed thereafter, he may only be allowed c) The maintenance of industrial peace by
to be employed upon presentation of a duly promoting harmonious, equitable and stable
approved employment permit. (Section 4, employment relations that assure protection
Rule XIV, Book 1 of the Implementing Rules for the rights of all concerned parties.
and Regulations) Principle of Co-
determination or Shared Responsibility The
State shall promote the principle of shared 5. Jurisprudence
responsibility between workers and
employers and the preferential use of The State is bound under the Constitution to
voluntary modes in settling disputes, afford full protection to labor and when

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conflicting interests of labor and capital are applicants (Poquiz, Labor Standards and
to be influence of the latter should be Social Legislation, 2018, P. 15; Dankert, An
counterbalanced with the sympathy and Introduction to Labor, p. 68). It does not
compassion the law accords the less mean that everybody is working and the
privileged workingman. This is to be given society does not experience involuntary
the opportunity and the right to assert and unemployment (Ibid.)
defend his cause, not as a subordinate, but
as part of management with which he can Reason for Affording Protection to
negotiate on even plane.. Thus, labor is not Labor
a mere employee of capital but its active and
equal partner. (Fuentes, et. al. v. NLRC, et Due to labor's economic dependence upon
al., 266 SCRA 24 [1997]) the capital, it is considered the weaker factor
of production and therefore needs protection
While the Constitution is committed to the from the State. (Poquiz, Labor Standards and
policy of social justice and the protection of Social Legislation with Notes and Comments,
the working class, it should not be supposed 2018, p.14)
that every labor dispute will be automatically
decided in favor of labor. (Best Wear Extent of Protection
Garments v. De Lemos, G.R. No. 191281, 05
December 2012) Protection extends to all of labor - local and
overseas, organized and unorganized,
B. STATE POLICIES whether in private or public sectors. (Lopez
vs. MWSS, G.R. No. 154472, June 30, 2005)
BASIC POLICY ON LABOR
Limitations on Protection to Labor
Declaration of Basic Policy
In protecting the rights of the workers, the
Under Section 3, Article XIII of the 1987 law does not authorize the oppression or self-
Constitution and the Labor Code, the state is destruction of the employer. The
duty-bound to: [APERA] constitutional commitment to the policy of
a. Afford full protection to labor; social justice cannot be understood to mean
b. Promote full employment; that every labor dispute shall automatically
c. Ensure equal work opportunities be decided in favor of labor. The
regardless of sex, race or creed; constitutional and legal protection equally
d. Regulate the relations between recognize the employer's right and
workers and employers; and prerogative to manage its operation
e. Assure the rights of workers to [CJSS] according to reasonable standards and norms
i. Collective bargaining; of fair play. (Imasen Philippine Manufacturing
ii. Just and humane conditions of work; Corporation vs. Alcon, G.R. No. 194884,
iii. Self-organization; and October 22, 2014)
iv. Security of Tenure (Chan, Bar
Reviewer on Labor, 2019, pp. 1-2) Examples of non-application of
protection to labor are:
NOTE: Full employment means that "those
who want to work at the prevailing rates of If an employee is found guilty of violating
pay are able to find work without undue rules designed for the safety of the laborers
difficulty" (Poquiz, Labor Standards and themselves, his dismissal should be upheld.
Social Legislation, In this manner, labor is protected and at the
2018, p. 15; Lester, Economics of same time capital is given its due. (Northern
Employment, p17) Motors vs. National Labor Union, G.R. No. L-
10022, January 31, 1958)
It covers a situation under which there are
more job openings than there are job

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Protection to labor cannot be extended to an under this Code (Art. 218.B, Labor Code, as
employee found guilty of malfeasance or amended)
misfeasance because the law, in protecting
the rights of labor, authorizes neither Constitutional Basis
oppression nor self-destruction of the
employer. (Manila Trading and Supply Co. vs. 1. Security of Tenure
Zulueta, G.R. No. L-46853, January 30, 1940)
The State shall guarantee the rights of all
Where both parties have violated the law, workers to self-organization, collective
neither party is entitled to protection. bargaining and negotiations, and peaceful
(PAMBUSCO Employees Union vs. CIR, G.R. concerted activities, including the right to
No.46/27, September 27, 1939) strike in accordance with law. They shall be
entitled to security of tenure, humane
Declaration of Policy on Labor Relations conditions of work, and a living wage. They
shall also participate in policy and decision-
It is the policy of the State: making processes affecting their rights and
a. To promote and emphasize the primacy benefits as may be provided by law (Sec.
of free collective bargaining and 3(2), Art. XIII, 1987 Constitution)
negotiations, including voluntary
arbitration, mediation and conciliation, Security of tenure is a right of paramount
as modes of settling labor or industrial value.
disputes; Our laws and jurisprudence guarantee to
b. To promote free trade unionism as an every employee security of tenure. That
instrument for the enhancement of guarantee is an act of social justice. The right
democracy and the promotion of social to security of tenure guarantees the right of
justice and development; employees to continue in their employment
c. To foster the free and voluntary absent a just or authorized cause for
organization of a strong and united labor termination. In contrast, the prerogative of
movement; management to dismiss a worker, as an
d. To promote the enlightenment of aspect of property right, has never been
workers concerning their rights and endowed with a constitutional status. (Inter-
obligations as union members and Asia Development Bank v. Pereña, G.R. No.
employees; 213627, April 5, 2022)
e. To provide an adequate administrative
machinery for the expeditious In cases of regular employment, the
settlement of labor or industrial employer shall not terminate the services of
disputes; an employee except for a just cause or when
f. To ensure a stable but dynamic and just authorized by this Title. An employee who is
industrial peace; and unjustly dismissed from work shall be entitled
g. To ensure the participation of workers in to reinstatement without loss of seniority
decision and policy-making processes rights and other privileges and to his full
affecting their rights, duties and welfare backwages, inclusive of allowances, and to
(Art. 218.A, Labor Code, as amended). his other benefits or their monetary
equivalent computed from the time his
To encourage a truly democratic method of compensation was withheld from him up to
regulating the relations between the the time of his actual reinstatement. (Art.
employers and employees by means of 294, Labor Code)
agreements freely entered into through
collective bargaining, no court or Our labor laws and the Constitution afford
administrative agency or official shall have security of tenure to employees that one may
the power to set or fix wages, rates of pay, have a reasonable expectation that they are
hours of work or other terms and conditions secured in their work and that management
of employment, except as otherwise provided prerogative, although unilaterally wielded,

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will not harm them. Employees are The aim and the reason and therefore the
guaranteed that they can only be terminated justification of labor laws is social justice.
from service for a just aan valid cause and While social justice is the reason for existence
when supported by substantial evidence after of labor laws, their BASIS or FOUNDATION is
due process. (Telus International Philippines the police power of the State (Everyone's
v. De Guzman, G.R. No.202676, December Labor Code, Azucena, 2021, p.3)
04, 2019)
When conflicting interests of labor and capital
While the right of workers to security of are to be weighed on the scales of social
tenure is guaranteed by the Constitution, its justice, the law should accord more sympathy
exercise may be reasonably regulated and compassion to the less privileged
pursuant to the police power of the State to workingman.
safeguard health, morals, peace, education, This is only fair if the worker is to be given
order, safety, and the general welfare of the the opportunity and the right to assert and
people. Consequently, persons who desire to defend his cause, not as a subordinate, but
engage in the learned professions requiring as part of management with which he can
scientific or technical knowledge may be negotiate on even plane, thus, labor is not a
required to take an examination as a mere employee of capital but it's active as
prerequisite to engaging in their chosen equal partner (Fuentes vs. NLRC, G.R. No.
careers. The most concrete example of this 110017, January 2, 1997).
would be in the field of medicine, the practice
of which in all its branches has been closely Social justice connotes equality under the law
regulated by the State. (St. Luke's Medical and the attainment of a decent quality of life
Center Employee's Association-AFW v. NLRC, by the people through humane productive
G.R. No. 162053, March 7, 2007) work.
Social justice is both a legal mandate and a
2. Social Justice socio-economic goal. (Azucena, Everyone's
Labor Code, 2021, p.3)
Social Justice is neither communism, nor
despotism, nor atomism, nor anarchy, but It should be borne in mind that social justice
the humanization of laws and the ceases to be an effective instrument for the
equalization of social and economic forces by "equalization of the social and economic
the State so that justice in its rational and forces" by the State when it is used to shield
objectively secular conception may at least wrongdoing. (Jamer vs. NLRC, G.R. No.
be approximated. 112630, September 5, 1997)

Social justice means the promotion of the 3. Equal Work Opportunities

welfare of all the people, the adoption by the
Government of measures calculated to insure The State shall afford protection to labor,
economic stability of all the competent promote full employment, ensure equal work
elements of society, through the opportunities regardless of sex, race or creed
maintenance of a proper economic and social and regulate the relation between workers
equilibrium in the interrelations of the and employers. The State shall assure the
members of the community, constitutionally, rights of workers to self-organization,
through the adoption of measures legally collective bargaining, security of tenure, and
justifiable, or extra-constitutionally, through just and humane conditions of work. (Art. 3,
the exercise of powers underlying the Labor Code)
existence of all governments on the time-
honored principle of salus populi est suprema 4. Right to Self-Organization and
lex. (Calalang vs. Willams, G.R. No. 47800, Collective Bargaining
December 2, 1940)
It is the right of workers and employees to
form, join or assist unions, organizations for

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purposes of collective bargaining and by law. Having accepted the employment

negotiation and for mutual aid and freely and being chargeable with knowledge
protection. of the fact that he has no right to resort to
strike to enforce his demands against his
It also refers to the right to engage in employer, his only recourse is either to
peaceful concerted activities or to participate respect and comply with that condition or
in policy and decision-making processes resign. (Confederation of Unions in
affecting their rights and benefits. Government Corporations and Offices vs. The
Commissioner of Civil Service, et. al, G.R. No.
The concept of the government employees' L-22723, April 30, 1970)
right of self-organization differs significantly
from that of employees in the private sector. The right to form a union or association or to
self-organization comprehends two notions,
The latter's right of self-organization, i.e., "to to wit:
form, join or assist labor organizations for a. the liberty or freedom, that is, the
purposes of collective bargaining," admittedly absence of restraint which guarantees
includes the right to deal and negotiate with that the employee may act for himself
their respective employers in order to fix the without being prevented by law; and
terms and conditions of employment and b. the power, by virtue of which an
also, to engage in concerted activities for the employee may, as he pleases, join or
attainment of their objectives, such as refrain from joining an association.
strikes, picketing, boycotts. (Samahan ng Manggagawa sa Hanjin
Shipyard vs. Bureau of Labor Relation,
But the right of government employees to G.R. No. 211145, October 14, 2015)
"form, join or assist employees organizations
of their own choosing" under Executive Order Limitations to the Rights to Self-
No.180 is not regarded as existing or Organization
available for "purposes of collective
bargaining," but simply "for the furtherance The right to self-organization, however, is
and protection of their interests. subject to certain limitations as provided by
(Confederation for Unity, Recognition and law. For instance, the Labor Code specifically
Advancement of Government Employees v. disallows managerial employees from joining,
Abad, G.R. No. 200418, November 10, 2020) assisting or forming any labor union.

The right of the government employees to Meanwhile, supervisory employees, while

deal and negotiate with their respective eligible for membership in labor
employers is not quite as extensive as that of organizations, are proscribed from joining the
private employees. Excluded from collective bargaining unit of the rank and file
negotiation are the employees.
"terms and conditions of employment...that
are fixed by law." The right to engage in Even government employees have the right
concerted activities, including the right to to self-organization. It is not, however,
strike, must be exercised in accordance with regarded as existing or available for purposes
law i.e. are subject both to Civil Service Law of collective bargaining, but simply for the
and rules and any legislation that may be furtherance and protection of their interests.
enacted by the Congress. (Ibid) (Ibid)

The right to form and join associations and 5. Construction in Favor of Labor
unions is not absolute or unlimited. Thus, if a
person accepts employment that falls under
In case of Doubt in the…
the civil service law and his employer
performs governmental functions, he may
not resort to strike, because that is prohibited

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The rule remains that where the law speaks

Labor Code and GR: Interpretation
in clear and categorical language, there is no
Implementing in favor of labor
room for interpretation; there is only room for
Rules and
application (Leoncio vs. MST Marine Services,
Regulations
Inc., G.R. No. 230357, December 6, 2017).
(IRR)

Labor legislation GR: Interpretation Those who have less in life should have
and all labor in favor of the more in law.
contracts safety and decent
living for the When conflicting interests of labor and capital
laborer are weighed on the scales of social justice,
the heavier influence of the latter must be
counterbalanced by the sympathy and
All doubts in the implementation and compassion the law must accord the
interpretation of the provisions of this Code, underprivileged worker. This is in line with
including its implementing rules and the express mandate of the Labor Code and
regulations, shall be resolved in favor of labor the principle that those with less in life should
(Art. 4, Labor Code) have more in law. (Eastern Shipping Lines vs.
POEA, G.R. No. L-76633, October 18, 1988)
In case of doubt, all labor legislation and all
labor contracts shall be construed in favor of A contrary ruling would be a dilution and
the safety and decent living for the laborer emasculation of the protection to labor clause
(Art. of the Constitution. (MD Transit vs. Estrella,
1702, New Civil Code). G.R. No. L-52188, March 30, 1982)

In case of doubt in the interpretation or The Rule Does Not Deprive Employers
application of laws, it is presumed that the of Fair Treatment
lawmaking body intended right and justice to
prevail (Art. 10, New Civil Code) The rule of interpretation and construction in
favor of labor does not mean that capital
Article 4 of the Labor Code applies only when should, at all times, be at the losing end of a
there is doubt. This principle has been controversy. The law does not say so. For
extended by jurisprudence to cover doubts in while the Constitution and the law tend to
the evidence presented by the employer and favor the working man, protection to the
the employee. (Peñaflor vs. Outdoor Clothing employer is also assured. Protection of the
Mfg. Corp., G.R. No. 177114, April 13, 2010) rights of the laborer authorizes neither the
oppression nor self-destruction of the
When the evidence of the employer and the employer.
employee are in equipoise, doubts are
resolved in favor of labor. This is in line with Management also has its own rights which as
the policy of the State to afford greater such are entitled to respect and enforcement
protection to labor. (Hubilla vs. HSY in the interest of simple fair play. Out of its
Marketing Ltd., Co., G.R. No. 207354, concern for those with less privilege in life,
January 10, 2018) the Court has inclined more often than not
towards the workers and upheld his cause
It bears stressing that the policy of liberal with his conflicts with the employer. Such
approach only applies when there is doubt on favoritism, however, has not blinded the
the evidence, but not when evidence is Court to rule that justice is, in every case, for
lacking. the deserving to be dispensed in the light of
(Santos v. Bicol Apparel Corp., G.R. No. the established facts and applicable law and
226259, October 19, 2022) doctrine (Chan, Bar Reviewer on Labor Law,
2019, рб)

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The Philippine Constitution, while inexorably On Burden of Employers

committed towards the protection of the
working class from exploitation and unfair The burden of proving that the
treatment, nevertheless mandates the policy termination of an employee was for a
of social justice so as to strike a balance just or authorized cause lies with the
between an avowed predilection for labor, on employer. If the employer fails to meet this
the one hand, and the maintenance of the burden, the dismissal is unjustified, thus,
legal rights of capital, the proverbial hen that illegal. To discharge this burden, the
lays the golden egg, on the other. (Ibid) employer must present substantial evidence,
or the amount of relevant evidence which a
The constitutional policy to provide full reasonable mind might accept as adequate to
protection to labor is not meant to be a sword justify a conclusion, and not based on mere
to oppress employers. Justice is for the surmises or conjectures. (Systems and Plan
deserving and must be dispensed within the Integrator and Development Corp. v.
light of established facts, the applicable law, Ballesteros, G.R. No. 217119, April 25, 2022,
and existing jurisprudence. The Court's J. Hernando)
commitment to the cause of labor is not a
lopsided undertaking. It cannot and does not Before a case for illegal dismissal can
prevent us from sustaining the employer prosper, an employer-employee relationship
when it is in the right. (Trans-Global Maritime must first be established by the employee
Agency, Inc. vs. Utanes, G.R. No. 236498, (Javier vs. Fly Ace Corp., G.R. No. 192558,
September 16, 2020) February 15, 2012)

The employer should not be compelled to On Burden of Employees

continue employing a person who is
admittedly guilty of misfeasance or It is well-established that the employee must
malfeasance and whose continued first prove the fact of dismissal before the
employment is patently inimical to the burden shifts to the employer to prove that
employer. The law protecting the rights of the dismissal was legal. (Nerida vs. NJ World
the laborer authorizes neither oppression nor Corp., G.R. No. 240005, December 6, 2022)
self- destruction of the employer. (Agabon
vs. NLRC, G.R. No. 158693, November 17, In illegal dismissal cases, the burden of proof
2004) is on the employer in proving the validity of
dismissal. However, the fact of dismissal, if
6. Burden of Proof and Quantum of disputed, must be duly proven by the
Evidence complainant. (Rubio V. Lucky Star Service
Placement, G.R. No. 242556, June 13, 2022)
Summary on Burden of Proof in
It is true that in constructive dismissal cases,
Illegal Dismissal Cases
the employer is charged with the burden of
proving that its conduct and action or the
Existence of ER-EE EmployEE
transfer of an employee are for valid and
Relationship
legitimate grounds such as genuine business
necessity. (Ibid)
Fact of dismissal EmployEE
Only then when the dismissal is established
that the burden shifts to the employer to
Validity of Dismissal EmployER prove that the dismissal was for just and/or
(compliance with authorized cause. The logic is simple - if there
procedural & is no dismissal, there can be no question as
substantive due to its legality or illegality. (Ibid)
process)

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To discharge its burden, the employer must On the other hand, for overtime pay,
rely on the strength of its own evidence. premium pays for holidays and rest days, the
Hence, any doubt or vagueness in the burden is shifted on the employee, as these
provisions of the contract of employment monetary claims are not incurred in the
should have been interpreted and resolved in normal course of business. It is thus
favor of the employee. (Centro Project incumbent upon the employee to first prove
Manpower Services Corporation vs. Naluis that he actually rendered service in excess of
and CA, G.R. No. 160123, June 17, 2015) the regular eight working hours a day, and
that he in fact worked on holidays and rest
When there is doubt between the evidence days (Minsola vs. New City
submitted by the employer and that Builders, Inc., G.R. No. 207613 January 31,
submitted by the employee, the scales of 2018)
justice must be tilted in favor of the
employee. This is consistent with the rule Quantum of Proof; Substantial Evidence
that an employer's cause could only succeed
on the strength of its own evidence and not Substantial evidence is the quantum of proof
on the weakness of the employee's evidence required in labor cases. It is such relevant
(Misamis Oriental II Electric Service evidence as a reasonable mind might accept
Cooperative vs. Virgilio Cagalawan, G.R. No. as adequate to support a conclusion.
175170, September 5, 2012) (Tavera, Jr. v.
Red Ribbon Bakeshops, Inc., G.R. No.
227817, June 13, 2022)
Summary on Burden of Proof in
Monetary claims
In constructive dismissal cases, the
employee has the burden to prove first the
Incurred in normal course of EmployER
fact of dismissal by substantial evidence.
business
(Rubio v.Lucky Star Service Placement, G.R.
No. 242556, June 13, 2022)
Not incurred in normal course EmployEE
of business
In all cases, as in other administrative and
quasi-judicial proceedings, the quantum of
In determining the employee's entitlement to proof necessary is substantial evidence, or
monetary claims, the burden of proof is such amount of relevant evidence which a
shifted from the employer or the employee, reasonable mind might accept as adequate to
depending on the monetary claim sought. justify a conclusion. (Valencia vs. Classic
Vinyl Products Corp., G.R. No. 206390,
In claims for payment of salary differential, January 30, 2017)
service incentive leave, holiday pay and 13th
month pay, the burden rests on the employer
II. RECRUITMENT AND PLACEMENT
to prove payment. This standard follows the
basic rule that in all illegal dismissal cases the OF WORKERS
burden rests on the defendant to prove
payment rather than on the plaintiff to prove A. Recruitment and Placement of Local
non-payment. This likewise stems from the and Migrant Workers
fact that all pertinent personnel files, payrolls,
records, remittances and other similar
documents - which will show that the Definition of Recruitment and
differentials, service incentive leave and Placement
other claims of workers have been paid - are
not in the possession of the worker but are in Recruitment And Placement Refers to Any Act
the custody and control of the employer. of: [CETCHUP]
1. Canvassing,
2. Enlisting,

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3. Transporting, or she is not an immigrant, citizen,

4. Contracting, or permanent resident or is not awaiting
5. Hiring, naturalization, recognition, or admission,
6. Utilizing, or whether land-based or sea-based regardless
7. Procuring workers. of status; excluding a Filipino engaged under
a government-recognized exchange visitor
It Includes: [CRAP] program for cultural and educational
1. Contract services; purposes. For purposes of this provision, a
2. Referrals; person engaged in remunerated activity
3. Advertising for; or covers a person who has been contracted for
4. Promising employment, locally or overseas employment but has yet to
abroad, whether for profit or not. leave the Philippines, regardless of status,
and includes “Overseas Contract Workers”.
Provided that any person or entity which, in The term “OFW” is synonymous to “Migrant
any manner, offers or promises for a fee, Worker”; (Sec. 3.g., RA No. 11641)
employment to two or more persons shall be
deemed engaged in recruitment and A person to be engaged in a remunerated
placement. (Art. 13(b), Labor Code) activity refers to an applicant worker who has
been promised or assured employment
The act of referral, which is included in overseas.
recruitment, is the "act of passing along or
forwarding of an applicant for employment Private Employment Agency (PEA) -
after an initial interview of a selected means any person or entity engaged in
applicant for employment to a selected recruitment and placement of workers for a
employer, placement officer or bureau". fee which is charged, directly or indirectly,
(Rodolfo vs. People, G.R. No. 146964, August from the workers or employers or both. (Art.
10, 2006) 13[c], Labor Code)

Definition of Terms Private Recruitment Entity - means any

person or association engaged in the
Worker - any member of the labor force, recruitment and placement of workers, locally
whether employed or unemployed. (Art. 13, or overseas, without charging, directly or
Labor Code, as amended) indirectly, any fee from the workers or
employees. (Art. 13[e], Labor Code).
Overseas Filipino - Dependents of migrant
workers and other Filipino nationals abroad Who May Engage in Recruitment and
who are in distress as mentioned in Sections Placement of Workers
24 and 26 of the Migrant Workers Act. (Sec. a. Public Employment Offices;
3[c], R.A. No. 8042) b. Private Recruitment Offices
c. Private Employment Agencies
Overseas Filipino Worker or Migrant d. Shipping or Manning Agents &
Worker - is a person who is to be engaged, Representatives;
is engaged or has been engaged in a e. Such other persons or entities as may
remunerated activity in a state of which he or be authorized by the DOLE Secretary
she is not a citizen or on board a vessel (Rule III, Sec. 1, Omnibus Rules
navigating the foreign seas other than a Implementing the Labor Code)
government ship used for military or non- f. Philippine Overseas Employment
commercial purposes or on an installation Administration (POEA) (Section 14,
located offshore or on the high seas. (Sec. R.A. No. 10022);
2[a], R.A. No. 8042); g. Construction Contractors
refers to a Filipino who is to be engaged, is
engaged, or has been engaged in DISTINCTIONS BETWEEN PEA AND PRE
remunerated activity in a country of which he

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Private Private
1. For Local Employment
Employment Recruitment
a. Filipino citizens, partnerships or
Agency (PEA) Entity (PRE)
corporation at least 75% of the
Has a right duly Does not charge authorized capital stock must be
recognized in law to any fee either owned and controlled by Filipino
charge a fee directly directly or indirectly citizens;
or indirectly from from the workers or b. Must have a minimum net worth of
the workers or the employers to which P1,000,000.00 in case of single
employers or from they would be proprietorship and partnership, or a
both. deployed. minimum paid-up capital of
P1,000,000.00 in case of a
Authorized to recruit Allowed to recruit corporation.
only for overseas for both local and c. Office space with a minimum area of
placement or overseas 50 square meters.
deployment employment d. Owners, partners or the officers of
the corporation must be of good
Derive its authority Derive its authority moral character and not otherwise
from a “license” from a “authority” disqualified by law.

2. For Overseas Employment

License And Authority; Distinguished a. Filipino citizens, partnerships or
corporation at least 75% of the
LICENSE AUTHORITY authorized capital stock must be
owned and controlled by Filipino
Document issued by the DOLE Secretary citizens;
b. Must have a minimum capitalization
of P5,000,000.00 in case of single
authorizing a authorizing the
proprietorship or partnership, and a
person, partnership, officers, personnel,
minimum paid-up capital of
or corporation to agents or
P5,000,000.00 in case of a
operate a private representatives of a
corporation.
recruitment/mannin licensed
i. Those with existing licenses
g agency. (Section recruitment/mannin
shall within 4 years from the
1[w], Rule II, g agency to conduct
effectivity hereof, increase
Omnibus Rules and recruitment and
their capitalization or paid up
Regulations placement activities
capital to P5,000,000 at the
Implementing the in a place stated in
rate of P750,000 every year.
Migrant Workers the license or in a
(2016 Revised POEA Rules
and Overseas specified place.
and Regulations
Filipinos Act of (Section 1 [b], Rule
Governing the Recruitment
1995, as amended II, Omnibus Rules
and Employment of
by Republic Act No. and Regulations
Landbased OFWs)
10022) Implementing the
c. Office space with a minimum area of
Migrant Workers
100 square meters.
and Overseas
d. Owners, partners or the officers of
Filipinos Act of
the corporation must be of good
1995, as amended
moral character and not otherwise
by Republic Act No.
disqualified by law.
10022)
e. An escrow agreement with a bank
authorized by
Qualifications to Operate a Recruitment the Bangko Sentral ng Pilipinas to
and Placement Agency handle trust accounts, with deposit in

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the amount of One Million Five The general rule is that Philippine laws
Hundred Pesos (PhP1,500,000.00). apply even to overseas employment
contracts.
The escrow deposit shall answer for This rule is rooted in the constitutional
all valid and legal claims arising from provision of Section 3, Article XIII that the
contracts of employment and State shall afford full protection to labor,
violations of the conditions for the whether local or overseas. Hence, even if the
grant and use of the license, OFW has his employment abroad, it does not
including fines imposed by the strip him of his rights to security of tenure,
Administration. The escrow shall humane conditions of work and a living wage
likewise guarantee compliance with under our Constitution. (supra)
prescribed recruitment procedures,
rules and regulations, appropriate As an exception, the parties may agree that
terms and conditions of employment, a foreign law shall govern the employment
and relevant issuances of the DMW, contract, provided:
and shall be separate from the 1. That it is expressly stipulated in the
capitalization requirement. (Sec. 20, overseas employment contract that a
DMW Dept. Circular 01-23) specific foreign law shall govern;
2. That the foreign law invoked must be
Re: Terms of employment contract of proven before the courts pursuant to
OFWs. the Philippine rules on evidence;
3. That the foreign law stipulated in the
A contract freely entered into should, of overseas employment contract must
course, be respected, as PIA argues, since a not be contrary to law, morals, good
contract is the law between the parties. The customs, public order, or public policy
principle of party autonomy in contracts is of the Philippines; and
not, however, an absolute principle. The rule 4. That the overseas employment
in Article 1306, of our Civil Code is that the contract must be processed through
contracting parties may establish such the POEA.(supra)
stipulations as they may deem convenient,
"provided they are not contrary to law, 1. Regulatory Authorities
morals, good customs, public order or
public policy." Thus, counterbalancing the a. Department of Migrant Workers
principle of autonomy of contracting parties
is the equally general rule that provisions of Sec. 4. Creation – The Philippine
applicable law, especially provisions relating Overseas Employment Administration
to matters affected with public policy, are (POEA) created under Executive Order
deemed written into the contract. Put a little No. 247, Series of 1987, as amended, and
differently, the governing principle is that all the entities, agencies and units
parties may not contract away applicable enumerated in Section 19 are
provisions of law, especially peremptory consolidated and merged, and hereby
provisions dealing with matters heavily constituted as the Department of Migrant
impressed with public interest. The law Workers, hereinafter referred to as "the
relating to labor and employment is Department". The Department is hereby
clearly such an area and parties are not organized structurally and functionally in
at liberty to insulate themselves and accordance with the provisions of this
their relationships from the impact of Act.
labor laws and regulations by simply
contracting with each other. (Industrial Sec. 5. Mandate – The Department
Personnel & Management Services vs. De shall absorb all the powers, functions and
Vera, G.R. No. 205703, March 7, 2016) mandate of the POEA and all the entities
enumerated in Section 19 hereof, and
shall be the primary agency under the

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Executive Branch of the government recruitment or trafficking in persons

tasked to protect the rights and promote cases as defined under Republic Act No.
the welfare of OFWs, regardless of status 9208, as amended, and other existing
and of the means of entry into the laws and other issuances; and hold or cite
country of destination. It shall formulate, any person in contempt as may be
plan, coordinate, promote, administer, provided by the implementing rules and
and implement policies, and undertake regulations; (2) to administer oaths upon
systems for regulating, managing, and cases under investigation; and (3) to
monitoring the overseas employment of have access to all public records and to
Filipino workers and reintegration of records of private parties and concerns,
OFWs, while taking into consideration the in accordance with law;
national development programs (d) Protect and promote the welfare,
formulated by the National Economic and well-being, and interests of the families
Development Authority (NEDA). It shall of OFWs in accordance with this Act,
also promote the empowerment and consistent with the constitutional policy
protection of Filipinos working overseas of upholding the sanctity of the family as
by empowering and training them to gain a basic autonomous social institution and
appropriate skills and by ensuring access of valuing the vital role of youth in nation-
to continuous training and knowledge building;
development. (e) Support and assist the Department of
Foreign Affairs (DFA) and relevant
Sec. 6. Powers and Functions – government agencies in building strong
(a) Formulate, recommend, and and harmonious partnerships with
implement national policies, plans, counterpart and relevant agencies in
programs, and guidelines that will ensure foreign countries in order to facilitate the
the protection of OFWs, including their implementation of strategies and
safe, orderly and regular migration, then programs for the protection and
promotion of their interests, the timely promotion of the rights and well-being of
and effective resolution of their problems OFWs and their families, and to
and concerns, and their effective continuously monitor economic, political
reintegration into Philippine society; and labor developments therein;
(b) Regulate the recruitment, (f) Support and assist the DFA in the
employment, and deployment of OFWs; negotiation of bilateral and multilateral
(c) Investigate, initiate, sue, pursue, and agreements, initiatives and programs,
help prosecute, in cooperation with the including intergovernmental processes,
Department of Justice (DOJ) and the which primarily concern labor migration;
Inter-Agency Council Against Trafficking (g) Represent, in coordination with and
(IACAT), illegal recruitment and human under the guidance of the DFA, interests
trafficking cases as defined under pertaining to OFWs in bilateral, regional,
Republic Act No. 8042, as amended by and multilateral fora and international
Republic Act No. 10022, otherwise known bodies. A written authorization shall be
as the Migrant Workers and Overseas secured by the Department from the
Filipinos Act of 1995, as amended, and as President, through the Secretary of
provided under Republic Act No. 9208, as Foreign Affairs, prior to any international
amended by Republic Act No. 10364, meeting or negotiation of a treaty or
otherwise known as the Anti-Trafficking executive agreement on any subject
in Persons Act, and other existing laws matter within its mandate;
and other issuances. In the performance (h) Provide, in cooperation with the
of its functions, the Department Department of Education (DepEd), the
Secretary and his or her authorized Department of Trade and Industry (DTI),
deputy shall have the power: (1) to issue the Commission on Higher Education
subpoena or subpoena duces tecum to (CHED), the Technical Education and
any person for investigation for illegal Skills Development Authority (TESDAT),

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the Maritime Industry Authority to the training services being provided by

(MARINA), and other government the Foreign Service Institute of the DFA.
agencies, civil society organizations, The training shall also include effective
nongovernmental organizations and the means and methods in handling the
private sector, trainings aimed at concerns of OFWs;
promoting the global competitiveness of (p) Develop and create an institute for
OFWs, as well as job matching services advanced and strategic studies on
to persons desiring to become OFWs; migration and development, which shall,
(i) Encourage and enhance information among others, conduct advanced,
and resource sharing among related strategic and up-to-date studies and
agencies, and develop an electric research on global migration and
database to improve services for OFWs in development trends;
accordance with Section 18 of this Act; (q) In coordination with the DFA, conduct
(j) Regulate the operations of private regular, timely and relevant political and
recruitment and manning agencies security risk assessment of the conditions
involved in the deployment of OFWs in the receiving country, including
abroad to protect the interests and well- adequate evacuation plans that will be
being of these workers; communicated with all migrant workers
(k) Foster the professionalization, thereat, not only for deployment
promote ethical recruitment practices, purposes but more especially in cases of
and ensure compliance with legal and emergencies which will require swift
ethical standards, training, and capacity- actions including, but not limited to,
building of private recruitment and possible evacuation of our migrant
manning agencies; workers;
(l) Establish a 24/7 Emergency Response (r) Create a system for the blacklisting of
and Action Center Unit and media and persons, both natural and juridical,
social media monitoring center to including local and foreign recruitment
respond to the emergency needs of agencies, their agents, and employers,
OFWs and their families; who are involved in trafficking as defined
(m) Perform all the powers, functions, in Section 16(h), second paragraph of
and responsibilities assigned to all Republic Act No. 9208, as amended. The
agencies, offices, or units to be Department shall create and update a
transferred to, or absorbed by, the database of blacklisted persons which will
Department pursuant to the be shared within the concerned agencies
consolidation mandated by this Act; of the Department and with the IACAT. It
(n) Require private recruitment and shall also establish a monitoring system
manning agencies to provide for cases involving trafficking and illegal
comprehensive insurance to the OFWs recruitment of OFWs; and
they deploy in accordance with the law: (s) Perform such other functions as may
Provided, That with respect to OFWs be necessary to achieve the objectives of
deployed through other arrangements, a this Act.
substantially similar benefit shall be
provided to the concerned OFW; The exercise of the powers and functions of
(o) Develop and create a training institute the Department shall in no way limit, restrict,
that will provide substantive, analytical or diminish the pursuit of an independent
and strategic leadership training foreign policy or the conduct of foreign
programs meant to equip employees of relations and treaty negotiations by the DFA.
the Department , especially those who
will be working overseas, with necessary Protection of the rights and promotion
knowledge and skills, such as, but not of the welfare of overseas Filipinos is a
limited to, the language, customs, pillar of Philippine foreign policy. The DFA
traditions, and laws of the host countries shall continue providing assistance to other
where OFWs are located, with due regard Filipino nationals not covered under this Act.

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license to recruit Overseas Filipino

Legal assistance, investigative, and Workers, and;
prosecution powers of the department b. disciplinary action cases that are
in illegal recruitment, human administrative in character, excluding
trafficking, and related cases money claims. In the exercise of its
quasi0judicial power and the
Section 49. Legal Assistance, Investigative, promotion of access to justice, the
and Prosecution Powers of the Department in Department shall formulate its own
Illegal Recruitment, Human Trafficking, and rules and procedures governing the
Related Cases. Pursuant to Section 6 (c) of proceedings before the Overseas
this Act, the Secretary, and his/her Employment Adjudicators (OEAs),
authorized deputies, shall have the powers to Regional Directors, Bureaus and offices
investigate, initiate, sue, pursue, and help exercising such functions, and the
prosecute illegal recruitment and human Office of the Secretary.
trafficking cases. Accordingly, the
Department shall adopt policies and b. DOLE Secretary; Regulatory and
procedures, as well as prepare and Visitorial Powers
implement programs and strategies towards
the eradication of illegal recruitment, human Art. 33. Reports on Employment Status
trafficking, and related cases through: – Whenever the public interest requires, the
a. Providing legal assistance to victims of Secretary of Labor may direct all persons or
illegal recruitment, human trafficking, entities within the coverage of this Title to
and related cases which are submit a report on the status of employment,
administrative or criminal in nature, including job vacancies, details of job
such as but not limited to requisitions, separation from jobs, wages,
documentation and counseling; other terms and conditions and other
b. Prosecution of illegal recruiters, in employment data.
collaboration with the DOJ
prosecutors; during preliminary Art. 36. Regulatory Power – The
investigation and during trial; Secretary of Labor shall have the power to
c. Investigation and special operations, restrict and regulate the recruitment
including surveillance and closure of and placement activities of all agencies
establishment or entities suspected to within the coverage of this Title and is hereby
be engaged in illegal recruitment; authorized to issue orders and promulgate
d. Information and education campaign; rules and regulations to carry out the
and objectives and implement the provisions of
e. Coordination with other appropriate this Title.
entities in the implementation of said
programs. Art. 37. Visitorial Power. – The Secretary
of Labor or his duly authorized
Quasi-judicial Power of the Department representatives may, at any time -
1. Inspect the premises, books of accounts
Section 57. Original and Exclusive, and and records of any person or entity
Appellate Jurisdiction. The Department shall covered by this Title
exercise original and exclusive, and appellate 2. Require it to submit reports regularly on
jurisdiction to hear and decide all cases which prescribed forms, and
are administrative in character, involving or 3. Act on violation of any provisions of this
arising out of: Title.
a. violations of recruitment rules and
regulations, including refund of fees Art. 128. Visitorial and Enforcement
collected from Overseas Filipino Power
Workers and any violation of the
conditions for the issuance of the

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The Secretary of Labor and Employment or Code; and (3) order work stoppage or
his duly authorized representatives, including suspend an establishment's operations when
labor regulation officers, shall: noncompliance with labor standards poses
grave and imminent danger to the health and
1. Have access to employer's records and safety of workers. (Ang v. Avila, G.R. No.
premises at any time of the day or night 222889, February 26, 2020)
whenever work is being undertaken
therein and the right: 2. Regulation of Recruitment and
i. To copy therefrom, Placement Activities
ii. To question any employee and
iii. To investigate any fact, condition or a. Ban on Direct Hiring
matter which may be necessary to
determine violations or which may General Rule: No employer may hire a
aid in the enforcement of this Code Filipino worker for overseas employment.
and of any labor law, wage order or
rules and regulations issued pursuant Exception: Through the Boards and entities
thereto. authorized by the Secretary of Labor. (Article
18, Labor Code)
2. Have the power to issue compliance
orders Direct Hiring
Direct hiring refers to the process of directly
Purpose: to give effect to the labor hiring workers by employers for overseas
standards provisions of the Labor Code employment as authorized by the DOLE
and other labor legislation based on the Secretary and processed by the POEA,
findings of labor employment and including:
enforcement officers or industrial safety a. Those hired by international organizations.
engineers made in the course of b. Those hired by members of the diplomatic
inspection. corps.
c. Name hires or workers who are able to
Notwithstanding the provisions of Arts. secure overseas employment opportunities
129 and [224] of this Code to the contrary, with an employer without the assistance or
and in cases where the relationship of participation of any agency. (Sec. 1/i], Rule
employer-employee still exists. Il, Omnibus Rules and Regulations
Implementing the Migrant Workers and
3. Issue writs of execution to the Overseas Filipinos Act of 1995, as amended
appropriate authority for the by R.A. No. 10022)
enforcement of their orders
Exceptions: The following are exempted
Exception: cases where the employer from the ban on direct-hiring:
contests the findings of the labor a. Members of the diplomatic corps.
employment and enforcement officer b. International organizations.
and raises issues supported by c. Heads of state and government officials
documentary proofs which were not with the rank of at least deputy minister.
considered in the course of inspection. d. Other employers as may be allowed by
the DOLE Secretary, such as:
The visitorial and enforcement powers i. Those provided in (a), (b) and (c)
empowered the Secretary of Labor and who bear a lesser rank, if
Employment, or his or her authorized endorsed by the Philippine
representative, to: (1) access the employer's Overseas Labor Office (POLO), or
records and premises at any time of the day Head of Mission in the absence of
or night, so long as work is being undertaken; the POLO;
(2) issue compliance orders to give effect to ii. Professionals and skilled workers
the labor standards provisions of the Labor with duly executed/authenticated

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contracts containing terms and corporation or partnership engaged

conditions over and above the in the business of a travel agency;
standards set by the POEA. The D. Individuals, partners, officers, or
number of professional and skilled directors of an insurance company
Overseas Filipino Workers hired who make, propose or provide an
for the first time by the employer insurance contract under the
shall not exceed five (5). For the compulsory insurance coverage for
purpose of determining the agency-hired OFWs;
number, workers hired as a group E. Sole proprietors, partners or officers
shall be counted as one; or and members of the board with
iii. Workers hired by a relative/family derogatory records, such as, but not
member who is a permanent limited to the following:
resident of the host country. i. Those convicted or against
(Section 124, 2016 POEA Rules on whom probable cause or prima
Land-based Overseas Filipino facie finding of guilt is
Workers) determined by a competent
authority for illegal recruitment
b. Entities and persons prohibited or for other related crimes or
from recruiting offenses committed in the course
of, related to, or resulting from,
A. Travel agencies and sales agencies of illegal recruitment, or for crimes
airline companies, whether for profit involving moral turpitude, b.
or not; (Art. 26, Labor Code, as Those agencies whose licenses
amended) have been revoked for violation
of RA 8042, PD 442, RA 9208,
- To avoid confusion that may arise and their IRRS; Those agencies
to the detriment and disadvantage of whose licenses have been
an overseas applicant-worker or may canceled, or those who,
lead to exploitation of the applicant- pursuant to the order of the
worker who will be at the economic Administrator, were included in
mercy of the travel agency or sales the list of persons with
agencies of airline company from the derogatory record for violation of
time his papers are processed to the recruitment laws and
time he departs. (Poquiz, Labor regulations;
Standards and Social Legislation F. Any official employee of the DOLE,
Volume I, 2018, p.112) POEA, OWWA, DFA, DOJ, DOH, BI,
- Illegal recruitment activities can be IC, NLRC, TESDA, CFO, NBI, PNP,
traced to travel agencies that Civil Aviation Authority of the
facilitate papers of jobseekers for Philippines, international airport
overseas. They do the dirty job of authorities, and other government
legalizing the travel on tourist-visas agencies directly involved in the
and with the assurance that the same implementation of RA 8042, as
could be converted into work-visas in amended, and/or any of his/her
the country of employment. (Ibid) relatives within the fourth civil degree
of consanguinity or affinity. (Sec. 3,
B. Officers or members of the Board of Rule I, Part II, Rule II, Part III,
any corporation or partners in a Revised POEA Rules and Regulations
partnership engaged in the business Governing the Recruitment and
of a travel agency; Employment of Land-Based Overseas
C. Corporations and partnerships, where Filipino Workers of 2016)
any of its officers, members of the
board or partners is also an officer, c. Non-transferability of License or
member of the board or partner of a Authority

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b. To furnish or publish any false notice or

No license or authority shall be used directly information or document in relation to
or indirectly by any person other than the one recruitment or employment;
in whose favor it was issued or at any place c. To give any false notice, testimony,
other than that stated in the license or information or document or commit any act
authority be transferred, conveyed or of misrepresentation for the purpose of
assigned to any other person or entity. Any securing a license or authority under this
transfer of business address, appointment or Code;
designation of any agent or representative d. To induce or attempt to induce a worker
including the establishment of additional already employed to quit his employment in
offices anywhere shall be subject to the prior order to offer him to another unless the
approval of the Department of Labor. (Art. transfer is designed to liberate the worker
29, Labor Code) from oppressive terms and conditions of
employment;
d. Suspension or cancellation of license e. To influence or to attempt to influence any
or authority person or entity not to employ any worker
who has not applied for employment through
Grounds for the SOLE to cancel his agency;
license/authority: f. To engage in the recruitment or placement
1. Violation of Rules and Regulations of workers in jobs harmful to public health or
issued by the Department of Labor and morality or to the dignity of the Republic of
Employment, the Overseas Employment the Philippines;
Development Board, and the National g. To obstruct or attempt to obstruct
Seamen Board; or inspection by the Secretary of Labor or by his
2. Violation of the provisions of this and duly authorized representatives;
other applicable laws, General Orders and h. To fail to file reports on the status of
Letters of Instructions. (Art. 35, Labor employment placement vacancies,
Code, as amended) remittance of foreign exchange earnings,
separation from jobs, departures and such
Note: Illegal recruitment and acts prohibited other matters or information as may be
under Art. 34 or R.A. No. 8042, as amended required by the Secretary of Labor;
by R.A. No. 10022, as the case may be, are i. To substitute or alter employment contracts
grounds for suspension or cancellation of approved and verified by the Department of
license. Labor from the time of actual signing thereof
by the parties up to and including the periods
Who Can Suspend or Cancel the of expiration of the same without the
License? approval of the Secretary of Labor;
1. Secretary of Labor and Employment, and j. To become an officer or member of the
2. POEA Administrator (Article 35, Labor Board of any corporation engaged in travel
Code) agency or to be engaged directly or indirectly
in the management of a travel agency; and
e. Prohibited Practices k. To withhold or deny travel documents from
applicant workers before departure for
Article 34. Prohibited Practices. monetary or financial considerations other
It shall be unlawful for any individual, entity, than those authorized under this Code and its
licensee, or holder of authority: implementing rules and regulations.
a. To charge or accept, directly or indirectly,
any amount greater than that specified in the Under Section 6 of RA 8042:
schedule of allowable fees prescribed by the a. Failure to actually deploy without valid
Secretary of Labor, or to make a worker pay reason as determined by the Department
any amount greater than that actually of Labor and Employment; and
received by him as a loan or advance; b. Failure to reimburse expenses incurred by
the worker in connection with his

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documentation and processing for The essential elements of illegal recruitment

purposes of deployment, in cases where vary in accordance with the following
the deployment does not actually take classifications:
place without the worker's fault. Illegal 1. Simple illegal recruitment;
recruitment when committed by a a. For Local workers
syndicate or in large scale shall be b. For Migrant Workers
considered an offense involving economic
sabotage. (Article 34, Labor Code) 2. Illegal Recruitment involving economic
sabotage:
f. Illegal Recruitment a. When committed by a syndicate; or
b. When committed in large scale.
Illegal Recruitment - Any recruitment
activities, including the prohibited practices b) Types
enumerated under Article 34 of the Labor
Code, to be undertaken by non-licensees or Simple Illegal Recruitment
non-holders of authority. (Article 38, Labor
Code) The crime of illegal recruitment is committed
when two elements concur, namely:
RA 8042 broadened the concept of illegal 1. the offender has no valid license or
recruitment for overseas employment and authority required by law to enable one
increased the penalties. Thus, while Article 38 to lawfully engage in recruitment and
of the Labor Code limits illegal recruitment to placement of workers; and
recruitment activities undertaken by non- 2. he undertakes either any activity within
licensees or non-holders of authority, Part II the meaning of "recruitment and
of RA 8042 defines and penalizes illegal placement" defined under Article 13 (b),
recruitment for employment abroad, or any prohibited practices enumerated
regardless of whether it was undertaken by a under Article 34 of the Labor
non-licensee or non-holder of authority or by Code.(Romero v. People, G.R. No.
a licensee or holder of authority. (People v. 171644, November 23, 2011)
Manalang, G.R. No. 198015, January 20,
2021) Illegal Recruitment of Local Workers

To prove illegal Recruitment, it must be 1. By a licensee/holder of authority

shown that the accused gave the a. Offender has a valid license or
complainants the distinct impression that he authority required by law to enable one
or she had the power or ability to deploy the to lawfully engage in the recruitment
complainants abroad in such a manner that and placement of workers;
they were convinced to part with their money b. Offender undertakes any of the
for that end. (People V. Imperio y Antonio, prohibited acts under Art. 34. (Article
G.R. No. 232623, October 5, 2020, Per J. 34, Labor Code)
Hernando) 2. By a non-licensee/non-holder of authority
a. Offender has no valid license or
Illegal Recruitment is committed by persons authority required by law to enable one
who, without authority from the government, to lawfully engage in the recruitment
give the impression that they have the power and placement of workers;
to send workers abroad for employment b. Offender undertakes either:
purposes. (People v. Centeno, G.R. No. i. Any activity within the meaning of
225960, October 13, 2021) recruitment and placement under
Art. 13(b)
i. Elements and Types ii. Any of the prohibited practices
under Art. 34 (Article 38, Labor
a) Elements Code)

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 PURPLE NOTES 2024 – LABOR LAW

Illegal Recruitment of Migrant Workers Illegal Recruitment as

Economic Sabotage
Illegal recruitment shall mean any act of
canvassing, enlisting, contracting, Illegal recruitment is considered economic
transporting, utilizing, hiring, or procuring sabotage when attended by the following
workers and includes referring, contract qualifying circumstances:
services, promising or advertising for 1. Committed by a syndicate - carried out
employment abroad, whether for profit or by a group of 3 or more persons
not, when undertaken by a non-licensee or conspiring and confederating with one
non-holder of authority contemplated under another;
Article 13(f) of the Labor Code. 2. Committed in large scale - committed
against 3 or more persons individually or
Provided, That any such non-licensee or non- as a group.
holder who, in any manner, offers or
promises for a fee employment abroad to two The persons liable for the above offenses are
or more persons shall be deemed so the principals, accomplices and accessories.
engaged. (Section 5, RA No. 10022) In case of juridical persons, the officers
having control, management or direction of
RA 8042 broadened the concept of illegal their business shall be liable. (People v.
recruitment for overseas employment and Manalang, G.R. No. 198015, January 20,
increased the penalties. Thus, while Article 38 2021, Per J. Hernando)
of the Labor Code limits illegal recruitment to
recruitment activities undertaken by non- Illegal Recruitment may be undertaken by
licensees or non-holders of authority, Part II either non-license or license holders. Non-
of RA 8042 defines and penalizes illegal license holders are liable for the simple act of
recruitment for employment abroad, engaging in recruitment and placement
regardless of whether it was undertaken by a activities, while license holders may also be
non-licensee or non-holder of authority or by held liable for committing the acts prohibited
a licensee or holder of authority. (People v. under Section 6 of RA 8042. Further, Illegal
Manalang, G.R. No. 198015, January 20, Recruitment is deemed done in large scale
2021, Per J. Hernando) and is considered as an offense involving
economic sabotage if it is committed against
Profit immaterial three or more persons individually or as a
group. (People v. Liwanag, G.R. No. 232245,
It is the absence of the necessary license or March 2, 2022, Per J. Hernando)
authority to recruit and deploy workers that
renders the recruitment activity unlawful. To By a Syndicate
prove illegal recruitment, it must be shown
that "the accused gave the complainants the
Local Workers Migrant Workers
distinct impression that she had the power or
ability to deploy the complainants abroad in Offender Offender undertakes
a manner that they were convinced to part undertakes either: either:
with their money for that end. (People vs. • Any activity • Any activity
Sison, G.R. No.187160, August 9, 2017) within the within the
meaning of meaning of
The absence of receipts issued by the “recruitment “recruitment
accused in an illegal recruitment case is not and and
fatal to their conviction if the prosecution placement” placement”
establishes, through credible evidence, that defined under defined under
the accused has engaged in illegal Art. 13(b) Art. 13(b)
recruitment. (People v. Dela Concepcion y • Any of the • Any of the
Valdez, G.R. No. 251876, March 21, 2022) prohibited prohibited

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 PURPLE NOTES 2024 – LABOR LAW

practices under practices recruit and deploy or an authority to

Art. under Section 6 workers, either recruit and deploy
of RA 8042 locally or overseas workers, either
locally or overseas
Offender has no Accused does not
valid license or have the valid Offender commits Offender
authority required license or authority the unlawful acts committed the
by law to enable required by law to against 3 or more same against 3 or
one to lawfully engage in persons individually more persons
engage in recruitment and or as a group [Art. 38 individually or as a
recruitment and placement of (b) group
placement of workers
workers
ii. Illegal recruitment vs. Estafa
Illegal recruitment Illegal recruitment is
is committed by a carried out by a ILLEGAL ESTAFA
group of 3 or more group of 3 or more RECRUITMENT
persons conspiring persons conspiring
or confederating and/or As to the Nature of the Criminal
with one another confederating with Offense
one another in
carrying out any Malum Prohibitum Malum In Se
unlawful or illegal
transaction, As to Necessity of Criminal Intent
enterprise or
scheme. Not necessary Required

As to the Law Punishing the Offense

In Large Scale
Labor Code, a Revised Penal Code,
Local Workers Migrant Workers special law a general law

Offender undertakes Offender As to damage

either: undertakes:
• Any activity • Any of the Not essential Essential
within the prohibited
meaning of practices under As to the Scope
“recruitment and Section 6 of RA
placement” 8042 limited to broader scope;
defined under recruitment and covers
Art. 13(b) placement activities. and applies to
• Any of the deceits whether or
prohibited not related to
practices under recruitment and
Art. 34 placement
activities.
Offender has not Offender has not
complied with the complied with the Illegal recruitment and estafa cases
guidelines issued by guidelines issued may be filed simultaneously or
the SOLE, particularly by the SOLE, separately; double jeopardy will not set
with respect to the particularly with in.
securing of license or respect to the
an authority to securing of license

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 PURPLE NOTES 2024 – LABOR LAW

In this jurisdiction, it is settled that a person In the same manner, a person acquitted of
who commits illegal recruitment may be illegal recruitment may be held liable for
charged and convicted separately of illegal estafa. Double jeopardy will not set in
recruitment under the Labor Code and estafa because illegal recruitment is malum
under par. 2 (a) of Art. 315 of the Revised prohibitum, in which there is no necessity to
Penal Code. The offense of illegal recruitment prove criminal intent, whereas estafa is
is malum prohibitum where the criminal malum in se, in the prosecution of which,
intent of the accused is not necessary for proof or criminal intent is necessary. (Sy vs.
conviction, while estafa is malum in se where People, G.R No. 183879, April 14, 2010)
the criminal intent of the accused is crucial
for conviction. Conviction for offenses under Act Constituting Estafa
the Labor Code does not bar conviction for
offenses punishable by other laws. The offended party must have relied on the
Conversely, conviction for estafa under par. 2 false pretense, fraudulent act or fraudulent
(a) of Art. 315 of the Revised Penal Code means of the accused, and as a result
does not bar a conviction for illegal thereof, the offended party suffered
recruitment under the Labor Code. It follows damages.
that one's acquittal of the crime of estafa will
not necessarily result in his acquittal of the Accused-appellant's false pretenses led
crime of illegal recruitment in large scale, and private complainants to part with various
vice versa. (People v. Rios y Catagbui, G.R. amounts of money, hoping for a better life
No. 226140, February 26, 2020) abroad.

A conviction for illegal recruitment whether Unfortunately, they were never deployed and
simple or committed in large scale would not were never reimbursed. Thus, they suffered
preclude punishment for estafa under Article damage. (People v. Dela Concepcion y
315 (2) (a) of the RPC. This is because no Valdez, G.R. No. 251876, March 21, 2022)
double jeopardy could attach from the
prosecution and conviction of the Accused, without any license or authority to
accused for both crimes considering that do so, promised private complainants
they are penalized under different laws and overseas employment, then required them to
involved elements distinct from one another. undergo training and collected fees or
Conviction under Article 315 (2) (a) requires payments from them, while continually
the concurrence of the following elements: assuring them that they would be deployed
(1) the accused defrauded another by abuse abroad, but failed to do so.
of confidence or by means of deceit; and (2)
the offended party, or a third party, suffered Persuaded by these assurances given by
damage or prejudice capable of pecuniary Manalang, the private complainants paid
estimation. These are elements completely their placement fees, albeit partially. Thus,
different from those required for illegal her representation induced the victims to part
recruitment. (People v. Estrada, G.R. No. with their money, resulting in damage.
225730, February 28, 2018) (People v. Manalang, G.R. No. 198015,
January 20, 2021)
Illegal recruitment and estafa are entirely
different offenses and neither one necessarily The accused represented themselves to
includes or is necessarily included in the complainants to have the capacity to send
other. A person who is convicted of illegal workers abroad although they did not have
recruitment may in addition, be convicted of any authority or license. It is by this
estafa under Art. 315, par 2(a) of the Revised representation that they induced
Penal code (People vs. Billaber, G.R. No. complainants to pay a placement fee. Such
114967-68, January 26, 2004). an act constitutes estafa under Art. 315 (2)
of the RPC (People vs. Hernandez, G.R No.
199211, June 4, 2014).

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 PURPLE NOTES 2024 – LABOR LAW

The performance bond to be filed by the

g. Solidary Liability of Local recruitment/placement agency, as provided
Recruitment Agency and Foreign by law, shall be answerable for all money
Employer claims or damages that may be awarded to
the workers.
a) Solidary Liability
If the recruitment/placement agency is a
The liability of the principal/employer and the juridical being, the corporate officers and
recruitment/placement agency for any and all directors and partners as the case may be,
claims arising out of an employer-employee shall themselves be jointly and solidarily
relationship or by virtue of any law or liable with the corporation or partnership for
contract involving Filipino workers for the aforesaid claims and damages. (Sec. 10,
overseas R.A. No. 8042, as amended by Sec. 7, R.A.
deployment including claims for actual, No. 10022)
moral, exemplary and other forms of
damages under this section shall be joint and Illegal Recruitment of Local Workers
several. (Sec. 10,R.A. No. 8042, as amended
If acts performed by Penalty
by Sec. 7, R.A. No. 10022)
Licensee/authority 2-5 years
One of the safeguards incorporated in R.A. holder imprisonment
No. 8042 is found in Sec. 10 which provides or P10k-P50k
for the solidary and continuing liability of fine or both
recruitment agencies against monetary
claims of migrant workers. These Non- 4-8 years
pecuniary claims may arise from licensee/authority imprisonment
employer-employee relationship or by holder or P20K-P100K
virtue of law or contract, and may fine or both
include claims of overseas workers for
damages. (SRL International Manpower *Illegal recruitment Life
Agency v. Yarza, Jr., G.R. No. 207828, constituting imprisonment
February 14, 2022, Per J. Hernando) economic sabotage and P100k fine

The liability of petitioners should be solidary,

Illegal Recruitment of Migrant Workers
"as provided under Section 10 of RA 8042,
which mandates that the principal/employer, Act Penalty
recruitment/placement agency, and its
corporate officers and directors in case of Illegal 2-12 years
corporations, shall be solidarily liable for Recruitment imprisonment and
money claims arising out of employer- P1M- P2M fine
employee relationship with OFWs. (SRL
International Manpower Agency v. Yarza, Jr., Illegal Life imprisonment
G.R. No. 207828, February 14, 2022, Per J. Recruitment and P2M-P5M fine
Hernando) constituting
economic
Incorporation into the contract sabotage

The provision of joint and several liability Prohibited Acts 6-12 years
shall be incorporated in the contract for imprisonment and
overseas employment and shall be a P500K - P1M fine
condition precedent for its approval.
Conviction carries with it:
Posting of bond by recruiter

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Automatic revocation of the license or under the agreement do not at all end, but
registration of the recruitment/manning the same extends up to and until the
agency, lending institution, training school or expiration of the employment contracts of the
medical clinic. (Sec. 7, R.A. No. 8042, as employees recruited and employed pursuant
amended by Sec. 6, R.A. No. 10022) to the said recruitment agreement.
Otherwise, this will render nugatory the very
Automatic revocation of the license or purpose for which the law governing the
authority and all the permits and privileges employment of workers for foreign jobs
granted to such person or entity under this abroad was enacted. (OSM Shipping Phil, Inc.
Title, and the forfeiture of the cash and vs. NLRC, G.R. No. 138193, March 5, 2003)
surety bonds in favor of the Overseas
Employment Development Board or the Liability of corporate directors and
National Seamen Board, as the case may be, officers not automatic
both of which are authorized to use the same
exclusively to promote their objectives. To make them jointly and solidarily liable with
(Article 39, Labor Code) their company, there must be a finding that
they were remiss in directing the affairs of
If the offender is a corporation, partnership, that company, such as sponsoring or
association or entity, the penalty shall be tolerating the conduct of illegal activities.
imposed upon the officer or officers of the (Gagui v. Dejero, G.R. No. 196036, October
corporation, partnership, association or entity 23, 2013)
responsible for violation.
Non-suability cannot defeat the
If the offender is an alien, he or she shall, in solidary nature of the liability
addition to the penalties herein prescribed,
be deported without further proceedings. To allow petitioners to simply invoke the
immunity from suit of its foreign principal or
Effect of severance of agency to wait for the judicial determination of the
agreement on liability foreign principal's liability before petitioner
can be held liable renders the law on joint
Such liabilities shall continue during the and solidary liability inutile. (ATCI Overseas
entire period or duration of the employment Corp. vs. Echin, G.R. No. 178551, October 11,
contract and shall not be affected by any 2010)
substitution, amendment or modification AWI cannot evade responsibility for the
made locally or in a foreign country of the money claims of Overseas Filipino Workers
said contract. (Sec. 10, R.A. No. 8042, as (OFWs) whom it deploys abroad by the mere
amended by Sec. 7, R.A. No. 10022) expediency of claiming that its foreign
principal is a government agency clothed with
POEA Rules and Regulations are clear enough immunity from suit, or that such foreign
that the manning agreement extends up to principal's liability must be established first
and until the expiration of the employment before it, as agent, can be held jointly and
contracts of the employees recruited and solidarily liable. (Cuartocruz v. Active Works,
employed pursuant to the said recruitment Inc., G.R. No. 209072, July 24, 2019)
agreement. (Skippers United Pacific, Inc. v.
Maguad, G.R. No. 166363, August 15, 2006) b) Theory of Imputed Knowledge

The obligations covenanted in the [manning] Knowledge of the agent is deemed

agreement between the local agent and its knowledge of the principal but not the
foreign principal are not coterminus with the other way around
term of such agreement so that if either or
both of the parties decide to end the The theory of imputed knowledge ascribes
agreement; the responsibilities of such the knowledge of the agent to the principal,
parties towards the contracted employees not the other way around. The knowledge of

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the principal-foreign employer cannot, Exemplary, Moral and other forms of

therefore, be imputed to its agent. (Sunace damages may be awarded if the acts or
International Management Services, Inc. vS. omissions of the employer is tainted with bad
NLRC, G.R. No. 161757, January 25, 2006) faith, malice, or fraud. (Sec. 10, RA 8042)
There was no substantial proof that Sunace
knew of and consented to be bound under In computing the award due to an illegally
the 2-year employment contract extension of dismissed employee, salary includes all other
the domestic helper that Sunace deployed, it benefits guaranteed in the employment
cannot be said to be privy thereto. Thus, contract which were not made contingent
Sunace cannot be solidarily liable for any of upon the performance of any task or the
Divina's claim arising from the 2-year fulfilment of any condition. The Court
employment extension. (supra) included in the computation of salary the
The agency is revoked if the principal directly amount of seafarer's vacation leave pay and
manages the business entrusted to the tonnage bonus as the same were guaranteed
agent, dealing directly with third persons. and fixed benefits as provided in the contract.
(supra) Hence, the total compensation salary of
Montealto, inclusive of guaranteed benefits
h. Termination of Contract of Migrant should be included in the computation of his
Workers award. (International Skill Development, Inc.
v. Montealto, Jr., G.R. No. 237455 (Notice),
The fact that respondent was a migrant October 7, 2020)
worker in Taiwan does not remove him from
the protective mantle of the Labor Code of Allowing "foreign employers to determine for
the Philippines when applicable. This and by themselves whether an overseas
pronouncement is in keeping with the basic contract worker may be dismissed on the
public policy of the State to afford protection ground of illness would encourage illegal or
to labor; promote full employment; ensure arbitrary pre-termination of [the]
equal work opportunities regardless of sex, employment contract." (Jerzon Manpower
race or creed; and regulate the relations and Trading, Inc. v. Nato, G.R. No. 230211,
between workers and employers. (Jerzon October 6, 2021)
Manpower and Trading, Inc. v. Nato, G.R. No.
230211, October 6, 2021) The three-month salary rule
Rule before Serrano (1995-2009)
The worker shall be entitled to full The employment contract involved in the
reimbursement: instant case covers a two-year period but the
1. In case of termination of overseas overseas contract worker actually worked for
employment without just, valid or only 26 days prior to his illegal dismissal.
authorized cause as defined by law or Thus, the three months' salary rule applies.
contract, or (Flourish Maritime Shipping vs. Almanzor,
2. In case of any unauthorized G.R. No. 177948, March 14, 2008)
deductions from the migrant worker's
salary. (Sec. 10, R.A. No, 8042, as Rule after Serrano (2009-present)
amended by Sec. 7, R.A. No. Invalidated the 3-month salary cap clause.
10022) Sec. 10 of 8042, which limited the separation
pay to three months, was unconstitutional for
The worker shall be entitled to full violating the equal protection clause.
reimbursement of: (Serrano vs. Gallant, G.R. No. 167614, March
1. His placement fee and the deductions 24, 2009)
made with interest at twelve percent
(12%) per annum; and The phrase "or for three (3) months for every
2. His salaries for the unexpired portion year of the unexpired term, whichever is less"
of his employment contract. has been declared as unconstitutional.

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Despite the fact that the clause "or for three he is not entitled to moral and exemplary
(3) months for every year of the unexpired damages, as he failed to prove bad faith on
term, whichever is less" was reinstated in R.A the part of Quintinians. (Gabriel V.
8042 upon promulgation of R.A. 10022 in Quintinians Placement Agency, Inc., G.R. No.
2010, the Supreme Court reiterated its 238101 (Notice), September 30, 2020)
finding in Serrano vs. Gallant Maritime that
limiting wages that could be recovered by an B. Employment of Non-Resident Aliens
illegally dismissed overseas worker to three
months is both a violation of due process and Alien Employment Permit (AEP)
the equal protection clauses of the A document issued by the DOLE Secretary
Constitution. (Sameer Overseas Placement through the DOLE-Regional Director who has
Agency vs. Cabiles, G.R. 170139, August 5, jurisdiction over the intended place of work
2014) of the foreign national. All foreign nationals
who intend to engage in gainful employment
Sameer stresses that "when a law or a in the Philippines shall apply for an AEP. (Sec.
provision of law is null because it is 1 [1], D.O. No. 221 s. 2021; D.O. No. 146 s.
inconsistent with the Constitution, the nullity 2015)
cannot be cured by reincorporation or
reenactment of the same or a similar law or Gainful Employment
provision. A law or provision of law that was Gainful Employment refers to a state or
already declared unconstitutional remains as condition that creates an employer-employee
such unless circumstances have so changed relationship between the Philippine-based
as to warrant a reverse conclusion." employer and the foreign national, where the
However, there are no noted relevant former has the power to:
changes in the surrounding circumstances, as a. Hire/Dismiss the foreign national from
RA 10022 merely reinstated the provision employment;
after the Court already declared it b. Pays the salaries or wages thereof; Has
unconstitutional in Serrano. authority to control the performance or
conduct of the tasks and duties. (Sec. 1,
Additionally, the Court declared that an D.O. No. 186, s. 2017)
unconstitutional clause in the law, being
inoperative at the outset, confers no rights, Considering that McBurnie, an Australian,
imposes no duties and affords no protection. alleged illegal dismissal and sought to claim
Withal, even if Yarza's dismissal became under our labor laws, it was necessary for
effective on May 22, 2011, or when RA 10022 him to establish that he was qualified and
was already in force, “the declaration of duly authorized to obtain employment within
unconstitutionality found in the Serrano case our jurisdiction. His failure to obtain an
promulgated in March 2009 [and employment permit, by itself, necessitates
subsequently the Sameer case promulgated the dismissal of his labor complaint.
on August 5,2014] shall retroactively apply." (McBurnie vs. Ganzon, G.R. Nos. 178034,
(SRL International Manpower Agency v. 178117 & 186984-85 [Resolution], October
Yarza, Jr., G.R. No. 207828, [February 14, 17, 2013)
2022, Per J. Hernando)
Persons required to secure Alien
Gabriel's unjustified refusal to sign the Employment Permit [AEP]:
Romanian Labor Contract on the belief that it 1. Any alien seeking admission to the
was a falsified contract was the cause of the Philippines for employment purposes,
pre-termination of his overseas employment and
contract, as his stay in Romania became 2. any domestic or foreign employer
illegal. who desires to engage an alien for
Thus, Gabriel is not entitled to his salaries for employment in the Philippines (Article
the unexpired portion of overseas 40, Labor Code, as
employment contract. In the same vein, that amended).

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4. All foreign nationals granted

The law and the rules are consistent in exemption by special Laws and all
stating that the employment permit must be other laws that may be promulgated
acquired prior to employment. (WPP by the Congress;
Marketing Communications, Inc. v. Galera, 5. Owners and representatives of
G.R. Nos. 169207 & 169239, March 25, 2010) foreign principals, whose companies
are Accredited by the Philippine
Galera cannot come to this Court with Overseas Employment Administration
unclean hands. To grant Galera's prayer is to (POEA), who come to the Philippines
sanction the violation of the Philippine labor for a limited period solely for the
laws requiring aliens to secure work permits purpose of interviewing Filipino
before their employment. We hold that the applicants for employment abroad;
status quo must prevail in the present case 6. Resident foreign nationals and
and we leave the parties where they are. This temporary or probationary resident
ruling, however, does not bar Galera from visa holders employed or seeking
seeking relief from other jurisdictions. (Ibid) employment in the Philippines;
7. Foreign nationals who come to the
Resident aliens do not fall within the ambit of Philippines to Teach, present and/or
this provision (Almodiel vs. NLRC, G.R. No. conduct research studies in
100641, June 14, 1993) universities and colleges as visiting,
exchange or adjunct professors
Qualifications to secure AEP: under formal agreements between
the universities or colleges in the
In the case of a nonresident alien or to the Philippines and foreign universities or
applicant employer after a determination of colleges; or between the Philippine
the non-availability of a person in the government and foreign government:
Philippines who is competent, able and willing provided that the exemption is on a
at the time of application to perform the reciprocal basis (Sec. 2, D.O. No.
services for which the alien is desired. (Article 186, s. 2017)
40, Labor Code, as amended).
For an enterprise registered in preferred Exclusions From Permit Requirement
areas of investments, upon recommendation 1. Members of the governing board with
of the government agency charged with the voting rights only and do not
supervision of said registered enterprise intervene in the management of the
(Article 40, Labor Code, as amended). corporation or in the day-to-day
operation of the enterprise;
Exceptions: [DOSBLART] 2. President and Treasurer, who are
1. Members of the Diplomatic services part- owners of the company;
and foreign government officials 3. Those providing consultancy services
accredited by the Philippine who do not have employees in the
government; Philippines;
2. Officers and staff of international 4. Intra-corporate transferee who is a
Organizations of which the Philippine manager, executive or specialist as
government is a cooperating defined below in accordance with
member, and their legitimate Trade Agreements and an employee
Spouses desiring to work in the of the foreign service supplier for at
Philippines; least one (1) year continuous
3. Foreign nationals elected as employment prior to the deployment
members of the Governing Board to a branch, subsidiary, affiliate or
who do not occupy any other representative office in the
position, but have only voting rights Philippines. (Sec. 3, D.O. No. 186, s.
in the corporation; 2017)

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Note: Pursuant to Sec. 4 of DO 186-17, all

foreign nationals excluded from securing AEP 6. Representative of the Foreign
shall secure Certificate of Exclusion from the Principal/Employer assigned in the
Regional Office. (Sec. 4, D.O. No. 186, s. Office of Licensed Manning Agency
2017) (OLMA) in accordance with the POEA
law, rules and regulations.
5. Contractual service supplier who is a
manager, executive, or specialist and AEP Is Not an Exclusive Authority
an employee of a foreign service Generally, the issuance of Alien Employment
supplier which has no commercial Permit (AEP) is not an exclusive authority for
presence in the Philippines: a foreign national to work in the Philippines
a. Who enters the Philippines (D.O. No. 186, s. 2017)
temporarily to supply a service
pursuant to a contract between A Foreign National Must Obtain
his/her employer and a service 1. Alien Employment Permit (AEP) from the
consumer in the Philippines; DOLE; (Sec. 3, D.O. No. 97-09; Sec.
b. Must possess the appropriate 1[2], D.O. No. 221, s. 2021)
educational and professional 2. Special Temporary Permit (STP) from
qualifications; and the PRC, in case the employment
c. Must be employed by the foreign involves practice of profession; (Policy
service supplier for at least one Declaration, D.O. No. 146 s. 2015; Sec.
year prior to the supply of service 1[22], D.O. No. 221, s. 2021)
in the Philippines 3. Authority to Employ Alien (AEA) from the
DOJ where the employment is in a
Executive: a natural person within the nationalized or partially nationalized
organization who primarily directs the industry and DENR, in case of mining.
management of the organization and (Sec.1[4], D.O. No. 221, s. 2021)
exercises wide latitude in decision- making
and receives only general supervision or Procedure in The Processing of
direction from higher level executives, the Applications for AEP
board of directors, or stockholders of the All applications for AEP shall be filed and
business; an executive would not directly processed at the DOLE Regional Office or
perform tasks related to the actual provision Field Office having jurisdiction over the
of the service or services of the organization; intended place of work. In case the foreign
Manager: a natural person within the national will be assigned in related companies
organization who primarily directs the of his employer, the applications may be filed
organization/department/subdivision and in the Regional Office or Field Office having
exercises supervisory and control functions jurisdiction over any of the applicant’s
over other supervisory, managerial or intended place of work. Additional position of
professional staff; does not include first-line the foreign national in the same company or
supervisors unless employees supervised are subsequent assignment in related companies
professionals; does not include employees during the validity or renewal of the AEP will
who primarily perform tasks necessary for be subject for publication requirement. A
the provision of the service; or change of position or employer shall require
Specialist: a natural person within the an application for new AEP. (Sec. 5, D.O. No.
organization who possesses knowledge at an 186, s. 2017)
advanced level of expertise essential to the
establishment/provision of the service and/or ART. 42. Submission of List. Any
possesses proprietary knowledge of the employer employing non- resident foreign
organization’s service, research equipment, nationals on the effective date of this Code
techniques or management; may include, but shall submit a list of such nationals to the
not limited to, members of a licensed Secretary of Labor within thirty (30) days
profession. after such date indicating their names,

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citizenship, foreign and local addresses, c. If thereafter, the subject foreign

nature of employment and status of stay in national has been elected and
the country. The Secretary of Labor shall then qualified for the same position, the
determine if they are entitled to an employer shall submit within thirty
employment permit. (30) days after the date of
election/appointment a duly
Prohibitions against transfer of notarized Board Secretary's
employment Certification stating such fact to the
After the issuance of an employment permit, concerned DOLE-RO.
the alien shall not transfer to another job or d. If the foreign national was
change his employer without prior approval elected/appointed for a different
of the Secretary of Labor (Article 41, Labor position, an application for a new AEP
Code, as amended). must be filed within (15) working
days after the date of appointment or
Validity of AEP election, together with a duly
The AEP shall be valid for the position and the notarized Board Secretary's
company for which it was issued for a period Certification. (Sec. 9, D.O. No. 221, s.
of one (1) year, unless granted a longer 2021)
period vis-a-vis the employment duration, as
stated in the employment contract or other Grounds for DENIAL of Application for
modes of engagement, but in no case shall New or Renewal of Permit
exceed three (3) years. (Sec. 8, D.O. No. 221, The DOLE-RO, after due process and
s. 2021) evaluation/assessment, may issue an Order
denying an application for new or renewal of
Renewal of AEP an AEP based on any of the following
An application for renewal of an AEP may be grounds:
filed as early as sixty (60) days before its a. misrepresentation of facts;
expiration. In case the foreign national needs b. submission of falsified, tampered or
to leave the country or any other similar fraudulent documents;
circumstances that will hinder the filling of c. submission of a visa not in accordance
renewal within the prescribed period, the with applicable rules and regulations.
application may be filed earlier. d. meritorious objection filed by a Filipino
citizen who is competent, able and
An application for renewal of an AEP where willing to do the job intended for or
an election or appointment is required for the being performed by the foreign national;
position, the procedure shall be as follows: e. grave misconduct in dealing with or ill
a. If the foreign national was elected or treatment of workers; and
appointed for the same position f. verified information against the
before his/her AEP expires, the employment of the foreign national.
application for renewal of AEP must (Sec.
be filed before its expiration together 11, D.O. No. 221, s. 2021)
with a duly notarized Board
Secretary's Certification stating such Grounds for Revocation of AEP
fact;
b. If the foreign national still holds the The DOLE-RO may, motu proprio or upon
same position or office in a hold-over petition/complaint, issue an Order revoking
capacity, an application for renewal an AEP after due process, based on any of
of AEP shall be filed before its the following grounds:
expiration supported by a duly a. any act of misrepresentation for
notarized Board Resolution for that purposes of securing an AEP, including
purpose. The DOLERO shall issue an but not limited to fraudulent application
AEP with one (1) year validity period of facts, falsification or tampering of
to said foreign national. documents, and similar circumstances;

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b. meritorious objection filed by a Filipino 2. Five (5) years, in case the denial or
citizen who is competent, able and revocation is based on grounds not specified
willing to do the job intended for or above. (Sec. 16 par. 2, D.O. No. 221, s. 2021)
being performed by the foreign national;
c. foreign national has been convicted or Effect of Fraudulent Application for AEP
found guilty of a criminal offense, or is a Foreign nationals found to be working with
fugitive from justice based on a verified expired AEP or had been working without the
information; necessary AEP under the rules and employers
d. verified information against the found to be employing such, shall be barred
employment of the foreign national; from filing AEP application for five (5) years,
e. verified information on grave misconduct plus payment of penalties. (Sec. 10 par. 1,
in dealing with or ill treatment of workers D.O. No. 221, s. 2021)
filed with the DOLE-RO against the
foreign national; Employers and/or foreign nationals, who are
f. violation and non-compliance of other found to possess fraudulent AEP, shall
pertinent provisions of this rules and likewise be barred indefinitely from applying
regulations, the Labor Code, as for or being granted an AEP, plus payment of
amended and other relevant guidelines penalties. (Sec. 10 par. 2, D.O. No. 221, s.
for issuance of AEP; and 2021)
g. failure to claim the AEP card within ten
(10) working days from date of Appeal
notification of availability. (Sec. 13, D.O. The foreign national or employer may file an
No. 221, s. 2021) appeal to the DOLE-RO after a Motion for
Reconsideration with the order issued by the
Additional Ground DOLE-RO has been denied.
Here, the alien, without the prior approval of a. Jurisdiction and Period to
the DOLE secretary, is prohibited from Appeal.
committing any of the following: An appeal may be filed with the
1. Transfer to another job; DOLERO within ten (10) days from
2. Change his employer; receipt of a copy of the order of the
DOLE-RO.
Such transfer to another job or change of
position or in employer requires the filing of An appeal filed beyond the
an application for new AEP. (par. (a), Art. 41, reglementary period shall not be
Labor Code) accepted by the DOLE-RO. As such,
the order of the DOLE-RO shall be
Effect of Denial or Revocation of AEP deemed final and executory.
b. Requirements of Appeal.
A foreign national whose AEP has been The appealing party shall file a notice
denied or revoked is disqualified to re-apply of appeal and an appeal
within a period of: memorandum with the concerned
1. Ten (10) years, in case the grounds for DOLE-RO. The appeal memorandum
revocation is any of the following: must be verified and shall clearly
a. foreign national has been convicted state the errors of law and/or fact in
or found guilty of a criminal offense, the decision appealed from.
or is a fugitive from justice based on c. Transmittal of Records of the
a verified information; or Case on Appeal.
b. verified information on grave Within five (5) days from receipt of
misconduct in dealing with or ill the appeal timely filed, the concerned
treatment of workers filed with the DOLE-RO shall transmit the entire
DOLE-RO against the foreign records of the case to the office of the
national. (Sec. 16 par. 1, D.O. No. Secretary.
221, s. 2021) d. Effect of Filing an Appeal.

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The order of the DOLE-RO shall be jurisdictional foundation for a compensation

stayed during the pendency of appeal claim (Asia Steel Corp. v. WCC, L-7636, 27
except: June 1955)
i. When the basis for denial or
revocation of AEP are any of the The basic factor underlying the exercise of
following: rights and the filing of claims for benefits
a. Misrepresentation and/or under the Labor Code and other presidential
fraudulent application of facts, issuances or labor legislations is the status
b. Submission of falsified or and nature of one’s employment. (Villuga vs.
tampered documents or similar NLRC, GR No. 75038, August 23, 1993)
circumstances,
c. Conviction of a criminal offense, The existence of employment relationship is
foreign national is a fugitive determined by law and not by contract and
from justice, or to rule otherwise would set a dangerous
d. Final finding on grave precedent, which would in effect permit
misconduct in dealing with or ill employers to evade their responsibilities
treatment of workers; under our labor laws through the scheme of
ii. When the basis for barring the having the employees sign agreements
employers, employer and foreign negating the existence of employer-
national's representatives, and/or employee relationship. (Magtibay v. Airtrac
agents in filing an AEP application Agricultural Corp., G.R. No. 228212, July 8,
is: 2020)
a. Fraudulent application of AEP,
b. Working with an expired AEP, 1. TESTS TO DETERMINE EMPLOYER-
or EMPLOYEE RELATIONSHIP
c. Working without an AEP.
1. Four-Fold Test
e. Decision of the DOLE Secretary.
The DOLE Secretary shall render The "four-fold test" in determining the
his/her decision within sixty (60) days existence of an employer-employee
from the receipt of transmittal of the relationship has the following requisites:
entire records of the case.
a. the selection and engagement of the
The decision of the DOLE Secretary employee;
SHALL be final and executory unless b. the payment of wages;
a Motion for Reconsideration is filed c. the power of dismissal; and
within ten (10) days from the receipt d. the power to control the employee's
of the copy of the Order. The decision conduct. (Gerome B. Ginta-Sison vs.
on the Motion for Reconsideration J.T.A. Packaging Corporation, G.R. No.
shall be final and executory. No 244206, March 16, 2022, J. Hernando)
second Motion for Reconsideration
shall be allowed. (Sec. 15, D.O. No. The Most Important Test is the Control
221, s. 2021) Test: Under the "control test," the employer
is the person who has the power to control
III. EMPLOYER-EMPLOYEE both the end achieved by his or her
employees, and the manner and means they
RELATIONSHIP
use to achieve that end. (Wyeth Philippines,
Inc. v. Estabaya, G.R. Nos. 231082 & 231102
A. Employer-Employee Relationship (Notice), October 6, 2021)

Proof of employment relation is of first Absent the power to control the employee
importance, for the reason that the existence with respect to the means and methods of
of the employer-employee relationship is the accomplishing his work, there is no employer-

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employee relationship between the parties. 3. the nature and degree of control
(Continental Marble Corp., et.al vs. NLRC, exercised by the employer;
G.R. No. 43825, May 9, 1988) 4. the worker's opportunity for profit and
loss;
The power of control refers merely to the 5. the amount of initiative, skill, judgment
existence of the power and not to the actual or foresight required for the success of
exercise thereof. It is not essential for the the claimed independent enterprise;
employer to actually supervise the 6. the permanency and duration of the
performance of duties of the employee; it is relationship between the worker and the
enough that the former has a right to wield employer; and
the power. To operate against the employer, 7. the degree of dependency of the worker
the power of control need not have been upon the employer for his continued
actually exercised. Proof of the existence of employment in that line of business.
such power is enough. (Chan, Bar Reviewer
on Labor Law, 2019, p.621- 622) The proper standard of economic
dependence is whether the worker is
The control test means that the employer dependent on the alleged employer for his
controls or has reserved the right to control continued employment in that line of
the employee not only as to the result of the business. Xxx The benchmark of economic
work to be done but also as to the means and reality in analyzing possible employment
methods by which the same is to be relationships for purposes of the Labor Code
accomplished. The three (3) terms: (1) ought to be the economic dependence of the
means, (2) methods and (3) results are the worker on his employer. (Wahing v. Spouses
critical elements of the control test. (Chan, Daguio, G.R. No. 219755, April 18, 2022)
2019 Preweek Notes on Labor Law, p. 76)
3. Two-Tiered Test
Not every form of control establishes ER-EE
relationship. A demarcation line should be The two-tiered test involves:
drawn between: (a) rules that merely serve
as guidelines which only promote the result, 1. the putative employer's power to
and (b) rules that fix the methodology control the employee with respect to
and bind or restrict the party hired to the the means and methods by which the
use of such means or methods. Under the work is to be accomplished; and
first category, there exists no employer- 2. the underlying economic realities of
employee relationship. In the second the activity or relationship. (Ibid)
category it has the effect of establishing
employer-employee relationship. (Insular Life This two-tiered test would provide us with a
Assurance Co., Ltd. U. NLRC, 179 SCRA 439; framework of analysis, which would take into
Consulta U. C.A., G.R. No. 145413, 18 March consideration the totality of circumstances
2005) surrounding the true nature of the
relationship between the parties. This is
2. Whole Economic Activity Test especially appropriate in this case where
there is no written agreement or terms of
The determination of the relationship reference to base the relationship on and due
between employer and employee depends to the complexity of the relationship based on
upon the circumstances of the whole the various positions and responsibilities
economic activity, such as: given to the worker over the period of the
latter’s employment. (Ibid)
1. the extent to which the services
performed are an integral part of the Note: Employment relationship under the
employer's business; control test is determined by asking whether
2. the extent of the worker's investment in “the person for whom the services are
equipment and facilities; performed reserves the right to control not

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only the end to be achieved but also the Test of Regularity

manner and means to be used in reaching
such end.” The broader economic reality test 1. By nature of work - when the
calls for the determination of the nature of employee has been engaged to
the relationship based on the circumstances perform activities which are usually
of the whole economic activity. Under this necessary or desirable in the usual
test, the proper standard of economic business or trade of the employer.
dependence is whether the worker is 2. By years of service - when the
dependent on the alleged employer for his employee is allowed to work beyond
continued employment in that line of the agreed period of probationary,
business. (Chan, Bar Reviewer on Labor Law, project, seasonal, casual, or fixed-
2019, p.622-623) term employment, irrespective of
whether it is just one day or more
2. KINDS OF EMPLOYMENT after the lapse of such period.
(University of Santo Tomas vs.
a. Regular Samahang Manggagawa ng UST, et
b. Casual al. G.R. No. 184262, April 24, 2017)
c. Probationary
d. Project Necessary or Desirable in the Usual
e. Seasonal Business or Trade
f. Fixed-Term
Workers assigned at the compounding area
a. Regular are indispensable to the operations of Wyeth
because they ensure the safety of Wyeth's
Regular Employees products by checking the expiration dates
and the condition of the sachets. They were
Regular employees refer to those who have also responsible for the cartoning of the
been engaged to perform activities which are sachets for distribution and exportation.
usually necessary or desirable in the usual Furthermore, the repeated and continuing
business or trade of the employer (Art. 295, need to rehire complainants is sufficient
Labor Code, as amended) evidence of the necessity, if not
indispensability, of their work to the business
Article 295 of the Labor Code "provides for of manufacturing and distribution of milk
two (2) types of regular employees, namely: products. (Wyeth Philippines, Inc. v.
Estabaya, G.R. Nos. 231082 & 231102
1. those who are engaged to perform (Notice), October 6, 2021)
activities which are usually necessary
or desirable in the usual business or AIMKO's janitorial/sanitation services cannot
trade of the employer (first be deemed as necessary to Wyeth's business.
category); and It is a fact that all businesses engaged in
2. those who have rendered at least one manufacturing would require their premises
year of service, whether continuous to be clean as this is only good manufacturing
or broken, with respect to the activity practice. However, it does not make the
in which they are employed (second janitorial/sanitation services essential
category). elements of Wyeth's business, which is
developing and manufacturing of milk
However, it is to be noted that regular products. (Wyeth Philippines, Inc. v.
employment status of a person is defined and Estabaya, G.R. Nos. 231082 & 231102
prescribed by law and not by what the parties (Notice), October 6, 2021)
say it should be. (Perdito R. Parayday vs.
Shogun Shipping Co., Inc., G.R. No. 204555. Right To Security Of Tenure
July 6, 2020, J. Hernando)

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The employer may not terminate the services Kabalikat para sa Maunlad na Buhay, Inc.,
of a regular employee except for a just cause G.R. No. 245938 (Resolution), April 5, 2022)
or when authorized under the Labor Code
(Art. 279, Labor Code, as amended) Although probationary employees enjoy
security of tenure, they do not enjoy
b. Casual permanent status and thus may be
terminated on two grounds:
Casual Employment
1. just cause; and
An employment arrangement between an 2. when they fail to qualify as a regular
employer and a casual employee wherein the employee in accordance with
latter performs work that is incidental to the reasonable standards prescribed by
business. the employer. (Ibid)

Any employee who has rendered at least one Probationary employment must have
year of service, whether such service is been expressly agreed upon. If there is
continuous or broken, shall be considered a no such agreement, the employment is
regular employee with respect to the activity considered regular (Sampaguita Auto
in which he is employed and his employment Transport Corp. vs. NLRC, G.R. No. 197384,
shall continue while such activity exists. (par. January 30, 2013)
2, Art. 280, Labor Code; (Claret School of
Quezon City vs. Sinday, G.R. No. 226358, Ideally, employers should immediately inform
October 9, 2019) probationary employees of the standards for
their regularization from day one; however,
The one (1) year period should be reckoned strict compliance thereof is not required.
from the hiring date. (Kimberty-C tark (Cambil v. Kabalikat para sa Maunlad na
[Phils.], Inc. v. Secretary of Labor, G .R . No. Buhay, Inc., G.R. No. 245938 (Resolution),
156668, Nov. 23,2007.) April 5, 2022)

No regular appointment papers necessary for An employer who would have substantially
a casual employee to become regular. (Kay complied with the rule on notification of
Products, Inc. v. CA, G R N o. 162472, July standards if it apprises its employee that they
28,2005) will be subjected to a performance evaluation
on a particular date. At any rate, it is
c. Probationary ludicrous to rule that petitioner was deprived
of due process considering that there is only
Probationary Employment a threeday difference between May 30, 2016
and June 2, 2016. (Ibid)
Probationary employment exists where the
employee, upon his engagement, is made to General Rule: Six-month Probationary
undergo a trial period during which the Period
employer determines his fitness to qualify for
regular employment based on reasonable Probationary employment shall not exceed 6
standards made known to him at the time of months from the date the employee started
his engagement (Labor Code, Art. 296, as working (Art. 296, Labor Code, as amended)
amended).
Our computation of the 6-month
A probationary employee under Article 296 of probationary period is reckoned from the
the Labor Code is one "who for a given period date of appointment up to the same calendar
of time, is being observed and evaluated to date of the 6th month following. (Jaso v.
determine whether or not he is qualified for Metrobank & Trust Co., G.R. No. 235794, May
permanent employment." (Cambil v. 12, 2021)

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Petitioner was hired on July 16, 2012 for a Leogardo, J.R. and Dequila. G.R. No.
sixmonth probationary contract; thus, her 74246, 1989.);
probation should last until January 16, 2012,
the same calendar date of the 6th month 6. The Employer gives the Employee a
following July 16, 2012. (Ibid) second chance to pass the standards set;
(Ibid.)
Renewal of Contract After the Lapse of 7. When the same is required by the
Probationary Period, Employee nature of the work, e.g. the probationary
Becomes a Regular Employee period set for professors, instructors and
teachers is 3 consecutive years of satisfactory
When an employer renews a contract of service pursuant to DOLE Manual of
employment after the lapse of the six-month Regulations for Private Schools. (Ibid)
probationary period, the employee thereby
becomes a regular employee. No employer is If not one of the exceptional circumstances
allowed to determine indefinitely the fitness above is proven, the employee whose
of its employees. (Malicdem and Flores vs. employment exceeds 6 months is
Marulas Industrial Corporation and Mancilla. undoubtedly a regular employee. (San Miguel
GR No. 204406, February 26, 2014) vs. Del Rosario, G.R. No. 168194 & 168693,
2005)
Note: In the absence of any evaluation or
valid extension, the employee had become a Extension Of Probation;
regular employee (Dusit Hotel Nikko vs. Double/Successive Probation Not
Gatbonton. G.R. 161654, May 5, 2006) Allowed

Exceptions to the Six-month The probationary period may be extended

Probationary Period: but only when the employee agrees to such
extension. Absent such agreement would
1. The employer and the employee make the extension invalid, hence, the
mutually agree on a shorter or longer employee would be considered as having
period (Mariwasa Manufacturing, Inc. become a regular employee after the lapse of
and Dazo vs. Leogardo, J.R. and the original probationary period. (Dusit Hotel
Dequila. G.R. No. 74246, 1989); Nikko vs. Gatbonton. G.R. 161654, May 5,
2. The nature of work requires a longer 2006)
period (eg. part-time faculty of
educational institutions); The evil sought to be prevented is to
3. A longer period is required and discourage scheming employers from
established by company policy using the system oWithin the 6-month
(Buiser, et al. vs. Leogardo, J.r., et. probationary period, probationary employees
al., G.R. No. L63316, July 31, 1984); are entitled to security of tenure
4. Covered by an Apprenticeship or notwithstanding their limited tenure and non-
Learnership agreement stipulating a permanent status. During their probationary
different period (Art. 296, Labor employment, they cannot be dismissed
Code, as amended); except under any of the following grounds:
5. Voluntary agreement of parties;
1. For a just or authorized cause as
Note: By voluntarily agreeing to such provided by law or under the
an extension, the Employee waived employment contract (Phil Federation
any benefit attaching to the of Credit Cooperatives, Inc. and
completion of the period if he still Jayoma vs. NLRC and Abril. G.R. No.
failed to make the grade during the 121071, December 11, 1998).
period of extension (Mariwasa 2. For failure to qualify as a regular
Manufacturing, Inc. and Dazo vs. employee in accordance with
reasonable standards made known

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 PURPLE NOTES 2024 – LABOR LAW

by the employer to the employee at Termination, to be valid, must be done before

the time of engagement. (Robinsons the lapse of the probationary period.
Galleria/Robinsons Supermarket (Pasamba vs. NLRC, et al. G.R. No. 168421,
Corporation vs. Sanchez, G.R. No. June 8, 2007; Meralco vs. NLRC and Meris,
177937, January 19, 2011) G.R. No. 83751, September 29, 1989)

In the case of No. 1, procedural due process Once the employer finds the employee
is required in the termination of probationary qualified, the employer may extend to him
employment. regular employment even before the end of
the probation. (Canagian Opportunities
In the case of No. 2, the following requisites Unlimited vs. Dalangin, J.r., G.R. No. 172223,
must be present: February 6, 2012)

i. The employer must communicate to the Limitations To Termination of

employee that he is being hired on a Probation
probationary basis;
1. It must be exercised in accordance
ii. The employer must convey to the with the specific requirements of the
probationary employee the reasonable contract;
standards to qualify for regularization; 2. If a particular time is prescribed, the
termination must be within such time
iii. The probationary status of the newly hired and if formal notice is required, then
employee must be communicated to him that form must be used;
prior to the commencement of his 3. The employer’s dissatisfaction must
employment; be real and in good faith, not feigned
so as to circumvent the contract or
iv. The employer must convey this reasonable the law;
standard at the start of the probationary 4. There must be no unlawful
employee‘s engagement and not in the discrimination in the dismissal.
course thereof or towards its end; otherwise (Manila Hotel Corporation vs. NLRC
he becomes a regular employee from day one and Cruz, G.R. No. 53453, January
of his employment. 22, 1986)

v. The employer must evaluate the Due Process Prior To Termination

performance of the probationary employee in
relation to the duly communicated Probationary employees are entitled to
reasonable standards; and procedural due process prior to dismissal
from service. Due process consists of making
vi. The employee fails to comply with these the reasonable standards excepted of the
reasonable standards before the completion employee during his probationary period
of the probationary period. (Tiamson‘s known to him at the time of his probationary
Enterprises, Inc. et al. vs. CA and Sy, G.R. employment. (Philippine Daily Inquirer, Inc.
No. 192881, November 16, 2011) vs. Magtibay, J.r. and PDIEU. G.R. No.
164532, July 24, 2007)
Termination must be done prior to the lapse
of the probationary period. Termination a few Acquisition Of Permanent Employment
days after the lapse of probationary period For Private School Teachers
cannot be done without due process as he
has already become a regular employee by The requisites to acquire permanent
that time. (Ibid) employment, or security of tenure, are:

Probationary employee may be dismissed 1. the teacher is a full-time teacher;

before the end of the probationary period.

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 PURPLE NOTES 2024 – LABOR LAW

2. the teacher must have rendered employment is for the duration of the season
three consecutive years of service; (Art. 295, Labor Code, as amended).
and
3. such service must have been Note: Absence of a definite duration of the
satisfactory. (Palgan v. Holy Name project, the employee is deemed to be
University, G.R. No. 219916, regular (Violeta and Baltazar vs. NLRC, G.R.
February 10, 2021, Per J. Hernando) No. 119523, October 10, 1997)

A part-time teacher cannot acquire Litmus Test

permanent status. Only when one has served
as a full-time teacher can he acquire The litmus test for determining whether
permanent or regular status. The petitioner particular employees are properly
was a part-time lecturer before she was characterized as project employees, as
appointed as a full-time instructor on distinguished from regular employees, is
probation. As a part-time lecturer, her whether or not the employees were assigned
employment as such had ended when her to carry out a specific project or undertaking,
contract expired. Thus, the three semesters the duration and scope of which were
she served as part-time lecturer could not be specified at the time the employees were
credited to her in computing the number of engaged for that project. (Innodata
years she has served to qualify her for Knowledge Services, Inc. v. Inting, G.R. No.
permanent status. (Ibid) 211892,[December 6, 2017)

d. Project Continuous rehiring of the employee a

badge of regular employment
The principal test in determining whether an
employee is a project employee is whether: Continuous rehiring of the employee may
serve as a badge of regular employment
1. he/she is assigned to carry out a when the activities performed by the
"specific project or undertaking," purported “project” employee are necessary
2. the duration and scope of which are and indispensable to the usual business or
specified at the time the employee is trade of the employer (Tomas Lao
engaged in the project, or Construction vs. NLRC, G.R. No. 116781,
3. where the work or service to be September 5, 1997)
performed is seasonal in nature and
the employment is for the duration of Once a project or work-pool employee who
the season. has been (1) continuously, as opposed to
intermittently, re-hired by the same employer
A true project employee should be assigned for the same tasks or nature of tasks; and (2)
to a project which begins and ends at these tasks are vital, necessary and
determined or determinable times, and be indispensable to the usual business or trade
informed thereof at the time of hiring. of the employer, then the employee must be
(Eduardo G. Jovero vs. Rogelio Cerio, GR No. deemed a regular employee. (Maraguinot,
202466, June 23, 2021, J. Hernando) J.r. and Enero vs. NLRC, G.R. 120969,
January 22, 1998)
Project Employees Refer To Those
Whose Employment: Two (2) Types of Project Activities:

a. has been fixed for a specific project A particular job or undertaking that is
or undertaking, the completion or termination
of which has been determined at the time of 1. within the regular or usual business
the engagement of the employee or of the employer company, but which
b. where the work or service to be is distinct and separate, and
performed is seasonal in nature and the

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 PURPLE NOTES 2024 – LABOR LAW

identifiable as such, from the other particular project/undertaking for which

undertaking of the company; and he is engaged;
2. not within the regular business of the D. The employee, while not employed and
corporation, such a job or awaiting engagement, is free to offer his
undertaking must also be identifiably service to any other employer;
separate and distinct from the E. The termination of his employment in the
ordinary or regular business particular project/undertaking is reported
operations of the employer. (ABS to the DOLE Regional office having
CBN Broadcasting Corporation vs. jurisdiction over the workplace within 30
Nazareno, G.R. No. 164156, days following the date of his separation
September 26, 2006) from work, using the prescribed form on
employees’ terminations/ f double or
The services of project employees are successive probation to circumvent the
coterminous with the project and may be mandate of the law on regularization and
terminated upon the end or completion of make it easier for them to dismiss their
that project for which they were hired. (Ibid) employees. (Holiday Inn Manila, et al. vs.
NLRC and Honasan. G.R. No. 109114,
Two (2) Types of Employees In The September 14, 1993)
Construction Industry
Right To Security Of Tenure
1. Project Employees - those
employed in connection with a Project employees are entitled to security of
particular construction project; tenure at least for the duration of the project.
2. Non-project Employees - those (Ibid)
employed by a construction company
without reference to a particular e. Seasonal Employees
project. (Fernandez vs. NLRC and
D.M. Consunji, Inc., G.R. No. 106090, Seasonal employees or those who work or
February 28, 1994) perform services which are seasonal in
nature, and the employment is for the
The length of service or the rehiring of duration of the season. (Mantalaba, Jr. v.
construction workers on a project-to-project Manila Electric Co., G.R. No. 238558 (Notice),
basis does not confer regular employment October 6, 2021)
status, since their hiring is only a natural
consequence of the fact that experienced Regular Seasonal Employment
construction workers are preferred.
(Grandspan Development Corporation vs. A seasonal employee may be considered a
Bernardo, G.R. No. 141464, September 21, regular employee. Regular seasonal
2005) employees are those called to work from time
to time. The nature of their relationship with
Indicators of Project Employment: the employer is such that during the off
season, they are temporarily laid off; but
A. The duration of the specific/identified reemployed during the summer season or
undertaking for which the worker is when their services may be needed. They are
engaged is reasonably determinable; in regular employment because of the nature
B. Such duration, as well as the specific of their job, and not because of the length of
work/service to be performed, is defined time they have worked (Gapayao vs. Fulo,
in an employment agreement and is made G.R. No. 193493, June 13, 2013)
clear to the employee at the time of
hiring; Note: Regular seasonal employment
C. The work/service performed by the requires at least two (2) seasons to make a
employee is in connection with the seasonal employee into a regular seasonal
employee. (Universal Robina Sugar Milling

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 PURPLE NOTES 2024 – LABOR LAW

Corporation and Cabati vs. Acibo, G.R. No. corresponding workers." (Paragele v. GMA
186439, January 15, 2014) Network, Inc., G.R. No. 235315, July 13,
2020)
Requisites For Regular Seasonal
Employment f. Fixed-Term

1. Seasonal employee should perform Fixed-Term Employment

work or services that are seasonal in
nature; and A type of employment "embodied in a
2. They must have also been employed contract specifying that the services of the
for more than one (1) season. employee shall be engaged only for a definite
period, the termination of which occurs upon
Both requisites should concur in order that the expiration of said period irrespective of
the employee may be classified as a regular the existence of just cause and regardless of
seasonal employee. (Hacienda Fatima, vs. the activity the employee is called upon to
National Federation of Sugarcane Workers- perform." (Regala vs Manila Hotel
Foods and General Trade, G.R. No. 149440, Corporation, G.R. No. 204684, Oct. 5, 2020,
January 28, 2003) J. Hernando)

The cessation of construction activities at the The fixed-term character of employment

end of every project is a foreseeable essentially refers to the period agreed upon
suspension of work. Of course, no between the employer and the employee.
compensation can be demanded from the (Ibid)
employer because the stoppage of operations
at the end of a project and before the start The decisive determinant in term
of a new one is regular and expected by both employment should not be the activities that
parties to the labor relations. Similar to the the employee is called upon to perform, but
case of regular seasonal employees, the the day certain agreed upon by the parties
employment relation is not severed by merely for the commencement and termination of
being suspended. The employees are, strictly their employment relationship. Specification
speaking, not separated from services but of the date of termination is significant
merely on leave of absence without pay until because an employee's employment shall
they are reemployed. Thus, we cannot affirm cease upon termination date without need of
the argument that nonpayment of salary or notice. (Ibid)
non-inclusion in the payroll and the
opportunity to seek other employment A fixed-term employment is allowable under
denote project employment. (ABSCBN the Labor Code only if the term was
Broadcasting Corp. v. Tajanlangit, G.R. No. voluntarily and knowingly entered into by the
219508, September 14, 2021) parties who must have dealt with each other
on equal terms not one exercising moral
Though project and seasonal employees may dominance over the other. (Samonte vs. La
perform functions that are necessary and Salle Greenhills, Inc. and Oca, G.R.
desirable to the usual business or trade of the No.199683, February 10, 2016)
employer, the law distinguishes them from
regular employees in that, project and Requisites Of A Valid Fixed-Term
seasonal employees are generally needed Employment:
and engaged to perform tasks which only last
for a specified duration. The relevance of this 1. The employee must have willfully and
distinction finds support in how "only voluntarily entered into the fixed-
employers who constantly need the specified term employment contract without
tasks to be performed can be justifiably any duress, force, intimidation, or
charged to uphold the constitutionally undue influence from the employer;
protected security of tenure of the and

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2. The employer and the employee CASES OF WRITTEN, UNEQUIVOCAL

must have bargained on equal AND VOLUNTARY RESIGNATION; PROVIDED
footing on the terms and conditions FURTHER, THAT SHOULD RETRENCHMENT
of employment. (Ibid) BE NECESSARY BEFORE OR AFTER THE
EXPIRATION OF THE EXTENSION OF
3. Related Concepts SUSPENSION OF EMPLOYMENT, THE
AFFECTED EMPLOYEE SHALL BE ENTITLED
a. Floating Status TO SEPARATION PAY AS PRESCRIBED BY
AMENDED RULE ON SUSPENSION OF THE COMPANY POLICIES OR COLLECTIVE
EMPLOYMENT RELATIONSHIP (DOLE BARGAINING AGREEMENT, WHICHEVER IS
DEPARTMENT ORDER NO. 215-20) HIGHER; PROVIDED, FINALLY, THAT THE
RETRENCHED EMPLOYEES SHALL HAVE
Suspension of relationship PRIORITY IN THE RE-HIRING IF THEY
The employer-employee relationship shall be INDICATE THEIR DESIRE TO RESUME THEIR
deemed suspended in case of suspension of WORK NOT LATER THAN ONE (1) MONTH
operation of the business or undertaking of FROM THE RESUMPTION OF OPERATIONS.
the employer for a period not exceeding six THIS NOTWITHSTANDING, BY MUTUAL
(6) months, unless the suspension is for the AGREEMENT OF THE EMPLOYER AND THE
purpose of defeating the rights of the EMPLOYEES, THROUGH THE UNION, IF ANY,
employees under the Code, and in case of OR WITH THE ASSISTANCE OF THE
mandatory fulfillment by the employee of a DEPARTMENT OF LABOR AND EMPLOYMEN
military or civic duty. The payment of wages T, EMPLOYEES MAY BE RECALLED TO WORK
of the employee as well as the grant of other OR RETRENCHED SUBJECT TO THE
benefits and privileges while he is ON REQUIREMENT OF NOTICE AND
SUSPENDED EMPLOYMENT OR on a SEPARATION PAY, ANYTIME BEFORE THE
military or civic duty shall be subject to EXPIRATION OF THE EXTENSION OF
EXISTING laws and decrees and to the SUSPENSION OF EMPLOYMENT.
applicable individual or collective bargaining
agreement and voluntary employer practice THE EXTENSION OF SUSPENSION OF
or policy. EMPLOYMENT SHALL NOT AFFECT THE
RIGHT OF THE EMPLOYEES TO SEPARATION
IN CASE OF DECLARATION OF WAR, PAY. THE FIRST SIX (6) MONTHS OF
PANDEMIC AND SIMILAR NATIONAL SUSPENSION OF EMPLOYMENT SHALL BE
EMERGENCIES, THE EMPLOYER AND THE INCLUDED IN THE COMPUTATION OF THE
EMPLOYEES, THROUGH THE UNION, IF ANY, EMPLOYEES' SEPARATION PAY."
OR WITH THE ASSISTANCE OF THE
DEPARTMENT OF LABOR AND EMPLOYMEN NON-DIMINUTION OF BENEFIT
T, SHALL MEET IN GOOD FAITH FOR THE Nothing in this issuance shall be construed to
PURPOSE OF EXTENDING THE SUSPENSION authorize or justify the diminution or
OF EMPLOYMENT FOR A PERIOD NOT reduction of benefits, supplements or
EXCEEDING SIX (6) MONTHS: PROVIDED, payments as provided in existing laws,
THAT THE EMPLOYER SHALL REPORT TO individual or collective agreement,
THE DEPARTMENT OF LABOR AND EMPLOY or employment practices or policies.
MENT, THROUGH THE REGIONAL OFFICES,
COMPLIANCE AND ENFORCEMENT
THE EXTENSION OF SUSPENSION OF The DOLE Regional Offices shall inspect and
EMPLOYMENT TEN (10) DAYS PRIOR TO monitor the proper implementation of this
THE EFFECTIVITY THEREOF SUBJECT TO issuance.
INSPECTION; PROVIDED, HOWEVER, THAT
THE EMPLOYEES SHALL NOT LOSE b. Employment Subject to a Suspensive
EMPLOYMENT IF THEY FIND ALTERNATIVE Condition
EMPLOYMENT DURING THE EXTENDED
SUSPENSION OF EMPLOYMENT EXCEPT IN

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The Supreme Court based their decision on contracting and now permissible job
the concept of an employment contract with contracting, they refer to the same
a suspensive condition. concept.
• Without DOLE Registration, there arises a
Perfected Contract: The Court presumption of labor-only contracting.
acknowledged that Lee's acceptance of the • The totality of circumstances is evaluated
offer letter constituted a perfected to determine whether a contractor is
employment contract. Both parties agreed to engaged in labor-only contracting or
the terms and conditions. legitimate job contracting.
Suspensive Condition: However, the • Where the principal is the one claiming
contract included a crucial detail - a that the contractor is a legitimate
satisfactory background check as a condition contractor, the burden of proving the
for employment. This is a suspensive supposed status of the contractor rests on
condition according to Article 1181 of the Civil the principal.
Code.
Condition Not Met: The background check 1. Concept
revealed inconsistencies in Lee's information, Contracting or subcontracting refers to “an
and he couldn't explain them. This meant the arrangement whereby a principal agrees to
suspensive condition wasn't met. farm out to a contractor the performance or
Obligations on Hold: Since the condition completion of a specific job or work within a
wasn't fulfilled, ANZ's obligations as an definite or predetermined period, regardless
employer weren't triggered. They weren't of whether such job or work is to be
legally obligated to recognize Lee as an performed or completed within or outside the
employee or provide him with employment premises of the principal.” (Section 3(c), DO-
benefits. 174)
No Employer-Employee Relationship:
Because the suspensive condition Otherwise stated, job contracting is an
(background check) wasn't met and Lee arrangement whereby a principal outsources
didn't report for work as per another a job, work, or service to the contractor who
condition, the Court concluded that no performs these through its deployed
employer-employee relationship ever existed. personnel, otherwise known as the
contractor’s workers.
Therefore, ANZ's withdrawal of the job offer
before Lee started working wasn't considered Job contracting arrangement is allowed and
an illegal dismissal because there was no recognized via Article 106 of the Labor Code
established employer-employee relationship and which have been implemented through
to begin with. This decision ensured various DOLE Regulations. The earlier
compliance with the law regarding regulations called this arrangement
employment contracts and the validity of legitimate job contracting in contrast to
suspensive conditions. (Sagun vs. ANZ, labor-only contracting.
August 22, 2016, G.R. No. 220399)
The current applicable regulation is
B. Legitimate Contracting vs. Labor- Department Order No. 174, Series of 2017
Only Contracting which calls the arrangement as permissible
job contracting.
• Job contracting is an arrangement
whereby a principal outsources a job, Whether legitimate or permissible job
work, or service to the contractor who contracting, they refer to the same
performs these through its deployed arrangement found in Articles 106-109 of the
personnel, otherwise known as the Labor Code. Accordingly, the following
contractor’s workers. discussions uses the two phrases
• While DOLE Regulations have referred to interchangeably as the terms/phrases refer
the arrangement as legitimate job to the same concept.

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Contractors Accreditation Board (PCAB) shall

a. List of DOLE Regulations on be governed by Department Order No. 19,
Contracting and Subcontracting Series of 1993 (Guidelines Governing the
Employment of Workers in the Construction
These were the earlier regulations and up to Industry); Department Order No. 13, Series
the present with D.O. 174, Series of 2017: of 1998 (Guidelines Governing the
1) Omnibus Rules Implementing the Labor Occupational Safety and Health in the
Code Construction Industry); and DOLE-DPWH-
2) DOLE Department Order No. 10, series of DILG-DTI and PCAB Memorandum of
1997; Agreement-Joint Administrative Order No. 1,
3) DOLE Department Order No. 3, series of Series of 2011 on coordination and
2001; harmonization of policies and programs on
4) DOLE Department Order No. 18, series of occupational safety and health in the
2002; construction industry. (Part III, Circular
5) DOLE Department Order No. 18-A, series 2017-01)
of 2011; and
6) DOLE Department Order No. 174, series of 3) Applicability/Non-Applicability of
2017 (“DO-174”). DO-174 to Private Security Agencies
Except for the registration requirements as
Currently, DO-174 is the DOLE Regulation provided for in DO-174, contracting or
which is applicable and is being enforced. subcontracting arrangements in the private
security industry shall be governed by DOLE
b. DO1-74 Applicability and Non- Department Order No. 150, Series of 2016
Applicability (“DO-150”; Revised Guidelines Governing the
Employment and Working Conditions of
1) Non-applicability of DO-174 to Security Guards and Other Private Security
BPO/LPO/KPO Personnel in the Private Security Industry.)
(Part IV, Circular 2017-01)
Under DOLE Circular No. 01, Series of
2017 (“Circular 2017-01”; Clarifying the 4) Non-Applicability of DO-174 to Other
Applicability of DOLE D.O. No. 174, Series of Contractual Relationships
2017), DO-174 applies only to trilateral DO-174 applies only to a trilateral
relationship which characterizes contracting relationship which characterizes contracting
or subcontracting. It does not contemplate to or subcontracting arrangement. It does not
cover information technology-enabled contemplate to cover contractual
services involving an entire or specific relationships such as in contract of sale or
business process such as: purchase, contract of lease, contract of
1) Business Process Outsourcing; carriage, contract growing/growership
2) Knowledge Process Outsourcing; agreement, toll manufacturing, contract of
3) Legal Process Outsourcing; management, operation and maintenance
4) IT Infrastructure Outsourcing; and such other contracts governed by the
5) Application Development; Civil Code of the Philippines and other special
6) Hardware and/or Software Support; laws. (Part IV, Circular 2017-01)
7) Medical Transcription; DO-174 does not also cover the contracting
8) Animation Services; and, out of job or work to a professional, or
9) Back Office Operations / Support. (Part II, individual unique skills and talents who
Circular 2017-01) himself or herself performs the job or work
for the principal. (Paragraph 2, Part IV,
2) Non-applicability of DO-174 to Circular 2017-01)
Construction Industry
Under Circular 2017-01, contracting or 2. Legitimate or permissible job
subcontracting in the construction industry contracting
under the licensing coverage of the Philippine

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In legitimate job contracting, an independent employed them. (Philippine Airlines, Inc. v.

contractor undertakes to perform work on its NLRC, supra.)
own account, under its own responsibility and
according to its own manner and method, 3. DOLE registration required,
free from the control and direction of the consequences
principal. No employment relationship arises
between its employees and the principal. For failing to register as a contractor, a
Consequently, the said employees can claim presumption arises that one is engaged in
separation pay only from the independent labor-only contracting unless the contractor
contractor, and not from the principal. overcomes the burden of proving that it has
(Philippine Airlines, Inc. v. NLRC, G.R. No. substantial capital, investment, tools and the
125792, 09 November 1998) like.” (Manila Memorial Park Cemetery, Inc.
v. Lluz, G.R. No. 208451, 03 February 2016)
Permissible job contracting or subcontracting
refers to an arrangement whereby a principal a. DOLE Certification
agrees to farm out with a contractor or
subcontractor the performance of a specific The certification issued by the DOLE stating
job, work, or service within a definite or that Interserve is an independent job
predetermined period, regardless of whether contractor does not sway this Court to take it
such job, work or, service is to be performed at face value, since the primary purpose
or completed within or outside the premises stated in the Articles of Incorporation of
of the principal. Under this arrangement, the Interserve is misleading. According to its
following conditions must be met: (a) the Articles of Incorporation, the principal
contractor carries on a distinct and business of Interserve is to provide janitorial
independent business and undertakes the and allied services. The delivery and
contract work on his account under his own distribution of Coca-Cola products, the work
responsibility according to his own manner for which respondents were employed and
and method, free from the control and assigned to petitioner, were in no way allied
direction of his employer or principal in all to janitorial services. While the DOLE may
matters connected with the performance of have found that the capital and/ or
his work except as to the results thereof; (b) investments in tools and equipment of
the contractor has substantial capital or Interserve were sufficient for an independent
investment; and (c) the agreement between contractor for janitorial services, this does not
the principal and contractor or subcontractor mean that such capital and/ or investments
assures the contractual employees’ were likewise sufficient to maintain an
entitlement to all labor and occupational independent contracting business for the
safety and health standards, free exercise of delivery and distribution of Coca-Cola
the right to self-organization, security of products. (Coca-Cola Bottlers Phils. Inc. v.
tenure, and social welfare benefits. (Alilin v. Agito, G.R. No. 179546, 13 February 2009)
Petron Corporation, G.R. No. 177592, 09
June 2014) 4. Solidary liability

In legitimate job contracting, no employer- In the event that the contractor or

employee relation exists between the subcontractor fails to pay the wages of his
principal and the job contractor’s employees. employees in accordance with this Code, the
The principal is responsible to the job employer shall be jointly and severally liable
contractor’s employees only for the proper with his contractor or subcontractor to such
payment of wages. But in labor-only employees to the extent of the work
contracting, an employer-employee relation performed under the contract, in the same
is created by law between the principal and manner and extent that he is liable to
the labor-only contractor’s employees, such employees directly employed by him. (Article
that the former is responsible to such 106, Labor Code)
employees, as if he or she had directly

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5. Authority of DOLE Secretary to

regulate a. Labor-only contracting, presumption
against employer
The Secretary of Labor and Employment
may, by appropriate regulations, restrict or Generally, the contractor is presumed to be a
prohibit the contracting-out of labor to labor-only contractor, unless such contractor
protect the rights of workers established overcomes the burden of proving that it has
under this Code. In so prohibiting or the substantial capital, investment, tools and
restricting, he may make appropriate the like. However, where the principal is the
distinctions between labor-only contracting one claiming that the contractor is a
and job contracting as well as differentiations legitimate contractor, as in the present case,
within these types of contracting and said principal has the burden of proving that
determine who among the parties involved supposed status. It is thus incumbent upon
shall be considered the employer for Petron, and not upon petitioners as Petron
purposes of this Code, to prevent any insists,48 to prove that RDG is an
violation or circumvention of any provision of independent contractor. (Ibid.)
this Code. (Article 106, Labor Code)
b. Totality of circumstances
6. Labor-only contracting
To determine whether a contractor is
There is ‘labor-only’ contracting where the engaged in labor-only contracting or
person supplying workers to an employer permissible job contracting, ‘the totality of
does not have substantial capital or the facts and the surrounding circumstances
investment in the form of tools, equipment, of the case are to be considered.’” (Petron
machineries, work premises, among others, Corporation v. Caberte, G.R. No. 182255, 15
and the workers recruited and placed by such June 2015)
person are performing activities which are
directly related to the principal business of c. Indirect employer of independent
such employer. In such cases, the person or contractor
intermediary shall be considered merely as an
agent of the employer who shall be If any person, partnership, association or
responsible to the workers in the same corporation which, not being an employer,
manner and extent as if the latter were contracts with an independent contractor for
directly employed by him. (Article 106, Labor the performance of any work, task, job or
Code) project, the former may be held liable as an
indirect employer if the provisions on labor-
Labor-only contracting, on the other hand, is only contracting are met. (Article 107, Labor
a prohibited act, defined as ‘supplying Code)
workers to an employer who does not have
substantial capital or investment in the form Independent contractor
of tools, equipment, machineries, work An independent contractor is an individual
premises, among others, and the workers (not a juridical entity) who offers his/her
recruited and placed by such person are talent or expertise in the form of services for
performing activities which are directly and in consideration of professional fee,
related to the principal business of such without entering into an employment
employer. (Alilin v. Petron Corporation, G.R. contract with the one hiring, who is not an
No. 177592, 09 June 2014) employer.

(I)n distinguishing between prohibited labor- The provisions of existing laws to the
only contracting and permissible job contrary notwithstanding, every employer or
contracting, the totality of the facts and the indirect employer shall be held responsible
surrounding circumstances of the case shall with his contractor or subcontractor for any
be considered. (Ibid.) violation of any provision of this Code. For

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purposes of determining the extent of their contractor rests on the principal.” (Alilin v.
civil liability under this Chapter, they shall be Petron Corporation, supra.)
considered as direct employers.” (Article 109,
Labor Code The law presumes a contractor to be a labor-
only contractor and the employees are not
7. Bond expected to prove the negative fact that the
An employer or indirect employer may contractor is a labor-only contractor. Thus, it
require the contractor or subcontractor to is not (the complainants) but (the principal)
furnish a bond equal to the cost of labor Petron which bears the burden of
under contract, on condition that the bond establishing that (the contractor) ABC is not
will answer for the wages due the employees a labor-only contractor but a legitimate
should the contractor or subcontractor, as independent contractor. (Petron Corporation
the case may be, fail to pay the same. (Article v. Caberte, supra.)
108, Labor Code)
9. Judicial notice on contracting and
Neither does the performance bond taken out subcontracting
by (the contractor) ABC serve as significant
evidence of its substantial capital. As aptly Besides, the Court has already taken judicial
explained by the (Court of Appeals): notice of the general practice adopted in
several government and private institutions
‘The performance bond posted by ABC of securing janitorial services on an
Contracting Services likewise fails to convince independent contractor basis. (Philippine
us that the former has substantial capital or Airlines, Inc. v. NLRC, supra.)
investment inasmuch as it was not shown
that the performance bond in the amount of IV. LABOR STANDARDS
₱596,799.51 was enough to cover not only
payrolls, rentals and equipment but also Labor Standards refers to the minimum
possible damages to the equipment and to requirements prescribed by existing laws,
third parties and other contingent liabilities. rules and regulations relating to wages, hours
Moreover, this Court takes judicial notice that of work, cost-of-living allowance and other
bonds of this nature are issued upon payment monetary and welfare benefits, including
of a small percentage as premium without occupational, safety and health standards
necessarily requiring any guarantee.’ (Maternity Children's Hospital v. Secretary of
Labor, G.R. 78909 (1989)).
If at all, the bond was a convenient smoke
screen to disguise the real nature of ABC’s A. Conditions of Employment
employment as an agent of Petron. (Petron
Corporation v. Caberte, supra.) 1. Covered Employees; Exceptions

8. Burden of proof Title I, Book III of the Labor Code deals with
hours of work, weekly rest periods, holidays,
The contractor has the burden of proof to service incentive leaves and service charges.
show that it is engaged in
legitimate/permissible job contracting as the General Rule: It shall apply to employees in
law itself presumes by default that it is a all establishments and undertakings, whether
labor-only contractor unless proven for profit or not (Art. 82, Labor Code, as
otherwise. amended).

a. When on the principal EXCEPTIONS:

a. Government employees
Where the principal is the one claiming that b. Managerial employees
the contractor is a legitimate contractor, the c. Field personnel
burden of proving the supposed status of the

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d. Officers and members of the managerial 1. Their primary duty consists of the
staff management of the establishment in
e. Members of the family of the employer which they are employed or of a
who are dependent on him for support department or subdivision thereof.
f. Workers who are paid by results 2. They customarily and regularly direct the
g. Persons in the personal service of another; work of two or more employees therein.
and 3. They have the authority to hire or fire
h. Domestic helpers (Kasambahays) employees of lower rank; or their
suggestions and recommendations as to
The aforementioned employees are not hiring and firing and as to the promotion
entitled to overtime pay, premium pay for or any other change of status of other
rest days and holidays, night shift differential employees, are given particular weight.
pay, holiday pay, service incentive leave and
service charges (Poquiz, Labor Standards and Managerial employees and managerial staff
Social Legislation, 2018, р. 219) are determined by their job description and
not their job title (Peñarada v. Baganga
a. Government Employees Plywood Corp., G.R. No. 159577, 2006).

The terms and conditions of employment of c. Field Personnel

all government employees, including
employees of GOCCs, are governed by the Field Personnel are Non-Agricultural
Civil Service Rules and regulations, not by the Employees:
Labor Code [Art. 291]. 1. Who regularly perform their duties away
However, not all GOCCs are governed by the from the principal or place of business or
Civil Service Rules; only those created by branch office of the employer; and
original charter are governed by the Civil 2. Whose actual hours of work in the field
Service rules. cannot be determined with reasonable
certainty [Art. 82].
b. Managerial Employees
Two Definitions of "Managerial Employee" in Legal Test: Control and supervision of
the Labor Code: employer
1. One whose primary duty consists of the
management of the establishment in In determining whether workers engaged on
which they are employed or of a "pakyaw" or task basis" is entitled to holiday
department or subdivision thereof and to and SIL pay, the presence (or absence) of
other officers or members of the employer supervision as regards the worker’s
managerial staff [Art. 82]. time and performance is the key: if the
2. One who is vested with the powers or worker is simply engaged on pakyaw or task
prerogatives to lay down and execute basis, then the general rule is that he is
management policies and/or to hire, entitled to a holiday pay and SIL pay unless
transfer, suspend, lay off, recall, exempted from the exceptions specifically
discharge, assign or discipline provided under Article 94 (holiday pay) and
employees [Art. 219(m)]. Article95 (SIL pay) of the Labor Code.
However, if the worker engaged on pakyaw
Characteristics of Managerial or task basis also falls within the meaning of
Employees [Sec. 2(b), Rule I, Book III, "field personnel" under the law, then he is not
IRR] entitled to these monetary benefits. (David v
Macario, G.R. No. 195466,,( 2014)
Managerial employees are exempted from
the coverage of Book III Articles 83 through In order to determine whether an employee
96 if they meet all of the following conditions: is a field employee, it is also necessary to
ascertain if actual hours of work in the field
can be determined with reasonable certainty

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by the employer. In so doing, an inquiry must Secretary of Labor and Employment in

be made as to whether or not the employee's accordance with the aforesaid Section.
time and performance are constantly
supervised by the employer [Far East These include those who are paid on piece
Agricultural Supply v. Lebatique, G.R. No. work, “takay,” “pakiao” or task basis, and
162813 (2007)]. other nontime work [Sec. 2(e), Rule I, Book
III, IRR]. Workers under piece-rate
d. Members of the Managerial Staff employment have no fixed salaries and their
(Supervisory Employees) compensation is computed on the basis of
accomplished tasks. That their work output
Supervisory employees are those who, in the might have been affected by the change in
interest of the employer, effectively their specific work assignments does not
recommend such managerial actions if the necessarily imply that any resulting reduction
exercise of such authority is not merely in pay is tantamount to constructive
routinary or clerical in nature but requires the dismissal. It is the prerogative of the
use of independent judgment [Art. 219(m)]. management to change their assignments or
Art. 82 also includes managerial staff to transfer them. (Best Wear Garments v. De
(supervisory employees) in the definition of Lemos and Ocubillo, G.R. No. 191281, 2012)
managerial employees. The definition in Art.
82 covers more people than that in Art. Workers paid by results may be grouped into
219(m). two: 1) those whose time and performance is
supervised by the employer and 2) those
In effect, managerial employees in Art. 82 whose time and performance is unsupervised
includes supervisors, but Art. 219(m) does by the employer (Azucena, p. 289)
not, for purposes of the right to self-
organization. g. Persons in the personal service of
another
Effective Recommendatory Power
Persons in the personal service of another
Supervisory employees are those who, in the are not covered by Title I: Working
interest of the employer, effectively Conditions and Rest Periods if they:
recommend such managerial actions and the
exercise of such authority is not merely 1. Perform such services in the employer’s
routinary or clerical in nature but requires the home which are usually necessary or
use of independent judgment [Art. 219(m)]. desirable for the maintenance and
enjoyment thereof; or
e. Members of the family of the 2. Minister to the personal comfort,
employer who are dependent on him convenience or safety of the employer as
for support well as the members of his employer’s
household (Sec. 2 (d), Rule I, Book III,
Workers who are family members of the IRR).
employer, and who are dependent on him for
their support, are outside the coverage of this h. Domestic helpers
Title on working conditions and rest periods
[Art. 82]. Domestic worker or “Kasambahay”
refers to any person engaged in domestic
f. Workers who are paid by results work within an employment relationship such
as but not limited to the following:
Workers who are paid by results are those 1. general househelp,
whose output rates are in accordance with 2. nursemaid or “yaya”,
the standards prescribed under Sec. 8, Rule 3. Cook,
VII, Book Three of these regulations, or 4. gardener, or
where such rates have been fixed by the 5. laundry person

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Rest periods of short durations during

"Domestic work" refers to work performed working hours shall be counted as hours
in or for a household (Sec. 3(d), IRR of worked. (Ibid.
RA10361).
Minimum normal 8 working hours fixed by
"Household" refers to the immediate law need not be continuous to constitute the
members of the family or the occupants of legal working day. It may mean broken hours
the house who are directly and regularly of say,
provided services by the kasambahay (Sec. 4 hours in the morning and 4 hours in the
3(g), IRR of RA 10361). evening or variation thereof provided the
total of 8 hours is accomplished within the
The Civil Code shall govern the rights of work day (Chan, Labor Law Vol I, 2018, p.
family driver. Article 141, Chapter III, Book 381).
III on Employment of Househelpers of the
Labor Code provides that family drivers are Compensable Hours worked shall include:
covered in the term domestic or household a. All time during which an employee is
service. The aforecited administrative rule required to be on duty or to be at the
clarified the status of family drivers as among employer’s premises or to be at a
those not covered by the definition of prescribed workplace, and
domestic or household help as contemplated b. All time during which an employee is
in Section 4(d) of the Kasambahay Law. suffered or permitted to work. (Art. 84,
(Atienza v Saluta, GR. 233413, 2019) Labor Code, as amended

Exclusivity of Function Required Note: all hours are hours worked which the
Note that the definition contemplates a employee is required to give his employer,
domestic helper who is employed in the regardless of whether or not such hours are
employer’s home to minister exclusively to spent in productive labor or involve physical
the personal comfort and enjoyment of the or mental exertion. (Sec. 4, Rule I, Book III,
employer’s family (Azucena) Rules Implementing the Labor Code.)

2. Hours of work b. Meal periods

a. Normal hours of work General Rule: Subject to such regulations

as the Secretary of Labor may prescribe, it
The normal hours of work of any employee shall be the duty of every employer to give
shall not exceed eight (8) hours a day. (Art. his employees not less than sixty (60)
83, Labor Code, as amended) minutes time-off for their regular meals [Art.
85]
The eight-hour work requirement does not,
however, preclude the employer in the Exceptions: Employees may be given a
exercise of its management prerogatives to meal period of not less than twenty (20)
reduce the number of working hours, minutes provided that such shorter meal
provided that there is no diminution of period is credited as compensable hours
existing benefits (Poquiz, Labor Standards worked of the employee:
and Social Legislation, 2018, p. 225). 1. Where the work is non-manual work in
nature or does not involve strenuous
If by the nature of employment, an employee physical exertion;
is required to be on the job for only six (6) 2. Where the establishment regularly
hours daily, the such period should be operates not less than sixteen (16) hours
regarded as full working day. (Ibid) a day;
3. In case of actual or impending
emergencies or there is urgent work to
be performed on machineries,

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equipment or installations to avoid meals within the company premises.

serious loss which the employer would Employees are not prohibited from going out
otherwise suffer; OR of the premises as long as they return to their
4. Where the work is necessary to prevent post on time. (PAL vs. NLRC, GR No. 138205,
serious loss of perishable goods (par. 1, February 2, 1999)
Sec. 1, Rule I, Book III, IRR)
For a full one-hour undisturbed lunch break,
Exception to the Exception: Shortened the employees can freely and effectively use
meal breaks upon the employees’ request – this hour not only for eating but also for their
NOT compensable. rest and comfort which are conducive to
more efficiency and better performance in
Conditions for Shortened Meal Breaks their work. (Sime Darby Pilipinas, Inc. vs.
Upon Employee’s Request NLRC, G.R. No. 119205, April 15, 1998).
1. The employees voluntarily agree in
writing to a shortened meal period of 30 c. Night-shift
minutes and are willing to waive the
overtime pay for such shortened meal Night Shift Differential is the additional
period; compensation of 10% of an employee’s
2. There will be no diminution whatsoever regular wage for each hour of work
in the salary and other fringe benefits of performed between ten o’clock in the evening
the employees existing before the and six o’clock in the morning. (Sec. 2, Rule
effectivity of the shortened meal period; II, Book III, Rules Implementing the Labor
3. The work of the employees does not Code)
involve strenuous physical exertion and
they are provided with adequate “coffee General Rule: All employees are entitled to
breaks” in the morning and afternoon; NSD.
4. The value of the benefits derived by the
employees from the proposed work Exceptions:
arrangement is equal to or 1. Government employees including those
commensurate with the compensation employed in government-owned or
due them for the shortened meal period controlled corporations with original
as well as the overtime pay for 30 charters;
minutes as determined by the 2. Employees of retail and service
employees concerned; establishments regularly employing not
5. The overtime pay of the employees will more than five (5) workers;
become due and demandable if ever 3. Domestic helpers
they are permitted or made beyond 4. Persons in the personal service of
4:30pm; and another;
6. The effectivity of the proposed working 5. Managerial employees as defined in
time arrangement shall be of temporary Book Three of this Code;
duration as determined by the Secretary 6. Field personnel and other employees
of Labor. (BWC-WHSD Opinion No. 197, whose time and performance is
s. 1998) unsupervised by the employer
7. Workers who are engaged on task or
Employees are not prohibited from contract basis, purely commission basis,
going out of the premises during meal or those who are paid a fixed amount for
period performing work irrespective of the time
consumed in the performance thereof
As a general rule, employees are entitled to (Sec 1, Rule II, Book III, Rules
at least one hour time-off for regular meals Implementing the Labor Code).
which can be taken inside or outside 8. Members of the family of the employer
company premises. No where in the law may who are dependent upon him for support
it be inferred that employees must take their (Art. 82, Labor Code, as amended).

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9. Where the night-time work of an d. Overtime work – Labor Code, arts.

employee overlaps with overtime work, 87-90; Omnibus Rules Implementing the
the receipt of overtime pay does not Labor Code, Book III, Rule I, secs. 8-10
preclude the receipt of night differential
pay. The latter is night pay; the former Overtime compensation is additional pay for
is payment beyond eight-hour work. service or work rendered or performed in
(Poquiz, Labor Standards and Social excess of eight hours a day by employees or
Legislation, 2018, page 234) laborers covered by the Eight-hour Labor Law
(National Shipyard and Steel Corp. v. CIR,
Additional compensation G.R. No. L-17068, 1961).
Where an employee is permitted or suffered
to work on the period covered after his work In computing overtime work, "regular wage"
schedule, he shall be entitled to his regular or "basic salary" means "cash" wage only
wage plus at least twenty-five per cent (25%) without deduction for facilities provided by
and an additional amount of no less than ten the employer. (Chan, Bar Reviewer on Labor
per cent (10%) of such overtime rate for Law, 2019, p. 131)
each hour or work performed between 10
p.m. to 6 a.m. (Sec. 3, Rule II, Book III, Rules "Premium pay" means the additional
Implementing the Labor Code) compensation required by law for work
performed within eight (8) hours on non-
Additional compensation on scheduled working days, such as regular holidays,
rest day/special holiday. special holidays and rest days while
An employee who is required or permitted to "Overtime pay" means the additional
work on the period covered during rest days compensation for work performed beyond
and/or special holidays not falling on regular eight (8) hours. (No. III and IV, DOLE
holidays, shall be paid a compensation Handbook on Workers Statutory Monetary
equivalent to his regular wage plus at least Benefits)
thirty (30%) per cent and an additional
amount of not less than ten (10%) per cent Rationale Behind the Overtime Pay
of such premium pay rate for each hour of Employee is made to work longer than what
work performed. (Sec. 4, Rule II, Book III, is commensurate with his agreed
Rules Implementing the Labor Code) compensation for the statutory fixed or
voluntarily agreed hours of labor he is
Additional compensation on regular supposed to do. (PNB vs. PEMA and CIR, G.R.
holidays. No. L-30279, July 30, 1982)
For work on the period covered during
regular holidays, an employee shall be Undertime Not Offset by Overtime nor
entitled to his regular wage during these days by Holiday
plus an additional compensation of no less Undertime work on any particular day shall
than ten (10%) per cent of such premium not be offset by overtime work on any other
rate for each hour of work performed. (Sec. day. Permission given to the employee to go
5, Rule II, Book III, Rules Implementing the on leave on some other day of the week shall
Labor Code) not exempt the employer from paying the
additional compensation required. (Art. 88,
Relation to agreements. Labor Code, as amended)
Nothing in this Rule shall justify an employer
in withdrawing or reducing any benefits, Offsetting the overtime with the undertime
supplements or payments as provided in and at the same time charging said
existing individual or collective agreements or undertime to the accrued leave of the
employer practice or policy. (Sec. 6, Rule II, employee is unfair, for under such method
Book III, Rules Implementing the Labor the employee is made to
Code) Entitlement to overtime pay must first be
established by proof that the overtime work

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was actually performed before the employee Refusal to render emergency overtime
may properly claim the benefit. The burden work is insubordination
of proving entitlement to overtime pay rests When an employee refuses to render
on the employee because the benefit is not emergency overtime work under any of the
incurred in the normal course of business. foregoing conditions, he may be dismissed on
Failure to prove such actual performance the ground of insubordination or willful
transgresses the principles of fair play and disobedience of the lawful order of the
equity. (Robina Farms v Villa, G.R. No. employer (Chan, Bar Reviewer on Labor Law,
175869, 2016) supra).
Emergency Overtime Work
Any employee may be required by the The right to claim overtime pay is not subject
employer to perform overtime work in any of to a waiver. Such right is governed by law
the following cases: (a) When the country is and not merely by the agreement of the
at war or when any other national or local parties. (Mercader vs. Manila Polo Club, G.R.
emergency has been declared by the National No. L-8373, September 28, 1956)
Assembly75 or the Chief Executive; (b) When
it is necessary to prevent loss of life or e. Compressed work week, flexible
property or in case of imminent danger to work arrangement, alternative work
public safety due to an actual or impending arrangements, telecommuting
emergency in the locality caused by serious program
accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity; (c) COMPRESSED WORKWEEK
When there is urgent work to be performed
on machines, installations, or equipment, in “Compressed Workweek” or “CWW”
order to avoid serious loss or damage to the refers to a situation where the normal
employer or some other cause of similar workweek is reduced to less than six (6) days
nature; (d) When the work is necessary to but the total number of work-hours of 48
prevent loss or damage to perishable goods; hours per week remains. The normal
and (e) Where the completion or continuation workday is increased to more than eight (8)
of the work started before the eighth hour is hours but not to exceed twelve (12) hours,
necessary to prevent serious obstruction or without corresponding overtime premium.
prejudice to the business or operations of the This concept can be adjusted accordingly in
employer. Any employee required to render cases where the normal workweek of the firm
overtime work under this Article shall be paid is five (5) days. (Department Advisory Order
the additional compensation required in this No. 2, Series of 2004).
Chapter. (Art. 89, Labor Code, as amended)
When overtime work is necessary to avail of Requisites:
favorable weather or environmental 1. The scheme is expressly and voluntarily
conditions where performance or quality of supported by majority of the employees.
work is dependent thereon. (Chan, Bar 2. In firms using substances, or operating
Reviewer on Labor Law, 2019, p. 133) in conditions that are hazardous to
health, a certification is needed from an
Computation of Additional accredited safety organization or the
Compensation firm’s safety committee that work
For purposes of computing overtime and beyond 8 hours is within the limit or
other additional remuneration as required by levels of exposure set by DOLE’s
this Chapter, the "regular wage" of an occupational safety and health
employee shall include the cash wage only, standards.
without deduction on account of facilities 3. the DOLE Regional Office is duly notified
provided by the employer. (Art. 90, Labor (Ibid)
Code, as amended)
Effects of CWW:

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1. Unless there is a more favorable practice goods or services or when there is a lack of
existing in the firm, work beyond eight raw materials. (Linton Commercial vs.
hours will not be compensable by Hellera, G.R. No. 163147, October 10, 2007)
overtime premium provided the total
number of hours worked per day shall FLEXIBLE WORK ARRANGEMENT/
not exceed twelve (12) hours. In any ALTERNATIVE WORK ARRANGEMENTS
case, any work performed beyond 12
hours a day or 48 hours a week shall be Flexible Work Arrangement
subject to overtime premium.
2. Consistent with Article 85 of the Labor Refers to alternative arrangements or
Code, employees under a CWW scheme schedules other than the traditional or
are entitled to meal periods of not less standard work hours, workdays, and
than sixty (60) minutes. Nothing herein workweek. (Department Advisory No. 4,
shall impair the right of employees to Guidelines on the Implementation of Flexible
rest days as well as to holiday pay, rest Work Arrangement, Series of 2010)
day pay or leaves in accordance with law
or applicable collective bargaining The following are the flexible work
agreement or company practice. arrangements which may be considered,
3. Adoption of the CWW scheme shall in no among others:
case result in diminution of existing 1. Compressed Workweek (as previously
benefits. Reversion to the normal eight- discussed)
hour workday shall not constitute a 2. Gliding or Flexi-time schedule - refers to
diminution of benefits. The reversion one where the employees are required
shall be considered a legitimate exercise to complete the core work hours in the
of management prerogative, provided establishment but are free to determine
that the employer shall give the their arrival and departure time. 3. Flexi-
employees prior notice of such reversion holidays schedule - refers to one where
within a reasonable period of time. (Ibid) the employees agree to avail the
holidays at some other days provided
Valid CWW there is no diminution of existing
benefits as a result of such arrangement.
The validity of the reduction of working hours (Ibid)
can be upheld when the arrangement is:
1. Temporary; Note: The employers and employees may
2. It is a more humane solution instead of likewise explore other alternative work
a retrenchment of personnel; arrangements under any agreement and
3. There is notice and consultations with company policy or practice in accordance
the workers and supervisors; with existing laws and regulations. (Ibid)
4. A consensus is reached on how to deal Flexible Work Arrangement; Voluntary The
with deteriorating economic conditions; effectivity and implementation of any of the
and flexible work arrangements shall be based on
5. It is sufficiently proven that the company voluntary agreements between the employer
was suffering from losses. (Philippine and the employees. (Ibid)
Graphic Arts Inc. vs. NLRC, G.R. No. L-
80737, September 29, 1988) Application of Non-Diminution of
Benefits
Under the Bureau of Working Conditions’
bulletin, a reduction of the number of regular The adoption of the flexible work
working days (RWD) is valid where the arrangements provided herein shall in no
arrangement is resorted to by the Er to case result in diminution of existing benefits
prevent serious losses due to causes beyond of the employees. (Ibid)
his control, such as when there is a
substantial slump in the demand for his TELECOMMUTING ACT (RA 11165)

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d. Have the same access to training and

Definition [Section 3] career development opportunities as
those of comparable workers at the
Telecommuting refers to a work employer's premises, and be subject to
arrangement that allows an employee to the same appraisal policies covering these
work from an alternative workplace, in whole workers.
or in part, with the use of telecommunication e. Receive appropriate training on the
and/or computer technologies. (Section 3, technical equipment at their disposal, and
Revised Implementing Rules and Regulations the characteristics and conditions of
of RA No. 11165, Otherwise Known as the telecommuting.
"Telecommuting Act", DOLE Department f. Have the same collective rights as the
Order No. 237, s. 2022, September 16, 2022) workers at the employer's premises, and
shall not be barred from communicating
Telecommuting Program [Section 4] with workers' representatives.

Telecommuting Program The employers shall also ensure that

An employer in the private sector may offer a measures are taken to prevent the
telecommuting program to its employees on telecommuting employee from being isolated
a voluntary basis, and upon such terms and from the rest of the working community in
conditions as they may mutually agree upon: the company by giving the telecommuting
Provided, That such terms and conditions employee the opportunity to meet with
shall not be less than the minimum labor colleagues on a regular basis, and allowing
standards set by law, and shall include access to company information. (Sec. 5,
compensable work hours, minimum number Ibid.)
of work hours, overtime, rest days, and
entitlement to leave benefits. In all cases, the Telecommuting shall apply to employers and
employer shall provide the telecommuting employees in the private sector that
employee with relevant written information in implement a telecommuting program.
order to adequately apprise the individual of (Revised Implementing Rules and
the terms and conditions of the Regulations of RA No. 11165, Otherwise
telecommuting program, and the Known as the "Telecommuting Act", DOLE
responsibilities of the employee. (Sec. 4, Department Order No. 237, s. 2022,
Ibid.) September 16, 2022)

Fair Treatment [Section 5] f. Non-compensable hours

Fair Treatment Meal break is not compensable

The employer shall ensure that the Since the employees are no longer required
telecommuting employees are given the to work during this one-hour lunch break,
same treatment as that of comparable there is no more need for them to be
employees working at the employer's compensated for this period. (Ibid)
premises. All telecommuting employees shall:
a. Receive a rate of pay, including overtime 3. Rest periods
and night shift differential, and other
similar monetary benefits not lower than It shall be the duty of every employer,
those provided in applicable laws, and whether operating for profit or not, to provide
collective bargaining agreements. each of his employees a rest period of not
b. Have the right to rest periods, regular less than twenty-four (24) consecutive hours
holidays, and special nonworking days. after every six (6) consecutive normal work
c. Have the same or equivalent workload days. (Sec. 3, Rule III, Book III, IRR)
and performance standards as those of
comparable workers at the employer's Scope
premises.

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It shall apply to all ERs whether operating for c. In the event of abnormal pressure of
profit or not, including public utilities work due to special circumstances,
operated by private persons. (Sec. 1, Rule where the employer cannot ordinarily be
III, Book III, IRR) expected to resort to other measures;
d. To prevent serious loss or damage to
Rest Day Not Necessarily Sunday or perishable goods;
Holiday e. Where the nature of the work requires
continuous operations and the stoppage
All establishments and enterprises may of work may result in irreparable injury
operate or open for business on Sundays and or loss to the employer; and
holidays provided that the employees are f. Under other circumstances analogous or
given the weekly rest day and the benefits similar to the foregoing as determined by
provided under the law. (Sec. 2, Rule III, the Secretary of Labor and Employment
Book III, IRR) (Article 92, Labor Code)

The employer shall determine and schedule Note: No employee shall be required against
the weekly rest day of his employees subject his will to work on his scheduled rest day
to the CBA and to such rules and regulations except under the above-mentioned
as the DOLE Secretary may provide. (Art 91, circumstances provided, however, where an
Labor Code) employee volunteers to work on his rest day
under other circumstances, he shall express
Preference of Employee If Based on such desire in writing, subject to the
Religious Grounds provision regarding additional compensation.
(Sec. 6, Rule III, Book III, Rules
The employer shall respect the preference of Implementing the Labor Code)
employees as to their weekly rest day when
such preference is based on religious 4. Holidays
grounds. The employee shall make known his
preference to the employer in writing at least Types of Holidays:
seven days before the desired effectivity of 1. Regular Holiday
the initial rest day so preferred. (Poquiz, 2. Special Non-Working Holiday
Labor Standards and Social Legislation, 2018,
p. 243) General Rule:
They are compensable whether worked or
When employer may Require work on a unworked subject to certain conditions. They
rest day are also called legal holidays (Sec. 94, Labor
Code as amended).
The employer may require any of its
employees to work on their scheduled rest Exception:
day for the duration of the following A legal holiday falling on a Sunday creates no
emergency and exceptional conditions: legal obligation for the employer to pay extra,
aside from the usual holiday pay, to its
a. In case of actual or impending monthly- paid employees. There is no
emergencies caused by serious accident, provision of law requiring any employer to
fire, flood, typhoon, earthquake, make such adjustments in the monthly salary
epidemic or other disaster or calamity to rate set by him to take account of legal
prevent loss of life and property, or holidays falling on Sundays in a given year,
imminent danger to public safety; or, contrary to the legal provisions bearing on
b. In cases of urgent work to be performed the point, otherwise to reckon a year at more
on the machinery, equipment, or than 365 days (Wellington Investment and
installation, to avoid serious loss which Manufacturing Corporation vs. Trajano et al.,
the employer would otherwise suffer; G.R. No. 114698, July 3, 1995)

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Proclamation No. 368 fixed the dates for the unsupervised by the employer including
observance of the regular and special those who are engaged on task or
holidays including additional special holidays contract basis, purely commission basis,
for 2024. or those who are paid a fixed amount for
performing work irrespective of the time
1. Regular Holiday consumed in the performance thereof.
New Year’s Day – January 1 (Sec. 1, Rule IV, Book III, Rules
Maundy Thursday – March 28 Implementing the Labor Code)
Good Friday – March 29
Araw ng Kagitingan - April 9 Status of employees paid by the month
Labor Day – May 1 Employees who are uniformly paid by the
Independence Day – June 12 month, irrespective of the number of working
National Heroes Day – August 26 days therein, with a salary of not less than
(Last Monday of August) the statutory or established minimum wage
Bonifacio Day – November (Monday shall be paid for all days in the month
nearest November 30) whether worked or not. For this purpose, the
Christmas Day – December 25 monthly minimum wage shall not be less than
Rizal Day – December 30 the statutory minimum wage multiplied by
365 days divided by twelve. (Sec. 2, Rule IV,
2. Special Non-working Days Book III, Rules Implementing the Labor
Ninoy Aquino Day – August 21 Code)
All Saints’ Day – November 1
Feast of the Immaculate Holiday Pay
Conception of Mary – December 8 Every employer shall pay his employees their
Last Day of the Year – December 31 regular daily wage for any worked regular
holidays. As used in the rule, the term
3. Additional Special Non-working 'regular holiday' shall exclusively refer to:
days New Year's Day, Maundy Thursday, Good
Chinese New Year – February 10 Friday, the ninth of April, the first of May, the
Black Saturday – March 30 twelfth of June, the last Sunday of August,
hristmas Eve – December 24 the thirtieth of November, the twenty-fifth
All Souls Day - November 2 and thirtieth of December. Nationwide special
days shall include the first of November and
The dates for Eid’l Fitr and Eid’l Adha (special the last day of December. As used in this Rule
holidays) shall follow after approximate dates legal or regular holiday and special holiday
of the Islamic holidays have been shall now be referred to as 'regular holiday'
determined. and 'special day', respectively. (Sec. 3, Rule
IV, Book III, Rules Implementing the Labor
Coverage Code)
This rule shall apply to all employees except:
a) Those of the government and any of the Compensation for holiday work
political subdivision, including Any employee who is permitted or suffered
government-owned and controlled to work on any regular holiday, not exceeding
corporation; eight (8) hours, shall be paid at least two
b) Those of retail and service hundred percent (200%) of his regular daily
establishments regularly employing less wage. If the holiday work falls on the
than ten (10) workers; scheduled rest day of the employee, he shall
c) Domestic helpers and persons in the be entitled to an additional premium pay of
personal service of another; at least 30% of his regular holiday rate of
d) Managerial employees as defined in 200% based on his regular wage rate. (Sec.
Book Three of the Code; 4, Rule IV, Book III, Rules Implementing the
e) Field personnel and other employees Labor Code)
whose time and performance is

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Overtime pay for holiday work (b) The regular holiday during the cessation
For work performed in excess of eight hours of operation of an enterprise due to business
on a regular holiday, an employee shall be reverses as authorized by the Secretary of
paid an additional compensation for the Labor and Employment may not be paid by
overtime work equivalent to his rate for the the employer. (Sec. 7, Rule IV, Book III,
first eight hours on such holiday work plus at Rules Implementing the Labor Code)
least 30% thereof. Where the regular holiday
work exceeding eight hours falls on the Holiday pay of certain employees.
scheduled rest day of the employee, he shall (a) Private school teachers, including faculty
be paid an additional compensation for the members of colleges and universities, may
overtime work equivalent to his regular not be paid for the regular holidays during
holiday-rest day for the first 8 hours plus semestral vacations. They shall, however, be
30% thereof. The regular holiday rest day paid for the regular holidays during Christmas
rate of an employee shall consist of 200% of vacation;
his regular daily wage rate plus 30% thereof. (b) Where a covered employee, is paid by
(Sec. 5, Rule IV, Book III, Rules results or output, such as payment on piece
Implementing the Labor Code) work, his holiday pay shall not be less than
his average daily earnings for the last seven
Absences (7) actual working days preceding the regular
(a) All covered employees shall be entitled to holiday; Provided, However, that in no case
the benefit provided herein when they are on shall the holiday pay be less than the
leave of absence with pay. Employees who applicable statutory minimum wage rate.
are on leave of absence without pay on the (c) Seasonal workers may not be paid the
day immediately preceding a regular holiday required holiday pay during offseason when
may not be paid the required holiday pay if they are not at work.
he has not worked on such regular holiday. (d) Workers who have no regular working
(b) Employees shall grant the same days shall be entitled to the benefits provided
percentage of the holiday pay as the benefit in this Rule. (Sec. 8, Rule IV, Book III, Rules
granted by competent authority in the form Implementing the Labor Code)
of employee's compensation or social security
payment, whichever is higher, if they are not Regular holiday falling on rest days or
reporting for work while on such benefits. Sundays.
(c) Where the day immediately preceding the (a) A regular holiday falling on the
holiday is a non-working day in the employee's rest day shall be compensated
establishment or the scheduled rest day of accordingly.
the employee, he shall not be deemed to be (b) Where a regular holiday falls on a Sunday,
on leave of absence on that day, in which the following day shall be considered a
case he shall be entitled to the holiday pay if special holiday for purposes of the Labor
he worked on the day immediately preceding Code, unless said day is also a regular
the non-working day or rest day. (Sec. 6, holiday. (Sec. 9, Rule IV, Book III, Rules
Rule IV, Book III, Rules Implementing the Implementing the Labor Code)
Labor Code)
Successive regular holidays.
Temporary or periodic shutdown and Where there are two (2) successive regular
temporary cessation of work holidays, like Holy Thursday and Good Friday,
(a) In cases of temporary or periodic an employee may not be paid for both
shutdown and temporary cessation of work holidays if he absents himself from work on
of an establishment, as when a yearly the day immediately preceding the first
inventory or when the repair or cleaning of holiday, unless he works on the first holiday,
machineries and equipment is undertaken, in which case he is entitled to his holiday pay
the regular holidays falling within the period on the second holiday. (Sec. 10, Rule IV,
shall be compensated in accordance with this Book III, Rules Implementing the Labor
Rule. Code)

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Covered Employees
Relation to agreements.
Nothing in this Rule shall justify an employer all employees, except managerial employees
in withdrawing or reducing any benefits, as defined herein, regardless of their
supplements or payments for unworked position, designations, or employment status,
holidays as provided in existing individual or and irrespective of the method by which their
collective agreement or employer practice or wages are paid.
policy. (Sec. 11, Rule IV, Book III, Rules
Implementing the Labor Code) Distribution

5. Service charges All service charges collected by covered

establishments shall be distributed
Service Charge is the amount that is added completely and equally, based on actual
to a bill for any work or services rendered in hours or days of work or service rendered,
all a hotel, restaurant, or similar among the covered employees.
establishments, which shall be distributed
completely and equally among the covered Frequency
workers, except managerial employees. (Sec.
1, RA 11360; Sec. 2(e), DO 206-19) Not less than once every two (2) weeks or
twice a month at intervals not exceeding
Art. 96, Labor Code sixteen (16) days
All service charges collected by hotels,
restaurants and similar establishments shall Non-Diminution
be distributed completely and equally among
the covered workers except managerial Nothing in these rules shall be construed to
employees. diminish existing benefits under present laws,
company policies, and collective bargaining
In the event that the minimum wage is agreements
increased by law or wage order, service
charges paid to the covered employees shall (DO 242-2024)
not be considered in determining the
employer’s compliance with the increased
minimum wage. Managerial Employee

To facilitate resolution of any dispute Refers to any person vested with powers or
between the management and the prerogatives to lay down and execute
employees on the distribution of service management policies or hire, transfer
charges, a grievance mechanism shall be suspend, lay-off, recall, discharge, assign or
established. If no grievance mechanism is discipline employees or to effectively
established or if inadequate, the grievance recommend such managerial actions. (Art.
shall be referred to the regional office of the 96, Labor Code)
Department of Labor and Employment which
has jurisdiction over the workplace for One who is vested with powers or
conciliation. prerogatives to lay down and execute
management policies and/or to hire, transfer,
Coverage suspend, lay-off, recall, discharge, assign, or
discipline employees or to effectively
All establishments collecting service charges recommend such managerial actions.
such as hotels, restaurants, and other similar
establishments including those entities All employees not falling within this definition
operating primarily as private subsidiaries of shall be considered rank-and-file employees.
the Government. (Sec. 2, Rule VI, Book III, Rules
Implementing the Labor Code)

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provided under Article 94 (holiday pay) and

6. Occupational Safety and Health Article 95 (SIL pay) of the Labor Code.
Standards Law – R.A. No. 11058, secs. However, if the worker engaged on pakyaw
4-6, 8 and 12 or task basis also falls within the meaning of
Occupational Safety and Health (OSH) "field personnel" under the law, then he is not
standards refers to a set of rules issued by entitled to these monetary benefits. (A. Nate
DOLE which mandates the adoption and use Casket Maker v Arango, G.R. No. 192282,
of appropriate practices, means, methods, 2016)
operations or processes, and working
conditions reasonably necessary to ensure Duties of Employers, Workers and
safe and healthful employment. (Sec. 3 (p), Other Persons:
Chapter II, IRR, RA 11058) (a) Every employer, contractor or
subcontractor, if any, and any person who
Coverage Workplaces [Section 3(c)] Covered manages, controls or supervises the work
workplaces refer to establishments, projects, being undertaken shall:
sites and all other places where work is being 1) Furnish the workers a place of
undertaken wherein the number of employment free from hazardous
employees, nature of operations, and risks or conditions that are causing or are likely
hazards involved in the business, as to cause death, illness or physical harm
determined by the Secretary of Labor and to the workers;
Employment, require compliance with the 2) Give complete job safety instructions or
provisions of this Rules. (Sec. 3 (c), Chapter orientation to all the workers especially
II, IRR, RA 11058) to those entering the job for the first
time, including those relating to
Coverage familiarization with their work
Establishments covered environment;
All establishments collecting service charges 3) Inform the workers of the hazards
for work or service they offer, such as hotels, associated with their work health risks
restaurants, lodging houses, night clubs, involved ot to which they are exposed to,
cocktail lounges, massage clinics, bars, preventive measures to eliminate or
casinos and gambling houses, and sports minimize the risks, and steps to be taken
clubs, including those entities operating in cases of emergency;
primarily as private subsidiaries of the 4) Use only approved devices and
government. equipment for the workplace;
5) Comply with OSH standards including
Employees covered training medical examination and where
All employees, except managerial employees, necessary, provision of protective and
under the direct employ of the covered safety devices such as personal
establishment, regardless of their positions, protective equipment (PPE) and machine
designations, or employment status, and guards;
irrespective of the method by which their 6) Allow workers and their safety and
wages are paid. (Sec. 2, Rule VI, Book III, health representatives to participate
Rule VI, IRR) actively in the process of organizing,
planning, implementing and evaluating
In determining whether workers engaged on the safety and health program to
"pakyaw" or task basis" is entitled to holiday improve safety and health in the
and SIL pay, the presence (or absence) of workplace; and
employer supervision as regards the worker's 7) Provide, where necessary, for measures
time and performance is the key: if the to deal with emergencies and accidents
worker is simply engaged on "pakyaw" or including first-aid arrangements.
task basis, then the general rule is that he is (b) Every worker shall participate in ensuring
entitled to a holiday pay and SIL pay unless compliance with OSH standards in the
exempted from the exceptions specifically workplace. The worker shall make proper use

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of all safeguards and safety devices furnished process or environment, chemical,

for the worker's protection and that of others, radiological, mechanical and other irritants or
and shall observe instructions to prevent hazards capable of causing injury or
accidents or imminent danger situation in impairment in the function of any part of the
workplace. The worker shall observe the body through absorption, inhalation or
prescribed steps to be taken in cases of physical contact. The cost of the PPE shall be
emergency. part of the safety and health program which
The worker shall report to the supervisor any is a separate pay item pursuant to Section 20
work hazard that may be discovered in the of this Act.
workplace.
(c) It shall be the duty of any person, All PPE shall be of the appropriate type as
including the builder or contractor who visits, tested and approved by the DOLE based on
builds, renovates or installs devices or its standards. The usage of PPE in all
conducts business in any establishment or establishments, projects, sites and all other
workplace, to comply with the provisions of places where work is being undertaken shall
this Act and all other regulations issued by be based on the evaluation and
the Secretary of Labor and Employment. recommendation of the safety officer.
(d) Whenever two(2) or more undertakings (Section 8, RA 11058)
are engaged in activities simultaneously in
one (1) workplace, it shall be the duty of all Covered workplaces shall have a safety
engaged to collaborate in the application of and health program including the
OSH standards and regulations. (Section 4, following policies, guidelines or
RA 11058) information:
a) Statement of commitment to comply
Workers' Right to Know with OSH requirements;
The right to safety and health at work shall b) General safety and health, including a
be guaranteed. All workers shall be drug-free workplace;
appropriately informed by the employer c) Human Immunodeficiency Virus (HIV)
about all types of hazards in the workplace, and Acquired Immune Deficiency
provided access to training and education on Syndrome (AIDS)/tuberculosis/hepatitis
chemical safety, electrical safety mechanical prevention control;
safety, and ergonomical safety. (Section 5, d) Company or project details;
RA 11058) e) Composition and duties of the safety and
health committee;
Workers' Right to Refuse Unsafe Work. f) Occupational Safety and health
The worker has the right of refusal to work personnel and facilities;
without threat or reprisal from the employer g) Safety and health promotion, training
if, as determined by the DOLE, an imminent and education;
danger situation exists in the workplace that h) Conduct of toolbox meetings;
may result in illness, injury or death, and i) Accident/incident/illness investigation,
corrective actions to eliminate the danger recording and reporting;
have not been undertaken by the employer. j) Provision and use of PPE;
(Section 6, RA 11058) k) Provision of safety signage;
l) Dust control and management, and
Workers' Right to Personal Protective regulations on activities such as building
Equipment (PPE) of temporary structures, and lifting and
Every employer, contractor or subcontructor, operation of electrical, mechanical,
if any, shall provide his workers, free of communications systems and other
charge, protective equipment for their eyes, equipment;
face, hands and feet, and free, and lifeline, m) Provision of workers' welfare facilities;
safety belt or harness, gas or dust respirators n) Emergency preparedness and response
or masks, protective shields whenever plan;
necessary by reason of the hazardous work o) Waste management system; and

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p) Prohibited acts and penalties for Statutory minimum wage

violations. Refers simply to the lowest basic wage rate
fixed by law that an employer can pay his
The safety and health program shall be workers (Ibid.).
prepared and executed by the employer,
contractor or subcontractor, if any, in Salary
consultation with the workers and their It denotes a higher degree of employment, or
representatives and shall be submitted to the a superior grade of services, and implies a
DOLE which shall approved disapproved or position of office and is suggestive of a larger
modify the same according to existing laws and more important service. The word salary
riles and regulations, and other issuances. is understood to relate to position of office,
to be the compensation given for official or
The approved safety and health program other service. It is subject to execution or
shall be communicated and be made readily attachment. (Gaa vs. CA, G.R. No. L-44169,
available to all persons in the workplace. December 3, 1985)

B. Wages Basic Salary

The term includes remunerations or earnings
1. Components and Exclusions paid by the employer to employee, but
excludes cost-of-living allowances, profit-
a. Wages sharing, payments, and all allowances and
monetary benefits which have not been
Wage considered as part of the basic salary of the
the remuneration or earnings, however employee (Duka, Labor Laws and Social
designated, capable of being expressed in Legislation, A Barrister’s Companion, 2016, p.
terms of money, whether fixed or ascertained 161)
on a time, task, piece, or commission basis,
or other method of calculating the same, Wages and salary are in essence synonymous
which is payable by an employer to an (Songco v. NLRC, G.R. No. L-50999, 1990)
employee under a written or unwritten
contract of employment for work done or to Wage Salary
be done, or for services rendered or to be Paid for skilled or Paid to white collar
rendered and includes the fair and unskilled manual workers and denote
reasonable value, as determined by the labor a higher grade of
Secretary of Labor and Employment, of employment
board, lodging, or other facilities customarily Not subject to Subject to
furnished by the employer to the employee. execution, execution,
"Fair and reasonable value" shall not include garnishment or garnishment or
any profit to the employer, or to any person attachment except attachment (Gaa v.
affiliated with the employer. (Sec. 97 (f), for debts related to CA, G.R. No.
Labor Code) necessities [Art. L44169, 1985)
1708]
(1) Basic wage
All the remuneration or earnings paid by an b. Facilities
employer to a worker for services rendered
on normal working days and hours but does Facilities include those articles or services of
not include cost-of-living allowances, profit- benefit to the employee and his family such
sharing payments, premium payments, 13th as rice ration, housing, recreational facilities,
month pay or other monetary benefits which medical treatment to dependents, school
are not considered as part of or integrated facilities, cost of light, water, fuel, meals or
into the regular salary of the workers (IRR; snacks. (Mayon Hotel vs. Adana, G.R. No.
Wage Rationalization Act; R.A. 6727). 157634, May 16, 2005)

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Requirements For Deducting Values For contributed to the success of the employer’s
Facilities: business and made possible for the
1. Proof must be shown that such facilities realization of profits. (Producer’s Bank of the
are customarily furnished by the trade; Philippines vs. NLRC, G.R. No. 100701, March
2. The provision of deductible facilities must 28, 2001)
be voluntarily accepted in writing; and
3. The facilities must be charged at fair and Bonus is NOT a demandable and
reasonable value (Mabeza vs. NLRC, G.R. enforceable obligation
No. 118506, April 18, 1997) The grant of a bonus is basically a
management prerogative which cannot be
c. Supplements forced upon the employer who may not be
obliged to assume the onerous burden of
Supplements are extra remuneration or granting bonuses or other benefits aside from
benefits given to, or received by laborers, the employee's basic salaries or wages.
over and above their ordinary earnings or (Manila Electric Co. v. Argentera, G.R. Nos.
wages (e.g., vacation leave pay, overtime 224729 & 225049, February 8, 2021)
pay in excess of the legal rate, profit-sharing
benefits, sick pension, retirement and death When Demandable
benefits, family allowances, Christmas bonus,
war-risk or cost-of-living bonuses or other A bonus, however, becomes a demandable or
bonuses other than those paid as reward for enforceable obligation when:
extra output or time spent on the jobs. (Atok- a. it is made part of the wage or salary or
Big Wedge Mutual Benefit Assn. vs. Atok-Big compensation of the employee.
Wedge Mining Co., Inc., supra) b. It is stipulated in the collective bargaining
agreement or those granted as company
The benefit or privilege given to the practice are demandable. (Manila Electric
employee which constitutes an extra Co. v. Argentera, G.R. Nos. 224729 &
remuneration over and above his basic or 225049, February 8, 2021)
ordinary earning or wage is supplement; and c. When the grant is mandated by law
when said benefit or privilege is made part of (Ungos III, Labor Law 3: The
the laborer’s basic wage, it is a facility. The Fundamentals of Labor Law Review, 2021,
criterion is not so much with the kind of the p. 175-176)
benefit or item (food, lodging, bonus or sick
leave) given but its purpose. Thus, free meals Exception to the exception
supplied by the ship operator to crew Bonus is not demandable when employer can
members, out of necessity, cannot be no longer afford to pay.
considered as facilities but supplements
which could not be reduced having been An employer cannot be forced to distribute
given not as part of wages but as a necessary bonuses which it can no longer afford to pay.
matter in the maintenance of the health and To hold otherwise would be to penalize the
efficiency of the crew during the voyage. employer for his past generosity. (Producer’s
Facilities are deductible from wage but not Bank of the Philippines vs. NLRC, G.R. No.
supplement (Chan, 2018 Last-Minute Pre- 100701, March 28, 2001)
Week Notes on Labor Law, p.23-24)
No company should be compelled to act
d. Bonus liberally and confer upon its employees’
additional benefits over and above those
A bonus is a gratuity or act of liberality of the mandated by law when it is plagued by
giver which the recipient has no right to economic difficulties and financial losses.
demand as a matter of right. (Manila Banking Corporation vs. NLRC, G.R.
No. 83588, September 27, 1997)
It is an amount granted and paid to an
employee for his industry and loyalty which

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Productivity Bonus vs. Sales employer (DOLE’s BWC issues Q & A on 13th
Commission month pay)
Productivity Sales
Bonus Commission Coverage
Generally tied to the Intimately related to All rank-and-file employees who have worked
productivity or or directly for at least one (1) month during the calendar
profit generation of proportional to the year, are entitled to receive 13th month pay
the employer extent or energy of regardless of the nature of their employment
corporation an employee’s and irrespective of the methods by which
endeavors their wages are paid (Presidential Decree No.
Not directly Commissions are 851; Memorandum Order No. 28, Revised
dependent on the paid upon the Guidelines on the Implementation of the 13th
extent an individual specific results Month Pay Law).
employee exerts achieved by the
himself salesman-employee When should be paid?
Something extra for It is a percentage of It should be paid not later than December 24
which no specific the sales closed by of each year. An employer, however, may
additional services a salesman and give to his employees one-half of the 13th
are rendered by any operate as an month pay before the opening of the regular
particular employee integral part of such school year and the other half on or before
salesman’s basic the 24th day of December of every year
pay/wage (Section 1, IRR; Ibid).
Not legally Legally demandable
demandable, Persons Covered (PD 851)
absent a contractual
undertaking to pay 1. Employees
it
General Rule: All rank-and-file EEs are
Bonus is forfeited when employee is covered by P.D. 851 regardless of the amount
guilty of serious misconduct or of basic salary that they receive in a month,
administrative charge if their Ers are not otherwise exempted from
paying the 13th month pay. Such Ees are
Employers may not be compelled to award a entitled to the 13th month pay regardless of
bonus to private respondents whom it found said designation of employment status, and
guilty of serious misconduct. (Philippine irrespective of the method by which their
National Construction Corporation vs. NLRC, wages are paid.
G.R. No. 128345, May 18, 1999) Provided that they have worked for at least 1
month, during a calendar year (Revised
In consonance with existing company policy, Guidelines on the Implementation of the 13th
the 1988 bonus should be forfeited in favor Month Pay Law).
of the Bank when records show that in 1988,
the employee was found guilty of an Exceptions:
administrative charge. (Republic Planters a. Government EEs;
Bank (now known as PNB-Republic Bank) vs. b. EEs paid purely on commission basis;
NLRC, G.R. No. 117460, January 6, 1997) c. EEs already receiving 13th month pay;
d. Managers; and
e. 13th Month Pay e. Seafarers

It is a form of monetary benefit equivalent to 2. Employers

the monthly basic compensation received by
an employee, computed pro-rata according General Rule: All Employers are covered by
to the number of months within a year that PD 851.
the employee has rendered service to the

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Exceptions: Equivalent forms of the 13th month

The Government and any of its political pay:
subdivisions, including GOCCs; 1. Christmas Bonus
2. Midyear Bonus
XPN to XPN: Corporations operating 3. Profit Sharing Scheme
essentially as private subsidiaries of the 4. Other Cash bonuses amounting to not less
Government. than 1/12 of its basic salary (Sec. 3, P.D.
a. ERs already paying their EEs 13th month No. 851)
pay, or more in a calendar year in its
equivalent at the time of the issuance of Things Not Proper Substitutes For 13th
the Revised Guidelines; Month Pay
b. ERs of those who are paid on purely
basis of: 1. Free rice;
2. Electricity;
i. Commission; 3. Cash and stock dividends; and
NOTE: Bus drivers and conductors 4. Cost-of-living Allowance (Ibid.)
who are paid a fixed or guaranteed
minimum wage in case their Coverage from Income Tax
commission be less than the statutory
minimum are entitled to a 13th- New Tax Obligation Rate under TRAIN Law
month pay equivalent to one-twelfth for 2018 Onwards
of their total earnings during the
calendar year (Philippine Agricultural • The 13th month pay is generally exempt
Commercial and Industrial Workers from taxation. However, there is a
Union vs. NLRC, GR No. 107994, 14 prescribed limit to this exemption
August 1995) provided under Section 32 (B)(7)(e) of the
National Internal Revenue Code (NIRC) –
ii. Boundary; or which was amended by Republic Act No.
iii. Task; and 10963 or the TRAIN law on January 2018.
iv. Fixed amount for performing a The amendment stipulates that the 13th
specific work irrespective of the time month pay and other equivalent benefits
consumed in the performance shall not be subject to tax for a maximum
thereof. of P90,000. This new amount is a relative
increase from the previous tax exclusion
EXCEPTION: rate of P82,000.
Where the workers are paid on a piece-rate • Anything beyond the maximum exclusion
basis, in which case, the employer shall be rate of P90,000 must be included in the
covered by the Revised Guidelines insofar as computation of the employee’s gross
the workers are concerned. income for the applicable taxable year
(Sec. 9, R.A. No. 10963)
c. Distressed ERs:
i. Currently incurring substantial losses; e. Holiday Pay
or
ii. In the case of non-profit institutions Holiday Pay
and organizations, where their
income, whether from donations, Holiday pay is a form of premium accorded to
contributions, grants and other an employee who does not work on regular
earnings from any source, has holidays. If he works on said regular holidays,
consistently declined by more than he is entitled to an additional compensation
40% of their normal income for the over his regular or basic remuneration known
last 2 years (Sec. 7, IRR; P.D. 851). as premium pay. (Poquiz, Labor Standards
and Social Legislation, 2018, p. 248).

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The payment of the regular daily wage for Exception: Unless the laborer was able,
any unworked regular holiday (Handbook on willing and ready to work but was prevented
Workers’ Statutory Monetary Benefits, by management or was illegally locked out,
Bureau of Working Conditions, 2016). suspended or dismissed (Azucena, citing
Philippine Airlines v. NLRC, G.R. No. 55159,
General Rule: Every worker shall be paid his 1989)
regular daily wage during regular holidays
(Art. 94, Labor Code, as amended). b. Equal Pay for Equal Work

Exceptions: Employees working in the Philippines, if they

1. Government employees and any of its are performing similar functions and
political subdivisions, including GOCCs (with responsibilities under similar working
original charter); conditions, should be paid equally. If an
2. Retail and service establishments employer accords employees the same
regularly employing less than 10 workers; position and rank, the presumption is that
3. Domestic helpers or kasambahays and these employees perform equal work.
persons in the personal service of another; (International School Alliance of Educators v.
4. Employee engaged on task or contract Hon. Quisumbing, G.R. No. 128845, 2000)
basis or purely commission basis;
5. Members of the Family of the Employer c. Fair Wage for Fair Work
who are dependent on him for support;
6. Managerial Employee and other General Rule: With respect to back wages,
members of the managerial staff; the principle of a "fair day's wage for a fair
7. Field personnel and other Employee day's labor" remains as the basic factor in
whose time and performance are determining the award thereof. If there is no
unsupervised by the Employer; and work performed by the employee there can
8. Employee paid fixed amount for be no wage or pay. (Ergonomic Systems
performing work irrespective of the time Philippines, Inc. v. Enaje, G.R. No. 195163,
consumed in the performance thereof (Sec. December 13, 2017)
1, Rule IV, Book III, IRR)
Exception: Unless the laborer was able,
Rules on Holiday Pay willing and ready to work but was illegally
If an employee is on leave of absence with locked out, suspended or dismissed or
pay on the day immediately preceding a otherwise illegally prevented from working.
regular holiday, he is entitled to holiday pay. (Ibid)
(Sec. 6(a), Rule IV, Book III, Rules
Implementing the Labor Code). d. Non-Diminution of Benefits

If an employee is on leave of absence The principle against diminution of benefits is

without pay on the day immediately applicable if it is shown that:
preceding a regular holiday, he is not entitled 1. The grant of benefit is based on a policy
to holiday pay unless he works on such or has ripened into a practice over a long
regular holiday. (Sec. 6(a), Rule IV, Book III, period;
Rules Implementing the Labor Code). 2. The practice is consistent and deliberate;
3. The practice is not due to an error in the
2. Principles construction or application of a doubtful
or difficult question of law; and
a. No Work, No Pay 4. It is done unilaterally by the employer.
(Vergara vs. Coca-Cola Bottlers
General Rule: If there is no work performed Philippines, Inc., GR No. 176985, April 1,
by the employee, there can be no wage or 2013)
pay.

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Nothing in the Labor Code shall be construed

to eliminate or in any way diminish The philosophy behind the law is to prohibit
supplements, or other employee benefits employers from reducing benefits already
being enjoyed at the time of the enjoyed by employees. A contrary rule will
promulgation of the Code (Art. 100, Labor corrupt the employer's mind to abuse and
Code, as amended). exploit employees, prostituting the social
enshrined in the fundamental charter.
Employers are prohibited from reducing (Poquiz, Labor Standards and Social
benefits already enjoyed by employees Legislation, 2018, p. 294; Opinion of the
Secretary of Labor, October 7, 1975).
The non-diminution rule under Art. 100 of the
Labor Code explicitly prohibits employers 3. Payment of Wages
from eliminating or reducing the benefits
already enjoyed by their employees. General Rule: Legal Tender Only
(Wesleyan University-Philippines vs.
Wesleyan University- Philippines Faculty and Exception: Check/Money Order if customary
Staff Association, GR No. 181806, March 12, OR necessary because of special
2014). Employees have vested right over circumstances, as specified by the Secretary
such existing benefits (Poquiz, Labor of Labor or the CBA.
Standards and Social Legislation, 2018, p.
294). Not allowed:
1. Promissory Notes
Exception; Payment by mistake 2. Vouchers
provided corrected immediately; 3. Tokens
Principle of solutio indebiti applies 4. Tickets
5. Chits; or
An exception to the rule is when "the practice 6. Any other form alleged to represent a
is due to error in the construction or legal tender, even when expressly
application of a doubtful or difficult question requested by the employee [Art. 102].
of law." The error, however, must be
corrected immediately after its discovery; Time of payment (Art. 103; Sec. 3, Rule
otherwise, the rule on Non- Diminution of VIII, Book III, IRR)
Benefits would still apply. (Wesleyan Particulars Time of Payment
University-Philippines vs. Wesleyan Frequency At least once every
University-Philippines Faculty and Staff 2 weeks or 2x per
Association, GR No. 181806, March 12, 2014) month
Intervals Must not be more
An employer does not violate the rule on non- than 16 days
diminution of benefits if it discontinues a Force Majeure or Valid excuse for
benefit that has been paid by mistake. Circumstances delayed payment
((Poquiz, Labor Standards and Social Beyond ER’s BUT ER must pay
Legislation, 2018, p. 296). Control immediately after
cessation and not
Exceptions: less than once a
1. Correction of error month
2. Contingent benefit or conditional bonus Tasks Which Payments should be
3. Wage order compliance Cannot Be made with intervals
4. Benefits on reimbursement basis Completed in 2 not more than 16
5. Reclassification of position Weeks days, in proportion
6. Negotiated benefits to work completed
7. Productivity incentives (Ibid.) Final settlement is
made upon
Purpose Of Non-Diminution of Benefits

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completion of the ATM system of payment is with the written

work. consent of the EEs.

When Payment Through Check, Postal 1. EEs are given reasonable time to withdraw
Orders or Money Orders is Allowed: their wages from the banking facility
(compensable hours, if during work
1. When payment is customary (on the date hours).
of Code effectivity); 2. System shall allow workers to receive their
2. Where it is so stipulated in a collective wages within the period/frequency
agreement; provided by law.
3. Where all of the following conditions are 3. There is a bank/ATM facility within a 1km
met: radius from the place of work.
a. Bank/Facility for encashment is within 4. Upon request of the concerned EEs, the
1-km radius from the workplace ER shall issue a record of payment of
b. ER did not receive any pecuniary wages, benefits and deductions for a
benefit because of said arrangement particular period.
c. EEs are given reasonable time during 5. There shall be no additional expenses and
banking hours to withdraw their no diminution of benefits and privileges.
wages (compensable hours, if during 6. The ER shall assume responsibility in case
working hours) the wage protection provisions of law and
d. The payment by check is with the regulations are not complied with under
written consent of the EEs concerned, the arrangement. (Labor Advisory on
in the absence of a CBA (Sec. 2, Rule Payment of Salaries thru ATM, 1996)
VIII)
Person to Pay
Place of Payment
General Rule: Directly to EE
General Rule: Shall be made at or near the
place of undertaking (workplace). Exceptions:
1. Member of EE’s family if ER is authorized
Exceptions: in writing by the EE.
1. Deterioration of peace and order 2. A 3rd person if authorized by law (e.g.
conditions, or by reason of actual or insurance companies for premiums, union
impending emergencies (fire, flood, dues where the right to check-off has
epidemic); been recognized by ER in accordance with
2. Free transportation to the employees back a CBA or authorized in writing by EE
and forth; concerned).
3. Under any other analogous circumstances 3. Heirs in case of death of EE, without
provided, that the time spent by the necessity of intestate proceedings.
employees in collecting their wages shall a. If heirs are of age - they shall execute
be considered as compensable hours an affidavit attesting to their
worked. (Art. 104; Sec. 4, Rule VIII, Book relationship to the deceased and the
III, IRR) fact that they are his heirs to the
exclusion of others.
No payment in any bar, night or day club, b. If any of the heirs is a minor - such
drinking establishment, massage clinic, affidavit shall be executed on his behalf
dance hall, or other similar places or in places by his natural guardian or next of kin.
where games are played with stakes of (Sec. 5, Rule VIII, Book III, IRR)
money or things representing money, except
in the case of persons employees in such 4. Prohibitions Regarding Wages
places.
1. Against interference in disposal of
Condition for ATM Payment wages

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It is unlawful for any person to

Interference with disposal of wages withhold any amount from the wages
also includes forcing, compelling, or of a worker or induce him to give up
obliging employees to purchase any part of his wages by force, stealth,
merchandise, commodities or other intimidation, threat or any other means
property from any other person. (Art. without his consent. (Art. 116)
112)
5. Against Deduction to Ensure
2. Against Wage Deduction Employment

General Rule: No employer, in his own It is unlawful to make any deduction

behalf or in behalf of any person, shall from the wages of any employee for
make any deduction from the wages of the benefit of the employer as
his employees. consideration of promise for
employment or retention. (Art. 117)
Exceptions:
a. where the worker is insured with his 6. Against Retaliatory Measures
consent, and the deduction is to
recompense the employer for the It is unlawful for an employer to
premium paid discriminate (e.g. to refuse to pay or
b. for union dues reduce the wages and benefits,
c. where the employer is authorized by discharge) against any employee who
law or regulations issued by SOLE has filed any complaint or instituted
(Art. 113) any proceeding under Title II of the LC.
(Art. 118)
3. Against Requirements to Make
Deposits for Loss or Damage 7. Against False Reporting

General Rule: No employer shall It is unlawful for any person to make a

require his worker to make deposits statement, report or record filed or
from which deductions shall be made kept pursuant to the LC knowing it to
for the reimbursement of loss of or be false in any material respect. (Art.
damage to tools, materials, or 119)
equipment supplied by the employer.
(Art. 114) Civil Code Provisions on Non-
Interference In Disposal Of Wages
Exception: When the employer is Art. 1705. The laborer's wages shall be paid
engaged in a business where the in legal currency.
practice of making deductions or
deposits is a recognized one, or is Art. 1706. Withholding of the wages, except
necessary or desirable as determined for a debt due, shall not be made by the
by SOLE. employer.

No deduction from the deposits of an Art. 1707. The laborer's wages shall be a lien
employee for the actual amount of the on the goods manufactured or the work
loss or damage shall be made unless done.
the employee has been heard thereon,
and his responsibility has been clearly Art. 1708. The laborer's wages shall not be
shown (Art. 115) subject to execution or attachment, except
for debts incurred for food, shelter, clothing
4. Against Withholding of Wage and medical attendance.

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Art. 1709. The employer shall neither seize and different wage rates) where the
nor retain any tool or other articles belonging surviving company absorbs all the
to the laborer. employees of the dissolved
corporation,
5. Wage Distortion 3. Wage distortion arose because the
effectivity dates of wage increases
A situation where an increase in wage results given to each of the two classes of
in the elimination or severe contraction of employees (rank- and-file and
intentional quantitative differences in wage supervisory) had not been
or salary rates between and among- the synchronized in their respective CBAs
employee-groups in an establishment as to (Metro Transit Organization, Inc. vs.
effectively obliterate the distinctions NLRC, G.R. No. 116008, July 11, 1995)
embodied in such wage structure based on
skills, length of service or other logical bases While it is true that ECOLA is being enjoyed
of differentiation. (Rules Implementing R.A. by minimum wage earners, the provisions of
No. 6727) the Wage Orders are not absolute since the
Orders expressly provide certain exceptions
Where the application of any prescribed wage as when it would result in wage distortion.
increase by virtue of a law or wage order (Supra Multi-Services, Inc.v Labitigan, GR.
issued by any Regional Board results in G.R. No. 192297, (2016)
distortions of the wage structure within an
establishment, the employer and the union
shall negotiate to correct the distortions. Any 6. Minimum Wage
dispute arising from wage distortions shall be
resolved through the grievance procedure Minimum wage is the lowest wage rate fixed
under their collective bargaining agreement by law that an employer can pay his workers
and, if it remains unresolved, through (Sec. 1, Rule VII-A, Book III, Rules to
voluntary arbitration. Unless otherwise Implement the Labor Code, as amended by
agreed by the parties in writing, such dispute Memorandum Circular No, 3, Series of 1992).
shall be decided by the voluntary arbitrators
within ten (10) calendar days from the time The term “statutory minimum wage” refers to
said dispute was referred to voluntary the lowest basic wage rate fixed by law that
arbitration. (Art. 124, Par. 4, Labor Code) an employer can pay his workers (Rules
Implementing R.A. No. 6727).
Elements of Wage Distortion:
1. An existing hierarchy of positions with Exemptions
corresponding salary rates. a) The following establishments may be
2. A significant change or increase in the exempted from compliance with the wage
salary rate of a lower pay class without increase prescribed under the Act:
a corresponding increase in the salary a. Retail/Service establishments regularly
rate of a higher one; employing not more than 10 workers
3. The elimination of the distinction upon application with and as
between the 2 groups or classes; and determined by the appropriate Board in
4. The WD exists in the same region of the accordance with applicable guidelines
country. (Alliance Trade Unions vs. to be issued by the Commission.
NLRC, G.R. No. 140689, February 17, b. 2) New business enterprises that may
2004) be established outside the National
Capital Region and export processing
Causes of Wage distortions: zones from July 1, 1989 to June 30,
1. Government-decreed increases in 1993, whose operation or investments
minimum wages need initial assistance may be
2. Merger of two companies (with exempted for not more than three
differing classifications of employees years from the start of operations,

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subject to guidelines to be issued by Wages and Productivity Boards. (Art. 99,

the Secretary in consultation with the Labor Code)
Department of Trade and Industry and
the Department of Agriculture. Basis of Minimum Wages Rates
The statutory minimum wage rules
New business enterprises in Region III prescribed under the Act shall be for the
(Central Luzon) and Region IV normal working hours, which shall not exceed
(Southern Tagalog) may be exempted eight hours work a day. (Sec. 7, Rule VII,
for two years only from start of Book III, Omnibus Rules Implementing the
operations, except those that may be Labor Code)
established in the provinces of
Palawan, Oriental Mindoro, Occidental Workers Paid by Results
Mindoro, Marinduque, Romblon, a) All workers paid by results, including those
Quezon and Aurora, which may also be who are paid on piecework, takay,
exempted for not more than three pakyaw, or task basis, shall receive not
years from the start of operations. less than the applicable statutory
minimum wage rates prescribed under the
b) Whenever an application for exemption Act for the normal working hours which
has been duly filed with the appropriate shall not exceed eight hours work a day,
office in the Department/Board, action by or a proportion thereof for work of less
the Regional Office of the Department on than the normal working hours.
any complaints for alleged non-
compliance with the Act shall be deferred The adjusted minimum wage rates for
pending resolution of the applicant for workers paid by results shall be computed
exemption. in accordance with the following steps:

c) In the event that the application for 1) Amount of increase in AMW - Previous
exemption is not granted, the workers and AMW x 100 = % Increase;
employees shall receive the appropriate 2) Existing rate/piece x % increase =
compensation due them as provided for increase in rate/piece;
under the Act plus interest of one percent 3) Existing rate/piece + increase in
per month retroactive to July 1, 1989 or rate/piece = Adjusted rate/piece. Where
the start of operations whichever is AMW is the applicable minimum wage
applicable. (Sec. 15, Rule VII, Book III, rate.
Omnibus Rules Implementing the Labor
Code) b) The wage rates of workers who are paid
by results shall continue to be established
Regional minimum wage rates is the lowest in accordance with Article 101 of the Labor
basic wage rates that an employer can pay Code, as amended and its implementing
his workers, as fixed by the Regional regulations. (Sec. 9, Rule VII, Book III,
Tripartite Wages and Productivity Boards Omnibus Rules Implementing the Labor
(RTWPBs), which shall not be lower than the Code)
applicable statutory minimum wage rates
(Sec. 4[k], Rule I, NWPC Guidelines No. 01, Minimum Wage is mandatory
Series of 2007; Chan, Bar Reviewer on Labor The minimum wage fixed by law is
Law, 2019, p. 159). mandatory; thus it is non-waivable and non-
negotiable. The enactment is compulsory in
Regional Minimum Wages nature in order to ensure decent living
The minimum wage rates for agricultural and conditions (PAM Co. vs. PAMEA-FFW, G.R.
non-agricultural employees and workers in No. L-35254, May 25, 1973).
each and every region of the country shall be
those prescribed by the Regional Tripartite National Wages and Productivity
Commission (NWPC)

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The NWPC was created by the Wage The stipulation in the contract for the
Rationalization Act (R.A. No. 6727). allowance of vacation to employees is merely
a recognition by management and labor that
C. Leaves a short interval of complete rest and
relaxation from daily routine with the benefit
1. Service Incentive Leaves of full pay is essential to the mental and
physical well-being of the workmen. (Sunripe
It is a five (5)-day leave with pay for every Coconut Products vs. NLU, G.R. No. L-7964,
employee who has rendered at least one (1) October 18, 1955)
year of service whether continuous or
broken. (Art. 95, Labor Code) The service incentive leave may be used for
sick and vacation leave purposes. The
The term “leave with pay” means that the unused service incentive leave is commutable
employee is entitled to his full compensation to its money equivalent at the end of the
during his leave of absence from work. year. In computing, the basis shall be the
(Escocura vs. San Miguel Brewery Inc., G.R. salary rate at the date of conversion. (DOLE,
No. L- 16696; Jan. 31, 1962) Bureau of Working Conditions, Handbook on
Worker’s Statutory Monetary Benefits, 2022
The term “at least one year of service” should Edition, Pg. 26)
mean service within twelve (12) months,
whether continuous or broken, reckoned EXCEPTIONS:
from the date the employee started working, 1. Government employees, whether
including authorized absences, unworked employed by the National Government
weekly rest days, and paid regular holidays, or any of its political subdivisions,
unless the number of working days in the including those employed in GOCCs with
establishment as a matter of practice or original charters or created under special
policy, or that provided in the employment laws;
contract, is less than twelve (12) months, in
which case, said period should be considered 2. Persons in the personal service of
as one (1) year for the purpose of another;
determining entitlement to the service 3. Managerial employees, if they meet all of
incentive leave benefit. (Sec. 3, Rule V, Book the following conditions:
IIII, IRR) a. Their primary duty is to manage the
establishment in which they are
In JPL vs. CA, where an employee was never employed or of a department or
paid his service incentive leave during all the subdivision thereof;
time he was employed, it was held that the b. They customarily and regularly direct
same should be computed not from the start the work of two or more employees
of employment but a year after therein; and
commencement of service, for it is only then c. They have the authority to hire or fire
that the employee is entitled to said benefit. other employees of lower rank; or
This is because the entitlement to said their suggestions and
benefit accrues only from the time he has recommendations as to hiring, firing,
rendered at least one year of service to his and promotion, or any other change
employer. The computation thereof should of status of other employees are
only be up to the date of termination of given particular weight.
employment. There is no cause for granting
said incentive to one who has already 4. Officers or members of managerial staff,
terminated his relationship with the if they perform the following duties and
employer. (JPL Marketing Promotions vs. CA, responsibilities:
G.R. No. 151966, July 8, 2005) a. Primarily perform work directly
related to management policies of
Purpose of the law: their employer;

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b. Customarily and regularly exercise Sec. 29 Leave Benefits. - A domestic worker

discretion and independent who has rendered at least one year of service
judgment; shall be entitled to an annual service
c. Regularly and directly assist a incentive leave of five days with pay:
proprietor or managerial employee in Provided, that any unused portion of said
the management of the annual leave shall not be cumulative or
establishment or subdivision thereof carried over to succeeding years. Unused
in which he or she is employed; or (ii) leaves shall not be convertible to cash.
execute, under general supervision,
work along specialized or technical Clearly as distinguished from the SIL under
lines requiring special training, Art. 95, this kind of SIL benefit is not
experience, or knowledge; or (iii) convertible to cash, if unused. (Chan, Bar
execute, under general supervision, Reviewer on Labor Law, 4th Revised Edition,
special assignments and tasks; and 2019)
d. Do not devote more than twenty
percent (20%) of their hours worked Right to service incentive leave
in a workweek to activities which are Every employee who has rendered at least
not directly and closely related to the one year of service shall be entitled to a
performance of the work described in yearly service incentive leave of five days
paragraphs 4.a, 4.b, and 4.c above; with pay. (Sec. 2, Rule V, Book III, Omnibus
Rules Implementing the Labor Code)
5. Field personnel and those whose time
and performance are unsupervised by Right of Part-time workers to SIL
the employer, including those who are In an Advisory Opinion issued by DOLE’s
engaged on task or contract basis, Bureau of Working Conditions, it was
purely commission basis, or those who declared that part-time workers are entitled
are paid a fixed amount for performing to the full benefit of the yearly five days SIL
work irrespective of the time consumed with pay. The reason is that the provision of
in the performance thereof; Art. 95 of the Labor Code and its
implementing rules, speaks of the number of
6. Those already enjoying this benefit; months in a year for entitlement to said
benefit. Resultantly, part- time employees
7. Those enjoying vacation leave with pay are also entitled to the full SIL benefit and not
of at least five (5) days; and on a pro-rata basis. (Advisory Opinion of the
Bureau of Working Conditions, Department of
8. Those employed in establishments Labor and Employment, on Conditions of
regularly employing less than ten (10) Employment of Part-time workers; Cebu
employees. (No. 7 [A], 2019 Handbook Institute of Technology vs. Ople, G.R. No. L-
on Workers’ Statutory Monetary 58870, Dec. 18, 1987, 156 SCRA 629)
Benefits; Chan, 2019 Reviewer on Labor
Law, p. 151) Definition of certain terms
The term "at least one-year service" shall
Teachers of private schools on contract basis mean service for not less than 12 months,
are entitled to service incentive leave. (Cebu whether continuous or broken reckoned from
Institute of Technology vs. Ople, G.R. No. L- the date the employee started working,
58870, December 18, 1987). including authorized absences and paid
regular holidays unless the working days in
Kasambahays are now entitled to SIL the establishment as a matter of practice or
The grant of 5-day SIL to domestic workers policy, or that provided in the employment
or kasambahay is not based on Article 95 of contract is less than 12 months, in which case
the Labor Code but on the following provision said period shall be considered as one year.
of RA 10361: (Sec. 3, Rule V, Book III, Omnibus Rules
Implementing the Labor Code)

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credits and opts for its commutation upon his

Accrual of benefit resignation or separation from employment,
Entitlement to the benefit provided in this his cause of action to claim the whole amount
Rule shall start December 16, 1975, the date of his accumulated SIL shall arise when the
the amendatory provision of the Code took employer fails to pay such amount of his
effect. (Sec. 4, Rule V, Book III, Omnibus accumulated SIL shall arise when the
Rules Implementing the Labor Code) employer fails to pay such amount at the time
of his resignation or separation from
Treatment of benefit employment.
The service incentive leave shall be
commutable to its money equivalent if not Applying Art. 306 [291] of the Labor Code in
used or exhausted at the end of the year. light of this peculiarity of the SIL, it can be
(Sec. 5, Rule V, Book III, Omnibus Rules concluded that the three year prescriptive
Implementing the Labor Code) period commences, not at the end of the year
when the employee becomes entitled to the
Relation to agreements commutation of his SIL, but from the time
Nothing in the Rule shall justify an employer when the employer refuses to pay its
from withdrawing or reducing any benefits, monetary equivalent after demand of
supplements or payments as provided in commutation or upon termination or the
existing individual or collective agreements or employee’s services, as the case may be.
employer's practices or policies. (Sec. 5, Rule
V, Book III, Omnibus Rules Implementing the Thus, in the 2017 case of Lourdes C.
Labor Code) Rodriguez vs. Park N Ride, Inc. involving an
employee who has not availed of SIL for the
Curious Animal Doctrine entire 25 years of her employment, it was
held that the prescriptive period with respect
Auto Bus Transport System, Inc. vs. Bautista, to petitioner’s claim for her entire SIL pay
clarified the correct reckoning of the commenced only from the time of her
prescriptive period for SIL pay in that it is a resignation or separation from employment.
curious animal in relation to other benefits Since petitioner had filed her complaint for
granted by law to every employee. This is so illegal dismissal on Oct. 7, 2009, or for a few
because in the case of SIL, the employee may days after her resignation in September
choose to either use his leave credits or 2009, her claim for SIL pay has not
commute it to its monetary equivalent if not prescribed. Accordingly, petitioner was
exhausted at the end of the year. awarded SIL pay for her entire 25 years of
Furthermore, if the employee entitled to SIL service-from 1984 to 2009- and not only
does not use or commute the same, he is three years’ worth (2006 to 2009) as
entitled upon his resignation or separation determined by the Court of Appeals. (Chan,
from work to the commutation of his accrued Bar Reviewer on Labor Law, 4th Revised
service incentive leave. In other words, an Edition, 2019)
employee who has served for one year is
entitled to it. He may use it as leave days or
he may collect its monetary value. 2. Leaves under Special Laws

Correspondingly, it can be conscientiously a. Expanded Maternity Leave

deduced that the cause of action of an
entitled employee to claim his SIL pay R.A. NO. 11210 – “105-DAY EXPANDED
accrues from the moment the employer MATERNITY LEAVE LAW” This is the new
refuses to remunerate its monetary prevailing law on maternity leave benefits.
equivalent if the employee did not make use (effective March 2019)
of said leave credits but instead chose to avail
of its commutation. Accordingly, if the Maternity leave is the period of time which
employee wishes to accumulate his leave may be availed of by a woman employee,

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married or unmarried, to undergo and

recuperate from childbirth, miscarriage or Extended Maternity Leave
complete abortion during which she is In cases of Live childbirth, an additional
permitted to retain her rights and benefits maternity leave of thirty (30) days without
flowing from her employment. (Chan, 2018 pay can be availed of, at the option of the
Pre-week Notes on Labor Law, p. 29) female worker, provided that the employer
shall be given due notice. Due notice to the
Coverage: employer must be in writing and must be
The Expanded Maternity Leave Law shall given at least forty-five (45) days before the
cover the following: end of the female worker’s maternity leave.
1. Female workers in the Public Sector; However, no prior notice shall be necessary
2. Female workers in the Private Sector; in the event of a medical emergency but
3. Female workers in the Informal subsequent notice shall be given to the
Economy; employer. The above period of extended
4. Female members who are voluntary maternity leave without pay
contributors to the Social Security shall not be considered as gap in the service.
System (SSS); and (Sec. 2, Rule IV)
5. Female national athletes. (Sec. 1, Rule
III, IRR of R.A. No. 11210) Under Sec 4, R.A. No. 11210:
Paid leave benefit granted to a qualified
All covered females, regardless of civil status female worker in both the PUBLIC SECTOR
(married/unmarried), employment status, and the PRIVATE SECTOR (which is covered
and the legitimacy of her child, shall be by the SSS, including those in the informal
granted one hundred five (105) days economy) for the duration of:
maternity leave with full pay, and an LIVE MISCARRIAGE
OF PREGNANCY
TERMINATION

additional fifteen (15) days with full pay in CHILDBIRTH, AND

case the female worker qualifies as a solo regardless of EMERGENCY
Maternity

parent under R.A. No. 8972, or the Solo the mode of TERMINATION
Benefit

Parents’ Welfare Act of 2000. delivery OF

PREGNANCY
This is applicable to both live childbirth, 105 days of 60 days of paid
regardless of the mode of delivery, paid leave leave
maternity leave

miscarriage, and emergency termination of

pregnancy. (Sec. 3, R.A. No. 11210)
Period of

All female workers in the government and

female members of the SSS, regardless of
their civil status, shall be granted maternity 105 days, with N/A
leave, with full pay. (Sec. 7, R.A. No. 11210) additional
For female workers qualified as a solo

"Solo Parents' Welfare Act of 2000"

parent under R.A. No. 8972, or the

fifteen (15)
In cases of miscarriage or emergency days of paid
termination of pregnancy, sixty (60) days leave
maternity leave with full pay shall be granted.
(Sec. 1 Rule IV, Id.; Sec. 3 R.A. No. 11210)

Requirements In Order That Maternity

Benefits May Be Claimed

1. There is childbirth, abortion or

miscarriage
2. She has paid at least three (3) monthly
semester of her childbirth or
miscarriage.

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Additional N/A applicable daily cash maternity benefits that

EXTENDED MATERNITY

thirty (30) days she should have received had her

without pay employment not been illegally terminated.
(Sec. 5, Rule IV, Id.)

The maternity leave benefits granted under

R.A. No. 11210 and the Rules shall be
LEAVE

enjoyed by a female worker in the public

sector and in the private sector even if she
In every In every has a pending administrative case. (Sec. 6,
instance of live instance of Rule IV, id.; Sec. 12, R.A. No. 11210)
childbirth, pregnancy,
FREQUENCY OF THE

regardless of miscarriage or Maternity Leave For Female National Athletes

frequency emergency
termination of In the event that a national athlete who is in
pregnancy,
GRANT

the roster of national athletes of the National

regardless of Sports Association (NSA) to which she is
frequency affiliated becomes pregnant, she will be
A female Not available referred to a physician of the Philippine
ALLOCATION OF MATERNITY LEAVE CREDITS

worker entitled Sports Commission (PSC) or an obstetrician-

to maternity
to the child's father OR alternate caregiver

gynecologist to determine ger fitness to

leave benefits continue training. She will be allowed to
may, at her participate in all team-related activities,
option, allocate unless the physician advises that
up to seven (7) participation is not medically safe or should
days of said be limited. Upon medical advice, she shall go
benefits to the on maternity leave until cleared to return to
child's father or training. She shall continue receiving her
alternate allowance and be entitled to the same
caregiver benefits while on maternity leave prior to
childbirth and up to six (6) months after,
unless she can resume sooner as advised by
her physician, in which case, she will continue
to receive the same allowances and benefits
she received prior to and during the
Grant of Maternity Leave Benefits after pregnancy: provided, that a female national
Termination of Employment athlete employed in the public sector shall
not receive double compensation or benefits.
Maternity leave with full pay shall be granted (Sec. 1, Rule IX, id.; Sec. 113, R.A. No.
even if the childbirth, miscarriage, or 11210)
emergency termination of pregnancy occurs
not more than fifteen (15) calendar days
after the termination of an employee’s b. Paternity Leave
service, as her right thereto has already
accrued. Such period is not applicable when Paternity Leave is granted to all married male
the employment of the pregnant woman employees in the private sector, regardless of
worker has been terminated without just their employment status (e.g., probationary,
cause, in which case the employer will pay regular, contractual, project basis).
her the full amount equivalent to her salary
for one hundred five (105) days childbirth The purpose of this benefit is to allow the
and sixty (60) days for miscarriage or husband to lend support to his wife during
emergency termination of pregnancy based her period of recovery and/or in nursing her
on her full pay, in addition to the other newborn child.

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If the existing paternity leave benefit under

Government employees are also entitled to the collective bargaining agreement,
the paternity leave benefit. They shall be contract, or company policy is greater than 7
governed by the Civil Service rules. (DOLE, calendar days as provided for in RA 8187, the
Bureau of Working Conditions, Handbook on greater benefit shall prevail.
Workers Statutory Monetary Benefits, 2022
Edition, P.28) If the existing paternity leave benefit is less
than that provided in RA 8187, the employer
Concept of paternity leave benefits shall adjust the existing benefit to cover the
Every married male Ee in the private and difference.
public sectors shall be entitled to a paternity
leave of 7 days with full pay for the first 4 NOTE: Where a company policy, contract, or
deliveries of the legitimate spouse with whom collective bargaining agreement provides for
he is cohabiting. an emergency or contingency leave
without specific provisions on paternity leave,
For this purpose, “cohabiting” means the the employer shall grant to the employee 7
obligation of the husband and wife to live calendar days of paternity leave (Handbook
together. If the spouses are not physically on Workers’ Statutory Monetary Benefits,
living together because of the workstation or Bureau of Working Conditions, 2016).
occupation, the male employee is still entitled
to the paternity leave benefit.
c. Solo Parent Leave
Conditions for Entitlement To Paternity Leave benefits granted to a solo parent to
Leave enable him/her to perform parental duties
and responsibilities - where physical presence
A married male employee shall be entitled to is required. (Sec. 8, R.A. No. 8972)
paternity leave benefit provided that he has
met the following conditions: In addition to leave privileges under existing
1. He is an employee at the time of the laws, parental leave of not more than 7
delivery of his child; working days every year shall be granted to
2. He is cohabiting with his spouse at the any solo parent Ee who has rendered service
time that she gives birth or suffers a of at least 1 year (Sec. 8, R.A. No. 8972).
miscarriage;
3. He has applied for paternity leave with Persons considered as solo parents
his employer within a reasonable period entitled to parental leave
of time from the expected date of
delivery by his pregnant spouse, or Parental leave for solo parents is granted to
within such period as may be provided any solo parent or individual who is left alone
by company rules and regulations, or by with the responsibility of parenthood due to:
collective bargaining agreement; and 1. Giving birth as a result of rape or, as used
4. His wife has given birth or suffered a by the law, other crimes against chastity;
miscarriage. 2. Death of spouse;
3. Spouse is detained or is serving sentence
NOTE: Delivery shall include childbirth or any for a criminal conviction for at least one
miscarriage. (1) year;
4. Physical and/or mental incapacity of
Non-conversion to cash spouse as certified by a public medical
In the event that the paternity leave is not practitioner;
availed of, it shall not be convertible to cash 5. Legal separation or de facto separation
and shall not be cumulative (except if a more from spouse for at least one (1) year:
favorable company policy exists) Provided that he/she is entrusted with the
custody of the children;
Crediting of Existing Benefits

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6. Declaration of nullity or annulment of 3. He/she has presented to his/her employer

marriage as decreed by a court or by a a Solo Parent Identification Card, which
church: Provided, that he/she is entrusted may be obtained from the DSWD office of
with the custody of the children; the city or municipality where he/she
7. Abandonment of spouse for at least one resides.
(1) year;
8. Unmarried father/mother who has Non-conversion to Cash
preferred to keep and rear his/her In the event that the parental leave is not
child/children, instead of having others availed of, it shall not be convertible to cash,
care for them or give them up to a welfare unless specifically agreed on previously.
institution;
9. Any other person who solely provides Crediting of Existing Leave
parental care and support to a child or If there is an existing or similar benefit under
children: Provided, that he/she is duly a company policy or a collective bargaining
licensed as a foster parent by the agreement, the same shall be credited as
Department of Social Welfare and such. If the same is greater than the seven
Development (DSWD) or duly appointed (7) days provided for in RA 8972, the greater
legal guardian by the court; and benefit shall prevail.
10. Any family member who assumes the
responsibility of head of family as a result Emergency or contingency leave provided
of the death, abandonment, under a company policy or a collective
disappearance, or prolonged absence of bargaining agreement shall not be credited
the parents or solo parent: Provided, that as compliance with the parental leave
such abandonment, disappearance, or provided for under RA 8972.
prolonged absence lasts for at least one
(1) year. Termination of the Benefit
A change in the status or circumstance of the
A solo parent kasambahay shall also be parent claiming the benefit under the law,
entitled to the seven-day parental leave such that he/she is no longer left alone with
benefits, provided that they have rendered the responsibility of parenthood, shall
service of at least six (6) months to the same terminate his/her eligibility for this benefit.
employer. (Sec. 22, Art. V, Revised (DOLE, Bureau of Working Conditions,
Implementing Rules and Regulations of R.A. Handbook on Worker’s Statutory Monetary
No. 8972 as amended by R.A. No. 11861) Benefits, 2022 Edition, P.31)

“Child” refers to a person living with and d. Gynecological Leave

dependent on the solo parent for support.
He/she is unmarried, unemployed, and below Special Leave Benefits for Women
eighteen (18) years of age, or even eighteen A woman employee having rendered
(18) years old and above but is incapable of continuous aggregate employment service of
self-support because he/she is mentally- at least six (6) months for the last twelve (12)
and/or physically-challenged. months shall be entitled to a special leave
benefit of two (2) months with full pay based
Conditions for Entitlement on her gross monthly compensation following
surgery caused by gynecological disorders.
A solo parent employee shall be entitled to (Sec. 18, RA 9710)
the parental leave, provided that:
1. He/she has rendered at least one (1) year Gynecological disorders
of service, whether continuous or broken;
2. He/she has notified his/her employer that Disorders that would require surgical
he/she will avail himself/herself of it, procedures such as, but not limited to,
within a reasonable period of time; and dilatation and curettage and those involving
female reproductive organs such as the

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vagina, cervix, uterus, fallopian tubes, Victims shall be entitled to take a paid leave
ovaries, breast, adnexa and pelvic floor, as of absence up to ten (10) days in addition to
certified by a competent physician. other paid leaves under the Labor Code and
Gynecological surgeries shall also include Civil Service Rules and Regulations,
hysterectomy, ovariectomy, and extendible when the necessity arises as
mastectomy. specified in the protection order.

Conditions for Entitlement Any employer who shall prejudice the right of
the person under this section shall be
For a female employee to be entitled to the penalized in accordance with the provisions
special leave benefits, she must comply with of the Labor Code and Civil Service Rules and
the following conditions. Regulations. Likewise, an employer who shall
1. She has rendered at least six (6) prejudice any person for assisting a co-
months continuous aggregate employment employee who is a victim under this Act shall
service for the last twelve (12) months prior likewise be liable for discrimination. (Section
to surgery; 43, RA 9262)
2. She has filed an application for
special leave with her employer within a Violence Against Women and their Children
reasonable period of time from the expected (VAWC) refers to any act or a series of acts
date of surgery or within such period as may committed by any person against a woman
be provided by company rules and who is his:
regulations or collective bargaining a. wife; former wife; or against a woman
agreement; and with whom the person has or had sexual
3. She has undergone surgery due to or dating relationship; or
gynecological disorders as certified by a b. with whom he has a common child; or
competent physician. c. against her child whether legitimate or
illegitimate within or without the family
The female employee is entitled to special abode, which result in or is likely to result
leave benefit of two (2) months with full pay in physical, sexual, psychological harm or
based on her gross monthly compensation suffering, or economic abuse including
following surgery caused by gynecological threats of such acts, battery, assault,
disorders. coercion, harassment or arbitrary
deprivation of liberty. (Sec 3[a], R.A. No.
The two (2) months special leave is the 9262)
maximum period of leave with pay that a
woman employee may avail of under R.A. Leave Entitlement
9710. It allows the victim of violence, which may be
physical, sexual, or psychological, to apply for
The special leave shall be granted to the the issuance of a protection order. If such
qualified employee after she has undergone victim is an employee, she is entitled to a paid
surgery without prejudice to an employer leave of up to 10 days in addition to other
allowing an employee to receive her pay paid leaves under the Labor Code, other laws
before or during the surgery. and company policies. (Sec. 43, R.A. No.
9262)
Non-conversion to Cash
The special leave shall be non-cumulative The employee has to submit a certification
and non-convertible to cash unless otherwise from the Punong Barangay or Kagawad,
provided by a collective bargaining prosecutor or clerk of court that an action
agreement (CBA). under R.A. 9262 has been filed and is
pending.
e. Battered Woman Leave

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For government employees in addition to the employment, promotion, and training

certification, the employee concerned must opportunities.
file an application for leave citing R.A. 9262. 4. R.A. No. 6955 – which bans the “mail-
order-bride” practice for a fee and the
Penalties for Violation export of female labor to countries that
Any employer who prejudices the right of the cannot guarantee protection to the rights
person under this section shall be penalized of women workers.
in accordance with the provisions of the 5. R.A. No. 7192 or “Women in Development
Labor Code and Civil Service Rules and and Nation Building Act.” – which affords
Regulations. Likewise, an employer who shall women equal opportunities with men to
prejudice any person for assisting a co- act and to enter into contracts, and for
employee who is a victim under this Act shall appointment, admission, training,
likewise be liable for discrimination. (Sec. 6, graduation, and commissioning in all
R.A. 9262) military or similar schools.
6. R.A. No. 7322 – increasing the maternity
Noncumulative/ Non-Conversion to benefits granted to women in the private
Cash sector.
7. R.A. No. 7877 or “Anti-Sexual Harassment
The availment of the ten day-leave shall be Act”
at the option of the woman employee, which 8. R.A. No. 8042 or the “Migrant Workers
shall cover the days that she has to attend to and Overseas Filipinos Act of 1995” –
medical and legal concerns. Leaves not which prescribes as a matter of policy, the
availed of are noncumulative and not deployment of migrant workers, with
convertible to cash. emphasis on women, only in countries
where their rights are secure (Philippine
Special Leave for Women (RA 9710) Telegraph and Telephone Co. vs. NLRC,
Any female employee regardless of age and G.R. No. 118978, May 23, 1997).
civil status shall be entitled to a special leave 9. R.A. No. 9710 or “the Magna Carta of
benefit under such terms and conditions Women”
provided. 10. R.A. No. 9262 or the “Anti-Violence
against Women and Children”
D. Special Groups of Employees
State Policy on Non-Discrimination
1. Women Against Women
The State condemns discrimination against
Laws protecting women Workers: women in all its forms and pursues by all
1. The State recognizes the role of women in appropriate means and without delay the
nation-building, and shall ensure the policy of eliminating discrimination against
fundamental equality before the law of women in keeping with the Convention on
women and men (Art. II, Sec. 14, 1987 the Elimination of All Forms of Discrimination
Constitution). Against Women (CEDAW) and other
2. The State shall protect working women by international instruments consistent with
providing safe and healthful working Philippine law. The State shall accord women
conditions, taking into account their the rights, protection, and opportunities
maternal functions, and such facilities and available to every member of society. (Sec.
opportunities that will enhance their 2, R.A. 9710 or the Magna Carta of Women)
welfare and enable them to realize their
full potential in the service of the nation The State shall take steps to review and,
(Art. XIII, Sec. 14, 1987 Constitution). when necessary, amend and/or repeal
3. R.A. No. 6725 – which explicitly prohibits existing laws that are discriminatory to
discrimination against women with women within 3 years from the effectivity of
respect to terms and conditions of this Act. (Sec. 12, R.A. 9710)

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(1) Discrimination operation of the job involved; and, (2) that

there is a factual basis for believing that all or
1. Discrimination with respect to the terms substantially all persons meeting the
and conditions of employment solely on qualification would be unable to properly
account of sex. Sex refers to gender, not perform the duties of the job. The concept of
sexual orientation. [UNGOS, Agrarian Law a bona fide occupational qualification is not
and Social Legislation, 2021, p. 251] foreign in our jurisdiction. We employ the
standard of reasonableness of the company
a. Discrimination in pay - Payment of a policy which is parallel to the bona fide
lesser compensation including wage, occupational qualification requirement. (Star
salary or other forms of remuneration Paper Corp. vs. Simbol, G.R. No. 164774,
and fringe benefits, to a female April 12, 2006).
employee as against a male employee;
b. Discrimination in employment (2) Stipulation Against Marriage
opportunity Favoring a male employee
over a female employee with respect to It shall be unlawful for the employer to
promotion, assignment, transfer, require as a condition for or continuation of
training opportunities, study and employment that a woman employee shall
scholarship grants solely in account or not get married, or to stipulate expressly or
their sexes (Art. 133, Labor Code, as tacitly that upon getting married, a woman
amended); employee shall be deemed resigned or
c. Discrimination in hiring – favoring a separated, or to actually dismiss, discharge,
male applicant with respect to hiring discriminate or otherwise prejudice a woman
where the particular job can equally be employee merely by reason of her marriage.
handled by a woman; (Article 134, Labor Code, as amended).
d. Discrimination in dismissal – favoring a
male employee over a female Glaxo’s policy prohibiting an employee from
employee with respect to dismissal of having a relationship with an employee of a
personnel or the application of the last competitor company is a valid exercise of
in / first out principle or other management prerogative. The prohibition
retrenchment policy of the employer against personal or marital relationships with
(Poquiz, Labor Standards and Social employees of competitor companies upon
Legislation, 2018, p. 405). Glaxo’s employees is reasonable under the
circumstances because relationships of that
2. Stipulating, whether as a condition for nature might compromise the interests of the
employmet or continuation of company. In laying down the assailed
employment: company policy, Glaxo only aims to protect
a. That a woman employee shall not get its interests against the possibility that a
married; or competitor company will gain access to its
b. That upon marriage, such woman secrets and procedures. (Duncan Association
employee shall be deemed resigned or vs. Glaxo Wellcome, G.R. No. 162994,
separated (Art. 134, Labor Code, as September 17, 2004).
amended)
c. Dismissing, discriminating or otherwise No-Spouse Employment Policy
prejudice a woman employee by It is a policy banning spouses from working
reason of her being married. (Art. 134, in the same company. Generally, spouses are
Labor Code, as amended) allowed from working in the same company,
provided it is not in the same department,
Reasonable Business Necessity Rule where there is direct supervision or control.
To justify a bona fide occupational In case spouses are in the same department,
qualification, the employer must prove two one of them may be reassigned to another
factors: (1) that the employment qualification department.
is reasonably related to the essential

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Exception: 2. To discharge such woman on account of

Bona Fide Occupational Qualification (BFOQ) her pregnancy, while on leave or in
Rule where the job itself necessarily requires confinement due to her pregnancy; or
a particular question, then the job applicant 3. To discharge or refuse the admission of
or worker who does not possess it may be such woman upon returning to her work
disqualified on that basis. This will not be for fear that she may again be pregnant.
unlawful discrimination (1, Azucena, 2016, p.
481) The Court is convinced that the petitioner
terminated the services of respondent on
There must be a finding of any BFOQ to account of her pregnancy which justified her
justify an ER’s no spouse employment rule. absences and, thus, committed a prohibited
There must be a compelling business act rendering the dismissal illegal. (Del Monte
necessity for which no alternative exists other Philippines, Inc. v. Velasco, G.R. No. 153477,
than the discriminating practice. To justify a March 6, 2007)
BFOQ, the ER must prove two factors:
1. That the employment qualification is
reasonably related to the essential 2. Minors
operation of the job involved; and
2. That there is a factual basis for believing “Children” refers to person below eighteen
that all or substantially all persons (18) years of age or those over but are
meeting the qualification would be unable to fully take care of themselves or
unable to properly perform the duties of protect themselves from abuse, neglect,
the job. (Star Paper vs. Simbol, G.R. No. cruelty, exploitation or discrimination
164774, April 12, 2006). because of a physical or mental disability or
condition. (Section 3, RA 7610)
(3) Prohibited Acts
A “working child” refers to any child
It shall be unlawful for any employer to: engaged as follows:
1. Deny any woman employee benefits I. when the child is below eighteen (18)
provided by law. years of age, in work or economic activity
2. Discharge any woman for the purpose of that is not “child labor;” and
preventing her from enjoying any of the II. when the child below fifteen (15) years of
benefits provided by law. age:
3. Discharge such woman on account of her • in work where he/she is directly under
pregnancy, or while on leave or in the responsibility of his/her parents or
confinement due to her pregnancy. legal guardian and where only
4. Discharge or refuse the admission of such members of the child’s family are
woman upon returning to her work for employed; or
fear that she may again be pregnant
(Article 135, Labor Code, as amended) • in “public entertainment or
information” which refers to artistic,
Discharging a woman due to pregnancy literary, and cultural performances for
television show, radio program, cinema
Article 137 contemplates the following or film, theater, commercial
prohibited acts in connection with the advertisement, public relations
pregnancy of a woman employee: activities or campaigns, print materials,
1. To deny any woman employee the internet, and other media.(Azucena,
benefits provided for in this Chapter or to Everyone’s Labor Code, 2021, p187-
discharge any woman employed by him 188)
for the purpose of preventing her from
enjoying any of the benefits provided Instances when the state can intervene
under this Code; in behalf of the child

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

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3. Will be engaged as regular extra or as c. The employer must secure a permit from
part of a crowd and is included in the the Department of Labor and
script or storyboard; Employment (DOLE) prior to engaging
4. Has been selected for a project after the child for work. (Sec. 2, Labor
undergoing auditions, workshops or VTR Advisory No. 23 s. 2020)
screenings; or
5. Has been selected as semi-finalist in a c. Prohibited Acts
singing, dance or talent contest for a
television show. (1.1 DOLE Department Prohibition of employing minors in
Order no. 02 s. 2018, Guidelines in certain undertakings and
Issuing Work Permit to Children) advertisements
No child below 18 years of age is allowed to
WCP Not required be employed as a model in any advertisement
1. Is a spot extra or is cast outright on the directly or indirectly promoting alcoholic
day of filming or taping of a project; beverages, intoxicating drinks, tobacco and
2. Will join auditions or VTR screenings; its by-products, gambling or any form of
3. Is part of the audience of a live television violence or pornography. (Sec. 5, R.A. No.
show unless the child’s participation is 9231)
expected;
4. Is picked or chosen as contestant from the The wages, salaries, earnings and other
audience of a live television show; income of the working child shall belong to
5. Is a contestant for a television show but him/her in ownership and shall be set aside
has not yet been selected as a semi- primarily for his/her support, education or
finalist; skills acquisition and secondarily to the
6. Is a recipient of gift-giving activities in collective needs of the family: Provided, That
television; not more than twenty percent (20%) of the
7. Is a participant in school-related child's income may be used for the collective
performance; needs of the family (Sec. 12-B, R.A. No.
8. Is a participant in sports activities, 7610)
trainings or workshops; or
9. Will be featured in a documentary material The parent or legal guardian of a working
(1.2 DOLE Department Order no. 02 s. child below eighteen (18) years of age shall
2018, Guidelines in Issuing Work Permit to set up a trust fund for at least thirty percent
Children) (30%) of the earnings of the child whose
wages and salaries from work and other
Work at Home Arrangement income amount to at least two hundred
thousand pesos (P200, 000.00) annually, for
A child below 15 years of age may be allowed which he/she shall render a semi-annual
to participate in public entertainment or accounting of the fund to the Department of
information during the community quarantine Labor and Employment. The child shall have
period provided that the following conditions full control over the trust fund upon reaching
are complied with: the age of majority (Sec. 12-C, R.A. No.
a. The child's performance of the assigned 7610).
task, such as photo shoot or audio-video
recording, shall be done in the child's No employer shall make a child work during
home under the supervision of the child's his/her school hours, and hinder his/her
adult family members; access to education during school days. [Sec
b. Representatives of the employer or 19 (a), Department Order No. 65-04]
production staff may be allowed to go to
the child's residence, when necessary, to Duty of the employer
assist the child in performing the The employer shall first secure a work permit
assigned task; and from the DOLE which shall ensure

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observance of the requirements (Sec. 12, 2. Children who are under foster family
R.A. No. 7160). arrangement, and are provided access to
education and given an allowance
3. Kasambahays incidental to education [Sec. 4(d), Art. 1,
RA 10361]
Domestic worker” or “kasambahay” 3. Service providers
refers to any person engaged in domestic 4. Family drivers [Sec. 2 of the IRR, RA
work within an employment relationship, 10361]
whether on a live- in or live-out arrangement,
such as, but not limited to, general The Civil Code shall govern the rights of
househelp, "yaya", cook, gardener, or family driver. Article 141, Chapter III, Book
laundry person, but shall exclude service III on Employment of Househelpers of the
providers, family drivers, children who are Labor Code provides that family drivers are
under foster family arrangement, or any covered in the term domestic or household
person who performs domestic work only service. The aforecited administrative rule
occasionally or sporadically and not on an clarified the status of family drivers as among
occupational basis. those not covered by the definition of
domestic or household help as contemplated
"Domestic work" refers to work performed in in Section 4(d) of the Kasambahay Law.
or for a household [Sec. 3(d), IRR of (Atienza v Saluta, GR. 233413 (2019)
RA10361]
Exclusivity of Function Required
"Household" refers to the immediate The term 'househelper' as used herein is
members of the family or the occupants of synonymous to the term 'domestic servant'
the house who are directly and regularly and shall refer to any person, whether male
provided services by the kasambahay [Sec. or female, who renders services in and about
3(g), IRR of RA 10361] the employer's home and which services are
usually necessary or desirable for the
Persons covered by R.A. 10361 maintenance and enjoyment thereof, and
otherwise known as “Batas ministers exclusively to the personal comfort
Kasambahay” and enjoyment of the employer's family.
(Remington Industrial Sales Corp. v.
All kasambahay engaged in domestic work, Castaneda, G.R. Nos. 169295-96, November
whether on a live-in or live-out arrangement, 20, 2006)
such as, but not limited to, the following:
1. General househelp; Hiring of Kasambahay
2. Nursemaid or Yaya;
3. Cook; Mode of Hiring:
4. Gardener; a. Directly by the employer
5. Laundry person; b. Indirectly through a licensed Private
6. Working children or domestic workers 15 Employment Agency (Sec. 1, Rule II,IRR
years and above but below 18 years of of R.A. 10361).
age; or
7. Any person who regularly performs Deployment Expenses
domestic work in one household on an
occupational basis (live-out arrangement) refers to expenses that are directly used for
(Sec. 3[d], R.A. 10361) the transfer of the Kasambahay from place of
origin to the place of work covering the cost
The definition of “Kasambahay” of transportation, meals, communication
excludes: expense, and other incidental expenses.
1. Any person who performs domestic work Advances or loans by the Kasambahay are
only occasionally or sporadically and not not included in the definition of deployment
on an occupational basis (sideline)

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expenses. (Sec. 3c, Rule I,IRR of R.A. 6. The employer shall have the obligation to
10361). furnish a copy of the employment contract
to the Kasambahay and a copy to the
• The employer, whether the Kasambahay Office of the Punong Barangay in the
is hired directly or through a PEA, shall barangay where the employer resides.
pay the expenses directly used for
his/her transfer from place of origin to Renewal of Contract
the place of work. (Sec. 3, Rule II, IRR
of R.A. 10361). Should the parties mutually agree to continue
their employment relationship upon
Recovery of Deployment Expenses: expiration of the contract, the parties shall
The employer may recover deployment costs execute a new contract to be registered with
from the Kasambahay whenever the the concerned barangay pursuant to Rule IX
employment relationship is terminated within of this IRR.
six (6) months without just cause. (Sec. 3, • Should the parties fail to execute a new
Rule II,IRR of R.A. 10361) contract, the terms and conditions of the
original contract and other improvements
Employment Contract granted during the effectivity of the
1. The contract between the Kasambahay contract are deemed renewed.
and the employer shall be accomplished in
three (3) copies. Recruitment and Deployment of
2. The contract shall be in a language or Kasambahay by Private Employment
dialect understood by both the Agencies
Kasambahay and the employer,
3. The contract shall include the following: “Private Employment Agency (PEA)”
a. Duties and responsibilities of the refers to any individual, partnership,
Kasambahay, which include the corporation or entity licensed by the
responsibility to render satisfactory Department of Labor and Employment
service at all times; (DOLE) to engage in the recruitment and
b. Period of employment; placement of Kasambahay for local
c. Compensation; employment.
d. Authorized deductions;
e. Hours of work and proportionate “Recruitment and finder’s fees” refers to
additional payment; charges and any amount collected by the
f. Rest days and allowable leaves; private employment agency, recruiter, entity
g. Board, lodging and or any third party for the recruitment and
medical attention; placement of the Kasambahay, which shall
h. Agreements on deployment not be charged to the Kasambahay.
expenses, if any;
i. Loan agreement, if any; Requirement of License
j. Termination of employment;and 1. The PEAs shall secure a license from the
k. Any other lawful condition agreed DOLE prior to any recruitment and
upon by both parties. deployment activities.
4. If the Kasambahay is below 18 years old, 2. The PEAs shall also register and secure
the employment contract shall be signed written authorization from the local
by his/her parent or lawful guardian on government unit where they recruit.
his/ her behalf.
5. Upon the request of either party, the Responsibilities of PEAs:
Punong Barangay or his/her designated a) Ensure that the Kasambahay is qualified
officer shall read and explain the contents as required by the employer;
of the contract to both parties and shall b) Secure the best terms and conditions of
serve as witness. employment for the Kasambahay;

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c) Ensure that the employment agreement • If such replacement is not provided,

between the Kasambahay and the the employer shall be entitled to a
employer stipulates the terms and refund of seventy-five percent (75%)
conditions of employment and all the of the deployment expenses or fees
benefits in accordance with this IRR; paid to the PEA
d) Provide a pre-employment orientation
briefing to the Kasambahay and the Rights and Privileges
employer about their rights and
responsibilities in accordance with this The rights and privileges of the kasambahay
IRR; are as follows:
e) Ensure that the Kasambahay is not a. Minimum wage;
charged or required to pay any • Minimum wage of kasambahay -
recruitment or placement fees; P6,000.00 for NCR (WO NCR-DW-03, 13
f) Keep copies of employment contracts and July 2022)
agreements pertaining to recruited
Kasambahay which shall be made Mode of Payment:
available during inspections or whenever The Kasambahay shall be paid his/her wages
required by the DOLE or local government in cash. No payment by means of promissory
officials; notes, vouchers, coupons, tokens, tickets,
g) Assist the Kasambahay in filing his/her chits, or any object other than cash shall be
complaints or grievances against the allowed.
employers;
h) Cooperate with government agencies in Frequency of Payment of Wages.
rescue operations involving abused or The Kasambahay shall be paid his/her wages
exploited Kasambahay; and at least once a month.
i) Assume joint and solidary liability with the
employer for payment of wages, wage- Payslip
related and other benefits, including The employer shall at all times provide the
monthly contribution for SSS, PhilHealth, domestic worker with a copy of the pay slip
and Pag-IBIG membership. containing the amount paid in cash every pay
day, and indicating all deductions made, if
Replacement of Kasambahay Hired any. The copies of the pay slip shall be kept
Through PEAs by the employer for a period of three (3)
In case the Kasambahay was hired through years. [Sec. 26, RA 10361]
the PEA and the circumstances listed below
occurred within one (1) month from the first b. Other mandatory benefits, such as the
day the Kasambahay reported for work, the daily and weekly rest periods, service
PEA shall provide qualified replacement at no incentive leave, and 13th month pay.
additional cost to the employer.
a. The Kasambahay is found to be suffering Rest Periods
from an incurable or contagious disease,
or mental illness as certified by a Daily Rest Period Weekly Rest
competent or government physician; Period
b. The Kasambahay abandons the job The Kasambahay The Kasambahay
without justifiable cause, voluntarily shall be entitled to shall be entitled to
resigns, commits theft or any other an aggregate daily at least twenty-four
analogous acts prejudicial to the employer rest period of eight (24) consecutive
or his/her family; or (8) hours per day. hours of rest in a
c. The Kasambahay is physically or mentally week.
incapable of discharging the minimum
normal requirements of the job, as The employer and the Kasambahay shall
specified in the employment contract. agree in writing on the schedule of the
weekly rest day but the preference of the

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Kasambahay, when based on religious (1) month of service shall be covered by the
grounds, shall be respected. Social Security System (SSS), Employees
Compensation Commission (ECC), Philippine
The Kasambahay and the employer may Health Insurance Corporation (PhilHealth),
agree on the following: and Home Development Mutual Fund or Pag-
a. Offsetting a day of absence with a IBIG, and shall be entitled to all the benefits
particular rest day; in accordance with their respective laws,
b. Waiving a particular rest day in return for rules and regulations.
an equivalent daily rate of pay;
c. Accumulating rest days not exceeding five Mandatory premium payments or
(5) days; or contributions shall be shouldered by the
d. Other similar arrangements. employer. However, if the Kasambahay is
receiving a monthly wage rate of Five
Service Incentive Leave Thousand Pesos (Php5,000.00) and above,
A Kasambahay who has rendered at least one the Kasambahay shall pay the proportionate
(1) year of service shall be entitled to an share in the premium payments or
annual service incentive leave of at least five contributions, as provided by law.
(5) days with pay.
In the event the Kasambahay avails of certain
Any unused portion of said annual leave shall loan privileges from Pag-IBIG Fund which
not be cumulative or carried over to the require the payment of additional or
succeeding years. Unused leaves shall not be upgraded contributions, the said additional or
convertible to cash. upgraded contributions shall be shouldered
solely by the Kasambahay.
Thirteenth-Month Pay
The Kasambahay who has rendered at least The SSS, Pag-IBIG and PhilHealth shall
one (1) month of service is entitled to a develop a unified system of registration and
thirteenth-month pay which shall not be less enrollment within six (6) months from the
than one twelfth (1/12) of his/her total basic issuance of this IRR.
salary earned in a calendar year.
(e) Standard of treatment;
The thirteenth-month pay shall be paid not The employer or any member of the
later than December 24 of every year. household or Domestic Worker’s Act shall not
subject a domestic worker or any form of
(c) Freedom from employers' physical violence or harassment or any act
interference in the disposal of wages; tending to degrade the dignity of a domestic
worker. [Sec. 5, RA 10361]
It shall be unlawful for the employer to
interfere with the freedom of the (f) Board, lodging and medical
Kasambahay in the disposition of his/her attendance;
wages, such as:
a. Forcing, compelling, or obliging the The Kasambahay shall be provided by the
Kasambahay to purchase merchandise, employer free basic necessities to include the
commodities or other properties from the following:
employer or from any other person; or a. At least three (3) adequate meals a day
b. Making use of any store or services of taking into consideration the
such employer or any other person. Kasambahay’s religious beliefs and
cultural practices.
(d) Coverage under the SSS, PhilHealth b. Humane sleeping condition that respects
and Pag-IBIG laws; the person’s privacy for live-in
arrangement; and
A Kasambahay who has rendered at least one c. Appropriate rest and medical assistance,
including first-aid medicine, in case of

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illnesses and injuries sustained during for purposes of mutual aid and collective
service without loss of benefits. negotiation.

For Kasambahay under live-out arrangement, The Kasambahay shall be afforded

he/she shall be provided space for rest and opportunity to attend organization meetings.
access to toilet.
The Regional Tripartite Industrial Peace
At no instance shall the employer withdraw Council (RTIPC), chaired by the DOLE
or hold in abeyance the provision of these Regional Director, shall create within the
basic necessities as punishment or council a sub- committee to ensure adequate
disciplinary action to the Kasambahay. representation of the Kasambahay in social
dialogue on issues and concerns peculiar to
(g) Right to privacy; Kasambahay work and their welfare.
The Kasambahay shall, at all times, be
respected of his/her privacy, including his/her (k) Right to be provided a copy of the
privacy of communication and personal employment contract;
effects.
(i) Right to certificate of employment;
(h) Access to outside communication; Upon the termination of employment, the
The Kasambahay shall be granted access to employer shall issue the Kasambahay, within
outside communication during free time. In five (5) days from request, a certificate of
case of emergency, access to communication employment (Form BK-3) indicating the
shall be granted even during work time. nature, duration of the service and work
description.
Should the Kasambahay use the employer’s
telephone or other communication facilities, (m) Right to terminate the
the costs shall be borne by the Kasambahay, employment; SECTION 2. Termination of
unless waived by the employer. Employment Initiated by the Kasambahay. –
The Kasambahay may terminate the
(i) Access to education and training; employment relationship at any time before
The Kasambahay shall be afforded the the expiration of the contract for any of the
opportunity to finish basic education, following causes:
consisting of elementary and secondary a. Verbal or emotional abuse of the
education. He/she may be allowed access to Kasambahay by the employer or any
alternative learning systems and, as far as member of the household;
practicable, higher education or technical b. Inhuman treatment including physical
vocational education and training. abuse of the Kasambahay by the employer
or any member of the household;
The employer shall adjust the work schedule c. Commission of a crime or offense against
of the Kasambahay to allow his/her access to the Kasambahay by the employer or any
education or training without hampering the member of the household;
services required by the employer. Access to d. Violation by the employer of the terms and
education may include financial assistance at conditions of the employment contract
the option of the employer. and other standards set forth under this
IRR;
The Department of Education (DepEd) shall e. Any disease prejudicial to the health of the
ensure continued access of Kasambahay to Kasambahay, the employer, or member/s
alternative learning system education. of the household; and
f. Other causes analogous to the foregoing.
(j) Right to form, join, or assist labor
organization; If the Kasambahay leaves without cause, any
The Kasambahay shall have the right to join unpaid salary due, not exceeding the
a labor organization of his/her own choosing

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equivalent of fifteen (15) days work, shall be field personnel and the industries employing
forfeited. In them. (Art. 151, Labor Code)

addition, the employer may recover from the Employer of a homeworker

Kasambahay deployment expenses, if any, if
the services have been terminated within six Includes any person, natural or artificial who,
(6) months from employment. for his account or benefit, or on behalf of any
person residing outside the country, directly
(n) Right to exercise their own religious or indirectly, or through an employee, agent
beliefs and cultural practices (Chan, contractor, subcontractor or any other
Labor Code Vol. 1, 2018, pp 694-695) person:
1. Delivers or causes to be delivered, any
Employable age for a kasambahay goods, articles or materials to be
The employable age for a kasambahay is 15 processed or fabricated in or about a
years old and above, provided that the home and thereafter to be returned or to
employment contract is signed by his/her be disposed of or distributed in
parent or lawful guardian on his/behalf. (Sec. accordance with his directions;
11, Art. III, R.A. No. 10361) 2. Sells any goods, articles or materials to be
processed or fabricated in or abut a home
4. Homeworkers and then rebuys them after such
processing or fabrication, either by himself
They are those who perform in or about his or through some other person (DO No. 05-
own home any processing or fabrication of 92, Sec. 2[d]).
goods or materials, in whole or in part, which
have been furnished directly or indirectly, by Prohibitions
an employer and sold thereafter to the latter.
(D.O. No. 05 (1992), Rule XIV of the Rules No homework shall be performed on the
Implementing Book III of the Labor Code on following:
Employment of Homeworkers) 1. Explosives, fireworks and articles of like
character;
Industrial homework 2. Drugs and poisons; and
It is a system of production under which work 3. Other articles, the processing of which
for an employer or contractor is carried out requires exposure to toxic substances.
by a homeworker at his/her home. Materials (D.O. No. 05 (1992), Rule XIV of the
may or may not be furnished by the employer Rules Implementing Book III of the
or contractor. Labor Code on Employment of
Homeworkers)
It differs from regular factory production
principally in that, it is a decentralized form The Magna Carta for Disabled Persons (R.A.
of production where there is ordinarily very No. 7277) ensures equal opportunities for
little supervision or regulation of methods of disabled persons and prohibits discrimination
work. (D.O. No. 05 (1992), Rule XIV of the against them.
Rules Implementing Book III of the Labor
Code on Employment of Homeworkers) The Magna Carta for Disabled Persons
mandates that qualified disabled persons be
Regulation of Industrial Homeworkers granted the same terms and conditions of
The employment of industrial homeworkers employment as qualified able-bodied
and field personnel shall be regulated by the employees. Once they have attained the
government through the appropriate status of regular workers, they should be
regulations issued by the Secretary of Labor accorded all the benefits granted by law,
and Employment to ensure the general notwithstanding written or verbal contracts to
welfare and protection of homeworkers and the contrary. This treatment is rooted not
merely on charity or accommodation, but on

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justice for all. (Bernardo vs. NLRC, G.R. No. reduce or avoid health problems associated
122917, July 12, 1999) with their work:
1. Before taking up an assignment as a night
Distribution of Homework worker;
For purposes of this Chapter, the "employer" 2. At regular intervals during such an
of homeworkers includes any person, natural assignment; and
or artificial who, for his account or benefit, or 3. If they experience health problems during
on behalf of any person residing outside the such an assignment which are not caused
country, directly or indirectly, or through an by factors other than the performance of
employee, agent contractor, sub-contractor night work (Art. 155, Labor Code)
or any other person: (1) Delivers, or causes
to be delivered, any goods, articles or Mandatory Facilities
materials to be processed or fabricated in or 1. Suitable first-aid facilities, including
about a home and thereafter to be returned arrangements where such workers, where
or to be disposed of or distributed in necessary, can be taken immediately to a
accordance with his directions; or (2) Sells place for appropriate treatment.
any goods, articles or materials to be 2. Safe and healthful working conditions and
processed or fabricated in or about a home adequate or reasonable facilities, i.e.
and then rebuys them after such processing sleeping or resting quarters in the
or fabrication, either by himself or through establishment, and transportation from
some other person. (Art. 153, Labor Code) the work premises to the nearest point of
their residence subject to exceptions and
5. Night Workers guidelines to be provided by the DOLE
(Art. 156, Labor Code, as amended)
“Night worker" means any employed
person whose work covers the period from 10 Transfer of Night Workers
o'clock in the evening to 6 o'clock the Night workers who are certified as unfit for
following morning provided that the worker night work, due to health reasons, shall be
performs no less than seven (7) consecutive transferred, whenever practicable, to a
hours of work. similar job for which they are fit to work.

Coverage Transfer to a similar job is not

practicable
General Rule: - these workers shall be granted the same
All persons who shall be employed or benefits as other workers who are unable to
permitted or suffered to work at night. work, or to secure employment during such
period.
Exception:
Those employed in agriculture, stock raising, "A night worker certified as temporarily unfit
fishing, maritime transport and inland for night work shall be given the same
navigation, during a period of not less than 7 protection against dismissal or notice of
consecutive hours, including the interval from dismissal as other workers who are
midnight to 5 in the morning, to be prevented from working for reasons of
determined by the SLE after consulting the health.
workers’ representatives/labor organizations
and ERs. (Chan, Labor Code Vol.1, p. 715) 6. Apprentices and Learners

Right of the Workers to Health Definition of Terms

Assessment
Apprenticeship means practical training on
At their request, workers shall have the right the job supplemented by related theoretical
to undergo health assessment without instruction.
charge and to receive advice on how to

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"On the job training" is the practical work related theoretical related theoretical
experience through actual participation in instructions instructions
productive activities given to or acquired by Competency-based System
an apprentice. No requirement Must implemented
based on the
An apprentice is a worker who is covered by TESDA- approved
a written apprenticeship agreement with an competency- based
individual employer or any of the entities system
recognized under the law. Duration of Training
Apprenticeship Learnership
Learners are persons hired as trainees in requires proficiency, involves practical
semi- skilled and other industrial occupations more than three (3) training on the job
which are non-apprenticeable and which may months but not over for a period not
be learned through practical training on the six (6) months of exceeding three (3)
job in a relatively short period of time which practical training on months
shall not exceed three (3) months. the job.
Qualifications
An apprenticeable occupation means any a. Be at least fifteen No requirement
trade, form of employment or occupation (15) years of age;
which requires more than three (3) months b. Possess
of practical training on the job supplemented vocational aptitude
by related theoretical instruction. and capacity for
appropriate tests;
Apprenticeship agreement is an and
employment contract wherein the employer c. Possess the ability
binds himself to train the apprentice and the to comprehend and
apprentice in turn accepts the terms of follow oral and
training. written instructions.
Limitation on the Number
Learnership agreement refers to the No limitation An enterprise is
employment and training contract entered allowed to take in
into between the employer and the learner. learners only up to
a maximum of
twenty percent
APPRENTICES LEARNERS (20%) of its total
Both involves on-the-job practical training regular workforce
Training Agreement Option to Employ
Governed by Governed by Only an “option” to Enterprise is obliged
apprenticeship learnership hire the apprentice to hire the learner
agreement agreement as an employee. after the lapse of
Occupation the learnership
Only employers in Learnable period
the highly technical occupations Wage Rate
industries may consisting of semi- The wage rate of a learner or an apprentice
employ apprentices skilled and other is set at seventy-five percent (75%) of the
and only in industrial statutory minimum wage.
apprenticeable occupations which Circumstances Justifying Hiring of
occupations are non- Trainees
approved by the apprenticeable The prerequisites
DOLE Secretary before learners may
Theoretical Instructions be validly
Should always be May or may not be employed, to wit:
supplemented by supplemented by

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a. When no
experienced Impairment
workers are Any loss, diminution or aberration of
available; psychological, physiological, or anatomical
b. The employment structure or function. (R.A. No. 7277, as
of learners is amended by R.A. No. 9442)
necessary to
prevent curtailment Disability
of employment
opportunities; and Means any of the following:
c. The employment a. a physical or mental impairment that
does not create substantially limits one or more
unfair competition psychological, physiological or
in terms of labor anatomical functions of an individual or
costs or impair or activities of such individual;
lower working b. a record of such an impairment; or
standards. c. being regarded as having such an
impairment. (R.A. No. 7277, as amended
TESDA Approval a Requisite for the by R.A. No. 9442)
Validity of Apprenticeship Program
The requisite TESDA approval of the Handicap
apprenticeship program prior to the hiring of A disadvantage for a given individual,
apprentices was further emphasized by the resulting from an impairment or a disability
DOLE with the issuance of Department Order that limits or prevents the function or activity
No. 68-04 on 18 August 2004. Department that is considered normal given the age and
Order No. 68-04, which provides the sex of the individual. (R.A. No. 7277, as
guidelines in the implementation of the amended by R.A. No. 9442)
Apprenticeship and Employment Program of
the government, specifically states that no (1) Discrimination
enterprise shall be allowed to hire Magna Carta for Disabled Persons (RA 7277)
apprentices unless its apprenticeship
program is registered and approved by R.A. No. 7277, Title III, Prohibition on
TESDA. (Century Canning Corporation vs. Discrimination Against Disabled Persons
CA, G.R. No. 152894, August 17, 2007)
No entity, whether public or private, shall
7. Persons with Disabilities discriminate against a qualified PWD by
reason of disability in regard to job
Persons with disability (PWD) application procedures, the hiring,
Those who are suffering from restriction or promotion, or discharge of employees,
different abilities, as a result of a mental, employee compensation, job training, and
physical or sensory impairment, to perform other terms, conditions and privileges of
an activity in the manner or within the range employment. The following constitute acts of
considered normal for a human being. (Rule discrimination:
III, Sec. 5.1, R.A. No. 7277, as amended by
R.A. No. 9442) a. Limiting, segregating or classifying a job
applicant with disability in such a manner
Those whose earning capacity is impaired by: that adversely affects his work
1. Physical deficiency opportunities;
2. Age b. Using qualification standards,
3. Injury employment tests or other selection
4. Disease criteria that screen out or tend to screen
5. Mental deficiency out a PWD unless such standards, tests or
6. Illness other selection criteria are shown to be

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job-related for the position in question and Sec. 5. Equal Opportunity for Employment. —
are consistent with business necessity; No disabled person shall be denied access to
c. Utilizing standards, criteria, or methods of opportunities for suitable employment. A
administration that: qualified disabled employee shall be subject
i. have the effect of discrimination on the to the same terms and conditions of
basis of disability; or employment and the same compensation,
ii. perpetuate the discrimination of others privileges, benefits, fringe benefits,
who are subject to common incentives or allowances as a qualified able
administrative control. bodied person.
d. Providing less compensation, such as
salary, wage or other forms of The fact that the employees were qualified
remuneration and fringe benefits, to a disabled persons necessarily removes the
qualified employee with disability, by employment contracts from the ambit of
reason of his disability, than the amount Article 80. Since the Magna Carta accords
to which a non-disabled person them the rights of qualified able-bodied
performing the same work is entitled; persons, they are thus covered by Article 280
e. Favoring a non-disabled employee over a of the Labor Code. (Bernardo vs. NLRC, G.R.
qualified employee with disability with No. 122917, July 12, 1999)
respect to promotion, training
opportunities, study and scholarship (b) Mental Health Act (RA 11036)
grants, solely on account of the latter’s Section 2. Declaration of Policy. - The state
disability; affirms the basic right of all Filipinos to
f. Re-assigning or transferring an employee mental health as well as the fundamental
with a disability to a job or position he rights of people who require mental health
cannot perform by reason of his disability; services.
g. Dismissing or terminating the services of
an employee with disability by reason of The state commits itself to promoting the
his disability unless the employer can well-being of people by ensuring that; mental
prove that he impairs the satisfactory health is valued, promoted and protected;
performance of the work involved to the mental health conditions are treated and
prejudice of the business entity; provided, prevented; timely, affordable, high quality,
however, that the employer first sought to and culturally-appropriate mental health case
provide reasonable accommodations for is made available to the public; mental health
persons with disability; service are free from coercion and
h. Failing to select or administer in the most accountable to the service users; and persons
effective manner employment tests which affected by mental health conditions are able
accurately reflect the skills, aptitude or to exercise the full range of human rights,
other factor of the applicant or employee and participate fully in society and at work
with disability that such tests purports to free from stigmatization and discrimination.
measure, rather than the impaired (Sec. 2, R.A. No. 11036)
sensory, manual or speaking skills of such
applicant or employee, if any; and Under this law, the Congress, after
i. Excluding PWD from membership in labor consultation with a wide range of public
unions or similar organizations. (Title III, mental health individuals, experts,
R.A. No. 7277). academics, professionals, governmental and
non-government associations, declared as
The Magna Carta for Disabled Persons policy that mental health conditions be
mandates that a qualified disabled employee treated and that persons affected by mental
should be given the same terms and health conditions are able to exercise the full
conditions of employment as a qualified able- range of human rights. RA 11036 further
bodied person. Section 5 of the Magna Carta states as an objective the protection of the
provides: rights and freedoms of persons with
psychiatric, neurologic, and psychosocial

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health needs. (Versoza vs. People, G.R. No. discrimination associated with mental
184535, Sep. 3, 2019) conditions, identify and provide support for
individuals with mental health conditions to
Discrimination treatment and psychosocial support. (Sec.
Discrimination refers to any distinction, 25, R.A. No. 11036)
exclusion or restriction which has the purpose
or effect of nullifying the recognition, Duties and Responsibilities of the
enjoyment or exercise, on an equal basis with Government Agencies
others, of all human rights and fundamental The DOLE and CSC shall develop policies that
freedoms in the political, economic, social, promote mental health in the workplace and
cultural, civil or any other field. It includes all address stigma and discrimination suffered
forms of discrimination, including denial of by people with mental health conditions.
reasonable accommodation. Special (Sec. 35 (b), R.A. No. 11036)
measures solely to protect the rights or
secure the advancement of persons with Penalty
decision-making impairment capacity shall Section 44. Penalty Clause. - Any person who
not be deemed to be discriminatory. (Sec. 4, commits any of the following acts shall, upon
R.A. No. 11036) conviction by final judgment, be punished by
imprisonment of not less than six (6) months,
Right of Service Users but not more than two (2) years, or a fine of
Service users shall enjoy , on an equal and not less than Ten thousand pesos
nondiscriminatory basis, all rights guaranteed (P10,000.00), but not more than Two
by the Constitution as well as those hundred thousand pesos (P200,000.00), or
recognizes under the United Nations both, at the discretion of the court:
Universal Declaration of Human Rights and (a) Failure to secure informed consent of the
the Convention on the Rights of Persons with service user, unless it falls under the
Disabilities and all other relevant exceptions provided under Section 18 of this
international and regional human rights Act;
conventions and declarations, including the (b) Violation of confidentiality of information,
right to: as defined under Section 4(c) of this Act;
(a) Freedom from social economic, and (c) Discrimination against a person with
political discrimination and stigmatization, mental-health condition, as defined under
whether committed by public or private Section 4(e) of this Act; and
actors; (d) Administering inhumane, cruel, degrading
or harmful treatment not based on medical or
(b) Exercise all their inherit civil, political, scientific evidence as indicated in Section
economic, social, religious, educational, and 5(h) of this Act;
cultural rights respecting individual qualities,
abilities, and diversity of background , If the violation is committed by a juridical
without discrimination on the basis of person, the penalty provided for in this Act
physical disability, age, gender, sexual shall be imposed [on] the directors, officers,
orientation, race, color, language, religion or employees or other officials or persons
nationality, ethnic, or social origin. (Sec. 5, therein responsible for the offense.
R.A. No. 11036)
If the violation is committed by an alien, the
Education, promotion of mental health alien offender shall be immediately deported
in Educational Institutions and in the after service of sentence without need of
Workplace further proceedings.

Section 25. Mental Health Promotion and These penalties shall be without prejudice to
Policies in the Workplace. - Employers shall the administrative or civil liability of the
develop appropriate policies and programs on offender, or the facility where such violation
mental health issues, correct the stigma and occurred. (Sec. 44, R.A. No. 11036)

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In a work-related or employment
(2) Incentives for Employers environment, sexual harassment is
Entitled to an additional deduction, from their committed when:
gross income, equivalent to 25% of the total 1. The sexual favor is made a condition in the
amount paid as salaries and wages to hiring or in the employment, re-
disabled persons Provided, however, that employment or continued employment of
such entities present proof as certified by the said individual or in granting said
DOLE that disabled persons are under their individual favorable compensation, terms,
employ; Provided further, that the disabled conditions, promotions, or privileges; or
Ee is accredited with the DOLE and the the refusal to grant the sexual favor
Department of Health as to his disability, results in limiting, segregating or
skills and qualifications. Private entities that classifying the employee which in any way
improve or modify their physical facilities in would discriminate, deprive or diminish
order to provide reasonable accommodation employment opportunities or otherwise
for disabled persons shall also be entitled to adversely affect said employee;
an additional deduction from their net taxable 2. The above acts would impair the
income, equivalent to 50% of the direct costs employee’s rights or privileges under
of the improvements or modifications (Sec. 8, existing labor laws; or
R.A. No. 7277) 3. The above acts would result in an
intimidating, hostile, or offensive
E. Sexual Harassment in the Work environment for the employee.
Environment
In an education or training
a) Anti Sexual Harassment Act (RA environment sexual harassment is
7877) employed:
1. Against one who is under the care,
Work, education or training-related custody or supervision of the offender;
sexual harassment 2. Against one whose education, training,
- is committed by an employer, employee, apprenticeship or tutorship is entrusted to
manager, supervisor, agent of the employer, the offender;
teacher, instructor, professor, coach, trainor, 3. When sexual favor is made a condition to
or any other person who, having authority, the giving of a passing grade, or the
influence or moral ascendancy over another granting of honors and scholarships, or
in a work or training or education the payment of a stipend, allowance or
environment, demands, requests or other benefits, privileges, or
otherwise requires any sexual favor from the considerations; or
other, regardless of whether the demand, 4. When sexual advances result in an
request or requirement for submission is intimidating, hostile or offensive
accepted by the object of said act. (Sec. 3, environment for the student, trainee or
R.A. No. 7877) apprentice.

Requisites: Duty of the Employer or Head of Office

1. Act is committed in a work, education, or in a Work-related, Education or
training-related environment; Trainings Environment:
2. The doer, the harasser, is any person who A. Promulgate appropriate rules and
has authority, influence or moral regulations, prescribing the procedure for
ascendancy over another; the investigation of sexual harassment
3. Doer demands or requests, or requires a cases and the administrative sanctions
sexual favor from the victim; therefor. Administrative sanctions shall
4. It does not matter whether such demand not be a bar to prosecution in the proper
is accepted or not (Sec. 3, R.A. No. 7877). courts for unlawful acts of sexual
harassment. The said rules and
regulations shall include, guidelines on

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proper decorum in the workplace and the seafarer's work environment. Petitioner
educational or training institutions; was harassed twice in one night. Though he
B. Create a committee on decorum and managed to escape in both instances, there
investigation of cases on sexual was no way for him to avoid. CO Oleksiy. The
harassment. In the case of a work-related only way he could protect himself from
environment, the committee shall be further sexual advances or unwanted sexual
composed of at least one (1) contact was to request for repatriation.
representative each from the
management, the union, if any, the In cases like these, it is possible that the
employees from the supervisory rank, and seafarer's fear is heightened because there is
from the rank and file employees. In the no way to escape from the environment
case of the educational or training where sexual harassment occurred. Being out
institution, the committee shall be at sea, the seafarer has to wait for the ship
composed of at least one (1) to dock at the nearest port before the
representative from the administration, seafarer can disembark and be repatriated.
the trainors, teachers, instructors, Thus, from the time the incident of sexual
professors or coaches and students or harassment occurred until the time the
trainees, as the case may be. seafarer is able to disembark, it is probable
C. Disseminate or post a copy of this Act for that the seafarer is cowered by fear. In
the information of all concerned. (Sec 4, addition, the sexual predator, knowing there
R.A. No. 7877) is no room for the victim to escape, is capable
of continuously committing such acts of
Liabilities of the Employer or Head of sexual harassment. The unique condition of
Office in a Work-related, Education or working on board a ship empowers the
Trainings Environment: harassment. The unique condition of working
The employer or head of office, educational on board a ship empowers the sexual
or training institution shall be solidarily predator and leaves the victim feeling
liable for damages arising from the acts of helpless because they are in the same
sexual harassment committed in the enclosed space. (Toliongco vs. CA, G.R. No.
employment, education or training 231748, July 8, 2020)
environment if the employer or head of
office, educational or training institution is Sexual Harassment not limited to
informed of such acts by the offended party Women
and no immediate action is taken thereon. Sexual harassment can happen to anyone
(Sec 5, R.A. No. 7877) and everyone. Our society has often depicted
women as being the weaker sex, and the only
Workplace sexual harassment victims of sexual harassment. It is high-time
Workplace sexual harassment occurs when a that this notion is corrected. To consider
supervisor, or agent of an employer, or any women as the weaker sex is discriminatory.
other person who has authority over another To think that only women can be victims of
in a work environment, imposes sexual favors sexual harassment is discriminatory against
on another, which creates an intimidating, men who have suffered the same plight; men
hostile, or offensive environment for the who have been victimized by sexual
latter; “the gravamen of the offense in sexual predators. (Toliongco v. Court of Appeals,
harassment is not the violation of the G.R. No. 231748, July 8, 2020)
employee’s sexuality but the abuse of f power
by the employer. (LBC Express Vis, Inc. vs. The distinction between the employer and an
Palco, G.R. No. 217101, Feb. 12, 2020) erring managerial officer is likewise present
in sexual harassment cases; under Section 5
Seafarers entitlement of the Anti-Sexual Harassment Act, the
A unique circumstance in this case is that the employer is only solidarity liable for damages
alleged illness is not caused by the duties and with the perpetrator in case an act of sexual
responsibilities of a Messman, but is due to harassment was reported and it did not take

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immediate action on the matter; this individual's employment or education, job

provision thus illustrates that the employer performance or opportunities;
must first be informed of the acts of the b. A conduct of sexual nature and other
erring managerial officer before it can be held conduct-based on sex affecting the dignity
liable for the latter’s acts; conversely, if the of a person, which is unwelcome,
employer has been informed of the acts of its unreasonable, and offensive to the
managerial staff, and does not contest or recipient, whether done verbally,
question it, it is deemed to have authorized physically or through the use of
or be complicit to the acts of its erring technology such as text messaging or
employee. (LBC Express-Vis, Inc. vs. Palco, electronic mail or through any other forms
G.R. No. 217101, Feb. 12, 2020) of information and communication
systems;
An employee is considered constructively c. A conduct that is unwelcome and
dismissed if he or she was sexually harassed pervasive and creates an intimidating,
by her superior and her employer failed to act hostile or humiliating environment for the
on his or her complaint with prompt and recipient: Provided, That the crime of
sensitivity. (Ibid) gender-based sexual harassment may
also be committed between peers and
b) Safe Spaces Act those committed to a superior officer by a
subordinate, or to a teacher by a student,
The State's policy against sexual harassment or to a trainer by a trainee; and
has been strengthened through Republic Act d. Information and communication system
No. 11313, otherwise known as the Safe refers to a system for generating, sending,
Spaces Act. This law has expanded the receiving, storing or otherwise processing
definition of gender-based sexual electronic data messages or electronic
harassment in the workplace and has added documents and includes the computer
to the duties of an employer as to its system or other similar devices by or in
prevention, deterrence, and punishment. It which data are recorded or stored and any
explicitly requires that complaints be procedure related to the recording or
investigated and resolved within 10 days or storage of electronic data messages or
less upon its reporting. It likewise expressly electronic documents. (Sec. 16, Article IV
provides for the liability of employers and of R.A. No. 11313)
duties of co-workers as to sexual
harassment. The law likewise specifies the Duties of Employers:
confidentiality of proceedings, and the a. Disseminate or post in a conspicuous
issuance of a restraining order for the place a copy of this Act to all persons in
offended person. Moreover, it allows local the workplace;
government units to impose heavier penalties b. Provide measures to prevent gender-
on perpetrators. (LBC Express-Vis, Inc. v. based sexual harassment in the
Palco, G.R. No. 217101, February 12, 2020) workplace, such as the conduct of anti-
sexual harassment seminars;
Gender-Based Sexual Harassment in c. Create an independent internal
the Workplace includes the following: mechanism or a committee on decorum
a. An act or series of acts involving any and investigation to investigate and
unwelcome sexual advances, requests or address complaints of gender-based
demand for sexual favors or any act of sexual harassment which shall:
sexual nature, whether done verbally, 1) Adequately represent the
physically or through the use of management, the employees from the
technology such as text messaging or supervisory rank, the rank-and-file
electronic mail or through any other forms employees, and the union, if any;
of information and communication 2) Designate a woman as its head and not
systems, that has or could have a less than half of its members should be
detrimental effect on the conditions of an women;

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3) Be composed of members who should i. Print or publish, or cause to be

be impartial and not connected or printed or published, in any form of
related to the alleged perpetrator; media, including the internet, any
4) Investigate and decide on the notice of advertisement relating to
complaints within ten (10) days or less employment suggesting preferences,
upon receipt thereof; limitations, specifications, and
5) Observe due process; discrimination based on age;
6) Protect the complainant from ii. Require the declaration of age or
retaliation; and birth date during the application
7) Guarantee confidentiality to the process;
greatest extent possible. iii. Decline any employment application
d. Provide and disseminate, in consultation because of the individual’s age;
with all persons in the workplace, a code iv. Discriminate against an individual in
of conduct or workplace policy which terms of compensation, terms and
shall: conditions or privileges of
1. Expressly reiterate the prohibition on employment on account of such
gender-based sexual harassment; individual’s age;
2. Describe the procedures of the internal v. Deny any employee’s or worker’s
mechanism created under Section 17 promotion or opportunity for training
(c) of this Act; and because of age;
3. Set administrative penalties. (Section vi. Forcibly lay off an employee or
17, Article IV of R.A. No. 11313) worker because of old age; or
vii. Impose early retirement on the basis
Duties of Employees and Co-workers: of such employee’s or worker’s age.
1. Refrain from committing acts of gender- b. It shall be unlawful for a labor contractor
based sexual harassment; or subcontractor, if any, to refuse to refer
2. Discourage the conduct of gender-based for employment or otherwise discriminate
sexual harassment in the workplace; against any individual because of such
3. Provide emotional or social support to person’s age.
fellow employees, co- workers, colleagues c. It shall be unlawful for a labor
or peers who are victims of gender-based organization to:
sexual harassment; and i. Deny membership to any individual
4. Report acts of gender-based sexual because of such individual’s age;
harassment witnessed in the workplace ii. Exclude from its membership any
individual because of such individual’s
age; or
F. Discriminatory Practices iii. Cause or attempt to cause an
employer to discriminate against an
1. Age individual in violation of this Act.
d. It shall be unlawful for a publisher to print
As provided under the Anti-Age or publish any notice of advertisement
Discrimination in Employment Act or RA relating to employment suggesting
10911, the prohibition on discrimination in preferences, limitations, specifications,
employment on account of age shall apply to and discrimination based on age. (Sec. 5,
any employer, labor contractors or RA 10911)
subcontractors, if any, and labor
organizations. (Sec. 4, RA 10911) Exceptions

Prohibition of Discrimination in It shall not be unlawful for an employer to set

Employment on Account of Age age limitations in employment if:
a. Age is a bona fide occupational
a. It shall be unlawful for an employer to: qualification reasonably necessary in the
normal operation of a particular business

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or where the differentiation is based on Provided, finally, that discrimination

reasonable factors other than age; compounded by or intersecting with other
b. The intent is to observe the terms of a grounds, status, or condition, such as
bona fide seniority system that is not ethnicity, age, poverty, or religion shall be
intended to evade the purpose of this Act; considered discrimination against women
c. The intent is to observe the terms of a under this Act. (Sec. 4 (b), RA 9710 or the
bona fide employee retirement or a Magna Carta for Women)
voluntary early retirement plan consistent
with the purpose of this Act: Provided, Right to Decent Work
That such retirement or voluntary
retirement plan is in accordance with the The State shall progressively realize and
Labor Code, as amended, and other ensure decent work standards for women
related laws; or that involve the creation of jobs of acceptable
d. The action is duly certified by the quality in conditions of freedom, equity,
Secretary of Labor and Employment in security, and human dignity.
accordance with the purpose of this Act.
(Sec. 6, RA 10911) a. Decent work involves opportunities for
work that are productive and fairly
remunerative as family living wage,
2. Gender and Marital Status security in the workplace, and social
protection for families, better prospects
"Discrimination Against Women" refers for personal development and social
to any gender-based distinction, exclusion, or integration, freedom for people to express
restriction which has the effect or purpose of their concerns organize, participate in the
impairing or nullifying the recognition, decisions that affect their lives, and
enjoyment, or exercise by women, equality of opportunity and treatment for
irrespective of their marital status, on a basis all women and men.
of equality of men and women, of human
rights and fundamental freedoms in the b. The State shall further ensure:
political, economic, social, cultural, civil, or 1. Support services and gears to protect
any other field. them from occupational and health
hazards taking into account women's
It includes any act or omission, including by maternal functions;
law; policy, administrative measure, or 2. Support services that will enable
practice, that directly or indirectly excludes or women to balance their family
restricts women in the recognition and obligations and work responsibilities
promotion of their rights and their access to including, but not limited to, the
and enjoyment of opportunities, benefits, or establishment of day care centers and
privileges. breast-feeding stations at the
workplace, and providing maternity
A measure or practice of general application leave pursuant to the Labor Code and
is discrimination against women if it fails to other pertinent laws;
provide for mechanisms to offset or address 3. Membership in unions regardless of
sex or gender-based disadvantages or status of employment and place of
limitations of women, as a result of which employment; and
women are denied or restricted in the 4. Respect for the observance of
recognition and protection of their rights and indigenous peoples' cultural practices
in their access to and enjoyment of even in the workplace.
opportunities, benefits, or privileges; or
women, more than men, are shown to have c. In recognition of the temporary nature of
suffered the greater adverse effects of those overseas work, the State shall exert all
measures or practices. efforts to address the causes of out-
migration by developing local employment

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and other economic opportunities for are labor laws and regulations which regulate
women and by introducing measures to certain pre-employment requirements, such
curb violence and forced and involuntary as whether a requirement may be allowed by
displacement of local women. The State the employer, who should pay for any
shall ensure the protection and promotion associated costs, and so on.
of the rights and welfare of migrant
women regardless of their work status, Coverage
and protect them against discrimination in The Guideline shall apply to all workplaces in
wages, conditions of work, and the private sector including their supply
employment opportunities in host chain.
countries. (Sec. 22, RA 9710 or the Magna
Carta for Women) Advocacy, Information and Training
All workers shall be provided with basic
3. Pregnancy information and education on Hepatitis B.
Employers shall be responsible for providing
Prohibited Acts appropriate, accurate and updated
Any employer who shall suggest, require, information. Standardized basic information
unduly influence or cause any applicant for package shall be developed by DOLE and its
employment or an employee to submit partners.
himself/herself to sterilization, use any
modern methods of family planning, or not Employers shall extend advocacy,
use such methods as a condition for information and training activities to their
employment, continued employment, contractors and supply chain, workers’
promotion or the provision of employment families, the community and other
benefits. Further, pregnancy or the number establishments, as part of their Corporate
of children shall not be a ground for non- Social Responsibility (CSR) and to strengthen
hiring or termination from employment. (R.A. multi-ssectoral partnerships in the prevention
No. 10354, sec. 23(c)) and control of Hepatitis B.

4. Illness Preventive Strategies

Prevention of Hepatitis B infection in the
a) DOLE D.A. No. 05-10 workplace shall be achieved through the
DOLE Department Advisory No. 05, Series of implementation of the following strategies:
2010 (“DA-05”), also known as the Guidelines 1. All establishments are encouraged to
for the Implementation of a Workplace Policy provide Hepatitis B immunizations for all
and Program on Hepatitis B, serves as the its workers. For those occupations with
regulation for anything that concerns conceivable risk of Hepatitis B
Hepatitis B at the workplace. transmission in the workplace such as
health care workers and other workers
Pre-employment requirement whose occupation involves the potential
A pre-employment requirement is one that is for exchange of body fluids, Hepatitis B
required to be done as part of the vaccination is required.
requirements prior to employment. It may be 2. Measures to improve working conditions,
in the form of documentary submission, a such as adequate hygiene facilities,
medical examination, or an assessment or containments and proper disposal of
evaluation of an individual’s knowledge, infectious and potentially contaminated
skills, and competence. materials shall be provided.
3. Personal Protective Equipment shall be
Pre-employment requirement as a made available for all workers in high risk
management prerogative occupations at all times. 4. Workers
The employer may set the pre-employment should be given training and information
requirements in line with its exercise of its on adherence to standard or universal
management prerogative. However, there precautions in the workplace. All health

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care-related establishments and Tuberculosis (TB) Prevention And Control in

establishments whose workers are The Workplace
exposed to potentially contaminated blood
or body fluid while in the workplace shall Formulation of workplace policy and
adhere to protocols developed or program on TB prevention and control
endorsed by the DOH.
a. Mandatory for the private sector
Non-discriminatory Policy and Practices It shall be mandatory for all private
a. There shall be no discrimination of any establishments, workplaces and worksites to
form against workers on the basis of their formulate and implement a TB prevention
Hepatitis B status consistent with and control policy and program. (Section
international agreements on non- B[1], Ibid.)
discrimination ratified by the Philippines
(ILO C111). Workers shall not be b. Integral to OSH workplace programs
discriminated against, from pre- to post- The workplace policy and program shall be
employment, including hiring, promotion made an integral part of the enterprise’s
or assignment, because of their Hepatitis occupational safety and health and other
B status. related workplace programs. A workplace
b. Individuals found to be Hepatitis B positive health and safety committee shall be
shall not be declared unfit to work without responsible for overseeing the
appropriate medical evaluation and implementation of the workplace TB policy
counseling. and program. (Section B[2], Ibid.)
c. Workers shall not be terminated on the
basis of actual, perceived or suspected c. Joint development
Hepatitis B status. Management and labor representatives shall
d. Workplace management of sick jointly develop the TB workplace policy and
employees shall not dier from that of any program aligned with EO 187 and the CUP.
other illness. Persons with Hepatitis B- (Section B[3], Ibid.)
related illnesses should be able to work for
as longas medically fit. d. CBA
In organized establishments, the workplace
Confidentiality policy and program shall, as much as
Job applicants and workers shall not be possible, be included as part of the Collective
compelled to disclose their Hepatitis B status Bargaining Agreements (CBA). (Section B[4],
and other related medical information. Co- Ibid.)
wor kers shall not be obliged to reveal any Components of a TB workplace prevention &
personal information about fellow workers. control policy and program
Access to personal data relating to a worker’s
Hepatitis B status shall be bound by the rules The TB policy shall be made an integral part
of confidentiality and shall be strictly limited of the enterprise’s occupational safety and
to medical personnel or if legally required. health program. The workplace health and
safety committee shall be responsible for
Benefits and Compensation overseeing the implementation of the TB
A worker who contracts Hepatitis B infection policy. (Section B-2 of DOLE Order 73-05)
in the performance of his/her duty is entitled
to sickness benefits under the Social Security The TB policy shall include, among others,
System and employees compensation the following components: Prevention,
benefits under PD 626. treatment, rehabilitation, restoration to work
and social policies.
b) DOLE D.O. No. 73-05
DOLE Department Order No. 73, Series of Programs on TB advocacy, education and
2005 provides for the Guidelines for The training shall be carried out in the workplace.
Implementation of Policy and Program On The employer shall provide information on

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the nature, frequency, transmission, working times, and arrangements for return
treatment of TB and control and to work. (Section C-4.2)
management of TB in the workplace. For
instance, workers must be given proper Workers who have symptoms of TB shall seek
information on ways of strengthening their immediate assistance from their health
immune responses against TB infection, i.e., service provider. Similarly, those at risk, i.e.,
information on good nutrition, adequate rest, those with family members with TB, shall do
avoidance of tobacco and alcohol, and good the same. (Section C-5.1)
personal hygiene practices. (Section C-1.2)
The company shall establish a referral system
To ensure that contamination from TB and provide access to diagnostic and
airborne particles is controlled, workplaces treatment services for its employees. The
must provide adequate and appropriate company shall make arrangements with the
ventilation. Likewise, there should be nearest treatment facility. Once diagnosed,
adequate sanitary facilities for workers. The employees shall avail of and adhere to the
number of workers in a work area shall not prescribed course of treatment.
exceed the required number of workers for a
specified area and shall observe the standard The Bureau of Working Conditions and the
for space requirement. (Sections C-1.3.1 and DOLE Regional Offices, through their labor
C-1.3.2) inspectors, shall enforce DOLE Order 73-05.
(Section C-7.2)
The employer is also mandated to report all
diagnosed cases of TB to the DOLE using an 5. Solo Parents – R.A. No. 8972, as
appropriate form, i.e., the Annual Medical amended by R.A. No. 11861, sec. 7
Report. This information shall be a part of the
TB Registry of the Department of Health. This On Discrimination Against Solo Parents
notwithstanding, the employer shall ensure
confidentiality of the health status of its No employer shall discriminate against any
employees and the access to medical records solo parent employee with respect to terms
shall be limited to authorized personnel. and conditions of employment on account of
(Section C-3.1) his or her status.

Workers who have or had TB shall not be On Telecommuting Program for Solo
discriminated against. There shall be no Parents
discrimination of any form against employees
from pre- to post-employment, including Employers may enter into agreements with
hiring, promotion, or assignment, on account their solo parent employees for a
of their TB status. Instead, they shall be telecommuting program, as provided in
supported with adequate diagnosis and Republic Act No. 11165, otherwise known as
treatment, and shall be entitled to work for the 'Telecommuting Act': Provided, That said
as long as they are certified by the company’s solo parent employees shall be given priority
accredited health provider/facility as by their employer." (Sec. 7, RA 8972 as
medically fit and shall be restored to work as amended by RA 11861)
soon as their illness is controlled. (Section C-
4.1) Categories of Solo Parent

Through agreements made between the A solo parent refers to any individual who
management and workers, work falls under any of the following categories:
accommodation measures to accommodate a. A parent who provides sole parental care
and support workers with TB is encouraged. and support of the child or children due to
The management and workers may agree on –
flexible leave arrangements, rescheduling of i. Birth as a consequence of rape, even
without final conviction: Provided,

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That the mother has the sole parental but who have the sole parental care and
care and support of the child or support over their grandchildren who are
children: Provided, further, That the unmarried, or unemployed and twenty-
solo parent under this category may two (22) years old or below, or those
still be considered a solo parent under twenty- two (22) years old or over but
any of the categories in this section; who are unable to fully take care or
ii. Death of the spouse; protect themselves from abuse, neglect,
iii. Detention of the spouse for at least cruelty, exploitation, or discrimination
three (3) months or service of because of a physical or mental disability
sentence for a criminal conviction; or condition, they shall be entitled to the
iv. Physical or mental incapacity of the benefits of this Act in addition to the
spouse as certified by a public or benefits granted to them by Republic Act
private medical practitioner; No. 9257, otherwise known as the
v. Legal separation or de facto ‘Expanded Senior Citizens Act of 2003’; or
separation for at least six (6) months, f. A pregnant woman who provides sole
and the solo parent is entrusted with parental care and support to the unborn
the sole parental care and support of child or children.” (Sec. 7, RA 8972 as
the child or children; amended by RA 11861)
vi. Declaration of nullity or annulment of
marriage, as decreed by a court 6. Persons with Disability
recognized by law, or due to divorce,
subject to existing laws, and the solo The Magna Carta for disabled persons
parent is entrusted with the sole ensures equal opportunities for disabled
parental care and support of the child persons and prohibits discrimination against
or children; or them.
vii. Abandonment by the spouse for at Definition of Terms:
least six (6) months;
b. Spouse or any family member of an Disabled Persons are those suffering from
Overseas Filipino Worker (OFW), or the restriction of different abilities, as a result of
guardian of the child or children of an a mental, physical or sensory impairment, to
OFW: Provided, That the said OFW perform an activity in the manner or within
belongs to the low/semi-skilled worker the range considered normal for a human
category and is away from the Philippines being;
for an uninterrupted period of twelve (12)
months: Provided, further, That the OFW, Impairment is any loss, diminution or
his or her spouse, family member, or aberration of psychological, physiological, or
guardian of the child or children of an anatomical structure of function;
OFW falls under the requirements of this
section; Disability shall mean:
c. Unmarried mother or father who keeps 1. a physical or mental impairment that
and rears the child or children; substantially limits one or more
d. Any legal guardian, adoptive or foster psychological, physiological or
parent who solely provides parental care anatomical function of an individual or
and support to a child or children; activities of such individual;
e. Any relative within fourth (4th) civil 2. a record of such an impairment; or
degree of consanguinity or affinity of the 3. being regarded as having such an
parent or legal guardian who assumes impairment;
parental care and support of the child or
children as a result of the death, Handicap refers to a disadvantage for a given
abandonment, disappearance or absence individual resulting from an impairment or a
of the parents or solo parent for at least disability, that limits or prevents the functions
six (6) months: Provided, That in cases of or activity that is considered normal given the
solo grandparents who are senior citizens

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age and sex of the individual. (Sec. 4, RA remuneration and fringe benefits, to a
7277) qualified disabled employee, by reason of
his disability, than the amount to which a
Equal Opportunity for Employment non-disabled person performing the same
No disabled persons shall be denied access to work is entitled;
opportunities for suitable employment. A e. Favoring a non-disabled employee over a
qualified disabled employee shall be subject qualified disabled employee with respect
to the same terms and conditions of to promotion, training opportunities, study
employment and the same compensation, and scholarship grants, solely on account
privileges, benefits, fringe benefits, of the latter’s disability;
incentives or allowances as a qualified able- f. Re-assigning or transferring a disabled
bodied person. Five percent (5%) of all employee to a job or position he cannot
casual, emergency and contractual positions perform by reason of his disability;
in the Department of Social Welfare and g. Dismissing or terminating the services of
Development; Health; Education, Culture and a disabled employee by reason of his
Sports; and other government agencies, disability unless the employer can prove
offices or corporations engaged in social that he impairs the satisfactory
development shall be reserved for disabled performance of the work involve to the
persons. (Title II, Chapter 1, Sec. 5, RA 7277) prejudice of the business entities;
Provided, however, That the employer
Discrimination on Employment first sought provide reasonable
No entity, whether public or private, shall accommodations for disabled persons;
discriminate against a qualified disabled h. Failing to select or administer in the
person by reason of disability in regard to job effective manner employment tests which
application procedures, the hiring, accurately reflect the skills, aptitude or
promotion, or discharge of employees, other factor of the disabled applicant or
employee compensation, job training, and employee that such test purports to
other terms, conditions, and privileges of measure, rather than the impaired
employment. sensory, manual or speaking skills of such
applicant or employee, if any; and
The following constitute acts of i. Excluding disabled persons from
discrimination: membership in labor unions or similar
a. Limiting, segregating or classifying a organizations. (Title III, Chapter 1, Sec.
disabled job applicant in such a manner 32, RA 7222)
that adversely affects his work
opportunities; Prohibition on Discrimination Against
b. Using qualification standards, Disabled Persons
employment tests or other selection No entity, whether public or private, shall
criteria that screen out or tend to screen discriminate against a qualified PWD by
out a disabled person unless such reason of disability in regard to job
standards, tests or other selection criteria application procedures, the hiring,
are shown to be job related for the promotion, or discharge of employees,
position on question and are consistent employee compensation, job training, and
with business necessity; other terms, conditions and privileges of
c. Utilizing standards, criteria, or methods of employment. The following constitute acts of
administration that: discrimination:
1) have the effect of discrimination on the a. Limiting, segregating or classifying a job
basis of disability; or applicant with disability in such a manner
2) perpetuate the discrimination of others that adversely affects his work
who are subject to common opportunities;
administrative control; b. Using qualification standards,
d. Providing less compensation, such as employment tests or other selection
salary, wage or other forms of criteria that screen out or tend to screen

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out a PWD unless such standards, tests or bodied person. Section 5 of the Magna Carta
other selection criteria are shown to be provides:
job-related for the position in question and
are consistent with business necessity; Sec. 5. Equal Opportunity for Employment. —
c. Utilizing standards, criteria, or methods of No disabled person shall be denied access to
administration that: opportunities for suitable employment. A
i. have the effect of discrimination on qualified disabled employee shall be subject
the basis of disability; or to the same terms and conditions of
ii. perpetuate the discrimination of employment and the same compensation,
others who are subject to common privileges, benefits, fringe benefits,
administrative control. incentives or allowances as a qualified able
b. Providing less compensation, such as bodied person.
salary, wage or other forms of
remuneration and fringe benefits, to a The fact that the employees were qualified
qualified employee with disability, by disabled persons necessarily removes the
reason of his disability, than the amount employment contracts from the ambit of
to which a non-disabled person Article
performing the same work is entitled; 80. Since the Magna Carta accords them the
c. Favoring a non-disabled employee over a rights of qualified able-bodied persons, they
qualified employee with disability with are thus covered by Article 280 of the Labor
respect to promotion, training Code. (Bernardo vs. NLRC, G.R. No. 122917,
opportunities, study and scholarship July 12, 1999)
grants, solely on account of the latter’s
disability; IV. SOCIAL WELFARE BENEFITS
d. Re-assigning or transferring an employee
with a disability to a job or position he A. SSS Law
cannot perform by reason of his disability;
e. Dismissing or terminating the services of R.A. 8282, REPEALED BY R.A.11199
an employee with disability by reason of R.A. No. 11199 (“Social Security Act of 2018”)
his disability unless the employer can which was signed by President Duterte on
prove that he impairs the satisfactory February 07, 2019, expressly repealed R.A.
performance of the work involved to the No. 8282.
prejudice of the business entity; provided,
however, that the employer first sought to Republic Act No. 1161 and Republic Act No.
provide reasonable accommodations for 8282 and all other laws, proclamations,
persons with disability; executive orders, rules and regulations or
f. Failing to select or administer in the most parts thereof inconsistent with this Act are
effective manner employment tests which hereby repealed, modified or amended
accurately reflect the skills, aptitude or accordingly: Provided, that no person shall be
other factor of the applicant or employee deemed to be vested with any property or
with disability that such tests purports to other right by virtue of the enactment or
measure, rather than the impaired operation of this Act. (Sec. 33 of RA 11199)
sensory, manual or speaking skills of such
applicant or employee, if any; and Declaration of Policy
g. Excluding PWD from membership in labor It is the policy of the State to establish,
unions or similar organizations. (Title III, develop, promote and perfect a sound and
R.A. No. 7277) viable tax-exempt social security system
suitable to the needs of the people
The Magna Carta for Disabled Persons throughout the Philippines which shall
mandates that a qualified disabled employee promote social justice through savings, and
should be given the same terms and ensure meaningful social security protection
conditions of employment as a qualified able- to members and their beneficiaries against
the hazards of disability, sickness, maternity,

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old age, death, and other contingencies ii. Private benefit plans which are
resulting in loss of income or financial existing and in force at the time
burden. Towards this end. the State shall of compulsory coverage shall be
endeavor to extend social security protection integrated with the plan of the
to Filipino workers, local or overseas, and SSS. If the employer's
their beneficiaries. contribution to his/her private
plan is more than that required
In the pursuit of this policy, a social security of him/her in the Social Security
program shall be developed emphasizing the Act of 2018, he/she shall pay to
value of "work, save, invest and prosper". the SSS only the contribution
The maximum profitability of investible funds required of him/her and he/she
and resources of the program shall be shall continue his/her
ensured through a culture of excellence in contribution to such private plan
management grounded upon sound and less his/her contribution to the
efficient policies employing internationally SSS so that the employer's total
recognized best practices. (Sec. 2 of RA contribution to his/her benefit
11199) plan and to the SSS shall be the
same as his/her contribution to
The SSS is mandated by law to establish a his/her private benefit plan
provident fund for the members which will before the compulsory coverage;
consist of voluntary contributions of [Sec 9, (a)]
employers and/or employees, self-employed iii. Any changes, adjustments,
and voluntary members and their earnings, modifications, eliminations or
for the payment of benefits to such members improvements in the benefits to
or their beneficiaries. (Duka, Labor Laws and be available under the remaining
Social Legislations: A Barrister’s Companion private plan, which may be
,2019 p.818) necessary to adopt by reason of
the reduced contributions
1. Benefts; Coverage and Exclusions thereto as a result of the
integration, shall be subject to
Coverage agreements between the
employers and employees
A. Compulsory concerned; [Sec 9, (a)]
a. Employees And Their Employers iv. The private benefit plan which
Coverage in the SSS shall be the employer shall continue for
compulsory upon all employees his/her employees shall remain
including domestic workers or under the employer's
“kasambahays” not over sixty (60) management and control unless
years of age (up to the day of his/her there is an existing agreement to
60th birthday) and their employers. the contrary; [Sec 9, (a)]
(Sec. 1, Rule 13, IRR) v. Nothing in the Social Security Act
b. Covered Employees with Private of 2018 shall be construed as a
Benefit Plans limitation to the right of
The following are rules which governs employers and employees to
employees with private benefit plans: agree on and adopt benefits
i. The benefit already earned by which are over and above those
the employees under private provided under the Social
benefit plans existing at the time Security Act of 2018; and [Sec 9,
of the approval of the Social (a)]
Security Act of 2018 shall not be vi. The guidelines on the single
discontinued, reduced or employer registration process
otherwise impaired; shall continue to apply, subject
to Section 33 of the Social

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Security Act of 2018 (SSC the Social Security Act of 2018, any law
Circular No. 2009- 00, 2009). to the contrary notwithstanding. [Sec
9-B, (b), 1st par]
c. Self-Employed Person Land-based OFWs are compulsory
Coverage in the SSS shall be members of the SSS and considered in
compulsory upon such self-employed the same manner as self-employed
persons as may be determined by the persons, until a Bilateral Labor
Commission under such rules and Agreement (BLA) shall have been
regulations as it may prescribe, entered into, under the provisions of
including, but not limited to the the Social Security Act of 2018 and
following: such other rules and regulations that
a. All self-employed professionals; the Commission. [Sec. 9-B(c)]
b. Partners and single proprietors of
businesses; A land-based OFW member shall pay
c. Actors and actresses, directors, both the employer and the employee
scriptwriters and news contributions; and [Sec 19-A, 1st
correspondents who do not fall proviso]
within the definition of the term
"employee" in Section 8(d) of this If the land-based OFW realizes no
Act; income in any given month, he/she
d. Professional athletes, coaches, shall not be required to pay
trainers and jockeys; and contributions for that month; [Sec 11-
e. Individual farmers and fishermen. A]
Unless otherwise specified herein,
all provisions of this Act applicable The monthly earnings declared by a
to covered employees shall also be landbased OFW at the time of his/her
applicable to the covered registration with the SSS shall be the
selfemployed persons. [Sec. 9(a)] basis of his/her initial MSC and the
corresponding amount of monthly
d. Overseas Filipino Workers (OFW) contribution; [Sec 19-A, 1st proviso]
Coverage in the SSS shall be
compulsory upon all sea-based and The DFA, the DOLE and the SSS shall
land-based OFWs as defined under ensure compulsory coverage of OFWs
R.A. No. 8042 or the Migrant Workers through bilateral social security and
and Overseas Filipinos Act of 1995 as labor agreements and other measures
amended [by R.A. No. 10022], for enforcement (Sec. 9-B, [e])
provided they are not over sixty (60)
years of age (par 1., Sec 9-B, [a]) B. Voluntary

Sea-based OFWs are compulsory Voluntary SSS Coverage

members of the SSS. Manning
Agencies are agents of their principals The following may be covered by the SSS on
(employer or foreign placement agency a voluntary basis:
hiring or engaging Filipino workers for a. A spouse of a member who devotes full
overseas employment) and considered time to managing the household and
as the employers of seabased OFWs. family affairs, but does not engage in
other vocation or employment which is
For purposes of the implementation of subject to compulsory or mandatory
the Social Security Act of 2018, coverage; [Sec 9, (b)]
manning agencies are jointly and b. An OFW upon the termination of his/her
severally or solidarily liable with their employment overseas; [Sec 9-B, (f)]
principals with respect to the civil
liabilities incurred for any violation of

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c. A covered employee who was separated When an employee under compulsory

from employment who continues to pay coverage is separated from employment, his
his/her contributions; [Sec 11] employer's contribution on his account and
d. A self-employed member who realizes no his obligation to pay contributions arising
income in any given month who continues from that employment shall cease at the end
to pay his/her contributions. [Sec 11-A] of the month of separation but said employee
e. Filipino permanent migrants, including shall be credited with all contributions paid on
Filipino immigrants, permanent residents his behalf and entitled to benefits according
and naturalized citizens of their host to the provisions of R.A. No. 11199. He may,
countries may be covered by the SSS on a however, continue to pay the total
voluntary basis [Sec. 9-B(g)] A voluntary contributions to maintain his right to full
member (VM) shall pay his/her benefit. (Last Minute Notes for the 2022 Bar
contribution in accordance with the Exam in Labor Law by Prof. Johanna Celine
guidelines on payment deadline applicable Mari A. Chan)
to self-employed members (Sec. 4, Rule
13, IRR) Effect of interruption of business or
professional income
EXCLUSIONS If the self-employed member realizes no
income in any given month, he shall not be
Excluded employers required to pay contributions for that month.
The government and any of its political He may, however, be allowed to continue
subdivisions, branches or instrumentalities, paying contributions under the same rules
including corporations owned or controlled by and regulations applicable to a separated
the Government [Sec. 8(c), R.A. No. 11199] employee member: Provided, That no
retroactive payment of contributions shall be
Excluded employees: allowed other than as prescribed under
A. Services where there is no Section 22-A of R.A. No. 11199 (Last Minute
employeremployee relationship in Notes for the 2022 Bar Exam in Labor Law by
accordance with existing labor laws, rules, Prof. Johanna Celine Mari A. Chan)
regulations and jurisprudence;
B. Service performed in the employ of the Effective Date of Coverage
Philippine Government or instrumentality
or agency thereof; For Compulsory Coverage:
C. Service performed in the employ of a
foreign government or international Employer - Compulsory coverage of the
organization, or their wholly-owned employer shall take effect on the first day of
instrumentality: they may however enter his operation or on the first day he hires
into an agreement with the Philippine employee/s. The employer is given only 30
Government for the inclusion of such days from the date of employment of the
employees in the SSS except those employee to report the person for coverage
already covered by their respective civil to the SSS. (Sec. 10)
service retirement systems.
D. Such other services performed by Employee - Compulsory coverage of the
temporary and other employees which employee shall take effect on the first day of
may be excluded by regulation of the his/her employment. (Sec. 10)
Commission. Employees of bona fide
independent contractors shall not be Self-employed - Compulsory coverage of
deemed employees of the employer the self-employed person shall take effect
engaging the service of said contractors. upon his/her registration with the SSS.
(8(j), R.A. No. 11199) Registration shall mean payment of first
contribution (Sec. 3, Rule 15, R.A. No. 11199
Effect of separation from employment IRR).

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OFWs
i. A sea-based OFW shall take effect on the BENEFICIARIES
first day of his/her employment;
ii. A land-based OFW covered under BLAs A. Primary
shall take effect based on the provisions The following are considered as primary
of the Agreement and its implementing beneficiaries:
arrangement; i. The dependent spouse who has not
iii. Compulsory coverage of a land-based remarried [Sec 8, (k)], cohabited or
OFW not covered under BLAs shall take entered in a “live-in” relationship
effect on the applicable month and year of before or after the death of the
the first contribution payment. member, and
ii. The dependent legitimate, legitimated
For Voluntary Coverage: or legally adopted and illegitimate
children. Where there are legitimate or
Land-based OFWS - Voluntary coverage of illegitimate children, the former shall
land-based overseas Filipinos shall take effect be preferred. The dependent
on the applicable month and year of the first illegitimate children shall be entitled to
contribution payment. (Sec. 4, Rule 15, R.A. fifty percent (50%) of the share of the
No. 11199, IRR) legitimate, legitimated or legally
adopted children. In the absence of the
Non-working spouse – upon first payment dependent legitimate, legitimated or
of contribution. legally adopted children of the
member, his/her dependent
Separated member – on the month he/she illegitimate children shall be entitled to
resumed payment of contribution. one hundred percent (100%) of the
benefits. (Sec 8, [k], Rule 12 Sec 12
2. Dependents and Beneficiaries IRR)
B. Secondary
DEPENDENTS In the absence of primary beneficiaries,
the secondary beneficiaries are as follows:
The dependents shall be the following: i. The dependent parents of the
(1) The legal spouse entitled by law to deceased member; and
receive support from the member; [Sec 8, ii. In the absence of dependent parents,
(e), (1)]; any other person/s designated and
(2) The legitimate, legitimated or legally reported by the member to the SSS
adopted and illegitimate child who is: [Sec 8, (k)]. The person designated by
a) Unmarried, the member shall be someone who has
b) Not gainfully employed, and a right to claim for support from the
c) Has not reached twenty-one (21) deceased member under the Family
years of age, or if over 21 years of Code of the Philippines, including
age, he/she is congenitally or while dependent children who have reached
still a minor has been permanently the age of majority. (Sec. 13, Rule 12,
incapacitated and incapable of self- IRR)
support, physically or mentally. [Sec
8, (e), (2)] Benefits
A child who has entered in a A. Monthly Pension (Sec. 12)
commonlaw relationship and has not B. Dependent’s Pension (Sec.12-A)
reached the age of eighteen (18) is C. Retirement (Sec.12-B)
still a dependent. However, upon D. Death (Sec.13)
reaching the age of 18, the child is no E. Permanent Disability (Sec. 13-A)
longer qualified as a dependent. F. Funeral (Sec. 13-B)
(3) The parent who is receiving regular G. Sickness (Sec. 14)
support from the member. [Sec 8, (e), (3)] H. Maternity Leave (Sec. 14-A)

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I. Unemployment Insurance or Involuntary or retirement, dependents’ pension

Separation Benefits (Sec.14-B) equivalent to ten percent (10%) of the
monthly pension or Two hundred fifty pesos
Non-Transferability of Benefits (P250.00), whichever is higher, shall also be
The SSS shall promptly pay the benefits paid for each dependent child conceived or
provided in this Act to such persons as may legally adopted on or before the date of the
be entitled thereto in accordance with the contingency. [Sec 12-A in relation to Sec 8,
provisions of this Act. (e), (2)]
i. The dependent’s pension shall be paid to
Such benefits are not transferable, and no dependent children, not exceeding five
power of attorney or other document (5), beginning from the youngest and
executed by those entitled thereto in favor of without substitution. [Sec 12-A] ii.
any agent, attorney or any other person for ii. Where there are legitimate and
the collection thereof on their behalf shall be illegitimate children, the former shall be
recognized, except when they are physically preferred. [Sec 12-A, proviso] (Sec 1, Rule
unable to collect personally such benefits: 20, IRR of RA 11199)

In case of death benefits, if no beneficiary C. RETIREMENT BENEFIT

qualifies under this Act, said benefits shall be
paid to the legal heirs in accordance with the The Retirement Benefit is a monthly pension
law of succession (Sec 15). or lump sum granted to a member who can
no longer work due to old age.
A. MONTHLY PENSION
TWO TYPES OF RETIREMENT BENEFITS
The Monthly Pension is a monthly specified 1. Monthly pension - a lifetime cash
cash amount that a qualified member or a benefit paid to a retiree who has paid at
qualified beneficiary will receive on account least 120 monthly contributions to the SSS
of permanent total disability, retirement or prior to the semester of retirement.
death. (Sec 1, Rule 18, IRR of RA 11199) 2. Lump sum amount - is granted to a
The monthly pension shall be the highest of retiree who has not paid the required 120
the following amounts: monthly contributions. It is equal to the
i. P300.00 + (20% x AMSC) + (2% x AMSC) total contributions paid by the member
x (CYS – 10); or and by the employer including interest.
ii. 40% x AMSC; or
iii. Minimum monthly pension WHO ARE QUALIFIED
For Retirement:
P1,200.00, if with at least 10 CYS A member must have at least one hundred
P2,400.00 if with at least 20 CYS twenty (120) monthly contributions prior to
semester of retirement; and
For Death/Disability benefit: i. Has reached sixty (60) years old and is
P1,000.00 if with less than 10 CYS, separated from employment or has
P1,200.00, if with at least 10 CYS, or ceased to be self-employed (Optional
P2,400.00 if with at least 20 CYS. Retirement)
ii. Is at least sixty-five (65) years old
Provided that the monthly pension shall not (Technical Retirement)
be paid in a total amount of less than sixty iii. A separated member who has paid less
(60) months. (Sec 2, Rule 18, IRR of RA than one hundred twenty (120) monthly
11199) contributions who continues as a
voluntarypaying member to complete the
B. DEPENDENT’S PENSION required monthly contributions to qualify
for full pension benefit (Sec. 11 and 11-
Where monthly pension is payable on A).
account of death, permanent total disability

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Exceptions as to age: beneficiaries of a deceased member (Sec. 1,

Rule 22, IRR R.A. No. 11199)
Underground Mineworker whose date of
actual retirement is not earlier than March 13, Upon death of the member:
1998: 1. If a member has paid at least 36 monthly
contributions prior to the semester of
Optional Retirement - 55 y/o death:
Technical Retirement - 60 y/o a. Primary Beneficiaries - entitled to
monthly pension;
Underground Mineworker whose date of b. Secondary Beneficiaries - entitled to a
actual retirement is not earlier than April 27, lump sum benefit equivalent to
2016: thirtysix (36) times the monthly
pension; and
Optional Retirement - 50 y/o c. If a member has not paid the required
Technical Retirement -60 y/o (Rule 21, Sec. 36 monthly contributions the primary
2 IRR) or secondary beneficiaries shall be
entitled to whichever is higher
13TH MONTH PENSION between.
2. a lump sum benefit equivalent to the
A retired member is entitled to a thirteenth monthly pension times the number of
(13th) month pension equivalent to the monthly contributions paid to the SSS;
amount of the monthly pension due and and
additional benefit allowance, payable every 3. twelve (12) times the monthly pension
month of December of the applicable year. (Sec. 13, R.A No. 11199)

REEMPLOYMENT OR RESUMPTION OF Settled is the rule that for a non-occupational

SELF-EMPLOYMENT disease to be compensable, substantial
evidence must be presented to prove that the
The monthly pension shall be suspended risk of contracting the illness was aggravated
upon the reemployment or resumption of by the employee's working conditions. It
self- employment of a retired member who is suffices that the evidence presented establish
less than sixty-five (65) years old. He shall a reasonable work connection. It is not
again be subject to Section Eighteen and his necessary that a direct causal relation be
employer to Section Nineteen of this Act. (12- proven. (Social Security System v. Simacas,
B[C]) G.R. No. 217866, June 20, 2022)

DEATH OF A RETIRED MEMBER E. PERMANENT DISABILITY BENEFIT

His primary beneficiaries as of the date of his The Permanent Disability Benefit is a cash
retirement shall be entitled to receive the benefit granted to a member who becomes
monthly pension Provided, That if he has no permanently disabled either partially or
primary beneficiaries and he dies within sixty totally. (Sec. 1 Rule 23, IRR R.A. No. 11199)
(60) months from the start of his monthly
pension, his secondary beneficiaries shall be F. DISABILITY BENEFITS
entitled to a lump sum benefit equivalent to i. Monthly pension
the total monthly pensions corresponding to ii. Lump sum
the balance of the five-year guaranteed
period, excluding the dependents’ pension. MONTHLY PENSION
The disabled member is entitled to a monthly
D. DEATH BENEFITS pension if he/she has paid at least thirty-six
(36) monthly contributions prior to the
The Death Benefit is a cash benefit either in semester of disability. (Sec 13-A, [a])
monthly pension or lump sum paid to the

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LUMP SUM iii. Has notified the employer, if employed, or

For members who have not met the required the SSS, if unemployed or SE/VM of the
thirty-six (36) monthly contributions prior to sickness or injury; (Sec. 14, [a], 3); and
the semester of disability, a lump sum iv. iv. Has used up all current company sick
disability benefit is granted. [Sec 13-A, (a)] leave with pay for the current year, if
employed, except sea-based OFWs. (Sec.
G. FUNERAL BENEFIT 14, [b])

The Funeral Benefit is intended to help defray Notification by the EMPLOYER

the cost of funeral expenses upon the death i. For Hospital confinement - employer
of a member, including permanently totally shall notify the SSS in the prescribed
disabled or retired members. (Sec 13-B) manner within one (1) year from date of
discharge [Sec. 14, (c)] ii.
Twelve thousand pesos (₱12,000.00) shall be ii. For confinement elsewhere - employer
paid, in cash or in kind, to help defray the shall notify the SSS in the prescribed
cost upon the death of a member, including manner within five (5) calendar days after
permanently totally disabled member or receipt of notification from the employee;
retiree. [Sec. 14, (c)] iii.
iii. For sickness/injury that occurred
Starting August 1, 2015, a variable amount while working or within company’s
ranging from a minimum of twenty thousand premises - The employer shall notify the
pesos (P20,000.00) to a maximum of forty SSS of such sickness/injury/confinement
thousand pesos (P40,000.00), depending on in the prescribed manner within five (5)
the member's number of contributions and calendar days after onset of
AMSC, (Sec. 2, Rule 24, IRR R.A 11199) sickness/injury. [Sec. 14, (a) (3)]

* AMSC - average monthly salary credit Notification by the unemployed or

selfemployed member, land-based
H. SICKNESS BENEFIT OFWs, or voluntary members

The Sickness Benefit is a daily cash allowance They shall directly notify the SSS of the
to the member who is unable to work due to confinement in the prescribed manner within
sickness or injury for each day of five (5) calendar days after the start of
compensable confinement or a fraction confinement, except when such confinement
thereof. (Sec 1 Rule 25, IRR R.A 11199) is in a hospital, notification to the SSS in the
prescribed manner shall be within one (1)
Requisites for Eligibility year from date of discharge; and [Sec. 14, (a)
i. Has paid at least three (3) monthly (3)]
contributions within the twelve-month
(12) period immediately before the Amount of Benefit
semester of sickness or injury; (Sec 14,
[a]) The daily sickness allowance shall be
equivalent to ninety-percent (90%) of the
No contributions paid retroactively by member's average daily salary credit. [Sec
SE/VM/OFWs shall be used in determining 14, (a)]
his/her eligibility to sickness benefit wherein
the date of payment is within or after the begin on the first (1st) day of sickness and
semester of contingency; the payment of such allowances shall be
made by the employer every:
ii. Was confined for at least four (4) days a. regular payday or on
either in a hospital or elsewhere as b. the fifteenth (15th) and last day of each
defined by the SSS; (Sec. 14, [a]) month

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Sickness and disability benefits may be which should be in the eighteen (18)
availed of simultaneously, provided, that the month period immediately preceding the
following conditions are satisfied: unemployment or involuntary separation;
a) Sickness/injury and disability are not iii. Involuntarily separated from employment
related; and provided that such separation did not arise
b) Member meets all the qualifying from fault or negligence of the employee
conditions for the grant of sickness and and which may be attributed to any of, but
disability benefits. not limited to, the following: a)
Installation of labor-saving devices; b)
I. MATERNITY LEAVE (R.A No. 11210) Redundancy; c) Retrenchment to prevent
loss; d) Closure or cessation of operation;
Maternity Leave Benefit is a daily cash or e) Disease/illness. (Sec. 2, Rule 27,
allowance granted to female members who IRR)
gave birth via normal delivery or caesarean
section or suffered miscarriage, regardless of Limitation
civil status or legitimacy of the child. A covered employee who is involuntarily
unemployed can only claim unemployment
Amount of Benefit benefits once every three (3) years starting
Covered female workers must receive their from the date of involuntary separation or
full pay. Full payment of the maternity leave unemployment. (Sec. 14-B)
benefit shall be advanced by the employer
within thirty (30) days from the filing of the Overlapping Benefits
maternity leave application. In case of concurrence of two (2) or more
contingencies within the same compensable
In the case of self-employed female period, only the highest benefit shall be paid.
members, including those in the informal (Sec. 14-B)
economy, OFWs and voluntary SSS
members, the SSS shall directly pay the B. GSIS Law
maternity benefit. (Sec. 3, Rule 3, IRR R.A
11210) 1. Benefts; Coverage and Exclusions

J. UNEMPLOYMENT INSURANCE OR a) Coverage

INVOLUNTARY SEPARATION 1. All government personnel, whether
BENEFITS elective or appointive, irrespective of
status of appointment, provided they
The unemployment insurance or involuntary are receiving fixed monthly
separation benefit is a monthly cash payment compensation and have not reached
equivalent to fifty percent (50%) of the AMSC the mandatory retirement age of 65
for a maximum of two (2) months, subject to years, are compulsorily covered as
the rules and regulations that the members of the GSIS and shall be
Commission may prescribe. (Sec. 14-B) required to pay contributions.
2. Employees who have reached the
Eligibility retirement age of 65 or more shall also
i. Not over sixty (60) years old at the time be covered, subject to the following
of involuntary separation, except; rules:
a. In the case of underground
mineworker or surface mineworker An employee who is already beyond the
[R.A. No. 10757], not over fifty (50) mandatory retirement age of 65 shall be
years old; or compulsorily covered and be required to pay
b. In the case of racehorse jockey [R.A. both the life and retirement premiums under
No. 10789], not over 55 years old. the following situations:
ii. Has paid at least thirty-six (36) monthly
contributions, twelve (12) months of

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a. An elective official who at the time of Philippine National Police (PNP), Bureau
election to public office is below 65 years of Fire Protection (BFP) and Bureau of
of age and will be 65 years or more at the Jail Management and Penology (BJMP);
end of his term of office, including the ii. Barangay and Sanggunian Officials who
period/s of his re-election to public office are not receiving fixed monthly
thereafter without interruption. compensation;
b. Appointive officials who, before iii. Contractual Employees who are not
reaching the mandatory age of 65, are receiving fixed monthly compensation;
appointed to government position by the and
President of the Republic of the Philippines iv. Employees who do not have monthly
and shall remain in government service at regular hours of work and are not
age beyond 65. receiving fixed monthly compensation.
c. Contractual employees including (Sec. 3, Rule 2, IRR)
casuals and other employees with an
employee-government agency 2. Dependents and Beneficiaries
relationship are also compulsorily covered,
provided they are receiving fixed monthly Dependents
compensation and rendering the required (a) the legitimate spouse dependent for
number of working hours for the month support upon the member or pensioner;
(Sec. 2, Rule 2, IRR RA 8291) (b) the legitimate, legitimated, legally
adopted child, including the illegitimate
Compulsory Membership child, who is unmarried, not gainfully
employed, not over the age of majority,
Membership in the GSIS shall be compulsory or is over the age of majority but
for: incapacitated and incapable of
a. All employees receiving compensation selfsupport due to a mental or physical
who have not reached the compulsory defect acquired prior to age of majority;
retirement age, irrespective of and
employment status, (c) the parents dependent upon the
member for support; (Sec. 2(f), R.A. No.
Except: 8291):
i. members of the Armed Forces of the
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 income at least equal to the minimum
settle first their financial obligation with compensation of government employees
the GSIS, and contractuals who have no (Sec. 2[p], R.A. No. 8291)
employer and employee relationship with
the agencies they serve. Beneficiaries

b. Members of the judiciary and A. Primary beneficiaries

constitutional commissions who shall The legal dependent spouse until he/she
have life insurance 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 B. Secondary beneficiaries
security protection such as disability, The dependent parents and, subject to
survivorship, separation, and unemployment the restrictions on dependent children, the
benefits. legitimate descendants; [Sec. 1(h), R.A.
No. 8291]
Exclusion from compulsory coverage
i. Uniformed personnel of the Armed Effectivity of Membership
Forces of the Philippines (AFP),

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The effective date of membership shall be the

date of the member’s assumption to duty on B. Compulsory Life Insurance Benefits under
his original appointment or election to public the Enhanced Life Policy (ELP)
office. (Sec. 5, Rule 2, IRR R.A. No. 8291)
A member under this policy may be entitled
b) Benefits to any of the following benefits, depending
A. Compulsory Life Insurance Benefits on the circumstances:
under the Life Endowment Policy (LEP)
B. Compulsory Life Insurance Benefits C. Death Benefit - equivalent to the latest
under the Enhanced Life Policy (ELP) annual salary multiplied by amount of
C. Death Benefit insurance (AOI) factor which is 1.5 or 18
D. Retirement Benefits times the current monthly salary of the
E. Disability member or as determined by the GSIS,
F. Survivorship payable to the legal heirs, less all
G. Separation outstanding obligations of the member in
H. Unemployment benefits accordance with the CLIP;
I. Funeral • Termination Value - The policy earns
a Termination Value during the life of
A. Compulsory Life Insurance Benefits the policy computed from the
under the Life Endowment Policy percentage of life insurance premiums
(LEP) actually remitted and paid to GSIS.
o Termination value is equivalent to a
A member under this policy may be entitled percentage of monthly life
to any of the following benefits, depending insurance premiums as determined
on the circumstances: by the GSIS, due and paid in full,
1. Maturity benefits is the face amount either by direct remittance or
payable to the member upon maturity of through an APL facility.
the policy. o The accumulated termination value
2. Cash Surrender Value is earned values will grow at such rate as determined
during the term of the insurance payable by the Actuary.
to the member when he is separated from o The termination value shall be paid
the service before maturity date of the to the member upon his separation
policy or when he is considered as a case from the government service less all
of PTD. indebtedness of the member with
3. Death Benefit is the face value of the the GSIS in accordance with CLIP.
policy payable to the designated • Cash Dividend - A policyholder is
beneficiary/beneficiaries or legal heirs, in entitled to dividends, subject to the
the absence of the former, upon the death guidelines as approved by the GSIS
of a member. Board. This is not a guaranteed benefit.
4. Accidental Death Benefit (ADB) is an (Sec. 19, IRR of R.A. No. 8291)
additional benefit equivalent to the
amount of Death Benefit when the D. Retirement Benefits
member dies by accident; Proof must be
presented to sufficiently establish that the The retirement benefit consists of a monthly
cause of the member’s death is accidental pension which is computed based on years of
& must be filed within four (4) years after creditable service and AMC for the last 3
the death. years.
5. Cash Dividend - A policy holder is
entitled to dividends subject to the Eligibility:
guidelines as approved by the GSIS Board. 1. has rendered at least Fifteen (15) years of
This is not a guaranteed benefit. (Sec. service;
18.1. to 18.5, Rule IV, IRR of R.A. No. 2. is at least Sixty (60) years of age; and
8291).

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3. is not receiving a monthly pension benefit computation of service. In effect, he/she

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

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3. permanent complete paralysis of two

limbs; and All injuries, disabilities, illnesses and all other
4. brain injury resulting in incurable infirmities compensable under PD 626 shall
imbecility or insanity. not be compensable under this Act.
5. such other cases as may be determined
and approved by the GSIS Suspension of Disability Benefit

Permanent Partial Disability (PPD) – Any applicable disability benefit shall be

arises due to the complete and permanent suspended when he/she:
loss of the use of any of the following 1. is re-employed; or
resulting to the disability to work for a limited 2. recovers from his/her disability as
period of time: determined by the GSIS, whose decision
1. any finger shall be final and binding; or
2. any toe 3. fails to present himself for medical
3. one arm; examination when required by GSIS; or
4. one hand; 4. is receiving any other pension either
5. one foot; from GSIS or another local or foreign
6. one leg; institution or organization.
7. one or both ears;
8. hearing of one or both ears; Computation of Benefit
9. sight of one eye;
10. such other cases as may be determined Permanent Total Disability (PTD) - A
and approved by the GSIS member who becomes permanently and
totally disabled shall be entitled to the
Temporary Total Disability (TTD) – monthly income benefits for life equivalent to
accrues or arises when the impaired physical the basic monthly pension (BMP) effective
and/or mental faculties can be rehabilitated from the date of disability.
and/or restored to their normal functions, but
such disability shall result in temporary Permanent Partial Disability (PPD) - The
incapacity to work or to engage in any gainful period of entitlement to PPD benefit shall be
occupation. determined after due medical evaluation; but
such period of entitlement to the benefit
**Any disability or injury as a result of, or due shall not exceed 12 months for the same
to grave misconduct, participation in riots, contingency. Only the leave of absence/s
gross and inexcusable negligence, under the without pay incurred during the period of
influence of drugs or alcohol or willful entitlement, duly certified by the authorized
intention to injure or kill himself or another, officer of the agency where he is employed,
shall not be compensable. shall be compensable.

The actual loss of income shall refer to the The amount of PPD benefit shall be computed
number of days when a member went on by dividing the BMP by 30 days and
leave of absence without pay (LWOP) multiplying the quotient by the number of
reckoned immediately from the date of compensable calendar days of leave of
commencement of disability and for the absence without pay (LWOP).
duration of entitlement thereto, based on
medical evaluation. Any LWOP incurred after Temporary Total Disability (TTD) - The
the duration of entitlement to the benefit period of entitlement to TTD benefit shall be
shall not be compensable. determined after due medical evaluation and
proof of actual loss of work resulting in loss
If the member has two or more different of income by way of the incurred actual
contingencies during the same period of number of days of leave of absence/s without
benefit entitlement, he shall be compensated pay duly certified by the authorized officer of
only once for the overlapping periods. the agency where he is employed; but such

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period of entitlement to the benefit shall not Thousand Pesos (P12,000.00) (Sec.
exceed 120 days in one calendar year. 24.1.3, Rule IV, IRR of R.A. No. 8291).
However, if the disability requires more
extensive treatment that lasts beyond 120 Conditions for entitlement to
days, the payment of the TTD may be survivorship benefits
extended by the GSIS but not to exceed a
total of 240 days. The primary and secondary beneficiaries,
except dependent children, shall be entitled
Only the leave of absence/s without pay to applicable survivorship benefits, subject to
incurred during the period of entitlement the following:
shall be compensable. Entitlement, however, a. Not engaged in any gainful occupation as
shall start from the fourth day of the defined in Sec. 2(p) of R.A. No. 8291;
disability. The amount of TTD benefit shall be b. The surviving spouse and the deceased
computed by multiplying 75% of the daily member were living together as husband
salary of the member by the number of days and wife;
of disability based on the medical evaluation c. Not gainfully engaged in a business or
but not to exceed 240 days for the same economic activity (self- employed);
contingency. However, the computed daily d. Employed/engaged in a business or
salary shall not be less than seventy pesos economic activity but receiving income
(P70.00) but not to exceed P340.00 per day. less than the minimum compensation of
government employees;
**For the purpose of computing the e. Not receiving any other pension from the
corresponding benefit of inactive members GSIS or another local or foreign institution
for each kind of disability, the BMP, with or organization; and
respect to PTD and PPD, and daily salary, f. In the case of the dependent spouse,
with respect to TTD, shall be computed as of payment of the basic survivorship pension
the time of separation from GSIS. shall discontinue when he remarries,
cohabits, or engages in common-law
F. Survivorship Benefits relationship.

Survivorship benefits upon death of The foregoing conditions, except the last one,
member or pensioner must be present immediately preceding the
death of the member or pensioner (Sec. 24.5,
When a member or pensioner dies, the Rule IV, IRR of R.A. No. 8291).
beneficiaries shall be entitled to the following
survivorship benefits, whichever is G. Separation Benefits
applicable:
1. Surviving pension consisting of: Is either one of the following:
a. The basic survivorship pension which is 1. For those members who are separated
fifty percent (50%) of the BMP; and from service and who have at least 3 years
b. The dependent children’s pension of service but less than 15 years shall be
equivalent to 10% of the BMP for each entitled to cash payment equivalent to
child but not to exceed fifty percent 100% of the member’s AMC for each year
(50%) of the BMP (Sec. 24.1.1, Rule of creditable service, but not less than
IV, IRR of R.A. No. 8291). P12,000.00, payable upon reaching age
2. Cash payment equivalent to eighteen 60, or upon his separation if he is already
(18) months BMP (Sec. 24.1.2, Rule IV, 60 years of age at the time of separation.
IRR of R.A. No. 8291); 2. A cash payment equivalent to eighteen
3. Cash payment equivalent to one (18) times the basic monthly pension
hundred percent (100%) of the AMC payable at the time of resignation or
for every year of service with paid separation, provided the member resigns
contributions but not less than Twelve or separates from the service after he has
rendered at least 15 years of service and

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is below 60 years of age, plus an old-age

pension benefit equal to the basic monthly Amount, Duration and Payment of
pension payable monthly for life upon Unemployment Benefit
reaching the age of sixty (60).
3. Reckoning Date of Separation of The amount of unemployment benefit is
Uniformed PNP, BJMP and BFP Personnel equivalent to 50% of the AMC and shall be
shall be February 1, 1996. The paid in accordance with the following
computation of benefit shall be based on Schedule:
their basic monthly salary (premium-
based) when they ceased to be members Contributions Made Benefit
of the GSIS. Duration
4. Processing of Separation Benefit of 1 year but less than 3 2 months
Members Who Died While Their Claims are years
Being Processed 3 or more years but less 3 months
a. If the member dies during the than 6 years
pendency of his claim for separation 6 or more years but less 4 months
benefit and he has rendered at least 15 than 9 years
years of creditable service, his legal 9 or more years but less 5 months
heirs shall be entitled to receive cash than 11 years
payment equivalent to eighteen (18) 11 or more years but 6 months
times the basic monthly pension, plus less than 15 years
accrued BMP, if any, up to the date of
death of the member. Thereafter, the Those entitled to more than two (2) months
primary beneficiaries shall be entitled of Unemployment Benefits shall initially
to survivorship pension. receive two (2) monthly payments. A seven-
b. If the member dies during the day (7- day) waiting period shall be imposed
pendency of his claim for separation on succeeding monthly payments to
benefit and he has rendered less than determine whether the separated member
15 years of creditable service, his legal has found gainful employment either in the
heirs shall be entitled to cash payment public or private sector.
equivalent to one hundred percent
(100%) of AMC for each year of In cases of reemployment, all accumulated
creditable service, but not less than unemployment benefit paid to the employee
Twelve Thousand Pesos (P12,000.00) during his/her entire membership with the
(Sec. 21, IRR of R.A. No. 8291). GSIS shall be deducted without interest from
the separation or retirement benefits, as the
H. Unemployment Benefit case maybe, to which the member may be
entitled upon his voluntary resignation,
Conditions for Entitlement to separation or retirement. (Sec. 22, IRR of
Unemployment Benefit: R.A. No. 8291)

A member shall be entitled to the I. Funeral Benefits

unemployment benefits if the following
conditions are met: Funeral benefits is intended to help defray
1. he/she was a permanent employee at time the expenses incident to the burial and
of separation; funeral of the deceased member, pensioner
2. his/her separation was involuntary due to or retiree under R.A. No. 660 (“Magic 87”),
the abolition of his/her office or position R.A. No. 1616 (“Take All Retirement Mode”),
resulting from reorganization; and P.D. No. 1146 (“Revised Government Service
3. he/she has been paying the required Insurance Act of 1977”) and R.A. No. 8291
premium contributions for at least one (1) (Sec. 25, Rule IV, IRR of R.A. No. 8291).
year but less than 15 years prior to
separation.

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Contingency for the Payment of Funeral

Benefit (Revised Guidelines on Funeral Under this law, retirees may combine their
Benefit, 25 April 2018) years of service in the private sector
represented by contributions to the Social
The funeral benefit shall be paid upon the Security System (SSS) with their government
death of: service and contributions to the GSIS to
1. A member who: satisfy the required years of service under PD
a. died while in active service; or 1146 and RA 8291.
b. although separated from government
service, is entitled to future separation However, if retirees have already satisfied the
or retirement benefits under Section 11 required years of service under the GSIS
(Separation Benefits) or Section 13 retirement option they have chosen, they
(Retirement Benefits) of R.A. No. 8291, would not be allowed to incorporate
respectively, subject to the provisions their contributions to the SSS anymore for
of Section III of Policy and Procedural availment of additional benefits.
Guidelines No. 329-18;
c. retired under R.A. No. 1616 prior to 24 In case of death, disability and old age, the
June 1997 with at least 20 years of periods of creditable services or contributions
service, regardless of age; or, to the SSS and GSIS shall be added to entitle
d. retirement under R.A. No. 1616 on or retirees to receive the benefits under either
after 24 June 1997, with at least 20 PD 1146 or RA 8291.
years of service, and is at least 60
years of age at the time of his/her If qualified under RA 8291, all the benefits
retirement; and shall apply EXCEPT the cash payment. The
2. An old-age or disability pensioner. Portability Law provides that only benefits
common to both Systems (GSIS and SSS)
Order of Priority in the Payment of shall be paid. Cash payment is NOT included
Benefit in the benefits provided by the SSS.

The funeral benefit shall be payable to any All contributions paid by such member
qualified individual, in accordance with the personally, and those that were paid by his
following order of priority: employers to both Systems shall be
1. Surviving legitimate spouse; considered in the processing of benefits
2. Any of the following persons who can which he can claim from either or both
present receipt/s, provided that the Systems: Provided, however, That the
surviving spouse has acknowledged that amount of benefits to be paid by one System
this person shouldered the funeral shall be in proportion to the number of
expenses: contributions actually remitted to that
a. Children of the deceased member or System. (Sec. 4, RA 7699)
pensioner; or,
b. Any other person who can show Portability
incontrovertible proof that he or she Shall refer to the transfer of funds for the
shouldered the funeral expenses of account and benefit of a worker who
the deceased. transfers from one system to the other.

C. Limited Portability Law COVERAGE

Under RA 7699, otherwise known as the These rules and regulations shall apply to all
Portability Law, government retirees who do worker‐members of the Government Service
not meet the required number of years Insurance System (GSIS) and/or Social
provided under PD 1146 and RA 8291 may Security System (SSS) who transfer from one
still avail themselves of retirement and other sector to another, and who wish to retain
benefits.

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their membership in both Systems. (Rule 1, In no case shall the contribution be lost or
Sec 1, RRI RA 7699) forfeited. (Rule 3, Sec 2, RRI RA 7699)

LIMITED PORTABILITY OF FUNDS If after totalization the worker‐member still

does not qualify for any benefit listed in Rule
The process involved in the prompt payment III, Section 1 (j), the member will then get
of money benefits to eligible members shall whatever benefits correspond to his/her
be the joint responsibility of the GSIS and contributions in either or both Systems. (Rule
SSS. (Rule 4, Sec 1, RRI RA 7699) 4, Sec 4, RRI RA 7699)

The System or Systems responsible for the If a worker qualifies for benefits in both
payment of money benefits due a covered Systems, totalization shall not apply. (Rule 4,
worker shall release the same within fifteen Sec 5, RRI RA 7699)
(15) working days from receipt of the claim,
subject to the submission of the required The process of totalization of creditable
documents and availability of the complete services or periods of contributions and
employee/employer records in the System. computation of benefits provided for under
(Rule 4, Sec 2, RRI RA 7699) the Act shall be the joint responsibility of the
GSIS and the SSS. (Rule 4, Sec 6, RRI RA
TOTALIZATION 7699)

All creditable services or periods of Overlapping periods of creditable services or

contributions made continuously or in the contributions in both Systems shall be
aggregate of a worker under either of the credited only once for purposes of
Sectors shall be added up and considered for totalization. (Rule 4, Sec 7, RRI RA 7699)
purposes of eligibility and computation of
benefits. (Rule 5, Sec 1, RRI RA 7699) D. Disability and Death Benefits

All services rendered or contributions paid by a) Labor Code

a member personally and those that were
paid by the employers to either System shall The State shall promote and develop a
be considered in the computation of benefits, taxexempt employees’ compensation
which may be claimed from either or both program whereby employees and their
Systems. However, the amount of benefits to dependents, in the event of work connected
be paid by one System shall be in proportion disability or death, may promptly secure
to the services rendered/periods of adequate income benefit and medical related
contributions made to that System. (Rule 5, benefits (Art. 172, Labor Code, as amended)
Sec 2, RRI RA 7699)
EMPLOYEES COMPENSATION AND
Totalization shall apply in the following STATE INSURANCE FUND
instances: a) If a worker is not qualified for
any benefits from both Systems; b) If a The State Insurance Fund (SIF) is built up by
worker in the public sector is not qualified for the contributions of employers based on the
any benefits in the GSIS; or c) If a worker in salaries of their employees as provided under
the private sector is not qualified for any the Labor Code.
benefits from the SSS.
There are two (2) separate and distinct State
For the purpose of computation of benefits, Insurance Funds: one established under the
totalization shall apply in all cases so that the SSS for private sector employees; and the
contributions made by the worker‐member in other, under the GSIS for public sector
both Systems shall provide maximum employees. The management and
benefits which otherwise will not be available. investment of the Funds are done separately
and distinctly by the SSS and the GSIS. It is

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used exclusively for payment of the is engaged in any trade, industry or

employees’ compensation benefits and no business undertaking in the
amount thereof is authorized to be used for Philippines; otherwise, they shall not
any other purpose. be covered by the ECP. (Last Minutes
Notes for the 2022 Bar Exam in Labor
There are three (3) agencies involved in the Law, Prof. Johanna Celine Mari A.
implementation of the Employees’ Chan, p. 43)
Compensation Program (ECP). These are: (1)
The Employees’ Compensation Commission Effective Date of Coverage
(ECC) which is mandated to initiate, • Employer - on the first day of his
rationalize and coordinate policies of the ECP operation
and to review appealed cases from (2) the • Employee - on the date of his
Government Service Insurance System employment (Art. 176, Labor Code, as
(GSIS) and (3) the Social Security System amended)
(SSS), the administering agencies of the ECP.
(Last Minutes Notes for the 2022 Bar Exam in STATE INSURANCE FUND
Labor Law, Prof. Johanna Celine Mari A.
Chan, p. 43) The state insurance fund is built up by the
contributions of the employers based on the
Compulsory Coverage salaries of their employees as provided under
the Labor Code (Chan, Labor Law Reviewer
Coverage in the State Insurance Fund shall 2019, p.301)
be compulsory upon:
• All employers and their employees not Kinds of State Insurance Funds
over sixty (60) years of age; • SSS - for private sector employees
• An employee who is over sixty (60) years • GSIS - for public sector employees
of age and paying contributions to qualify
for the retirement or life insurance benefit Types of benefits
administered by the System (Art. 174 LC
as amended) The benefits under Employees Compensation
• An employee who is coverable by both the are in the form of income or services, and
GSIS and SSS and should be compulsorily consist of the following: (Rule VII, Sec. 1,
covered by both Systems (Art 174, Labor Amended Rules on Employees’
Code, as amended; Rule I, Sec. 2, Compensation)
Amended Rules on Employees’
Compensation). a. Medical services, appliances and supplies
b. Rehabilitation services
Sectors of employees covered by the c. Disability Benefits
ECP 1. Temporary total disability
The following sectors are covered under the 2. Permanent total disability
ECP: 3. Permanent partial disability
1. All public sector employees including d. Death Benefit
those of government-owned and/or e. Funeral Benefit
controlled corporations and local f. Carer’s Allowance (as provided under BR
government units covered by the GSIS; No. 90-12-0090, dated Dec. 20, 1990 and
2. All private sector employees covered by under Executive Order (E.O.) No. 134
the SSS; and [“Granting of Carer’s Allowance to EC PPD
3. Overseas Filipino workers (OFWs), and PTD Pensioners in the Public Sector,
namely: date of effectivity: May 31, 2013)
a. Filipino seafarers compulsorily covered
under the SSS Disability Benefits
b. Land-based contract workers provided
that their employer, natural or juridical,

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1. Temporary total disability - A total 2. Permanent total disability - A disability

disability is temporary if as a result of the is total and permanent if as a result of the
injury or sickness the employee is unable injury or sickness the employee is unable
to perform any gainful occupation for to perform any gainful occupation for
a continuous period not exceeding a continuous period exceeding 120
120 days, except as otherwise provided days, except as otherwise provided for in
for in Rule X of the Rules (Rule VII, Sec. Rule X of the Rules. (Rule VII, Sec. 2,
2, Amended Rules on Employees’ Amended Rules on Employees’
Compensation) Compensation)

Amount of Benefit - for each day of such a Amount of Benefit - for each month until
disability or fraction thereof, be paid by the his death, be paid by the System during such
System an income benefit equivalent to 90% a disability
of his average daily salary credit, subject to
the following conditions: • an amount equivalent to the monthly
income benefit, plus 10% thereof for
• The daily income benefit shall not be less each dependent child, but not exceeding
than PhP 10.00 nor more than PhP five, beginning with the youngest and
200.00. without substitution. Provided, that the
• The income benefit shall be paid monthly income benefit shall be the new
beginning on the first day of such amount of the monthly benefit for all
disability. covered pensioners, effective upon
• If caused by an injury or sickness it shall approval of this Decree.
not be paid longer than 120
consecutive days except where such The monthly income benefit shall be
injury or sickness still requires medical guaranteed for five years, and shall be
attendance beyond 120 days but not to suspended if the employee is gainfully
exceed 240 days from onset of employed, or recovers from his permanent
disability in which case benefit for total disability, or fails to present himself for
temporary total disability shall be paid. examination at least once a year upon notice
• The System (SSS or GSIS) shall be notified by the System.
of the injury or sickness. (Rule X, Sec. 2,
Amended Rules on Employees’ The following disabilities shall be deemed
Compensation) total and permanent:
1. Temporary total disability lasting
Period of Entitlement continuously for more than 120 days,
except as otherwise provided for in the
The income benefit shall be paid beginning Rules;
on the first day of such disability. If 2. Complete loss of sight of both eyes;
caused by an injury or sickness it shall not 3. Loss of two limbs at or above the ankle or
be paid longer than 120 consecutive wrist;
days except where such injury or sickness 4. Permanent complete paralysis of two
still requires medical attendance beyond 120 limbs;
days but not to exceed 240 days from onset 5. Brain injury resulting in incurable
of disability in which case benefit for imbecility or insanity; and
temporary total disability shall be paid. 6. Such cases as determined by the Medical
However, the System may declare the total Director of the System and approved by
and permanent status at any time after 120 the Commission. (Art. 198, Labor Code, as
days of continuous temporary total disability amended)
as may be warranted by the degree of actual
loss or impairment of physical or mental Period of Entitlement - The full monthly
functions as determined by the System. income benefit shall be paid for all
compensable months of disability.

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One foot 31
3. Permanent partial disability - A One leg 46
disability is partial and permanent if as a One ear 10
result of the injury or sickness the Both ears 20
employee suffers a permanent partial loss Hearing of one ear 10
of the use of any part of his body. (Rule Hearing of both ears 50
XII, Sec. 2, Amended Rules on Employees’ Sight of one eye 25
Compensation) (Art. 199, Labor Code, as amended)

Amount of Benefit - shall be paid by the Death Benefits

System a monthly income benefit for the
number of months indicated below. If the Eligibility
indicated number of months exceed twelve,
the income benefit shall be paid in monthly The beneficiaries of a deceased employee
pension; otherwise, the System may pay shall be entitled to an income benefit if all of
income benefit in lump sum or in monthly the following conditions are satisfied:
pension 1. The employee has been duly reported to
the System;
In case of permanent partial disability less 2. He died as a result of an injury or sickness;
than the total loss of the member, the same and
monthly income shall be paid for a portion of 3. The System has been duly notified of his
the period established for the total loss of the death, as well as the injury or sickness
member in accordance with the proportion which caused his death. His employer
that the partial loss bears to the total loss. If shall be liable for the benefit if such death
the result is a decimal fraction, the same shall occurred before the employee is duly
be rounded off to the next higher integer. reported for coverage to the System.

In case of simultaneous loss of more than If the employee has been receiving monthly
one member or a part thereof, the same income benefit for permanent total disability
monthly income shall be paid for a period at the time of his death, the surviving spouse
equivalent to the sum of the periods must show that the marriage has been validly
established for the loss of the member or part subsisting at the time of his disability.
thereof but not exceeding 75. If the result is
a decimal fraction, the same shall be rounded In addition, the cause of death must be a
off to the higher integer. complication or natural consequence of the
compensated Permanent Total Disability. (as
The benefit shall be paid for not more than provided under Board Resolution No. 19-09-
the period designated in the following 116, dated Sept. 2, 2010) (Rule XIII, Sec. 1,
schedules: Amended Rules on Employees’
Compensation)
Complete and No. of
permanent loss of the Months Beneficiaries
use of
One thumb 10 a. Primary Beneficiaries
One index finger 8 • Dependent spouse until he remarries;
One middle finger 6 and
One ring finger 5 • Dependent children (legitimate,
One little finger 3 legitimated, natural-born, or legally
One big toe 6 adopted).
One toe 3
One arm 50 b. Secondary Beneficiaries
One hand 39 • Illegitimate children and legitimate
descendants; and

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• Parents, grandparents, grandchildren shall be effective until the seafarer’s date of

[Art. 173(j), Labor Code, as amended] arrival at the point of hire upon termination
of his employment pursuant to Section 18 of
Benefits this Contract [Sec.2(a)]

Primary beneficiaries Duration

An amount equivalent to his monthly income The period of employment shall be a period
benefit, plus 10% thereof for each dependent mutually agreed upon by the seafarer and the
child, but not exceeding five, beginning with employer but not to exceed 12 months. Any
the youngest and without substitution, That extension of the contract shall be subject to
the monthly income benefit shall be mutual consent of both parties.
guaranteed for five years
Benefits for Injury or Illness
The aggregate monthly benefit payable in the
case of the GSIS shall in no case exceed the The liabilities of the employer when the
monthly wage or salary actually received by seafarer suffers work-related injury or illness
the employee at the time of his death. during the term of his contract are as follows:

The minimum income benefit shall not be less 1. The employer shall continue to pay the
than Fifteen Thousand Pesos (P15,000.00). seafarer his wages during the time he is
on board the vessel;
Secondary beneficiaries 2. If the injury or illness requires medical
and/or dental treatment in a foreign port,
The income benefit is payable in monthly the employer shall be liable for the full
pension which shall not exceed the period of cost of such medical, serious dental,
60 months and the aggregate income benefit surgical and hospital treatment as well as
shall not be less than P15, 000.00. board and lodging until the seafarer is
declared fit to work or to repatriated.
If the employee has been receiving monthly However, if after repatriation, the seafarer
income benefit for permanent total disability still requires medical attention arising
at the time of his death, the secondary from said injury or illness, he shall be so
beneficiaries shall be paid the monthly provided at cost to the employer until such
pension, excluding the dependent's pension time he is declared fit or the degree of his
of the remaining balance of the five year disability has been established by the
guaranteed period. (ECC Resolution No. companydesignated physician.
2799, July 25, 1984). 3. Upon sign-off from the vessel for medical
treatment, the seafarer is entitled to
A funeral benefit of Three Thousand Pesos sickness allowance equivalent to his basic
(P3,000.00) shall be paid upon the death of wage until he is declared fit to work or the
a covered employee or permanently totally degree of permanent disability has been
disabled pensioner. assessed by the company-designated
physician but in no case shall this period
b) POEA - Standard Employment exceed one hundred twenty (120) days.
Contract
For this purpose, the seafarer shall submit
Commencement of contract himself to a post employment medical
examination by a company-designated
The employment contract between the physician within three working days upon
employer and the seafarer shall commence his return except when he is physically
upon actual departure of the seafarer from incapacitated to do so, in which case, a
the Philippine airport or seaport in the point written notice to the agency within the
of hire and with a POEA approved contract. It same period is deemed as compliance.

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Failure of the seafarer to comply with the (4) children, at the exchange rate
mandatory reporting requirement shall prevailing during the time of payment.
result in his forfeiture of the right to claim
the above benefits. ii. In case death is caused by warlike
activity while sailing within a
If a doctor appointed by the seafarer declared war zone or war risk area
disagrees with the assessment, a third
doctor may be agreed jointly between the The compensation payable shall be doubled.
Employer and the seafarer. The third The employer shall undertake appropriate
doctor’s decision shall be final and binding war zone insurance coverage for this
on both parties. purpose.
4. Those illnesses not listed in Section 32 of
this Contract are disputably presumed as These benefits shall be separate and distinct
work related. from and will be in addition to whatever
5. Upon sign-off of the seafarer from the benefits which the seafarer is entitled to
vessel for medical treatment, the under Philippine laws from SSS, OWWA, ECC,
employer shall bear the full cost of PhilHealth and Pag-IBIG Fund.
repatriation in the event the seafarer is
declared (1) fit for repatriation; or (2) fit Liabilities of the Employer
to work but the employer is unable to find
employment for the seafarer on board his The other liabilities of the employer when the
former vessel or another vessel of the seafarer dies as a result of work-related
employer despite earnest efforts. injury or illness during the term of
6. In case of permanent total or partial employment are as follows:
disability of the seafarer caused by either
injury or illness the seafarer shall be A. The employer shall pay the deceased’s
compensated in accordance with the beneficiary all outstanding obligations due
schedule of benefits arising from an illness the seafarer under this Contract.
or disease shall be governed by the rates B. The employer shall transport the remains
and the rules of compensation applicable and personal effects of the seafarer to the
at the time the illness or disease was Philippines at employer’s expense, except
contracted. if the death occurred in a port where local
government laws or regulations do not
Requisites for compensability of Injury permit the transport of such remains. In
or Illness case death occurs at sea, the disposition
To be compensable under Section 20(A) of of the remains shall be handled or dealt
the 2010 POEA-SEC: with in accordance with the master’s best
1. The injury must be work-related; and judgment. In all cases, the
2. The work-related injury or illness must employer/master shall communicate with
have existed during the term of the the manning agency to advise for
seafarer’s employment contract (Labor disposition of seafarer’s remains.
Law Reviewer, Chan,2019 p.336) C. The employer shall pay the beneficiaries
of the seafarer the Philippine currency
Benefits for Death equivalent to the amount of One
Thousand US dollars (US$1,000) for burial
i. In case of work-related death the expenses at the exchange rate prevailing
employer: shall pay his beneficiaries the during the time of payment. (Sec. 20, B.4,
Philippines currency equivalent to the POEA- SEC)
amount of Fifty Thousand US dollars
(US$50,000) and additional amount of E. Claims of Seafarers
Seven Thousand US dollars
(US$7,000) to each child under the age Section 32 of the 2010 POEA-SEC provides a
of twenty-one (21) but not exceeding four detailed schedule of disability or impediment

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for injuries, diseases or illnesses that a the employer shall be liable for the full
seafarer may suffer or contract in the course cost of such medical, serious dental,
of his employment. The same section surgical and hospital treatment as well as
expressly provides that injuries or disabilities board and lodging until the seafarer is
that are classified as Grade 1 are considered declared fit to work or to be repatriated.
total and permanent, e.g., blindness or total However, if after repatriation, the seafarer
and permanent loss of vision of both eyes. still requires medical attention arising
This, however, as will be discussed later, from said injury or illness, he shall be so
should not be taken to mean that only those provided at cost to the employer until such
listed as Grade 1 injuries/disabilities are time he is declared fit or the degree of his
considered total and permanent. (Esplago v disability has been established by the
Naess Shipping Philippines, Inc. et. al, G.R. company-designated physician.
No. 238652, June 21, 2021) 3. In addition to the above obligation of the
employer to provide medical attention, the
Time and again, this Court has held that a seafarer shall also receive sickness
seafarer's entitlement to disability benefits allowance from his employer in an amount
for work-related illness or injury is governed equivalent to his basic wage computed
by the Labor Code, its Implementing Rules from the time he signed off until he is
and Regulation (IRR), the POEA-SEC, and declared fit to work or the degree of
prevailing jurisprudence.18 The applicable disability has been assessed by the
provisions were summarized by the Court in company-designated physician. The
the case of Jebsen Maritime, Inc. v. period within which the seafarer shall be
Ravena, to wit: entitled to his sickness allowance shall not
exceed 120 days. Payment of the sickness
By law, the seafarer's disability benefits allowance shall be made on a regular
claim is governed by Articles 191 to 193, basis, but not less than once a month.
Chapter VI (Disability benefits) of the Labor
Code, in relation to Rule X. Section 2 of the The seafarer shall be entitled to
Rules and Regulations Implementing the reimbursement of the cost of medicines
Labor Code. prescribed by the company-designated
physician. In case treatment of the
By contract, it is governed by the seafarer is on an out-patient basis as
employment contract which the seafarer and determined by the company-designated
his employer/local manning agency execute physician, the company shall approve the
prior to employment, and the applicable appropriate mode of transportation and
POEA-SEC that is deemed incorporated in the accommodation. The reasonable cost of
employment contract. (ibid.) actual traveling expenses and/or
accommodation shall be paid subject to
liquidation and submission of official
COMPENSATION AND BENEFITS receipts and/or proof of expenses.

A. COMPENSATION AND BENEFITS FOR For this purpose, the seafarer shall submit
INJURY OR ILLNESS himself to a post-employment medical
examination by a company-designated
The liabilities of the employer when the physician within three working days upon
seafarer suffers work-related injury or illness his return except when he is physically
during the term of his contract are as follows: incapacitated to do so, in which case, a
written notice to the agency within the
1. The employer shall continue to pay the same period is deemed as compliance. In
seafarer his wages during the time he is the course of the treatment, the seafarer
on board the ship; shall also report regularly to the company-
2. If the injury or illness requires medical designated physician specifically on the
and/or dental treatment in a foreign port, dates as prescribed by the company-

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designated physician and agreed to by the Filipino Seafarers On-Board Ocean-Going

seafarer. Failure of the seafarer to comply Ships)
with the mandatory reporting requirement
shall result in his forfeiture of the right to B. COMPENSATION AND BENEFITS FOR
claim the above benefits. 11 If a doctor DEATH
appointed by the seafarer disagrees with 1. In case of work-related death of the
the assessment, a third doctor may be seafarer, during the term of his
agreed jointly between the Employer and contract, the employer shall pay his
the seafarer. The third doctor’s decision beneficiaries the Philippine currency
shall be final and binding on both parties. equivalent to the amount of Fifty
4. Those illnesses not listed in Section 32 of Thousand US dollars (US$50,000) and
this Contract are disputably presumed as an additional amount of Seven
work-related. Thousand US dollars (US$7,000) to
5. In case a seafarer is disembarked from the each child under the age of twentyone
ship for medical reasons, the employer (21) but not exceeding four (4)
shall bear the full cost of repatriation in children, at the exchange rate
the event the seafarer is declared (1) fit prevailing during the time of payment.
for repatriation; or (2) fit to work but the 2. Where death is caused by warlike
employer is unable to find employment for activity while sailing within a declared
the seafarer on board his former ship or war zone or war risk area, the
another ship of the employer. compensation payable shall be
6. In case of permanent total or partial doubled. The employer shall undertake
disability of the seafarer caused by either appropriate war zone insurance
injury or illness the seafarer shall be coverage for this purpose.
compensated in accordance with the 3. It is understood and agreed that the
schedule of benefits enumerated in benefits mentioned above shall be
Section 32 of his Contract. Computation of separate and distinct from, and will be
his benefits arising from an illness or in addition to whatever benefits which
disease shall be governed by the rates and the seafarer is entitled to under
the rules of compensation applicable at Philippine laws from the Social Security
the time the illness or disease was System, Overseas Workers Welfare
contracted. Administration, Employee’s
Compensation Commission, Philippine
The disability shall be based solely on the Health Insurance Corporation and
disability gradings provided under Section Home Development Mutual Fund (Pag-
32 of this Contract, and shall not be IBIG Fund).
measured or determined by the number of 4. The other liabilities of the employer
days a seafarer is under treatment or the when the seafarer dies as a result of
number of days in which sickness workrelated injury or illness during the
allowance is paid. term of employment are as follows:
7. It is understood and agreed that the a. The employer shall pay the
benefits mentioned above shall be deceased’s beneficiary all
separate and distinct from, and will be in outstanding obligations due the
addition to whatever benefits which the seafarer under this Contract.
seafarer is entitled to under Philippine b. The employer shall transport the
laws such as from the Social Security remains and personal effects of
System, Overseas Workers Welfare the seafarer to the Philippines at
Administration, Employees’ Compensation employer’s expense except if the
Commission, Philippine Health Insurance death occurred in a port where
Corporation and Home Development local government laws or
Mutual Fund (Pag-IBIG Fund). (Sec. 20, regulations do not permit the
2010 Standard Terms and Conditions transport of such remains. In case
Governing the Overseas Employment of death occurs at sea, the

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disposition of the remains shall be shall form part of and shall be deducted
handled or dealt with in from the total amount that the seafarer
accordance with the master’s best is determined to be finally entitled to
judgment. In all cases, the under this Contract.
employer/master shall 10. Subsistence allowance benefit as
communicate with the manning provided in RA 8042, as amended by
agency to advise for disposition of RA 10022. The
seafarer’s remains. principal/employer/company shall
c. The employer shall pay the grant to the seafarer who is involved in
beneficiaries of the seafarer the a case or litigation for the protection of
Philippine currency equivalent to his rights in a foreign country, a
the amount of One Thousand US subsistence allowance of at least One
dollars (US$1,000) for burial Hundred United States Dollars
expenses at the exchange rate (US$100) per month for a maximum of
prevailing during the time of six (6) months.
payment. 11. Compassionate Visit as provided in RA
5. It is understood that computation of 8042, as amended by RA 10022. When
the total permanent or partial disability a seafarer is hospitalized and has been
of the seafarer caused by the injury confined for at least seven (7)
sustained resulting from warlike consecutive days, he shall be entitled
activities within the warzone area shall to a compassionate visit by one (1)
be based on the compensation rate family member or a 13 requested
payable within the warzone area as individual. The employer shall pay for
prescribed in this Contract. the transportation cost of the family
6. No compensation and benefits shall be member or requested individual to the
payable in respect of any injury, major airport closest to the place of
incapacity, disability or death of the hospitalization of the seafarer. It is,
seafarer resulting from his willful or however, the responsibility of the
criminal act or intentional breach of his family member or requested individual
duties, provided however, that the to meet all visa and travel document
employer can prove that such injury, requirements;
incapacity, disability or death is directly 12. The seafarer or his successor in
attributable to the seafarer. interest acknowledges that payment
7. A seafarer who knowingly conceals a for injury, illness, incapacity, disability
pre-existing illness or condition in the or death and other benefits of the
Pre Employment Medical Examination seafarer under this contract and under
(PEME) shall be liable for RA 8042, as amended by RA 10022,
misrepresentation and shall be shall cover all claims in relation with or
disqualified from any compensation in the course of the seafarer’s
and benefits. This is likewise a just employment, including but not limited
cause for termination of employment to damages arising from the contract,
and imposition of appropriate tort, fault or negligence under the laws
administrative sanctions. of the Philippines or any other country.
8. When requested, the seafarer shall be (Sec. 20, 2010 Standard Terms and
furnished a copy of all pertinent Conditions Governing the Overseas
medical reports or any records at no Employment of Filipino Seafarers On-
cost to the seafarer. Board Ocean-Going Ships)
9. The amounts paid to the seafarer due
to accidental or natural death, or SCHEDULE OF DISABILITY OR IMPEDIMENT
permanent total disablement by virtue FOR INJURIES SUFFERED AND DISEASES
of the provisions of RA 8042 as INCLUDING OCCUPATIONAL DISEASES OR
amended by RA 10022 and its ILLNESS CONTRACTED.
implementing rules and regulations

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HEAD partial ablation of the nose

Traumatic head injuries that result to: with big scars on face or
1. Apperture unfilled with Gr. 9 head
bone not over three (3) 3. Partial ablation of the nose Gr. 9
inches without brain injury or partial avulsion of the
2. Unfilled with bone over Gr. 3 scalp
three (3) inches without 4. Complete loss of the power Gr. 1
brain injury of mastication and speech
3. Severe paralysis of both Gr. 1 function
upper or lower extremities 5. Moderate constriction of Gr. 6
or one upper and one lower the jaw resulting in
extremity moderate degree of
4. Moderate paralysis of two Gr. 10 difficulty in chewing and
(2) extremities producing moderate loss of the power
moderate difficulty in or the expression of speech
movements with self-care 6. Slight disorder of Gr. 12
activities mastication and speech
5. Slight paralysis affecting Gr. 10 function due to traumatic
one extremity producing injuries to jaw or cheek
slight difficulty with self- bone
care activities EYES
6. Severe mental disorder or Gr. 1 1. Blindness or total and Gr. 1
Severe Complex Cerebral permanent loss of vision of
function disturbance or both eyes
post-traumatic 2. Total blindness of one (1) Gr. 5
psychoneurosis which eye and fifty percent (50%)
require regular aid and loss of vision of the other
attendance as to render eye
worker permanently unable 3. Loss of one eye or total Gr. 7
to perform any work blindness of one eye
7. Moderate mental disorder Gr. 6 4. Fifty percent (50%) loss of Gr. 10
or moderate brain vision of one eye
functional disturbance 5. Lagopthalmos, one eye Gr. 12
which limits worker to the 6. Ectropion, one eye Gr. 12
activities of daily living with 7. Ephiphora, one eye Gr. 12
some directed care or 8. Ptosis, one eye Gr. 12
attendance Note: (Smeller’s Chart – used to grade for
8. Slight mental disorder or Gr. 10 near and distant vision).
disturbance that requires NOSE AND MOUTH
little attendance or aid and Considerable stricture of Gr. 11
which interferes to a slight the nose (both sides)
degree with the working hindering breathing
capacity of the claimant Loss of the sense of hearing Gr. 11
9. Incurable imbecility Gr. 1 in one ear
FACE Injuries to the tongue Gr. 10
1. Severe disfigurement of the Gr. 2 (partial amputation or
face or head as to make the adhesion) or palate-causing
worker so repulsive as to defective speech
greatly handicap him in Loss of the three (3) teeth Gr. 14
securing or retaining restored by prosthesis
2. Moderate facial Gr. 5 EARS
disfigurement involving

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For the complete loss of the Gr. 3 without the aid of a pair of
sense of hearing on both crutches
ears Injury to the spinal cord as Gr. 1
Loss of two (2) external Gr. 8 to make walking impossible
ears even with the aid of a pair
Complete loss of the sense Gr. 11 of crutches
of hearing in one ear Injury to the spinal cord Gr. 1
Loss of one external ear Gr. 12 resulting to incontinence of
Loss of one half (1/2) of an Gr. 14 urine and feces
external ear ABDOMEN
NECK Loss of the spleen Gr. 8
Such injury to the throat as Gr. 6 Loss of one kidney Gr. 7
necessitates the wearing of Severe residuals of Gr. 1
a tracheal tube impairment of intra-
Loss of speech due to injury Gr. 9 abdominal organs which
to the vocal cord requires regular aid and
Total stiffness of neck due Gr. 8 attendance that will unable
to fracture or dislocation of worker to seek any gainful
the cervical pines employment
Moderate stiffness or two Gr. 10 Moderate residuals of Gr. 7
thirds (2/3) loss of motion disorder of the intra-
of the neck abdominal organs
Slight stiffness of the neck Gr. 12 secondary to trauma
or one third (1/3) loss of resulting to impairment of
motion nutrition, moderate
CHEST-TRUNK-SPINE tenderness, nausea,
Fracture of four (4) or more Gr. 6 vomiting, constipation or
ribs resulting to severe diarrhea
limitation of chest Slight residuals or disorder Gr. 12
Fracture of four (4) or more Gr. 9 of the intra-abdominal
ribs with intercostal organs resulting in
neuralgia resulting in impairment of nutrition,
moderate limitation of slight tenderness and/or
chest expansion constipation or diarrhea
Slight limitation of chest Gr. 12 Inguinal hernia secondary Gr. 12
expansion due to simple rib to trauma or strain
functional without myositis PELVIS
or intercostal neuralgia Fracture of the pelvic rings Gr. 1
Fracture of the dorsal or Gr. 6 as to totally incapacitate
lumber spines resulting worker to work
severe or total rigidity of Fracture of the pelvic ring Gr. 6
the trunk or total loss of resulting to deformity and
lifting power of heavy lameness
objects URINARY AND GENERATIVE
Moderate rigidity or two Gr. 8 ORGANS
thirds (2/3) loss of motion Total loss of penis Gr. 7
or lifting power of the trunk Total loss of both testicles Gr. 7
Slight rigidity or one third Gr. 11 Total loss of one testicle Gr. 11
(1/3) loss of motion or Scars on the penis or Gr. 9
lifting power of the trunk destruction of the parts of
Injury to the spinal cord as Gr. 4 the cavernous body or
to make walking impossible urethra interfering with

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erection or markedly Loss of three (3) fingers of Gr. 9

affecting coitus one hand not including
Loss of one breast Gr.11 thumb and index finger
Prolapse of the uterus Gr. 13 Loss of the index finger and Gr. 9
Great difficulty in urinating Gr. 13 any one of the other fingers
Incontinence of urine Gr. 10 of the same
THUMBS AND FINGERS hand excluding thumb
Total loss of one thumb Gr. 9 Loss of two (2) digits of one Gr. 10
including metacarpal bone hand not including thumb
Total loss of one thumb Gr. 10 and index finger
Total loss of one index Gr. 10 12. Loss of ten (10) fingers of Gr. 3
finger including metacarpal both hands
bone HANDS
Total loss of one index Gr. 11 Total loss of use of both Gr. 1
finger hands or amputation of
Total loss of one middle Gr. 11 both hands at wrist joints or
finger including metacarpal above
bone Amputation of a hand at Gr. 5
Total loss of one middle Gr. 12 carpo-metacarpal joints
finger Amputation between wrist Gr. 5
Total loss of one ring finger Gr. 12 and elbow joint
including metacarpal bone Loss of grasping power for Gr. 10
Total loss of one ring finger Gr. 13 small objects between the
Total loss of one small Gr. 13 fold of the finger of one
finger including metacarpal hand
bone Loss of grasping power for Gr. 10
Total loss of one small Gr. 14 large objects between
finger fingers and palm of one
11. Loss of two or more fingers. hand
Compensation for the loss Loss of opposition between Gr. 9
of use of two (2) or more the thumb and tips of the
fingers or one (1) or more fingers of one hand
phalanges of two or more Ankyclosed wrist in normal Gr. 10
digits of a hand must be position
proportioned to the loss of Ankyclosed wrist in position Gr. 11
the hand occasioned one third (1/3) flexed or
thereby but shall not half extended and/or
exceed the compensation severe limited action of a
for the loss of a hand: wrist
a. Loss of five (5) fingers of Gr. 6 SHOULDER AND ARM
one hand Inability to turn forearm Gr. 11
Loss of thumb, index Gr. 6 (forearm in normal
fingers and any of 2 or position-supination)
more fingers of the same Inability to turn forearm ( Gr. 10
hand forearm in abnormal
Loss of the thumb, index Gr. 7 position – pronation)
finger and any one of the Disturbance of the normal Gr. 11
remaining fingers of the carrying angle or weakness
same hand of an arm or a forearm due
Loss of thumb and index Gr. 8 to deformity of moderate
finger atrophy of muscles

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Stiff elbow at full flexion or Gr. 7 Loss of four (4) excluding Gr. 9
extension (one side) great toe of a foot
Stiff elbow at right angle Gr. 8 Loss of great toe and two Gr. 9
flexion (2) other toes of the same
Flail elbow joint Gr. 9 foot
Pseudoarthrosis of the Gr. 6 Loss of five digits of a foot Gr. 8
humerus with Loss of both feet at ankle Gr. 1
musculospiral or radial joint or above
paralysis Loss of one foot at ankle Gr. 6
Ankylosis of one (1) Gr. 9 joint or above
shoulder, the shoulder Depression of the arch of a Gr. 12
blade remaining mobile foot resulting in weak foot
Ankylosis of one shoulder, Gr. 8 Loss of one half (1/2) Gr. 8
the shoulder blade metatarsus of one (1) foot
remaining rigid Loss of whole metatarsus Gr. 7
Unreduced dislocation of Gr. 8 or forepart of foot
one (1) shoulder Tearing of achilles tendon Gr. 12
Ruptured biceps or Gr. 11 resulting in the impairment
pseudoarthrosis of the of active flexion and
humerus, close (one side) extension of a foot
Inability to raise arm more Gr. 11 Malleolar fracture with Gr. 10
than halfway from displacement of the foot
horizontal to perpendicular inward or outward
Ankylosis of the shoulder Gr. 10 Complete immobility of an Gr. 10
joint not permitting arm to ankle joint in abnormal
be raised above a level with position
a shoulder and/or Complete immobility of an Gr. 11
irreducible fracture or faulty ankle joint in normal
union collar bone position
Total paralysis of both Gr. 1 Total loss of a leg or Gr. 3
upper extremities amputation at or above the
Total paralysis of one upper Gr. 3 knee
extremity Stretching leg of the Gr. 10
Amputation of one (1) Gr. 4 ligaments of a knee
upper extremity at or above resulting in instability of the
the elbow joint
17. Scar the size of the palm in Gr. 14 Ankylosis of a knee in Gr. 10
one extremity genuvalgum of varum
LOWER EXTREMITIES Pseudoarthrosis of a knee Gr. 10
Loss of a big toe Gr. 12 cap
Loss of a toe other than the Gr. 14 Complete immobility of a Gr. 10
big one knee joint in full extension
Loss of ten (10) digits of Gr. 5 Complete immobility of a Gr. 7
both feet knee joint in strong flexion
Loss of a great toe of one Gr. 10 Complete immobility of a Gr. 5
foot + one toe hip joint in flexion of the
Loss of two toes not Gr. 12 thigh
including great toe or next Complete immobility of a Gr. 9
to it hip joint in full extension of
Loss of three (3) toes Gr. 10 the thigh
excluding great toe of a Slight atrophy of calf of leg Gr. 13
foot muscles without apparent

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shortening or joint lesion or 11 “ x 14.93%

disturbance of weight- 12 “ x 10.45%
bearing line 13 “ x 6.72%
Shortening of a lower Gr. 13 14 “ x 3.74%
extremity from one to three
centimeters with either To be paid in Philippine Currency equivalent
joint lesion or disturbance at the exchange rate prevailing during the
of weight-bearing joint time of payment. (Secs. 32, 2010 Standard
Shortening of 3 to 6 cm Gr. 12 Terms and Conditions Governing the
with slight atrophy of calf or Overseas Employment of Filipino Seafarers
thigh muscles On-Board Ocean-Going Ships)
Shortening of 3 to 6 cm Gr. 11
with either joint lesion or OCCUPATIONAL DISEASES
disturbance of
weightbearing joint For an occupational disease and the resulting
Irregular union of fracture Gr. 9 disability or death to be compensable, all of
with joint stiffness and with the following conditions must be satisfied:
shortening of 6 to 9 cm 1. The seafarer’s work must involve the
producing permanent risks described herein;
lameness 2. The disease was contracted as a
Irregular union of fracture Gr. 10 result of the seafarer’s exposure to
in a thigh or leg with the described risks;
shortening of 6 to 9 cms 3. The disease was contracted within a
Failure of fracture of both Gr. 1 period of exposure and under such
hips to unite other factors necessary to contract it;
Failure of fracture of a hip Gr. 3 and
to unite 4. There was no notorious negligence
Paralysis of both lower Gr. 1 on the part of the seafarer.
extremities
Paralysis of one lower Gr. 3 The following diseases are considered as
extremity occupational when contracted under working
37. Scar the size of a palm or Gr. 14 conditions involving the risks described
larger left on an extremity herein:

NOTE: Any item in the schedule classified OCCUPATIONAL NATURE OF

under Grade 1 shall be considered or shall DISEASE EMPLOYMENT
constitute total and permanent disability. 1. Cancer of the Work involving
epithelial of the exposure to
SCHEDULE OF DISBILITY bladder (Papilloma alphanapthyylamine,
ALLOWANCES of the bladder) beta-naphathylamin,
IMPEDIMENT
GRAD
IMPEDIMENT or benzidine of any
1 US$ x 120.00% part of the salts; and
50,000 auramine or
2 “ x 88.81% magenta
3 “ x 78.36% 2. Cancer, The use or handling
4 “ x 68.66% epithellomatous or of, exposure to tar,
ulceration of the pitch, bitumen,
5 “ x 58.96%
skin or of the mineral oil (including
6 “ x 50.00%
corneal surface of paraffin) soot or any
7 “ x 41.80%
the eye due to tar, compound product
8 “ x 33.59%
pitch, bitumen, or residue of any of
9 “ x 26.12% mineral oil or these substances
10 “ x 20.15% paraffin, or

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compound product of the skin or forms of radiant

or residue of these subcutaneous energy
substances tissues of the
3. Deafness – Any industrial bones or leukemia,
severe profound operation having or anemia of the
hearing loss in an excessive noise aplastic type due to
occupation where particularly in the x-rays, ionizing
employee is higher frequencies particle, radium or
exposed to other radioactive
prolonged, substances
significant noise
and vibration in his a. Acute radiation Short duration of
line of work syndrome exposure to large
4. Decompression doses of x-rays,
sickness gamma rays, alpha
a. Caissons disease Any process carried rays and beta rays
on in compressed or
rarefied air. b. Chronic radiation Chronic over-
b. Aeroembolism Any process carried syndrome exposure to x-rays
on in rarefied air with a long latent
5. Dermatitis due to The use or handling period affecting the
irritants and of chemical agents skin, blood and
sensitizers which are skin reproductive organ
irritants and
sensitizers c. Glass Blower’s Among furnace men,
6. Infections cataract glass blowers,
Pneumonia Work in connection baker, blacksmith,
Bronchitis with animals foundry workers.
Sinusitis infected with These are workers
Pulmonary TB anthrax, handling of exposed to infrared
Anthrax animal carcasses or rays.
Cellulitis parts of such 8. Poisoning and its
Conjunctivitis carcasses, including sequelae caused
(Bacterial and hides, hoofs, and by:
Viral) horns a. Ammonia
Norwalk Virus b. Arsenic or its
Salmonella Hepatitis A*, toxic compound
Leptospirosis Norwalk, Salmonella c. Benzene or its
Malaria toxic homologues;
Otitis Media nitro and
Tetanus aminotoxic
Viral Encephalitis derivatives
d. Beryllium or its All work involving
Including other toxic compounds exposure to the risk
infections resulting e. Brass, zinc or concerned
in complications nickel
necessitating f. Carbon dioxide
repatriation. g. Carbon bisulfide
7. Ionizing Exposure to x-rays, h. Carbon
radiation disease, ionizing particles of monoxide
inflammation, radium or other i. Chlorine
ulceration or radioactive j. Chrome or its
malignant disease substances or other toxic compounds

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k. Dinitrophenol or exacerbation was performance of

its homologue clearly precipitated his/her work and
l. Halogen by an unusual such symptoms and
derivatives of strain by reasons of signs persisted, it is
hydrocarbon of the the nature of his reasonable to claim
aliphatic series work a causal relationship
m. Lead or its toxic
compounds b. the strain of b. if a person is a
n. Manganese or its work that brings known hypertensive
toxic compounds about an acute or diabetic, he
o. Mercury or its attack must be should show
toxic compounds sufficient severity compliance with
p. Nitrous fumes and must be prescribed
q. Phosgene followed within 24 maintenance
r. Phosphorous or hours by the clinical medications and
its toxic signs of a cardiac doctor-
compounds insult to constitute recommended
s. Sulfur dioxide causal relationship lifestyle changes.
9. Vascular Any occupation The employer shall
disturbance in the causing repeated provide a workplace
upper extremities motions, vibrations conducive for such
due to continuous and pressure of compliance in
vibration from upper extremities accordance with
pneumatic tools or Section 1(A)
power drills, paragraph 6.
riveting machines
or hammers c. If a person who c. in a patient not
10. Vascular This is due to heavy was apparently known to have
disturbance in the straining upon the asymptomatic hypertension or
lower extremities – lifting of heavy loads before being diabetes as indicated
varicocoele causing and prolonged subjected to strain on his last PEME
pain, varicose veins standing and at work showed
resulting in ulceration. Any signs and
discoloration occupation requiring symptoms of
prolonged standing cardiac injury
and lifting of heavy during the
loads performance of his
11. Cardio-vascular work and such
events – to include symptoms and
heart attack, chest signs persisted, it is
pain (angina), reasonable to claim
heart failure or a causal
sudden death. Any relationship
of the following
conditions must be d. if a person is a
met: known
a. If the heart a. if a person who hypertensive or
disease was known was apparently diabetic, he should
to have been asymptomatic show compliance
present during before working with prescribed
employment, there showed signs and maintenance
must be proof that symptoms of cardiac medications and
an acute injury during the doctor-

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recommended Section 1(A)

lifestyle changes. paragraph 5.
The employer shall
provide a c. If a person who c. in a patient not
workplace was apparently known to have
conducive for such asymptomatic hypertension or
compliance in before being diabetes as indicated
accordance with subjected to strain on his last PEME
Section 1(A) at work showed
paragraph 5. signs and
symptoms of
e. in a patient not cardiac injury
known to have during the
hypertension or performance of his
diabetes, as work and such
indicated on his last symptoms and
PEME signs persisted, it is
12. Cerebro- reasonable to claim
vascular events All a causal
of the following relationship
conditions must be
met: d. if a person is a
known
a. If the heart a. if a person who hypertensive or
disease was known was apparently diabetic, he should
to have been asymptomatic show compliance
present during before working with prescribed
employment, there showed signs and maintenance
must be proof that symptoms of cardiac medications and
an acute injury during the doctor-
exacerbation was performance of recommended
clearly precipitated his/her work and lifestyle changes.
by an unusual such symptoms and The employer shall
strain by reasons of signs persisted, it is provide a
the nature of his reasonable to claim workplace
work a causal relationship conducive for such
compliance in
b. the strain of b. if a person is a accordance with
work that brings known hypertensive Section 1(A)
about an acute or diabetic, he paragraph 5.
attack must be should show
sufficient severity compliance with e. in a patient not
and must be prescribed known to have
followed within 24 maintenance hypertension or
hours by the clinical medications and diabetes, as
signs of a cardiac doctor- indicated on his last
insult to constitute recommended PEME
causal relationship lifestyle changes. 13. END ORGAN
The employer shall DAMAGE
provide a workplace RESULTING FROM
conducive for such UNCONTROLLED
compliance in HYPERTENSION
accordance with

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Impairment of abrasion and sea

function of the breeze
organs such as 15. Poisoning by Among workers in
kidneys, heart, cadmium battery factories,
eyes and brain who are exposed to
under the following cadmium fumes
conditions 16. Acute myeloid Secondary to
considered leukemia prolonged benzene
compensable: exposure
17. Chronic Secondary to
a. if a person is a a. if a person who lymphocytic prolonged benzene
known was apparently leukemia exposure
hypertensive or asymptomatic 18. Vitreal Caused by the strain
diabetic, he should before working hemorrhage and upon lifting of heavy
show compliance showed signs and retinal detachment loads
with prescribed symptoms of cardiac 19. Hernia. All of the following conditions
maintenance injury during the must be met:
medications and performance of
doctor- his/her work and a. The hernia should be of recent origin;
recommended such symptoms and b. Its appearance was accompanied by
lifestyle changes. signs persisted, it is pain, discoloration and evidence of a
The employer shall reasonable to claim tearing of the tissues;
provide a a causal relationship c. The disease was immediately preceded
workplace by undue or severe strain arising out of
conducive for such and in the course of employment; a
compliance in protrusion of mass should appear in the
accordance with area immediately following the alleged
Section 1(A) strain.
paragraph 20. Bronchial Asthma – all of the following
conditions must be met:
b. In a patient not b. if a person is a
known to have known hypertensive a. there is no evidence or history of asthma
hypertension has or diabetic, he before employment
the following on his should show b. the allergen is present in the working
last PEME: normal compliance with conditions
BP, normal CXR prescribed c. sensitivity test to allergens in the
and ECG/treadmill maintenance working environment should yield positive
medications and results
doctor- d. a provocative test should show positive
recommended results
lifestyle changes. 21. Osteoarthritis. Any occupation
The employer shall involving:
provide a workplace
conducive for such a. Joint strain from carrying heavy loads,
compliance in or unduly heavy physical labor, as among
accordance with laborers and mechanics;
Section 1(A) b. Minor or major injuries to the joint;
paragraph 6. c. Excessive use or constant strenuous
14. Cataract and Caused by usage of a particular joint, as among
pterygium prolonged exposure sportsmen, particularly those who have
to UV light or engaged in the more active sports
welding, wind activities;

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d. Extreme temperature changes Filipino Seafarers On-Board Ocean-Going

(humidity, heat and cold exposures) and; Ships)
e. Faulty work posture or use of vibratory
tools V. MANAGEMENT PREROGATIVE
22. Peptic Ulcer
Under the doctrine of management
Any occupation involving prolonged prerogative, an employer possesses the
emotional or physical stress, as among inherent right to regulate, according to its
professional people, transport workers and "own discretion and judgment, all aspects of
the like. employment, including:
23. Viral hepatitis
1. hiring;
In addition to working conditions already 2. work assignments;
listed under Philippine Decree No. 626, as 3. working methods
27 amended, any occupation involving 4. time
exposure to a source of infection through 5. place and manner of work
ingestion of water, milk or other foods 6. work supervision
contaminated with hepatitis virus; 7. transfer of employees
provided that the physician determining 8. lay-off of workers, and discipline,
the causal relationship between the dismissal
employment and the illness should be able 9. recall of employees.
to indicate whether the disease of the
afflicted worker manifested itself while he This wide sphere of authority to regulate its
was so employed, knowing the incubation own business may only be curbed by the
period thereof. limitations imposed by labor laws and the
24. Asbestosis. All of the following
principles of equity and substantial justice.
conditions must be met:
The importance of discouraging interference
a. The seafarer must have been exposed is necessary to ensure that the employer may
to Asbestos dust in the work place, as duly in turn expect good performance, satisfactory
certified to by the employer, or by a work, diligence, good conduct and loyalty
medical institution, or competent medical from its employees. (Magante v. Wellcare
practitioner acceptable to or accredited by Clinics and Lab, Inc., G.R. No. 242498
the System;
(Notice), October 6, 2021)
b. The chest X-ray report of the employee
must show findings of asbestos or Employers enjoy a wide sphere of authority
asbestosrelated disease, e.g. pleural
to regulate its own business, subject to
plaques, pleural thickening, effusion,
neoplasm and interstitial fibrosis; and limitations imposed by labor laws and the
c. In case of ailment is discovered after the principles of equity and substantial justice.
seafarer’s retirement/separation from the Thus, an employer may determine work
company, the claim must be filed with the assignments and corollarily, transfer or
System within three (3) years from reassign employees around various areas of
discovery. its business operation according to its sound
judgment, provided that the transfer is not
NOTE: Death or disability which is directly
caused by sexually transmitted disease or unreasonable, inconvenient, prejudicial, or
arose from complications thereof shall not be involve a demotion in rank or a diminution of
compensable nor shall be entitled to the salaries, benefits, and other privileges. (Ibid)
benefits provided in this Contract. (Secs. 32-
A, 2010 Standard Terms and Conditions Rights of an employer in the exercise of
Governing the Overseas Employment of management prerogative:

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1. Right to discipline; Bona Fide Occupational Qualifications

2. Right to dismiss; (BFOQ) refers to the standard which
3. Right to promulgate rules and employers are allowed to consider in making
regulations; decisions about hiring or retention of
4. Right to impose penalty; proportionality employees (Ungos Ill, Labor Law 3: The
rule; Fundamentals of Labor Law Review, 2021, p.
5. Right to determine who to punish; 490)
6. Right to choose which penalty to
impose; and Employment in particular jobs may not be
7. Right to impose heavier penalty than limited to persons of a particular sex, religion,
what the company rules prescribe. or national origin unless the employer can
(Chan, Bar Reviewer on Labor Law, show that sex, religion, or national origin is
2019, p. 797) an actual qualification for performing the job.
(Yrasuegui V. Pilippine Airlines, Inc., G.R. No.
It should be emphasized that absent showing 168081, October 17, 2008)
of illegality, bad faith, or arbitrariness, courts
often decline to interfere in employers' General rule: Employment in particular jobs
legitimate business decisions considering that may not be limited to persons of a particular
our labor laws also discourage intrusion in sex, religion or national origin.
employers' judgment concerning the conduct
of their business. (Bognot vs. Picnic The BFOQ Exception applies upon hire
International, G.R. No. 212471, March 11, and while performing the job
2019)
These "qualifying standards" are norms that
Management should not be hampered in the apply prior to and after an employee is hired.
operations of its business. (Manila Electric
Company vs. Quisumbing, G.R. No. 127598, They apply prior to employment because
February 22, 2000) these are the standards a job applicant must
initially meet in order to be hired. They apply
The law authorizes neither the oppression after hiring because an employee must
nor the self-destruction of the employer in continue to meet these standards while on
protecting the rights of the working class. the job in order to keep his job. Under this
perspective, a violation is not one of the
"Labor laws are not one-sided. Although the faults for which an employee can be
law bends over backwards to accommodate dismissed pursuant to pars.
the needs of the working class, not every
labor dispute shall be decided in favor of (a) to (d) of Article 282; the employee can be
labor." (Lagamayo v. Cullinan Group, Inc., dismissed simply because he no longer
G.R. No. 227718, November 11, 2021) "qualifies" for his job irrespective of whether
or not the failure to qualify was willful or
Management has a wide latitude to conduct intentional. (Yrasuegui v. Philippine Airlines,
its own affairs, so long as it exercises its Inc., G.R. No. 168081, October 17, 2008)
management prerogative in good faith for the
advancement of its interest and not to defeat Reasonable Necessity Rule
or circumvent employee rights under the law
or valid agreements. Its management In order to justify a BFOQ, the employer must
prerogative must likewise not be used in a show that:
way that is unreasonable, inconvenient, or
prejudicial to the employees involved. (Asian 1. The employment qualification is
Marine Transport Corp. V. Caseres, G.R. No. reasonably related to the essential
212082, November 24, 2021) operation of the job involved; and
2. There is factual basis for believing that
A. Occupational Qualifications all or substantially all persons meeting

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the qualification would be unable to schedules. Given the cramped cabin space
properly perform the duties of the job and narrow aisles and emergency exit doors
(Star Paper Corporation, et. al. vs. of the airplane, any overweight cabin
Simbol, et. al., G.R. No. attendant would certainly have difficulty
164774, 2006) navigating the cramped cabin area.
(Yrasuegui vs. Philippine Airlines, Inc.,
Meiorin Test G.R.No. 168081, October 17, 2008)

1. In determining whether an employment f. On account of civil status

policy is justified, the employer must
show that it adopted the standard for a A company policy which prohibits its
purpose rationally connected to the employees from marrying employees of a
performance of the job; rival company is reasonable considering that
2. the employer must establish that the its purpose is the protection of the interests
standard is reasonably necessary to the of the company against possible competitor
accomplishment of that work-related infiltration on its trade secrets and
purpose; and procedures. The company has a right to
3. the employer must establish that the guard its trade secrets and marital or
standard is reasonably necessary in personal relationships might compromise the
order to accomplish the legitimate work- interests of said company. (Duncan
related purpose. Association of Detailman-PTGWTO vs. Glaxo
(Yrasuegui v. Pilippine Airlines,Inc., Wellcome Philippines, Inc., G.R. No. 162994,
G.R. No. 168081, October 17, 2008) September 17, 2004).

Instances of a valid exercise of BFOQ: Instances of an invalid exercise of

BFOQ
1. Mandatory retirement ages for bus a. On account of civil status
drivers and airplane pilots for safety
reasons It shall be unlawful for an employer to require
2. Churches requiring members of its clergy as a condition of employment or continuation
to be of a certain denomination and may of employment that a woman employee shall
lawfully bar from employment anyone not get married, or to stipulate expressly or
who is not a member; tacitly that upon getting married, a woman
3. Use of models and actors for the purpose employee shall be deemed resigned or
of authenticity or genuineness; separated, or to dismiss, discharge,
4. Requirement of emergency personnel to discriminate or otherwise prejudice a woman
be bilingual, judged on the language employee merely by reason of her marriage
competency (Chan, Bar Reviewer on (Art. 134, Labor Code, as amended)
Labor Law, 2019, p.813)
5. On account of physical appearance. The petitioners' sole contention that "the
company did not just want to have two (2) or
The weight standards of PAL show its effort more of its employees related between the
to comply with the exacting obligations third degree by affinity and/or consanguinity"
imposed upon it by law as a common carrier. is unjustified. The policy is premised on the
The primary objective of PAL in the mere fear that employees married to each
imposition of the weight standards for cabin other will be less efficient. If we uphold the
crew is flight safety. questioned rule without valid justification, the
employer can create policies based on an
Truly, airlines need cabin attendants who unproven presumption of a perceived danger
have the necessary strength to open at the expense of an employee's right to
emergency doors, the agility to attend to security of tenure. The failure to prove a
passengers in cramped working conditions legitimate business concern in imposing the
and the stamina to withstand grueling flight questioned policy cannot prejudice the

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employee's right to be free from arbitrary The employer has the prerogative to
discrimination based upon stereotypes of prescribe the standards of productivity which
married persons working together in one may be used as:
company. (Star Paper Corporation, et. al. vs.
Simbol, et. al., G.R. No. 164774, 2006) 1. Incentive scheme - Employees who
surpass the productivity standards or
The employer imposed on Cadiz the condition quota are usually given additional
that she should subsequently contract benefits; and
marriage with her then boyfriend for her to 2. Disciplinary scheme - Employees may
be reinstated. be sanctioned or dismissed for failure to
According to the employer, this is "in meet the productivity standards or
consonance with the policy against quota. (Chan, Bar Reviewer on Labor
encouraging illicit or common-law relations Law, 2019, p. 807)
that would subvert the sacrament of
marriage." Such condition is coercive, Failure to meet the sales quota assigned to
oppressive and discriminatory. There is no each of them constitute a just cause of their
rhyme or reason for it. It forces Capiz to dismissal, regardless of the permanent or
marry for economic reasons and deprives her probationary status of their employment.
of the freedom to choose her status, which is
a privilege that inheres in her as an intangible Failure to observe prescribed standards of
and inalienable right. (Capin-Cadiz vs. Brent work, or to fulfill reasonable work
Hospital and Colleges, Inc., G.R. No. 187417, assignments due to inefficiency may
February 24, 2016) constitute just cause for dismissal. Such
inefficiency is understood to mean failure to
b. On account of age attain work goals or work quotas, either by
failing to complete the same within the
The prerogative to choose whom to hire is allotted reasonable period, or by producing
subject to the limitations imposed by the unsatisfactory results.
Anti-Age Discrimination in Employment Act
which forbids employers from placing a job This management prerogative of requiring
advertisement which suggests age standards may be availed of so long as they
preference, or declining an applicant for are exercised in good faith for the
employment simply because of age, among advancement of the employer's interest.
others. However, employers can validly set (Aliling v. Feliciano, G.R. No. 185829, April
age limitations when age is a bona fide 25, 2012)
occupational qualification (Ungos III, Labor
Law 3: The Fundamentals of Labor Law In order for the quota imposed to be
Review, 2021, p. 490). considered a valid productivity standard and
thereby validate a dismissal, management's
No employer shall discriminate against any prerogative of fixing the quota must be
person in respect to terms and conditions of exercised in good faith for the advancement
employment on account of his age (Art. 138, of its interest. (Ibid)
R.A. No. 9231)
Gross inefficiency warrants the dismissal of
B. Productivity Standards an employee. It is the prerogative of the
school to set high standards of efficiency for
An employer is entitled to impose productivity its teachers since quality education is a
standards for its workers, and in fact, non- mandate of the Constitution. As long as the
compliance may be visited with a penalty standards fixed are reasonable and not
even more severe than demotion. (Aliling v. arbitrary, courts are not at liberty to set them
Feliciano, G.R. No. 185829, April 25, 2012) aside. Several pieces of evidence, in this
case, point to numerous instances when the
teacher failed to observe the prescribed

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standards of performance set by the school In appropriate cases such as in the case of
in several areas of concern, especially in her workers paid by results who are considered
Filipino classes. Thus, the school validly "non-time" workers and in the case of
terminated her employment (International homeworkers, DOLE intervenes, motu
School Manila vs. International School proprio or upon the initiative of any
Alliance of Educators, G.R. No. 167286, interested party, to establish productivity
February 5, 2014) standards. (Chan, Bar Reviewer on Labor
Law, 2019, p. 808)
The CHR Director, on two occasions, gave
wrong information regarding issues on leave Determination of productivity
and holiday pay which generated confusion standards
among employees in the computation of
salaries and wages. Due to the nature of her The standard output rates or piece rates shall
functions, she is expected to have strong be determined through any of the following
working knowledge of labor laws and procedures:
regulations. She also received a less than par
performance in her performance evaluation, 1. Time and motion studies;
receiving deficient marks and low ratings on 2. An individual/collective agreement
areas of problem solving and decision between the employer and its workers as
making, interpersonal relationships, planning approved by the DOLE Secretary or his
and organization, project management and authorized representative; or
integrity notwithstanding an overall passing 3. Consultation with representatives of
grade. Thus, the company has sufficient and employers' and workers' organization in
valid reasons in terminating her services a tripartite conference called by the
(Reyes-Rayel vs. Philippine Luen Thai DOLE Secretary (Chan, Bar Reviewer on
Holdings, Corporation/L&T International Labor Law, 2019, р. 809)
Group Philippines, Inc., G.R. No. 174893, July
11, 2012) Time and motion study is the more scientific
and preferred method. The basis for the
The employee's failure to observe simple establishment of rates for piece, output or
procedure resulted in delays in the delivery of contract work is the performance of an
output, client dissatisfaction and additional ordinary worker of minimum skill or ability.
cost on the part of the company. Thus, (Section 5(b), Rule VII-A, Book III, Rules to
dismissal is valid. (Realda vs. New Age Implement the Labor Code, as amended)
Graphics, Inc., G.R. No. 192190, April 25,
2012) C. Change of Working Hours

The employees' failure to meet the sales Employers have the prerogative to
quota assigned to each of them constitute a change working hours.
just cause of their dismissal, regardless of the
permanent or probationary status of their Employers have the freedom and
employment. prerogative, according to their discretion and
best judgment, to regulate and control the
This management prerogative of requiring time when workers should report for work
standards may be availed of so long as they and perform their respective functions.
are exercised in good faith for the (Philippine Airlines, Inc. vS. NLRC, G.R. No.
advancement of the employer's interest. 115785, August 4, 2000)
(Buiser vs. Leogardo, Jr., G.R. No. L-63316,
July 31, 1984) It is a management prerogative, whenever
exigencies of the service require, to change
DOLE may intervene to establish the working hours of its employees as long as
productivity standards such prerogative is exercised in good faith
and not for the purpose of defeating or

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circumventing the rights of the employees The transfer or assignment of employees in

(Union Carbide Labor Union vs. Union good faith is one of the acknowledged valid
Carbide, G.R. No. L-41314, November 13, exercises of management prerogative "and
1992) will not, in and of itself, sustain a charge of
constructive dismissal." (Asian Marine
In a case, Section 1, Article IV of the Transport Corp. v. Caseres, G.R. No. 212082,
collective bargaining agreement provides for November 24, 2021)
a 7-hour work schedule from Mondays to
Saturdays; and Section 2, Article XI provides The right of employees to security of tenure
that the employer has the prerogative to does not give them vested rights to their
change the existing methods and their positions to the extent of depriving
scheduled working hours. In accordance with management of its inherent prerogative to
such provision, the employer changed the change their assignments or to transfer
working hours of the monthly-paid them. (Mendoza vs. Rural Bank of Lucban,
employees from 9:00am-5:00pm to 1:00pm- G.R. No. 155421, July 7, 2004)
8:00pm every Tuesday and Thursday, when
horse races are held. It is the employer’s prerogative, based on its
assessment and perception of its employee’s
In rationalizing such change, the employer qualifications, aptitudes, and competence, to
argued that when the CBA was signed, the move them around in the various areas of its
horse races started at 10:00am. When the business operations in order to ascertain
schedule was moved to a later time, the where they will function with maximum
employer was left with no choice but to also benefit to the company. (Pharmacia and
change the working hours of its employees. Upjohn, Inc. vs. Albayda, Jr., G.R. No.
172724, August 23, 2010)
Thus, the Court held that such exercise of
management prerogative is justified. (Manila Transfer Constituting Constructive
Jockey Club Employees Labor Union - Dismissal
PTGWO vs. Manila Jockey Club, Inc., G.R. No.
167760, March 7, 2007) A transfer is tantamount to constructive
dismissal when it is "unreasonable, unlikely,
Interphil Laboratories had to adopt a inconvenient, impossible, or prejudicial to the
continuous 24-hour work daily schedule by employee." The employer has the burden of
reason of the nature of its business and the proving that the transfer was for just and
demands of its clients. It was established that valid grounds, and that it was compelled by a
the employees adhered to the said work genuine business necessity. Failure to
schedule since 1988. The employees are overcome this burden of proof taints the
deemed to have waived the eight-hour transfer, making it constructive dismissal.
schedule since they followed, without any (Asian Marine Transport Corp. V. Caseres,
question or complaint, the two-shift schedule G.R. No. 212082, November 24, 2021)
while their CBA was still in force and even
prior thereto. The two-shift schedule In case of a constructive dismissal, the
effectively changed the working hours employer has the burden of proving that the
stipulated in the CBA. As the employees transfer and demotion of an employee are for
assented by practice to this arrangement, a valid and legitimate grounds such as
they cannot now be heard to claim that the genuine business necessity. Particularly, for a
overtime boycott is justified because they transfer not to be inconvenient, or prejudicial
were not obliged to work beyond eight hours. to the employee; nor does it involve a
(Interphil Laboratories Employees Union V. demotion in rank or diminution of his salaries,
Interphil Laboratories, Inc., G.R. No. 142824, privileges, and other benefits. Failure of the
December 19, 2001) employer to overcome this burden of proof,
the employee's demotion shall no doubt be
D. Transfer of Employees tantamount to unlawful constructive

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dismissal. (Peckson v. Robinson Supermarket (Abbott Laboratories [Phils], Inc. vs. NLRC,
Corporation, G.R. No. 198534, July 03, 2013) G.R. No. L-76959, October 12, 1987)

Transfer Must Not Result to Demotion/ Management prerogative includes the right to
Diminution transfer employees to any branch, which
their employees also agreed to in their
Provided there is no demotion in rank or application for employment, the employer's
diminution of salary, benefits and other right to transfer should not be taken in
privileges and not motivated by isolation, but rather, in conjunction with the
discrimination or made in bad faith or established company practice of notifying the
effected as a form of punishment or employees of the transfer first before sending
demotion without sufficient cause. them abroad for training. (Asian Marine
(Pharmacia and Upjohn, Inc. vs. Albayda, Jr., Transport Corp. v. Caseres, G.R. No. 212082,
G.R. No. 172724, August 23, 2010) November 24, 2021)

Demotion involves a situation in which an b. Transfer to avoid conflict of interest

employee is relegated to a subordinate or Tecson was transferred to another sales area
less important position constituting a by Glaxo, a pharmaceutical company with
reduction to a lower grade or rank, with a trade secrets, when the former married an
corresponding decrease in duties and employee of the competitor company, in
responsibilities, and usually accompanied by accordance with the policy which prohibits
a decrease in salary. (Isabela-1 Electric the same.
Coop., Inc. vs. Del Rosario, Jr., G.R. No.
226369, July 17, 2019) Considering that Glaxo has trade secrets to
protect from competitor company, the
2 Kinds of Transfer: transfer of Tecson should not be considered
1. A transfer from one position to another as a constructive dismissal. (Duncan
of equivalent rank, level or salary, Association of Detailman-PTGWO vs. Glaxo
without a break in the service; or Wellcome Philippines, Inc., G.R. No. 162994,
2. A transfer from one office to another September 17, 2004)
within the same business establishment
(Chan, Bar Reviewer on Labor Law, The employer must be able to show that the
2019, p. 800) transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it
Instances of a Valid Transfer involve a demotion in rank or diminution of
his salaries, privileges and other benefits. The
a. Consensual transfer anywhere in the decision of the company to transfer the
Philippines employee pending investigation was a valid
exercise of management prerogative to
The employee consented to be transferred discipline its employees. The transfer, while
anywhere in the Philippines in his employee's incidental to the charges against the
employment application and contract of employee, was not meant as a penalty, but
employment. This consent is binding to him. rather as a preventive measure to avoid
Thus, the transfer is valid. (Pharmacia and further loss of sales and the destruction of
Upjohn, Inc. vs. Albayda, Jr., G.R. No. the company's image and goodwill (Endico
172724, August 23, 2010) vs. Quantum Foods Distribution Center, G.R.
No. 161615, January 30, 2009)
An employee has no valid reason to disobey
the order of transfer when he had tacitly C. Reassignments pending
given his consent when he acceded to the investigation
policy of hiring sales staff who are willing to
be assigned anywhere in the Philippines, Reassignments made pending investigation
which is demanded by petitioner's business. of irregularities allegedly committed by an

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employee fall within the ambit of company's policy to avoid connivance among
management prerogative. The transfer, while the employees and thus, valid (Cinema,
incidental to the pending charges, was not Stage & Radio Entertainment Free Workers
meant to be a penalty, but rather a vs. CIR, G.R. No. L-19879, December 17,
preventive measure to avoid further damage 1966)
to the company (Duldulao vs. CA, G.R. No.
164893, March 1, 2007) g. Transfer based on breach of trust and
confidence
d. Transfer due to business transition or
corporate reorganization Breach of trust and confidence as a ground
for reassignment must be related to the
The transfer was valid since the integration performance of the duties of the employee
and transfer was a necessary consequence of such as would show him to be thereby unfit
the business transition or corporation to discharge the same task. The employee
reorganization that had been undertaken, having lost the employer's trust and
which had the characteristics of a corporate confidence, the company had the right to
spin-off. The spin-off and the attendant transfer the former to ensure that she would
transfer of employees are legitimate business no longer have access to the company's
interests. The transfer/absorption of confidential files (Ruiz vs. Wendel Osaka
employees from one company to another, as Realty Corp., G.R. No. 189082, July 11, 2012)
successor employer, was valid as long as the
transferor was not in bad faith and the Refusal to obey a valid transfer order
employees absorbed by a successor- constitutes willful disobedience of a
employer enjoy the continuity of their lawful order of an employer
employment status and their rights and
privileges with their former employer Refusal to obey a valid transfer order
(Marsman & Company, Inc. vs. Sta. Rita, G.R. constitutes willful disobedience of a lawful
No. 194765, April 23, 2018) order of an employer. Refusal to comply with
such orders on the ground of parental
e. In cases when an employee's position obligations, additional expenses, and the
is abolished due to corporate anguish he would suffer is assigned away
restructuring from his family is invalid Allied Banking
Corporation vs. CA, G.R. No. 144412,
The employee's transfer from her old position November 18, 2003)
to the new one is a valid management
prerogative exercised in the exigency of However, this management prerogative
service since there is no significant disparity cannot be used as a subterfuge by the
between the former position to that of the employer to rid himself of an undesirable
new one that amounts to a demotion worker (Yuco Chemical Industries, Inc. vs.
(Benguet Electric Cooperative vs. Fianza, Ministry of Labor and Employment, G.R. No.
G.R. No. 158606, March 9, 2004) 75656, May 28, 1990)
The employer must be able to show that such
f. Transfer as a standard practice transfer is not tantamount to constructive
dismissal. (Blue Dairy Corporation vs. NLRC,
Change of assignment by rotation from one G.R. No. 129843, September 14, 1999)
shift to another as a standard practice is a
valid transfer especially if it is adopted Burden of proof
precisely to avoid any discrimination among
the employees (Castillo vs. CIR, G.R. No. L- Employers have to prove that an employee's
26124, May 29, 1971) transfer is not tantamount to constructive
dismissal. (Pharmacia and Upjohn, Inc. vs.
The transfer of employees to other theaters Albayda, Jr., G.R. No. 172724, August 23,
was routine in nature and part of the 2010)

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aspects of employment, including the

The employer's unexplained failure and delay prerogative to instill discipline in its
in the submission of evidence before the employees and to impose penalties, including
Labor Arbiter is intolerable and cannot be dismissal, upon erring employees. x The
permitted. Thus, it failed to sufficiently Labor Code does not excuse employees from
support that the transfer was for a legitimate complying with valid company policies and
purpose (Misamis Oriental II Electric Service reasonable regulations for their governance
Cooperation [MORESCO II] vs. Cagalawan, and guidance. (Ibid)
G.R. No. 175170, September 5, 2012).
Among the employer's management
Instances wherein transfer may be prerogatives is the right to prescribe
validly refused: reasonable rules and regulations necessary
or proper for the conduct of its business or
a. If the transfer is consequential to a concern, to provide certain disciplinary
promotion measures to implement said rules and to
No law compels an employee to assure that the same would be complied
accept a promotion (Dosch vs. NLRC, with. (St. Luke's Medical Center, Inc. Vs.
G.R. No. L-51182, July 5, 1983) Sanchez, G.R. 212054, March 11, 2015)

Such refusal cannot be the basis for Suspension for three months is a valid and
the respondents' dismissal from reasonable exercise of management
service (Echo 2000 Commercial prerogative since mishandling the delivery of
Corporation vs. Obrero Filipino-Echo highly flammable petroleum products could
2000 Chapter-CLO). result in enormous damage to properties and
loss of lives at the terminal and surrounding
b. If the transfer is an overseas areas. (Deles, Jr. vs. NLRC, G.R. No. 121348,
assignment The transfer of an March 9, 2000)
employee to an overseas post cannot
be likened to a transfer from one city Dismissal should only be a last resort, a
to another (Allied Banking penalty to be meted only after all the relevant
Corporation vs. CA, G.R. No. 144412, circumstances have been appreciated and
November 18, 2003) evaluated with the goal of ensuring that the
ground for dismissal was not only serious but
E. Discipline of Employees true. The cause of termination, to be lawful,
must be a serious and grave malfeasance to
In general, management has the prerogative justify the deprivation of a means of
to discipline its employees and to impose livelihood. (Dongon vs. Rapid Movers and
appropriate penalties on erring workers Forwarders Co., Inc., G.R. No. 163431,
pursuant to company rules and regulations." August 28, 2013)
(Empas v. Mariwasa Siam Ceramics, Inc.,
G.R. No. 246176 (Notice), December 7, 2021) Discipline Must be Fair and Reasonable
This right to discipline employees is subject
Specific provision on the application of to reasonable regulation by the State in the
company rules in disciplinary actions is exercise of its police power. Accordingly, the
paramount over the general provision on finding that an employee violated company
grievance procedures.(Visayan Electric Co. rules and regulations is subject to scrutiny by
Employees Union [VECEU] v. Visayan Electric the Court to determine if the dismissal is
Co., Inc., G.R. No. 234556 (Notice), April justified and, if so, whether the penalty
28,2021) imposed is commensurate to the gravity of
his offense. (Holcim Philippines, Inc. v. Obra,
This is consistent with jurisprudential rulings G.R. No. 220998, August 8, 2016)
supporting an employer's free reign and
"wide latitude of discretion to regulate all

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Quantum of Proof Required to Impose c. When the grant is mandated by law

Disciplinary Action (Ungos III, Labor Law 3: The
Fundamentals of Labor Law Review,
Substantial proof is a sufficient basis for the 2021, p. 175-176)
imposition of any disciplinary action upon the
employee. The standard of substantial Exception to the exception
evidence is satisfied where the employer has
reasonable ground to believe that the Bonus is not demandable when employer can
employee is responsible for the misconduct no longer afford to pay.
that renders the latter unworthy of the trust
and confidence demanded by his or her An employer cannot be forced to distribute
position. (Ruiz vs. Wendel Osaka Realty bonuses which it can no longer afford to pay.
Corp., G.R. No. 189082, July 11, 2012)
To hold otherwise would be to penalize the
F. Grant of Bonuses and Other Benefits employer for his past generosity. (Producer's
Bank of the Philippines vs. NLRC, G.R. No.
A bonus is a gratuity or act of liberality of the 100701, March 28, 2001)
giver which the recipient has no right to
demand as a matter of right. No company should be compelled to act
liberally and confer upon its employees'
It is an amount granted and paid to an additional benefits over and above those
employee for his industry and loyalty which mandated by law when it is plagued by
contributed to the success of the employer's economic difficulties and financial
business and made possible for the losses.(Manila Banking Corporation vs. NLRC,
realization of profits. (Producer's Bank of the G.R. No. 83588, September 27, 1997)
Philippines vs. NLRC, G.R. No. 100701, March
28, 2001) Productivity Bonus vs. Sales
Commission
Bonus is NOT a demandable and
enforceable obligation
The grant of a bonus is basically a Productivity Sales Commission
management prerogative which cannot be Bonus
forced upon the employer who may not be
Generally tied to the Intimately related to
obliged to assume the onerous burden of
productivity or profit or directly
granting bonuses or other benefits aside from
generation of the proportional to the
the employee's basic salaries or wages.
employer corporation extent or energy of
(Manila Electric Co. v. Argentera, G.R. Nos.
an employee’s
224729 & 225049, February 8, 2021)
endeavors
When Demandable
Not directly Commissions are
dependent on the paid upon the
A bonus, however, becomes a demandable or
extent an individual specific results
enforceable obligation when:
employee exerts achieved by the
himself salesman-employee
a. it is made part of the wage or salary or
compensation of the employee. Something extra for It is a percentage of
b. It is stipulated in the collective which no specific the sales closed by a
bargaining agreement or those granted additional services salesman and
as company practice are demandable. are rendered by any operate as an
(Manila Electric Co. v. Argentera, G.R. particular employee integral part of such
Nos. 224729 & 225049, February 8, salesman’s basic
2021) pay/wage

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consistent with the equitable principle that

Not legally Legally demandable
“no one shall be unjustly enriched or
demandable, absent
benefited at the expense of another.” (Milan
a contractual
v. NLRC, G.R. No. 202961, 04 Feb. 2015)
undertaking to pay it
Payment of Final Pay and Issuance of
Bonus is forfeited when employee is Certificate of Employment
guilty of serious misconduct or
administrative charge 1. An employee’s final pay must be
released within thirty (30) days from the
Employers may not be compelled to award a date of separation or termination of
bonus to private respondents whom it found employment, unless there is a more
guilty of serious misconduct. (Philippine favorable company policy, individual or
National Construction Corporation vs. NLRC, collective agreement thereto; and
G.R. No. 128345,May 18, 1999) 2. a Certificate of Employment be released
by the employer within three (3) days
In consonance with existing company policy, from the time it was requested by the
the 1988 bonus should be forfeited in favor employee. (D.O. 06-20)
of the Bank when records show that in 1988,
the employee was found guilty of an Final Pay
administrative charge. (Republic Planters
Bank (now known as PNB-Republic Bank) vs. Final pay refers to the sum or totality of all
NLRC, G.R. No. 117460, January 6, 1997) the wages or monetary benefits due the
employee, regardless of the cause of
G. Clearance Process separation from employment, including but
not limited to:
Requiring clearance before the release of last
payments to the employee is a standard 1. Unpaid earned salary of the employee;
procedure among employers, whether public 2. Cash conversion of unused Service
or private. Clearance procedures are Incentive Leave (SIL) pursuant to Art.
instituted to ensure that the properties, real 95, LC;
or personal, belonging to the employer but 3. Cash conversions of remaining unused
are in the possession of the separated vacation, sick, or other leaves pursuant
employee, are returned to the employer to company policy or individual or
before the employee’s departure. (Milan v. collective agreement, if applicable;
NLRC, G.R. No. 202961, 04 Feb. 2015) 4. Pro-rated 13th month pay (Pursuant to
PD 851);
General Rule: Employers are prohibited 5. Separation pay (Art. 298-299, LC);
from withholding wages from employees. 6. Retirement pay (Art. 302, LC);
(Art. 116, LC) 7. Income Tax claim for the excess taxes
withheld;
Exception: Employers may institute 8. Other types of compensation stipulated
clearance procedures before the release of in an individual or collective bargaining
wages as authorized by law or regulations agreement, if any; and
issued by the SOLE. Withholding of payment 9. Cash Bond/s or any kind of deposit/s due
by the employer does not mean that the for return to the employee, if any.
employer may renege on its obligation to pay
employees their wages, termination Certificate of Employment
payments, and due benefits. The employees’
benefits are also not being reduced. It is only Certificate of Employment refers to a
subjected to the condition that the certificate specifying the dates of an
employees return properties properly employee’s engagement and the termination
belonging to the employer. This is only

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of his/her employment and the type or types Article 1409 of the New Civil Code, those
of work in which he/she is employed. contracts whose cause, object or purpose is
The certificate of employment shall be issued contrary to law, morals, good customs, public
by the employer within three (3) days from order or public policy are inexistent or void
the time of request by the employee. from the beginning.

Enforcement Mechanism Respondent, as employer, is burdened to

establish that a restrictive covenant barring
Any issue or dispute arising out of the an employee from accepting a competitive
payment of final pay or the issuance of employment after retirement or resignation is
certificate of employment shall be filed before not an unreasonable or oppressive, or in
the nearest DOLE Regional/Provincial/ Field undue or unreasonable restraint of trade,
Office which has jurisdiction over the thus, unenforceable for being repugnant to
workplace for conciliation and subject to public policy. (Ibid)
DOLE’s existing enforcement mechanism.
Non-Compete or Non-Involvement
H. Post-Employment Restrictions Clause

The employer may insist on an agreement The employer and the employee are free to
with the employee, for certain restrictions to stipulate in an employment contract
take effect after the termination of the prohibiting the employee within a certain
employer-employee relationship. period from and after the termination of his
employment, from:
The following stipulations in an employment
contract are illustrative of the prohibitions a. Starting a similar business, profession or
normally agreed upon by the employer and trade; or
the employee: b. Working in an entity that is engaged in a
similar business that might compete with
1. Non-Compete Clause; the employer.
2. Confidentiality and Non-Disclosure
Clause; A non-compete clause is not necessarily void
3. Non-Solicitation Clause; for being in restraint of trade as long as there
4. Non-Recruitment or Anti-Piracy Clause; are reasonable limitations as to time, place
and and trade (Chan, Bar Reviewer on Labor Law,
5. Inventions Assignment Clause 2019, p. 822)
(Intellectual Property Clause) (Chan, Bar
Reviewer on Labor Law, 2019, p. 822) Confidentiality and Non-Disclosure
Clause
A post-retirement competitive employment
restriction is designed to protect the It reflects the commitment of the employee
employer against competition by former that he shall not, either during the period of
employees who may retire and obtain his employment with the employer or at any
retirement or pension benefits and, at the time thereafter, use or disclose to any
same time, engage in competitive person, firm or corporation any information
employment. (Rivera vs. Solidbank, G.R. No. concerning the business or affairs of his
163269, April 19, 2006) employment, for his own benefit or to the
detriment of the employer. This clause may
The petitioner retired and received also cover Former Employer Information and
₽963,619.28 under the Special Retirement Third-Party Information (Chan, Bar Reviewer
Program from the respondent. However, on Labor Law, 2019, р. 822).
petitioner is not proscribed, by waiver or
estoppel, from assailing the post-retirement Non-Solicitation Clause
competitive employment ban since under

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A non-solicitation agreement restricts

someone from soliciting or approaching Factors to be considered by the trial court in
employees or customers of a business to determining whether the contract is
protect the business interests of the reasonable or not
employer. If the restriction is on recruiting
employees, it may be denominated as a "non- a. Whether the covenant protects a
poaching agreement" or "non-recruitment legitimate business interest of the
clause" (Chan, Bar Reviewer on Labor Law, employer;
2019, p. 822) b. Whether the covenant creates an undue
burden on the employee;
Non-Recruitment or Anti-Piracy Clause c. Whether the covenant is injurious to the
public welfare;
It prohibits the recruitment by the employee d. Whether the time and territorial
of personnel or employees of the employer limitations contained in the covenant are
for a certain period after his termination of reasonable; and
employment, either on his own account or in e. Whether the restraint is reasonable from
conjunction with or on behalf of any other the standpoint of public policy (Rivera
person (Chan, Bar Reviewer on Labor Law, vs. Solidbank, supra)
2019, p. 822).
VI. POST-EMPLOYMENT
Inventions Assignment Clause
(Intellectual Property Clause)
A. Termination of Employment by
It requires the employee, within a certain Employer
period, in confidence to the employer and its
subsidiaries and to assign all inventions, 1. Just Causes
improvement, design, original works of 1. Serious Misconduct or Willful
authorship, formulas, processes, Disobedience (Insubordination)
compositions of matter, computer software 2. Gross & Habitual Neglect of Duties
programs, databases, mass works and trade 3. Fraud/Willful Breach of Trust
secrets, whether or not patentable, 4. Commission of A Crime
copyrightable or protectable as trade secrets 5. Analogous cases
(collectively the "Inventions"), which the
employee may solely or jointly conceive or An employer may terminate an employment
develop or reduce to practice, or cause to be for any of the following causes:
conceived or developed or reduced to i. Serious misconduct or willful
practice, during the period of his employment disobedience by the employee of the
with the employer (Chan, Bar Reviewer on lawful orders of his employer or
Labor Law, 2019, p. 822) representative in connection with his
work;
Two principal grounds on which the doctrine ii. Gross and habitual neglect by the
is founded that a contract in restraint of trade employee of his duties;
is void as against public policy: iii. Fraud or willful breach by the employee
of the trust reposed in him by his
1. The injury to the public by being employer or duly authorized
deprived of the restricted party's representative;
industry; and iv. Commission of a crime or offense by the
2. The injury to the party himself by being employee against the person of his
precluded from pursuing his occupation, employer or any immediate member of
and thus being prevented from his family or his duly authorized
supporting himself and his family (Rivera representatives; and
vs. Solidbank, G.R. No. 163269, April 19, v. Other causes analogous to the foregoing
2006) (Article 297, Labor Code, as amended).

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revolting circumstances as to shock the

An employer cannot be compelled to continue common sense of decency (Narag vs. Narag.
employing an employee guilty of acts inimical A.C. No. 3405, June 29, 1998)
to the employer's interest, justifying loss of
confidence in him. A company has the right Open and Willful Disobedience
to dismiss its erring employees as a measure For willful disobedience to be a valid cause
of self-protection against acts inimical to its for dismissal, these two elements must
interest. (Maula v. Ximex Delivery Express, concur:
Inc., G.R. No. 207838, January 25, 2017) 1. the employee's assailed conduct must
have been willful or intentional, the
i. Serious Misconduct; Elements: willfulness being characterized by "a
To constitute a valid cause for dismissal wrongful and perverse attitude"; and
under the Labor Code: 2. the order violated must have been
1. The employee's conduct must be serious reasonable, lawful, made known to the
— of such grave and aggravated employee, and must pertain to the
character and not merely trivial or duties which he had been engaged to
unimportant. discharge. (Systems and Plan Integrator
2. The misconduct must be related to the and Development Corp. v. Ballesteros,
performance of the employee's duties G.R. No. 217119, April 25, 2022, per J.
showing him to be unfit to continue Hernando)
working for the employer.
3. The act or conduct must have been ii. Habitual Neglect of Duties
performed with wrongful intent. (Colegio The degree of skill, care, diligence and
San Agustin-Bacolod v. Montaño, G.R. attention imposed by the implied possession
No. 212333, March 28, 2022, Per J. of competency, knowledge, skillfulness, etc.,
Hernando) of the employee is that of ordinary and
reasonable skill, care and diligence. He
Allowing the ineligible students to march in cannot be discharged on the ground of
the graduation is clearly a conscious and incompetency, negligence, etc., MERELY
willful transgression of the university's BECAUSE he fails to employ the highest
established rule regarding graduation rites. degree of skillfulness and care known in the
(Ibid) trade, UNLESS

Spur-Of-The-Moment Outburst • the contract of employment expressly

The admittedly insulting and unbecoming stipulates for such degree of skill and
language [Siguro na abnormal ang utak mo] care;
uttered by the employee to the HR Manager • the employee represents that he
on April 3, 2009 should be viewed with possesses such. (St. Luke’s Medical
reasonable leniency in light of the fact that it Center, Inc. and Kuan vs. Notario. G.R.
was committed under an emotionally charged No. 152166, October 20, 2010)
state. (Maula vs. Ximex Delivery Express,
G.R. No. 207838, January 25, 2017) The repeated violations for reckless driving of
[De Guzman] is a serious violation especially
Immoral Conduct in the field of transportation where countless
It is the conduct which is so willful, flagrant, of lives are at stake on a daily basis. As an
or shameless as to show indifference to the employer, [Genesis Transport] have the
opinion of good and respectable members of prerogative to instill discipline among its
the community. Furthermore, such conduct drivers being in the transport business where
must not only be immoral, but grossly the safety and lives of its passengers is
immoral. It must be so corrupt as to paramount. We would be sending the wrong
constitute a criminal act, or so unprincipled signals to the errant drivers of bus companies
as to be reprehensible to a high degree or who have been found to be driving recklessly
committed under such scandalous or in our highways if we would sustain the

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assailed decision. [De Guzman]'s reckless Forms of Neglect of Duty:

driving has been proved by competent • Abandonment
evidence. (Genesis Transport Service, Inc. v. • Tardiness and Absenteeism
De Guzman, G.R. No. 229741, February 23, • Poor Performance (Japos vs. First
2022) Agrarian Reform Multi-Purpose
Cooperative and/or Bagares. G.R. No.
Gross Negligence 208000, July 26, 2017)
Gross negligence has been defined as the
want or absence of even slight care or Abandonment of employment is "the
diligence as to amount to a reckless disregard deliberate and unjustified refusal of an
of the safety of the person or property. It employee to resume his employment." This
evinces a thoughtless disregard of requires:
consequences without exerting any effort to 1. the employee's failure to report for work
avoid them. Put differently, gross negligence or absence without valid or justifiable
is characterized by want of even slight care, reason, and
acting or omitting to act in a situation where 2. a clear intention to sever the employer-
there is a duty to act, not inadvertently, but employee relationship. It is recognized
willfully and intentionally with a conscious that abandonment is incompatible with
indifference to consequences insofar as other the filing of a case for constructive
persons may be affected. (Systems and Plan dismissal. (ABSCBN Corp. v. Magno, G.R.
Integrator and Development Corp. v. No. 203876, March 29, 2022)
Ballesteros, G.R. No. 217119, April 25, 2022,
J. Hernando) “Attitude Problem” Is A Just Cause
An employee who cannot get along with his
GROSS HABITUAL FRAUD co-employees is detrimental to the company
NEGLIGENCE NEGLECT AND for he can upset and strain the working
WILLFUL
environment. Without the necessary
NEGLECT
teamwork and synergy, the organization
Gross Habitual Fraud
cannot function well. Thus, management has
negligence neglect and
the prerogative to take the necessary action
connotes implies willful
to correct the situation and protect its
want of care repeated neglect
organization. When personal differences
in the failure to of duties
between employees and management affect
performance perform one's imply
the work environment, the peace of the
of one's duties for a bad faith
company is affected. (Heavylift Manila vs. CA,
duties. It period of time, on the
G.R. No. 154410, October 20, 2005)
evinces a depending part of
thoughtless upon the the
Habitual tardiness alone is a just cause for
disregard of circumstances employe
termination. Punctuality is a reasonable
consequence . (Ibid) e in
standard imposed on every employee,
s without failing to
whether in government or private sector,
exerting any perform
whereas habitual tardiness is a serious
effort to his job to
offense that may very well constitute gross or
avoid them. the
habitual neglect of duty, a just cause to
(Matis v. detrimen
dismiss a regular employee. Habitual
Manila t of the
tardiness manifests lack of initiative, diligence
Electric Co., employer
and discipline that are inimical to the
G.R. No. and the
employer's general productivity and business
206629, latter's
interest. (Systems and Plan Integrator and
September business.
Development Corp. v. Ballesteros, G.R. No.
14, 2016) (Ibid)
217119, April 25, 2022, J. Hernando)

iii. Dishonesty and Loss of Confidence

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The fraud must be committed against the As ground for valid Proof of beyond
employer or representative in connection dismissal, requires reasonable doubt is
with the employee’s work. Thus, the fraud proof of NOT required, it
committed against third persons not in involvement in the being sufficient that
connection with his work, and which does not alleged events in there is some basis
in any way involve his employer, is not a question. for such loss of
ground for dismissal. confidence, such as
Mere when the employer
Furthermore, since fraud implies willfulness uncorroborated has reasonable
or wrongful act intent, the innocent assertion and ground to believe
nondisclosure of facts by the employee to the accusations by the that the employee
employer will not constitute a just cause for employer will not be concerned is
the dismissal. (Bookmedia Press, Inc. and sufficient. (Bravo responsible for the
Brizuela vs. Sinajon and Abenir, G.R. No. vs. Urios College, purported
213009, July 17, 2019) G.R. No.198066, misconduct, and the
June 7, 2017) nature of his
Dishonesty participation therein
The disposition to lie, cheat, deceive or renders him
defraud; unworthiness; lack of integrity; lack unworthy of the
of honesty, probity, or integrity in principle; trust and
lack of fairness and straightforwardness; confidence
disposition to defraud, deceive or betray. demanded by his
(Philippine Amusement and Gaming Corp. vs. position. (Ibid)
Rilloraza, G.R. No. 141141, June 25, 2001)
Loss of confidence applies to: (1) employees
Loss Of Trust and Confidence occupying positions of trust and confidence,
Loss of trust and confidence may be a just the managerial employees; and (2)
case for termination of employment only employees who are routinely charged with
upon proof that: the care and custody of the employer's
1. the dismissed employee occupied a money or property which may include rank-
position of trust and confidence; and and-file employees, e.g., cashiers, auditors,
2. the dismissed employee committed "an property custodians, or those who, in the
act justifying the loss of trust and normal routine exercise of their functions,
confidence”. (Systems and Plan regularly handle significant amounts of
Integrator and Development Corp. v. money or property. (Matis v. Manila Electric
Ballesteros, G.R. No. 217119, April 25, Co., G.R. No. 206629, September 14, 2016)
2022, Per J. Hernando)
“Pecuniary Gain” Not A Necessary
Loss of trust and confidence, be it a principal Element Of Termination On Account Of
or an analogous ground for dismissal, is not Loss Of Trust
justified if it exists in vacuum. As a just cause, Misappropriation of company funds, although
it requires an underlying act, deed or conduct the shortages had been fully restituted, is a
from which a reasonable belief of valid ground to terminate the services of an
untrustworthiness might be inferred. (PNOC employee of the company for loss of trust and
Development and Management Corp vs. confidence. (Santos v. San Miguel Corp., G.R.
Gomez, G.R. Nos. 220526-27, July 29, 2019) No. 149416, March 14, 2003)

Loss of Confidence with respect to Guidelines for Applying the Doctrine of

Rank-and-File Personnel and Loss Of Confidence
Managerial Employee: 1. Loss of confidence should not be
RANK-AND-FILE MANAGERIAL simulated.
PERSONNEL EMPLOYEE

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2. Should not be used as a subterfuge for of those enumerated in Art. 296 of the Labor
causes which are improper, illegal or Code will depend on the circumstances of
unjustified. each case. To be considered analogous to the
3. It may not be arbitrarily asserted in the just causes enumerated, however, a cause
face of overwhelming evidence to the must be due to the voluntary and/or willful
contrary. act or omission of the employee. (Nadura vs.
4. It must be genuine, not a mere Benguet Consolidated, Inc., G.R. No. L-
afterthought to justify earlier action 17780, August 24, 1962)
taken in bad faith.
5. The employee involved holds a position Must the Analogous Causes be
of trust and confidence. (Casco vs. anticipated in company regulations?
NLRC, G.R. No. 200571, February 19, No act or omission shall be considered as
2018; San Miguel Corporation vs. analogous cause unless expressly specified in
Gomez, G.R. No. 200815, 24 August the company rules and regulations or
2020) policies. (DOLE Order No. 147-15)

iv. Commission of a Crime or Offense Principle of Totality of Infractions

Elements: The Principle of Totality of Infractions cannot
1. There must be an act or omission be used against the employee because his
punishable/prohibited by law; transgression for wearing an improper
2. The act or omission was committed by uniform was not related to his latest
the employee against the person of his infractions of insubordination and purported
employer, against any immediate poor performance evaluation. "Previous
member of the employer’s family, offenses may be used as valid justification for
against the employer's duly authorized dismissal only if they are related to the
representative. (DOLE No. 147 s. 2015) subsequent offense upon which the basis of
termination is decreed, or if they have a
Immediate Family Members bearing on the proximate offense warranting
The immediate members of the family dismissal." (Celis v. Bank of Makati (A Savings
referred to are limited to spouse, ascendants, Bank), Inc., G.R. No. 250776, June 15, 2022)
descendants, or legitimate, natural, or
adopted brothers or sisters of the employer 2. Authorized Causes
or of his relative by affinity in the same
degrees, and those by consanguinity within The Employer May Terminate the
the fourth civil degree. (Subsection 2, Art. 11, Employment Of Any Employee Due To:
RPC) i. Installation of Labor-Saving Devices
ii. Redundancy
The commission of the crime of homicide was iii. Retrenchment or Downsizing to prevent
outside the perimeter of the IRRI complex, losses or the closing or cessation of
having been committed in a restaurant after operation of the establishment
office hours and against a non-IRRI iv. Closures or Cessation of Operations of
employee. Thus, the conviction of Micosa for establishment or undertaking not due to
homicide was not work-related, his misdeed serious business losses or financial
having no relation to his position as laborer reverses (Art. 298, Labor Code, as
and was not directed or committed against amended)
IRRI or its authorized agent. (International v. Disease and whose continued
Rice Research Institute v. National Labor employment is prohibited by law or is
Relations Commission, G.R. No. 97239, May prejudicial to his health as well as to the
12, 1993) health of his coemployee (Art. 299,
Labor Code, as amended)
v. Analogous Causes
The determination of whether the cause for i. Installation of Labor-Saving Devices
terminating employment’s analogous to any

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Elements: Redundancy exists when the service of an

1. There must be introduction of employee is in excess of what is reasonably
machinery, equipment or other devices; demanded by the actual requirements of the
2. Such introduction must be done in good business. (Ilaw at Buklod ng Manggagawa sa
faith; General Milling Corp. v. General Milling Corp.,
3. The purpose for such introduction must G.R. No. 216787 , February 15, 2022)
be valid (e.g., to save on cost; enhance
efficiency; other justifiable economic Redundancy means an excess position. It is
reasons; not the way to remove an unwanted
4. There is no other option available to the occupant. If the functions of the position are
employer than the introduction of still needed but the position-holder needs to
machinery, equipment or device and the be removed, the cause of the removal should
consequent termination of employment be valid and the proper procedure should be
of those affected thereby; observed. (Manggawa ng Komunikasyon sa
5. There must be fair and reasonable Pilipinas vs. PLDT, Inc., G.R. No. 190389,
criteria in selecting employees to be April 19, 2017)
terminated. (DOLE Order No. 147-15)
The determination of the continuing
The right to reduce personnel should, of necessity of a particular officer or position in
course, not be abused. It should not be made a business corporation is a management
a pretext for easing out laborers on account prerogative, and the courts will not interfere
of their union activities. But neither should it unless arbitrary or malicious action on the
be denied when it is shows that they are not part of management is shown. It is also
discharging their duties in a manner within the exclusive prerogative of
consistent with good discipline and the management to determine the qualification
efficient operation of an industrial enterprise. and fitness of an employee for hiring and
(Philippine Sheet Metal Workers’ Union vs. firing, promotion or reassignment. Indeed, an
CIR, G.R. No. L-2028, April 28, 1949) employer has no legal obligation to keep
more employees than are necessary for the
ii. Redundancy operation of its business (Lowe, Inc. vs. IAC
and Mutuc. G.R. Nos. 164813 and 174590,
Elements: August 14, 2009)
1. There must be superfluous positions or
services of employees; Valid Redundancy Program Requisites
2. The positions or services are in excess of 1. written notice served on both the
what is reasonably demanded by the employees and the DOLE at least one
actual requirements of the enterprise to month prior to the intended date of
operate in an economical and efficient retrenchment;
manner; 2. payment of separation pay equivalent to
3. There must be good faith in abolishing at least one month pay or at least one
redundant positions; month pay for every year of service,
4. There must be fair and reasonable whichever is higher;
criteria in selecting the employees to be 3. good faith in abolishing the redundant
terminated; positions; and
5. There must be adequate proof of 4. fair and reasonable criteria in
redundancy such as but not limited to ascertaining what positions are to be
the new staffing pattern, feasibility declared redundant and accordingly
studies/proposal, on the viability of the abolished, taking into consideration such
newly created positions, job description factors as
and the approval by the management of a. preferred status;
the restructuring. (DOLE Order No. 147- b. efficiency; and
15)

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c. seniority, among others. (Vibal Co. 3. The expected of actual losses must be
v. Morquin, G.R. No. 247879 , April proved by sufficient and convincing
19, 2022) evidence;
4. The retrenchment must be in good faith
Contracting out of services is a valid exercise for the advancement of its interest and
of business judgment or management not to defeat or circumvent the
prerogative. (Ilaw at Buklod ng Manggagawa employees’ right to security of tenure;
sa General Milling Corp. v. General Milling 5. There must be fair and reasonable
Corp., G.R. No. 216787, February 15, 2022) criteria in ascertaining who would be
dismissed and who would be retained
Garden Leave among the employees, such as status,
The practice of the employer directing an efficiency, seniority, physical fitness, age
employee not to attend work during the and financial hardship for certain
period of notice of resignation or termination workers. (DOLE Order No. 147-15)
of the employment. During the period of
garden leave, employees continue to be paid The idea of rightsizing is to reduce the
their salary and any other contractual number of workers and related functions and
benefits as if they were rendering their trim clown, streamline, or simplify the
services to the employer. (Mejila vs. Wrigley structure of the organization to the level of
Philippines, Inc., G.R. No. 199469, utmost efficiency and productivity in order to
September 11, 2019) realize profit and survive. (Cabaobas, et al.
vs. Pepsi-Cola Products Phil., Inc., G.R. No.
In the Philippines, garden leave has been 176908, March 25, 2015)
more commonly used in relation to the 30-
day notice period for authorized causes of Retrenchment or downsizing is a mode of
termination. There is no prohibition under our terminating employment initiated by the
labor laws against a garden leave clause in employer through no fault of the employee
an employment contract. (Ibid) and without prejudice to the latter, resorted
to by management during periods of business
Evidence Of Good Faith To Arrest Losses recession, industrial depression or seasonal
Before Terminating The Employees: fluctuations or during lulls over shortage of
1. Engaging an independent consulting materials. It is a reduction in manpower, a
firm to conduct manpower audit and OD measure utilized by an employer to minimize
(organization development) business losses incurred in the operation of
2. Instituting of cost-saving programs its business. (Flight Attendants and Stewards
3. Termination of probationary employees Association of the Philippines v. Philippine
4. Retrenchment of some managers Airlines, Inc., G.R. Nos. 178083 & A.M. No.
5. Efforts to find jobs in other firms where 11-10-1-SC, March 13, 2018)
employees to be retrenched may be
employed. (Manila Polo Club Employees Requisites of a Valid Retrenchment
Union vs. Manila Polo Club, Inc., G.R. 1. The retrenchment must be reasonably
No. 172846, July 24, 2013) necessary and likely to prevent losses
and such losses are proven;
iii. Retrenchment or Downsizing 2. Losses, if already incurred, are not
merely de minimis but substantial,
Elements: serious, actual and real; or if only
1. The retrenchment must be reasonably expected, are reasonably imminent;
necessary and likely to prevent business 3. Expected or actual losses must be
losses; proved by sufficient and convincing
2. The losses, if already incurred, are not evidence;
merely de minimis, but substantial, 4. Retrenchment must be in good faith for
serious, actual and real, or if only the advancement of its interest and not
expected, are reasonably imminent;

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to defeat or circumvent the employees' complete cessation Reduction of

right to security of tenure; and of business personnel usually
5. Fair and reasonable criteria who would operations and/or due to financial
be retained and who would be dismissed an actual locking-up returns so as to cut
and who would be retained among the of the doors of down on costs of
employees such as status, efficiency, establishment, operations in terms
seniority, physical fitness, age, and usually due to of salaries and
financial hardship for certain workers) financial losses. wages to prevent
(Ibid) Closure of business bankruptcy of the
as an authorized company. (Ibid.)
Last-In, First-Out (LIFO) Policy cause for
“Last One Hired is the First One Fired" termination of
employment aims to
This rule applies only to cases of labor-saving prevent further
devices, redundancy and retrenchment. financial drain (JAT
General Services vs.
Exceptions: NLRC, G.R. No.
1. When an employee volunteers to be 148340, January
separated from employment (Maya 26, 2004).
Farms Employees Organization vs.
NLRC, G.R. No. 106256, December 28, Partial Closure
1994) The Court had occasion to reiterate
2. Determination of the Employees to be management’s prerogative to close or abolish
Retrenched Is in Accord with the CBA. a department or section of the employer’s
(Mendros, Jr. v. Mitsubishi Motors Phils. establishment for economic reasons. The
Corp., G.R. No. 169780, February 16, Court reasoned out that since the greater
2009) right to close the entire establishment and
cease operations due to adverse economic
iv. Closure or Cessation of Operation conditions is granted an employer, the
closure of a part thereof to minimize
Elements: expenses and reduce capitalization should
1. There must be a decision to close or also be recognized (Dangan vs. NLRC, G.R.
cease operation of the enterprise by the No. 63127-28, February 20, 1984)
management;
2. The decision was made in good faith; No Separation Pay in Case of Closure
3. There is no other option available to the Because of Serious Business Losses
employer except to close or cease Article 298 of the Labor Code considers
operations. (D.O. No. 147-15) closure of business as an authorized cause
for the dismissal of employees, whether or
Right to Close Whether Losing or Not not the closure is due to serious business
If the business is not losing but its owner, for losses. However, if the closure is not due to
reasons of his own, wants to get out of the serious business losses, the employer is
business, he in good faith can lawfully do so required to pay its employees separation pay
anytime. Just as no law forces anyone to go equivalent to one (1) month pay or at least
into business, no law compels anybody to one-half (1/2) month pay for every year of
stay in business. But the employees should service, whichever is higher. (Dusol v. Lazo,
be paid the severance pay (Mac Adams Metal G.R. No. 200555, January 20, 2021)
Engineering Workers Union vs. Mac Adams, Summary Of Rules on Closure
etc., G.R. No. 141615, October 24, 2003) 1. Closure or cessation operations of
establishment or undertaking may either
Closure of Business vs. Retrenchment be partial or total.
CLOSURE OF RETRENCHMENT 2. Closure or cessation operations of
BUSINESS establishment or undertaking may or

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may not be due to serious business The Court has upheld the transfer/absorption
losses or financial reverses. However, in of employees from one company to another,
both instances, proof must be shown as successor employer, as long as the
that: transferor was not in bad faith and the
• It was done in good faith to advance employees absorbed by a successor-
the employer’s interest and not for employer enjoy the continuity of their
the purpose of defeating or employment status and their rights and
circumventing the rights if privileges with their former employer.
employees under the law or a valid (Marsman & Co., Inc. v. Sta. Rita, G.R. No.
agreement; 194765, April 23, 2018)
• A written notice on the affected
employees and the DOLE is served Change of Name
at least one month before the Change of Corporate name is not an
intended date of termination of authorized cause of employment termination.
employment. Under the Corporate Code, amendment of
3. The employer can lawfully close shop the articles of incorporation is not one of the
even if not due to serious business losses modes of dissolving a corporation. The
or financial reverses but separation pay, change of name was not a change of the
which is equivalent to at least one month corporate being. Since the change does not
pay as provided for by Art 298 of the create a new corporation, the renamed
Labor Code, as amended, must be given corporation remains liable for illegal dismissal
to all the affected employees. committed under the old name (Zuellig
4. If the closure or cessation is due to Freight Cargo vs. NLRC, G.R. No. 157900,
serious business losses or financial July 22, 2013)
reverses, the employer must prove such
allegations in order to avoid the payment Merger
of separation pay. Otherwise, the The merger of a corporation with another
affected employees are entitled to does not operate to dismiss the employees of
separation pay. the corporation absorbed by the surviving
5. The burden of proving compliance with corporation. This is in keeping with the
all the above-stated falls upon the nature and effects of a merger as provided
employer (Art. 283, Labor Code, as under law and the constitutional policy
amended; Manila Polo Club Employees’ protecting the rights of labor. The
Union vs. Manila Polo Club, Inc. G.R. No. employment of the absorbed employees
172846, July 24, 2013) subsists. Necessarily, these absorbed
employees are not entitled to separation pay
Sale Of Business In Good Faith on account of such merger in the absence of
No law prohibits bona fide sale of a going any other ground for its award. (Philippine
enterprise. When that happens, the Geothermal, Inc. Employees Union v. Unocal
purchaser, unless he agrees to do so, has no Philippines, Inc., G.R. No. 190187,
legal obligation to continue employing the September 28, 2016)
employees of the seller. The seller, as
employer, is obliged to pay his employees Succession of employment rights and
separation pay and other benefits founded on obligations occurs between the absorbing
law, policy, or contract. The transferee may, corporation and the employees of the
but is not obliged to, give employment absorbed corporation. Not only must the
preference to the former employees; if hired, absorbing corporation retain the employees;
they may be required to pass probation (SME it should likewise recognize the length of
Bank, Inc. vs. De Guzman, G.R. No. 184517, service in the previous employer (BPI vs. BPI
October 8, 2013) Employees UnionDavao Chapter, G.R. No.
164301, August 10, 2010)
Successor-Employer Doctrine
I. Disease

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Under Art. 299 of the Labor Code, an acts/omissions;

employer may terminate the services of an Second notice,
employee: stating Written
1. who has been found to be suffering from notice to DOLE and
any disease and whose continued the employee at
employment is prohibited by law or is least 30 days before
prejudicial to his health as well as to the the decision to
health of his co-employees. dismiss
2. To be a valid ground for termination, employment and
there must be a certification by a findings)
competent public authority that the Effectivity Date
disease is of such nature or at such stage Determined by the At least 30 days
that it cannot be cured within a period of employer after after the employee
six (6) months even with proper medical compliance with AND DOLE is
treatment. (Jerzon Manpower and due process notified.
Trading, Inc. v. Nato, G.R. No. 230211,
October 6, 2021) 3. DUE PROCESS

Medical Certificate Philippine law conceives "due process" in two

A medical certificate issued by the company’s senses:
own physician is not a certificate by 1. Substantive due process which
“competent public health authority.” (Cebu means the employee's dismissal is
Royal Plant [San Miguel Corporation] vs. justified by a lawful and valid reason,
Deputy Minister of Labor, G.R. No. 58639, and
August 12, 1987) 2. Procedural due process which
requires ample opportunity for the
Just Causes vs. Authorized Causes worker to explain his side before he is
JUST CAUSES AUTHORIZED dismissed.
CAUSES
Provisions under the Labor Code By present jurisprudence, absence of
Article 297 Article 298 and 299 substantive due process makes the dismissal
Removal of the Employee is Called illegal, while absence of procedural due
Dismissal or Separation process, although similarly illegal, does not
discharge invalidate the dismissal but makes the
Refer to employer liable for monetary penalty.
Faults and misdeed Business or (Azucena, Everyone’s Labor Code, 2021,
of the employee economic reasons p405)
Employer’s Liability
Not liable for Required by law to a) Twin-Notice Requirement
employee’s provide separation
separation pay. pay to the Due process has been described as a
employee. "malleable concept anchored on fairness and
XPN: based on XPN: closure or equity." Indeed, at its core is simply the
compassion cessation of reasonable opportunity for every party to be
financial assistance operation due to heard. (Reyes v. Rural Bank of San Rafael
may be given to a serious business (Bulacan), Inc., G.R. No. 230597, March 23,
deserving dismissed losses duly proved. 2022, Per J. Hernando)
employee.
Procedural Due Process For Termination of Employment Based
Twin-Notice Rule the employee’s On Just Causes As Defined In Article
(First notice, separation. 282 Of The Labor Code:
informing alleged 1. A written notice served on the employee
specifying the: (a) ground/s for termination,

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and (b) giving to said employee reasonable • a formal hearing or conference becomes
opportunity within which to explain his side. mandatory only when requested by the
2. hearing or conference during which the employee in writing or substantial
employee concerned, with the assistance of evidentiary disputes exist or a company
counsel if the employee so desires, is given rule or practice requires it, or when similar
an opportunity to respond to the charge circumstances justify it.
present his evidence or rebut the evidence • the "ample opportunity to be heard"
presented against him. standard in the Labor Code prevails over
3. A written notice of termination served on the "hearing or conference" requirement
the employee indicating that upon due in the implementing rules and regulations
consideration of all the circumstances, (Perez vs. Philippine Telegraph and
grounds have been established to justify his Telephone, Co., G.R. No. 152048, April 7,
termination. 2009).

The heart of procedural due process is the Right To Counsel

need for notice and an opportunity to be The right to counsel and the assistance of
heard. Moreover, what is required is not one in investigations involving termination
actual hearing but a real opportunity to be cases is neither indispensable nor mandatory,
heard. Thus, one who refuses to appear at a except when the employee himself requests
hearing is not thereby denied due process if for one or that he manifests that he wants a
a decision is reached without waiting for him. formal hearing on the charges against him.
Likewise, the requirement of due process can (Lopez vs. Alturas Group. G.R. No. 191008,
be satisfied by subsequent due hearing. April 11, 2008)
(Reyes v. Rural Bank of San Rafael (Bulacan),
Inc., G.R. No. 230597, March 23, 2022, J. The right to counsel under Section 12 (1) of
Hernando) Article III of the Constitution applies in
criminal proceedings, but not in
The twin requirements of notice AND hearing administrative proceedings. It is a right given
constitute essential elements of due to persons accused of an offense during
process in cases of employee dismissal: criminal investigation. Any proceeding
the requirement of notice is intended to conducted by an administrative body is not
inform the employee concerned of the part of the criminal investigation or
employer's intent to dismiss and the reason prosecution. (Gutierrez v. Commission on
for the proposed dismissal; upon the other Audit, G.R. No. 200628, January 13, 2015)
hand, the requirement of hearing affords
the employee an opportunity to answer his When Hearing Not Required
employer's charges against him accordingly • If the employee has admitted his guilt.
to defend himself therefrom before dismissal • Termination which is justified by any of
is effected (Kwikway Engineering Works vs. the authorized causes under Art. 298.
NLRC, G.R. No. 85014, March 22, 1991) • Termination initiated by the employee
(Art. 300, Labor Code, as amended).
b) Hearing • Termination of the probationary period
of employment. (Art. 281, Labor Code as
GUIDING PRINCIPLES in connection with amended).
the hearing requirement in dismissal cases: • Suspension of employment relationship
• "ample opportunity to be heard" means resulting from bona fide suspension of
any meaningful opportunity (verbal or operation (Art. 301, Labor Code as
written) given to the employee to answer amended).
the charges against him and submit • In case of project employment,
evidence in support of his defense, termination upon completion of the
whether in a hearing, conference or some project or phase thereof for which the
other fair, just and reasonable way. employee is hired. (Dizon vs. NLRC, G.R.
No. 79554, December 14, 1989)

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quitting or cessation of work because

B. Termination of Employment by continued employment is rendered
Employee impossible, unreasonable or unlikely; when
there is a demotion in rank or a diminution of
An employee may terminate without just pay and other benefits. (Ibid)
cause the ER-EE relationship: pronouncement or relinquishment of an
a. by serving a written notice on the office, with the intention of relinquishing the
employer at least one (1) month in office accompanied by the act of
advance. The employer upon whom no relinquishment. (Alenaje v. C.F. Sharp Crew
such notice was served may hold the Management, Inc., G.R. No. 249195,
employee liable for damages. February 14, 2022)
b. An employee may put an end to the
relationship without serving any notice on Intent to Relinquish
the employer for any of the following just The intent to relinquish must concur with the
causes: overt act of relinquishment. The acts of the
i. Serious insult by the employer or his employee before and after the alleged
representative on the honor and resignation must be considered in
person of the employee; determining whether the employee
ii. Inhuman and unbearable treatment concerned, in fact, intended to terminate his
accorded the employee by the employment.” (University of the Cordilleras v.
employer or his representative; Lacanaria, G.R. No. 223665, September 27,
iii. Commission of a crime or offense by 2021, Per J. Hernando)
the employer or his representative
against the person of the employee or Petitioners' voluntary resignation coupled by
any of the immediate members of his their execution of quitclaims and the
family; and processing of the documents required from
iv. Other causes analogous to any of the resigning employees such as the exit
foregoing. (Article 300 of the Labor interview, company clearance and
Code) information sheets indubitably show their
intent to relinquish voluntarily their
The Labor Code recognizes termination by employment with the Company. (Tacis v.
the employee of the employment contract by Shields Security Services, Inc., G.R. No.
"serving written notice on the employer at 234575, July 7, 2021, Per J. Hernando)
least one (1) month in advance." Given that
provision, the law contemplates the Resignation must be voluntary. In illegal
requirement of a written notice of dismissal cases, the employer, if defense of
resignation. In the absence of a written resignation is presented, must show that the
resignation, it is safe to presume that the employee indeed voluntarily resigned. (Bance
employer terminated the seafarers. (Skippers v. University of St. Anthony, G.R. No. 202724,
United Pacific, Inc. v. Doza, G.R. No. 175558, February 3, 2021, Per J. Hernando)
February 8, 2012)
Constructive dismissal
A. Resignation vs. Constructive Constructive dismissal exists where there is
Dismissal cessation of work, because "continued
employment is rendered impossible,
Resignation Constructive Dismissal unreasonable or unlikely, as an offer
Resignation is the voluntary act of an involving a demotion in rank or a diminution
employee who is in a situation where one in pay" and other benefits. (Ibid) There is
believes that personal reasons cannot be constructive dismissal when an employee is
sacrificed in favor of the exigency of the compelled by the employer to resign or is
service, and one has no other choice but to placed in a situation where there would be no
dissociate oneself from employment. It is a other choice but to resign. An unconditional
formal Constructive dismissal is defined as and categorical letter of resignation cannot

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be considered indicative of constructive [the HR Officer and security personnel] who

dismissal if it is submitted by an employee positively attested to the fact of [the
fully aware of its effects and implications. employee's] desertion. (Mehitabel, Inc. v.
(Pascua v. Bank Wise, Inc., G.R. Nos. 191460 Jufhel L. Alcuizar, G.R. No. 228701-02, 13
& 191464, January 31, 2018) Constructive December 2017)
dismissal is an involuntary resignation by the
employee due to the harsh, hostile, and Termination by Employer
unfavorable conditions set by the employer
and which arises when a clear discrimination, An employer may terminate an employment
insensibility, or disdain by an employer exists for any of the following causes:
and has become unbearable to the employee. a. Serious misconduct or willful
(SME Bank, Inc. v. De Guzman, G.R. Nos. disobedience by the employee of the
184517 & 186641, October 8, 2013) lawful orders of his employer or
representative in connection with his
B. Abandonment work;
b. Gross and habitual neglect by the
Elements: employee of his duties;
1. The first element of abandonment is the c. Fraud or willful breach by the employee
failure of the employee to report to work of the trust reposed in him by his
without a valid and justifiable reason. employer or duly authorized
2. The second element is a clear intention to representative;
sever the employer-employee d. Commission of a crime or offense by the
relationship, with the second element as employee against the person of his
the more determinative factor and being employer or any immediate member of
manifested by some overt acts. (Borja et. his family or his duly authorized
al, v Minoza et. al, G.R. No. 218384, July representatives; and
3, 2017) e. Other causes analogous to the
foregoing. (Art. 297, Labor Code)
Absence Without Leave
An employee is considered Absent Without Although abandonment of work is not
Leave (AWOL) when he or she is absent from expressly enumerated as a just cause under
work without informing the employer and Article 297 of the Labor Code, jurisprudence
without a valid reason for an extended has recognized it as a form of or akin to
period. Being AWOL can be a ground for just neglect of duty. (Demex Rattancraft, Inc. v.
termination under the Labor Code of the Leron, G.R. No. 204288, November 08, 2017)
Philippines.
C. Preventive Suspension
The mere absence of an employee is not
sufficient to constitute abandonment. As an Preventive suspension is a disciplinary
employer, [the Company] has the burden of measure for the protection of the company's
proof to show the deliberate and unjustified property pending investigation of any alleged
refusal of the employee to resume the latter’s malfeasance or misfeasance committed by
employment without any intention of the employee. The employer may place the
returning. (Tegimenta Chemical Phils. v. Oco, worker concerned under preventive
G.R. No. 175369, 27 February 2013) suspension if his continued employment
poses a serious and imminent threat to the
The employee's "non-compliance with the life or property of the employer or of his co-
directive in the Return to Work..., signifies his workers. (Gatbonton v. National Labor
intention to sever the employment relation Relations Commission, G.R. No. 146779,
with [the employer], and gives credence to January 23, 2006)
the latter’s claim that it was [the employee]
who abandoned his job. Moreover, such Preventive suspension
omission substantiates the testimonies of

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The employer may place the worker under special laws and valid agreements.|
concerned under preventive suspension if his (Ibid)
continued employment poses a serious and
imminent threat to the life or property of the Note that while preventive suspension
employer or of his co-workers. (Omnibus without pay may not last longer than thirty
Rules Implementing the Labor Code, Book V, (30) days, preventive suspension may
Rule XIV, sec. 3) continue as long as employee is reinstated on
payroll after the 30-day maximum period.
Notice of Dismissal Failure to reinstate on payroll while
continuing the preventive suspension is
Any employer who seeks to dismiss a worker tantamount to constructive dismissal.
shall furnish him a written notice stating the
particular acts or omission constituting the D. Reliefs from Illegal Dismissal
grounds for his dismissal. In cases of
abandonment of work, the notice shall be An illegally dismissed employee is entitled to
served at the worker's last known address. the following reliefs:
((Omnibus Rules Implementing the Labor a. Reinstatement
Code, Book V, Rule XIV, sec. 4) 1. Pending appeal
2. Separation pay in lieu of reinstatement
Preventive Suspension Not a Penalty b. Backwages
While preventive suspension is not a penalty c. Damages, Interest and Attorney’s Fees
but a measure to protect the life or property
of the employer or the co-workers pending a. Reinstatement
investigation of any alleged infraction
committed by the employee, it should be Reinstatement is a restoration to a state from
imposed with caution as employees are which one has been removed or separated.
deprived of their salaries and benefits during The person reinstated assumes the position
the period of the suspension. As such, it he had occupied prior to his dismissal.
should only be meted out when the Reinstatement presupposes that the previous
employee's continued employment poses a position from which one had been removed
serious and imminent threat to the life or still exists, or that there is an unfilled position
property of the employer or of his co- which is substantially equivalent or of similar
workers. (Celis v. Bank of Makati (A Savings nature as the one previously occupied by the
Bank), Inc., G.R. No. 250776, June 15, 2022) employee. (Traveloka Philippines, Inc. v.
Ceballos, Jr., G.R. No. 254697 , February 14,
Period of Suspension 2022)
No preventive suspension shall last longer
than thirty (30) days The imposition of this Reinstatement restores the employee who
disciplinary measure falls within the ambit of was unjustly dismissed to the position from
the employer's exercise of its management which he was removed, that is, to his status
prerogative. For it has been recognized that quo ante dismissal (Civil Service Commission
employers have the right to protect itself, its vs. Moralde, G.R. No. 211077, August 15,
assets and operations or its other employees 2018)
from further harm or losses that the erring
employee might cause during the pendency Respondent company has already hired a
of the investigation of any alleged infraction. replacement for the petitioner. It would not
(Lao v. Filinvest Land, Inc., G.R. No. 248768 be justified for the respondent company to
, November 11, 2021) terminate the services of the person who was
hired to replace the petitioner just so the
The imposition of preventive suspension latter could assume his former position. Thus,
must be done reasonably, in good faith, and the remedy left for the petitioner is
in a manner not otherwise intended to defeat reinstatement to a substantially equivalent
or circumvent the rights of the employee

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position. (Magtoto vs. NLRC, G.R. No. 63370, the dismissed employee during the period of
November 18, 1985). appeal until reversal by a higher court.
(Dumaog v. CocaCola Bottlers Phils., Inc.,
An employee who is unjustly dismissed from G.R. No. 226828, November 11, 2021)
work shall be entitled to reinstatement
without loss of seniority and other privileges. The principle of reinstatement pending
(Art. 294 Labor Code, as amended). appeal applies only in case there is a finding
of illegality of dismissal by the Labor Arbiter.
1. Reinstatement pending appeal If the dismissal is not illegal as in fact it was
declared valid and legal by the Labor Arbiter,
Employer has 2 options involving neither can the employer be held liable for
reinstatement: payment of any reinstatement wages.
a. Actual reinstatement; or (Lansangan vs. Amkor Technology
b. Payroll reinstatement. Philippines, G.R. No. 177026, January 30,
2009)
Under Article 223 of the Labor Code, "the
decision of the Labor Arbiter reinstating a 2. Separation pay in lieu of
dismissed or separated employee, insofar as reinstatement
the reinstatement aspect is concerned, shall Separation pay may be awarded in lieu of
immediately be executory, even pending reinstatement if reinstatement is no longer
appeal. The employee shall either be practical or will no longer serve the best
admitted back to work under the same terms interest of the parties. Separation pay in lieu
and conditions prevailing prior to his of reinstatement may likewise be awarded if
dismissal or separation, or at the option of the employee decides not to be reinstated
the employer, merely reinstated in the anymore. (Anting v. LT Steel Center, Inc.,
payroll. The posting of a bond by the G.R. No. 256655, December 7, 2021)
employer shall not stay the execution for
reinstatement." (Wenphil Corporation vs. Separation Pay as An Alternative Relief
Tuazon, G.R. No. 207983, April 7, 2014) In Lieu of Reinstatement
Under the law and prevailing jurisprudence,
The right to reinstatement pending appeal is an illegally dismissed employee is entitled to
a statutory embodiment of social justice reinstatement as a matter of right. The
principles; a reflection of a compassionate award of separation pay is a mere
policy of the law which "vivifies and enhances exception to the rule. It is made an
the provisions of the 1987 Constitution on alternative relief in lieu of reinstatement in
labor and the working man." It is "designed certain circumstances, like:
to stop x x x a continuing threat or danger to 1. when reinstatement can no longer be
the survival or even the life of the dismissed effected in view of the passage of a long
or separated employee and his family." period of time or because of the realities
(Dumaog v. Coca-Cola Bottlers Phils., Inc., of the situation;
G.R. No. 226828 , November 11, 2021) 2. reinstatement is inimical to the
employer's interest;
The employer is obliged to pay the dismissed 3. reinstatement is no longer feasible;
employee’s salary if he refuses to reinstate 4. reinstatement does not serve the best
until actual reinstatement or reversal by a interests of the parties involved;
higher tribunal. (Bergonion vs. South East 5. the employer is prejudiced by the
Asian Airlines, G.R. No. 195227, April 21, workers' continued employment;
2014) 6. facts that make execution unjust or
inequitable have supervened; or a.
It is settled that even if the order of strained relations between the employer
reinstatement of the labor arbiter is reversed and employee. (Fernandez Jr. vs.
on appeal, it is obligatory on the part of the MERALCO, G.R. No. 226002, June 25,
employer to reinstate and pay the wages of 2018)

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7. for the best interest of the parties to B. Retrenchment, closure or cessation of

prevent exacerbation of tension or business- equivalent of at least one (1)
compromised efficiency. month pay or one-half (1/2) month pay
8. when the employee is well over the for every year of service, whichever is
statutory compulsory retirement age of higher
65. (Simon v. Results Companies, G.R. C. Incurable disease- equivalent to at least
Nos. 249351-52, March 29, 2022) one (1) month pay or one-half (1/2)
9. when the respondent's position as month pay for every year of service,
country manager was already filled up. whichever is greater. (Art. 283, Labor
(Traveloka Philippines, Inc. v. Ceballos, Code)
Jr., G.R. No. 254697, February 14, 2022)
b. Backwages
Computation of separation pay in lieu of
reinstatement An employee who is unjustly dismissed from
Separation pay equivalent to one (1) month work shall be entitled to his full backwages,
pay for every year of service, with a fraction inclusive of allowances, and to his other
of at least six (6) months considered as one benefits or their monetary equivalent
(1) whole year. (Inter-Asia Development computed from the time his compensation
Bank v. Pereña, G.R. No. 213627, April 5, was withheld from him up to the time of his
2022) actual reinstatement. (Art. 294 Labor Code)

When separation pay in lieu of reinstatement The payment of backwages is a form of relief
is decreed, the finality of the ruling that that restores the income that was lost by
decreed the illegal dismissal becomes the reason of the unlawful dismissal. (Advan
reckoning point, for in allowing separation Motor, Inc. vs. Veneracion, G.R. No. 190944,
pay, the final decision effectively declares December 13, 2017)
that the employment relationship is ended so
that separation pay and backwages are to be The payment of full backwages can only be
computed up to that point. (Broadcom Asia, granted to an unjustly dismissed employee,
Inc. v. Cosare, G.R. No. 228079, February 15, allowing him/her to recover from the
2022) employer what he/she had lost by way of
wages as a result of his/her dismissal. (De
In other words, the finality of the decision Leon v. Good Year Steel Pipe Corp., G.R. No.
cutsoff the employment relationship and 225311, November 29, 2021)
represents the final settlement of the rights
and obligations of the parties against each The payment of backwages is generally
other. (Broadcom Asia, Inc. v. Cosare, G.R. granted on the ground of equity. It is a form
No. 228079, February 15, 2022) of relief that restores the income that was
lost by reason of the unlawful dismissal; the
It must be emphasized that this payment of grant thereof is intended to restore the
separation pay is in addition to payment of earnings that would have accrued to the
back wages. dismissed employee during the period of
dismissal until it is determined that the
The amount given to the employee depends termination of employment is for a just
on the specific authorized cause for their cause. It is not private compensation or
termination, which could be any of the damages but is awarded in furtherance and
following: effectuation of the public objective of the
A. Installation of labor-saving devices or Labor Code. Nor is it a redress of a private
redundancy- equivalent of at least one right but rather in the nature of a command
(1) month pay or one (1) month for to the employer to make public reparation for
every year of service, whichever is dismissing an employee either due to the
higher former’s unlawful act or bad faith. The award
of backwages is not conditioned on the

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employee's ability or inability to, in the The two forms of relief are distinct and
interim, earn any income. (Advan Motor Inc., separate, one from the other. Though the
vs. Veneracion, G.R. No. 190944, December grant of reinstatement commonly carries with
13, 2017) it an award of backwages, the
inappropriateness or non-availability of one
Employees who are illegally dismissed are does not carry with it the inappropriateness
entitled to full backwages, inclusive of or non-availability of the other. (Tomas
allowances and other benefits or their Claudio Memorial College, Inc. vs. CA, supra.)
monetary equivalent, computed from the
time their actual compensation was withheld c. Separation Pay, Doctrine of Strained
from them up to the time of their actual Relations
reinstatement. (Philippine Journalists Inc.,
vs. Morqueda, G.R. No. 141430, May 7, Separation Pay
2004). Separation pay is the amount given to an
employee who has been terminated from
If reinstatement is no longer possible, the service for authorized causes, which could be
back wages shall be computed from the time either of the two: business closure (Art. 283,
of their illegal termination up to the finality of Labor Code, as amended) or disease
the decision. (Buenviaje et al. vs. CA, G.R. contracted by the employee that could be
No. 147806, November 12, 2002). prejudicial to their health as well as the
health of their coworkers (Art. 284, Labor
A closer adherence to the legislative policy Code, as amended).
behind Rep. Act No. 6715 points to "full
backwages" as meaning exactly that, i.e., Doctrine of Strained Relations
without deducting from backwages the Under the doctrine of strained relations, such
earnings derived elsewhere by the concerned payment of separation pay is considered an
employee during the period of his illegal acceptable alternative to reinstatement when
dismissal. In other words, the provision the latter option is no longer desirable or
calling for "full backwages" to illegally viable. On the one hand, it liberates the
dismissed employees is clear, plain and free employee from what could be a highly
from ambiguity and, therefore, must be oppressive work environment. On the other
applied without attempted or strained hand, it releases the employer from the
interpretation. Index animi sermo est. grossly unpalatable obligation of maintaining
(Equitable Banking Corporation vs. Sadac, in its employ a worker it could no longer trust.
G.R. No. 164772, June 8, 2006) (Guinto v. Sto. Niño LongZeny Consignee,
G.R. No. 250987, March 29, 2022)
Backwages and Reinstatement are
Separate and Distinct Reliefs Strained relationship may be invoked only
against employees whose positions demand
Backwages and reinstatement are separate trust and confidence, or whose differences
and distinct reliefs given to an illegally with their employer are of such nature or
dismissed employee in order to alleviate the degree as to preclude reinstatement. (Advan
economic damage brought about by the Motor, Inc. v. Veneracion, G.R. No. 190944,
employee's dismissal. "Reinstatement is a December 13, 2017)
restoration to a state from which one has
been removed or separated" while "the Strained Relations Must Be
payment of backwages is a form of relief that Demonstrated As A Fact
restores the income that was lost by reason The implementation of the doctrine of
of the unlawful dismissal." Therefore, the strained relationship must be supplemented
award of one does not bar the other. (Reyes by the rule that the existence of a strained
vs. RP Guardians Security Agency, Inc., G.R. relationship is for the employer to clearly
No. 193756, April 10, 2013) establish and prove in the manner it is called
upon to prove the existence of a just cause;

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the degree of hostility attendant to a litigation example or correction for the public good.
is not, by itself, sufficient proof of the (Aguilera v. CocaCola FEMSA Philippines,
existence of strained relations that would rule Inc., G.R. No. 238941, September 29, 2021)
out the possibility of reinstatement. (Advan 2. Exemplary Damages
Motor, Inc. vs. Veneracion, G.R. No. 190944, Exemplary damages may be awarded if the
December 13, 2017) dismissal was effected:
a. in a wanton, oppressive or
The doctrine of strained relations cannot be malevolent manner;
applied indiscriminately since every labor b. If moral damages was awarded,
dispute almost invariably results in "strained exemplary damages may be awarded
relations"; otherwise, reinstatement can as well (Ganancial vs. Cubagao, G.R.
never be possible simply because some No. 203348, July 06, 2020).
hostility is engendered between the parties
as a result of their disagreement. That is 3. Nominal Damages
human nature. In labor cases, nominal damages are
awarded when an employer removes an
Strained relations must be employee for a just or authorized cause but
demonstrated as a fact. The doctrine without complying with the requirements of
should not be used recklessly or loosely due process. (LBP Service Corp. v. Tuppil,
applied, nor be based on impression alone. G.R. No. 249747, March 15, 2022)
(Guinto v. Sto. Niño Long-Zeny Consignee,
G.R. No. 250987, March 29, 2022) Failure to observe or to prove compliance of
the two-notice rule would still make the
The doctrine of strained relations should not dismissal valid, as long as a just or
be used recklessly or applied loosely nor be authorized cause for dismissal exists, with
based on impression alone" so as to deprive the employer, however, being held liable for
an illegally dismissed employee of his means nominal damages. (Systems and Plan
of livelihood and deny him reinstatement. Integrator and Development Corp. v.
Since the application of this doctrine will Ballesteros, G.R. No. 217119, April 25,
result in the deprivation of employment 2022, Per J. Hernando)
despite the absence of just cause. (Advan
Motor, Inc. vs. Veneracion, supra) e. Attorneys’ Fees

d. Damages In labor cases, attorneys’ fees partake of the

nature of an extraordinary award granted to
Damages refers to the sum of money which the victorious party as an indemnity for
the law awards or imposes as a pecuniary damages. As a general rule, it is payable to
compensation, a recompense, or satisfaction the client, not his counsel, unless the former
for an injury done or a wrong sustained as a agreed to give the amount to the latter as an
consequence either of a breach of a addition or part of the counsel’s
contractual obligation or a tortious act. (MEA compensation. (Alva vs. High Capacity
Builders, Inc. vs. CA, G.R. No. 121484, Security Force Inc. G.R. No.203328
January 31, 2005) November 8, 2017)

Damages Which May Be Awarded In Article 111 of the Labor Code, sanctions the
Relation With Illegal Dismissal award of attorney's foes in cases of the
1. Moral Damages unlawful withholding of wages, wherein the
Moral damages may be awarded when the culpable party may be assessed attorney's
employer acted (a) in bad faith or fraud; (b) fees equivalent to ten percent (10%) of the
in a manner oppressive to labor; or (c) in a amount of wages recovered. The amount of
manner contrary to morals, good customs, attorney's fees shall not exceed ten percent
or public policy. Finally, the Court may (10%) of the total monetary award, and the
impose exemplary damages by way of

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fees may be deducted from the amount due

the winning party. (Ibid) Availment of Free Legal Services Does
Not Foreclose an Award of Attorney's
To recapitulate, both the Labor Code and the Fees
Civil Code provide that attorney's fees may be The laborer's availment of the free legal
recovered in the following instances, namely: services offered by the Public Attorney's
1) in cases when the employee's wages Office (PAO) does not prevent the award of
have been unlawfully withheld or there attorney's fees upon the successful
is a showing that lawful wages were not conclusion of the litigation. (Ibid)
paid accordingly. (Salvador v. Saint
Nicolas Security & Investigation Agency, g. Liabilities of Corporate Officers
Inc., G.R. No. 229384 , July 28, 2021)
2) where the defendant's act or omission Corporate Officers Generally Not Liable for
has compelled the plaintiff to litigate Illegal Dismissal
with third persons or the plaintiff As a general rule, only the employer-
incurred expenses to protect his interest; corporation, partnership or association or any
3) in actions for the recovery of wages of other entity, and not its officers, which may
household helpers, laborers and skilled be held liable for illegal dismissal of
workers; employees or for other wrongful acts. This is
4) in actions for indemnity under as it should be because a corporation is a
workmen's compensation and juridical entity with legal personality separate
employer's liability laws; and and distinct from those acting for and in its
5) in cases where the court deems it just behalf and, in general, from the people
and equitable that attorney's fees and comprising it. A corporation, as a juridical
expenses of litigation should be entity, may act only through its directors,
recovered. (Ibid) officers and employees. Obligations incurred
as a result of the directors' and officers' acts
f. Interest as corporate agents, are not their personal
All monetary awards shall earn interest at the liability but the direct responsibility of the
rate of six percent (6%) per annum corporation they represent. It is settled that
computed from the finality of the Court’s in the absence of malice and bad faith, a
resolution until fully paid. (Salvador v. Saint stockholder or an officer of a corporation
Nicolas Security & Investigation Agency, Inc., cannot be made personally liable for
G.R. No. 229384 , July 28, 2021) corporate liabilities. (Echo 2000 Commercial
Corp. v. Obrero Filipino-Echo 2000 Chapter-
Exception to the Declared Policy of CLO, G.R. No. 214092, January 11, 2016)
Strict Construction in the Award of
Attorney’s Fees The personal liability of corporate officers
Article III is an exception to the declared validly attaches only when:
policy of strict construction in the award of a. they assent to a patently unlawful act of
attorney's fees." In fact, the general rule that the corporation; or
attorney's fees may only be awarded upon b. they are guilty of bad faith or gross
proof of bad faith takes a different turn when negligence in directing its affairs; or (c)
it comes to labor cases. The established rule they incur conflict of interest, resulting in
in labor law is that the withholding of wages damages to the corporation, its
need not be coupled with malice or bad faith stockholders or other persons.
to warrant the grant of attorney's fees under (Zaragoza v. Tan, G.R. No. 225544,
Article III of the Labor Code. All that is December 4, 2017)
required is that the lawful wages were not
paid without justification, thereby compelling Obligations incurred by corporate officers,
the employee to litigate. (Alva vs. High acting as such corporate agents, are not
Capacity Security Force Inc. G.R. No.203328 theirs but the direct accountabilities of the
November 8, 2017) corporation they represent.” As such, they

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should not be generally held jointly and agency, conduit or adjunct of another
solidarily liable with the corporation (Harpoon corporations.
Marine Services, Inc. vs. Francisco, G.R. No.
167751, March 2, 2011). Piercing the veil of corporate fiction is
frowned upon and must be done with
To hold a director or officer personally liable caution. The corporation's wrongdoing must
for corporate obligations, two requisites must be proven clearly and convincingly.
concur, to wit:
1) the complaint must allege that the director The fact that both companies share the same
or officer assented to the patently address, have the same stockholders, and
unlawful acts of the corporation, or that that he shuttled back and forth from one
the director or officer was guilty of gross company to another does not justify that
negligence or bad faith; and both corporations are alter egos of each
2) there must be proof that the director or other.
officer acted in bad faith. (Lozada vs.
Mendoza, G.R. No. 196134, October 12, To pierce the corporate veil based on the
2016). alter ego theory requires the concurrence of
three elements, namely:
The sole proprietor is personally liable for all i. control of the corporation by the
the debts and obligations of the business. stockholder or parent corporation;
(Quiñones y Conde v. Ortofon Telecom, G.R. ii. fraud or fundamental unfairness
No. 225675, June 23, 2021) imposed on the plaintiff; and
iii. harm or damage caused to the plaintiff
Piercing the Corporate Veil by the fraudulent or unfair act of the
A corporation is invested by law with a corporation. The absence of any of these
personality separate and distinct from those elements prevents piercing the
of the persons composing it as well as from corporate veil. (De Leon v. Good Year
that of any other legal entity to which it may Steel Pipe Corp., G.R. No. 225311,
be related. However, in certain cases, the November 29, 2021)
corporation's mask may be removed or its veil
pierced when it serves as an alter ego of Mere ownership by another corporation of all
another entity and becomes a shield for or nearly all of the capital stock of a
fraud, illegality or inequity committed against corporation is not of itself sufficient ground
third persons. (De Leon v. Good Year Steel for disregarding separate corporate
Pipe Corp., G.R. No. 225311, November 29, personality. The element of control requires
2021) that the subsidiary be completely under the
control and domination of the parent. It
Particularly, the doctrine of piercing the examines the parent corporation's
corporate veil applies in the following relationship with the subsidiary. (Dumaog v.
instances: Coca-Cola Bottlers Phils., Inc., G.R. No.
a. defeat of public convenience as when the 226828, November 11, 2021)
corporate fiction is used as a vehicle for
the evasion of an existing obligation; The veil of corporate fiction can be
b. fraud cases or when the corporate entity pierced, and responsible corporate
is used to justify a wrong, protect fraud, directors and officers or even a
or defend a crime; or separate but related corporation, may
c. alter ego cases, where a corporation is be impleaded and held answerable
merely a farce since it is a mere alter ego solidarily in a labor case, even after
or business conduit of a person, or where final judgment and on execution, so
the corporation is so organized and long as it is established that such
controlled and its affairs are so conducted persons have deliberately used the
as to make it merely an instrumentality, corporate vehicle to unjustly evade the
judgment obligation, or have resorted

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to fraud, bad faith or malice in doing so. collective bargaining agreement or other
When the shield of a separate corporate employment contract or employers'
identity is used to commit wrongdoing and retirement plan. In the absence of any
opprobriously elude responsibility, the courts provision on optional retirement in a
and the legal authorities in a labor case have collective bargaining agreement, other
not hesitated to step in and shatter the said employment contract, or employer's
shield and deny the usual protections to the retirement plan, an employee may optionally
offending party, even after final judgment. retire upon reaching the age of 60 years or
The key element is the presence of fraud, more, but not beyond 65 years, provided they
malice or bad faith. Bad faith, in this instance, have served at least five years in the
does not connote bad judgment or establishment concerned. That prerogative is
negligence but imports a dishonest purpose exclusively lodged in the employee.
or some oral obliquity and conscious doing of (Youngbros Parts Centre, Inc. v. Taduran,
wrong; it means a breach of a known duty G.R. No. 232527, July 7, 2021)
through some motive or interest or ill will; it
partakes of the nature of fraud. (Dinoyo v. Employees Eligible for Retirement
Undaloc Construction Company, Inc., G.R. 1. All employees in the private sector,
No. 249638, June 23, 2021) regardless of their position, designation or
status and irrespective of the method by
E. Retirement which their wages are paid;
2. Part-time employees;
Retirement is "the result of a bilateral act of 3. Employees of service and other job
the parties, a voluntary agreement between contractors;
the employer and the employee whereby the 4. Domestic workers/kasambahays or
latter, after reaching a certain age, agrees to persons in the personal service of another;
sever their employment with the former.” 5. Underground mine workers;
(Youngbros Parts Centre, Inc. v. Taduran, 6. Employees of government-owned and/or
G.R. No. 232527, July 7, 2021) controlled corporations organized under
the Corporation Code (without original
Article 287. Retirement. — Any employee charters). (Article 302, Labor Code)
may be retired upon reaching the retirement
age established in the collective bargaining Exclusions
agreement or other applicable employment The following employees are not covered
contract. under Article 302 [287], Labor Code:
1. Employees of the national government
In the absence of a retirement plan or and its political subdivisions, including
agreement providing for retirement benefits government-owned and/or controlled
of employees in the establishment, an corporations, if they are covered by the
employee upon reaching the age of sixty (60) Civil Service Law and its regulations;
years or more, but not beyond sixty-five (65) 2. Employees of retail, service and
years which is hereby declared the agricultural establishments or operations
compulsory retirement age, who has served regularly employing not more than ten
at least five (5) years in the said (10) employees.
establishment, may retire and shall be a. “Retail establishment” is one
entitled to retirement pay [equivalent to at principally engaged in the sale of
least one-half (1/2) month salary for every goods to end-users for personal or
year of service, a fraction of at least six (6) household use. It shall lose its retail
months being considered as one whole year]. character qualified for exemption if
The article provides for two types of it is engaged in both retail and
retirement, namely: (a) compulsory and (b) wholesale of goods.
optional. The first takes place when the b. “Service establishment” is one
employee reaches the age of 65, while the principally engaged in the sale of
second is primarily determined by the service to individuals for their own

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or household use and is generally The employer who retires the employee
recognized as such. prematurely is guilty of illegal dismissal, and
c. “Agricultural is liable to pay his backwages and to reinstate
establishment/operation” refers to him without loss of seniority and other
an employer which is engaged in benefits, unless the employee has meanwhile
agriculture. However, it does not reached the mandatory retirement age under
include the manufacture and/or the Labor Code, in which case he is entitled
processing of sugar, coconut, to separation pay pursuant to the terms of
abaca, tobacco, pineapple, aquatic the plan, with legal interest on the
or other farm products. (Section 2, backwages and separation pay reckoned
Rule II, Implementing Rules and from the finality of the decision. (Laya vs.
Regulations of R.A. 7641) Philippine Veterans Bank, G.R. No. 205813,
January 10, 2018)
Kinds of Retirement Schemes
1. Compulsory and contributory in nature; For underground mine workers:
This is embodied in R.A. No. 8282 (private 1. Optional Retirement — an employee
sector) and R.A. No. 8291 (government). may retire upon reaching the age of
These laws require a mandatory 50 years or more.
contribution from the employer as well as 2. Compulsory Retirement — an
the employee, which shall become a employee shall be retired at the age
pension fund for the employee upon of 60 years. (Article 302 [287], Labor
retirement. (United Doctors Medical Code as amended by R.A. 10757)
Center vs. Bernadas, G.R. No. 209468,
December 13, 2017) R.A. No. 10789 reduced the compulsory
retirement age of racehorse jockeys to 55
2. One set up by the agreement of the years.
employer and employee in the CBA or
other agreement between them; Importance of 5 years
Five (5) years is the minimum years of service
3. One that is voluntarily given by the that must be rendered by the employee
employer. (Gerlach vs. Reuters Ltd. PHL., before he can avail of the retirement benefits
G.R. No. 148542, January 17, 2005) upon reaching optional or compulsory
retirement age under Article 287.
Age of Retirement
But this period holds true only “in the
In the absence of a retirement plan or absence of a retirement plan or agreement
agreement, the age of retirement shall be providing for retirement benefits of
fixed by law, that is, in accordance with employees in the establishment. ” Hence, the
Article 302 [287] of the Labor Code. employer and the employee are free to
1. Optional Retirement — an employee stipulate a different period in the retirement
may retire upon reaching the age of 60 plan, employment contract or CBA.
or more if he has served for at least 5
years in said establishment. Amount of Retirement Pay
2. Compulsory Retirement — an employee A retiring employee shall be entitled to
shall be retired at the age of 65 years. retirement pay equivalent to at least one-half
(Sec. 4, IRR, R.A. 7641) (1/2) month salary for every year of service,
a fraction of at least six (6) months being
An employer is free to impose a retirement considered as one (1) whole year. (Article
age less than 65 for as long as it has the 302 [287], Labor Code)
employees’ consent. (Jaculbe vs. Siliman
University, G.R. No. 156934, March 16, 2007) In determining the minimum retirement pay
due, the term “one-month salary” includes:

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1. Fifteen (15) days salary of the employee 2. The employee should have reached the
on his latest salary date; age of 60 years, and should have
2. Cash equivalent of not more than five (5) rendered at least 5 years of service with
days of service incentive leave; the employer.
3. One-twelfth (1/12) of 13th month pay
due the employee or two and a half (2.5) The components of retirement benefits of
days; and parttime workers may be computed at least
4. All other benefits that the employer and in proportion to the salary and related
employee may agree upon that should benefits due them. (DOLE Handbook on
be included in the computation of the Workers’ Statutory Monetary Benefits, 2022
employee’s retirement pay. (Sec. 5.2, ed.)
Rule II, Implementing Rules and
Regulations of R.A. 7641) Retirement Benefits vs Separation Pay
Retirement Separation Pay
The meaning of “one-half (1/2) month salary” Benefits
under Article 302 [287] of the Labor Code Cause
means a total of 22.5 days. (Capitol Wireless, Paid by reason of Required in cases
Inc. vs. Confesor, G.R. No. 117174, retirement enumerated in
November 13, 1996) Articles 298 [283]
and 299 [284] of
Article 302 [287] of the Labor Code ONLY the Labor Code and
applies in a situation where: as substitute
1. There is no CBA or other applicable remedy in cases
employment contracts providing for the where
benefits for employees; or reinstatement is no
2. There is a CBA or other applicable longer feasible nor
employment contracts providing for the possible
retirement benefits for employees, but Purpose
such benefits are below the To help the It is designed as a
requirements set by law. (Elegir vs. employee enjoy the wherewithal during
Philippine Airlines, G.R. No. 181995, July remaining years of the period that an
16, 2012) his life thereby employee is looking
lessening the for another
Retirement of Workers Paid by Results burden of worrying employment after
The basis for the determination of the salary for his financial his termination
for fifteen (15) days shall be their average support; also a form
daily salary (ADS). The ADS is the average of reward for the
salary for the last twelve (12) months employee’s loyalty
reckoned from the date of their retirement, and service to the
divided by the number of actual working days employer
in that particular period. (Sec. 5.3, Rule II, (Aquino vs. NLRC, G.R. No. 87653, February
Implementing Rules and Regulations of R.A. 11, 1992)
7641)
Rules on Double Recovery
Retirement of Part-Time Workers 1. If CBA/Retirement Plan prohibits double
Part-time workers are entitled to retirement recovery of separation pay and
pay of “one-half month salary” for every year retirement benefit – then grant only one
of service under R.A. 7641 after satisfying the benefit, whichever is greater. (Article
following conditions precedent for optional 283, Labor Code)
retirement: 2. If CBA/Retirement Plan contains no
1. There is no retirement plan between the prohibition, grant both. (Aquino vs.
employer and employee; and NLRC, G.R. No. 87653, February 11,
1992)

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3. Same is true with retirement plans vis-a- a. the liberty or freedom, that is, the absence
vis CBA. (Ibid) of restraint which guarantees that the
4. If CBA does not require payment of employee may act for himself without
retirement pay “in addition” to being prevented by law; and
retrenchment pay, then no double b. the power, by virtue of which an employee
recovery. (Ibid) may, as he pleases, join or refrain from
joining an association. (Ibid)
VII. LABOR RELATIONS
A labor organization is defined as "any union
Labor relations define the status, rights or association of employees which exists in
and duties, as well as the institutional whole or in part for the purpose of collective
mechanisms that govern the individual and bargaining or of dealing with employers
collective interactions between employers, concerning terms and conditions of
employees and their representatives. employment.
Unionization, negotiation, and dispute
settlements fall in the area of labor relations. A labor organization has two broad rights:
(Everyone’s Labor Code, Azucena, 2021, 1. to bargain collectively and
p.11) 2. to deal with the employer concerning
terms and conditions of employment.
A. Right to Self-Organization
To bargain collectively is a right given to a
1. Coverage
union once it registers itself with the DOLE.
All persons employed in commercial,
Dealing with the employer, on the other
industrial and agricultural enterprises and in
hand, is a generic description of interaction
religious, charitable, medical, or educational
between employer and employees
institutions, whether operating for profit or
concerning grievances, wages, work hours
not, shall have the right to self-organization
and other terms and conditions of
and to form, join, or assist labor
employment, even if the employees' group is
organizations of their own choosing for
not registered with the DOLE. (Confederation
purposes of collective bargaining. (Article
for Unity, Recognition and Advancement of
253, Labor Code of the Philippines)
Government Employees v. Abad, G.R. No.
200418, November 10, 2020)
The right to self-organization includes the
right to form, join or assist labor
a) Eligibility for Membership
organizations for the purpose of collective
bargaining through representatives of their
Who May Join, Form, or Assist a Labor
own choosing and to engage in lawful
Organization for the Purpose of
concerted activities for the same purpose for
Collective Bargaining
their mutual aid and protection. This is in line
with the policy of the State to foster the free
The following are eligible to join, form or
and voluntary organization of a strong and
assist a labor organization.
united labor movement as well as to make
sure that workers participate in policy and
1. In the private sector:
decision-making processes affecting their
i. All persons employed in commercial,
rights, duties and welfare. (Confederation for
industrial and agricultural
Unity, Recognition and Advancement of
enterprises;
Government Employees v. Abad, G.R. No.
ii. Employees of GOCCs without original
200418, November 10, 2020)
charters established under the
Corporation Code;
The right to form a union or association or to
iii. Employees of religious, charitable,
self-organization comprehends two notions,
medical or educational institutions,
to wit:
whether operating for profit or not;
iv. Supervisory employees;

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v. Alien employees; the Philippine DFA (Par. 2, Rule II, DOLE

vi. Working children; Department Order NO. 40, Series of 2003)
vii. Homeworkers;
viii.Employees of cooperatives; Working children
ix. Employees of legitimate contractors Working children have the same freedom as
not with principal but with the adults to join the collective bargaining union
contractor; of their own choosing in accordance with law.
x. Security Guards Neither management nor any collective
bargaining union shall threaten or coerce
2. In the public/government sector: working children to join, continue or
i. All rank-and-file employees of all withdraw as members of such union. (Article
branches, subdivisions, 11, P.D No. 603)
instrumentalities, and agencies of
government, including GOCCs with Homeworkers
original charters. Homeworkers have the right to form, join or
assist organizations of their own choosing in
Right of Supervisory Employees/ accordance with law. (Section 3, Department
Frontline Managers to Join a Union Order 05-92, Series of 1992)

Supervisory employees are those, who in the Employees of cooperatives

interest of the employer, effectively Employees who are not members-consumers
recommend such managerial actions if the may form, join or assist labor organizations
exercise of such authority is not merely for purposes of collective bargaining
routinary or clerical in nature but requires the notwithstanding the fact that employees of
use of independent judgment (Art. 219(m), SAJELCO who are not members-consumers
Labor Code of the Philippines) were employed ONLY because they are
members of the immediate family of
Supervisory employees shall not be eligible members-consumers. The fact remains that
for membership in the collective bargaining they are not themselves members-
unit of the rank-and-file employees but may consumers, and as such, they are entitled to
join, assist or form separate collective exercise the rights of all workers to
bargaining units and/or legitimate labor organization, collective bargaining,
organizations of their own. (Article 255, negotiations and others as are enshrined in
Labor Code of the Philippines) the Constitution and the Labor Code. (San
Jose City Electric Service Cooperative, Inc. v.
The employees so improperly included are Ministry of Labor and Employment, G.R. No.
automatically deemed removed from the list 77231, May 31, 1989)
of members of said union. In other words,
their removal from the said list is by operation Owner cannot bargain with himself
of law. Members-consumers are not qualified to
form, join or assist labor organizations for
Alien employees purposes of collective bargaining. The reason
for withholding from employees of a
For an alien employee to exercise his right to cooperative who are members-co-owners the
self-organization, the following requisites right to collective bargaining is clear: an
must be complied with: owner cannot bargain with himself. (Ibid)
a. He should have a valid working permit Employees of legitimate contractors not
issued by the DOLE; and with the principals but with the
b. He is a national of a country which grants contractors
the same or similar rights to Filipino
workers or which has ratified either ILO There is a legitimate job contracting or
Convention No. 87 or 98, as certified by subcontracting if there is an agreement
between the principal and the contractor or

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subcontractor that assure the contractual 2. intermittent and other workers;

employee’s entitlement to all labor and 3. the self-employed;
occupational safety and health standards, 4. rural workers and
free exercise of the right to self-organization, 5. those without any definite employers.
security of tenure, and social welfare benefits (Article 253, Labor Code of the
(Mago vs. Sun Power Manufacturing, Ltd., Philippines)
G.R. No. 210961, January 24, 2018)
The reason for this rule is that these persons
But this right cannot be exercised and have no employers with whom they can
invoked against the principal but only against collectively bargain.
the independent contractor which employed
them. (Chan, Bar Reviewer on Labor Law, Workers in Export Processing Zones
2019, p. 381) Export processing zones are still part of the
Philippine territory which is subject to
Security Guards sovereignty and laws. Therefore, the
The security guards and other personnel Constitution that guarantees workers’ right to
employed by the security service contractor organize applies to them with undiminished
shall have the right to form, join or assist in force. (Azucena, The Labor Code With
the formation of a labor organization of their Comments and Cases, Vol. II-A, 2021, p.
own choosing for purposes of collective 241)
bargaining and to engage in concerted
activities which are not contrary to law Religious objectors
including the right to strike. (Section 10, Members of said religious sects cannot be
Department Order No. 14, Series of 2001) compelled or coerced to join labor unions
even when said unions have closed shop
In the public sector agreements with the employers; that in spite
All rank-and-file employees of all branches, of any closed shop agreement, members of
subdivisions, instrumentalities, and agencies said religious sects cannot be refused
of government, including GOCCs with original employment or dismissed from their jobs on
charters. the sole ground that they are not members
of the collective bargaining union. (Gonzales
Non-Employees are not entitled to join v. Central Azucarera de Tarlac Labor Union,
or form a labor organization for G.R. No. L-38178, October 3, 1985)
purposes of collective bargaining
Persons who are not employees of a Religious objectors can form and join
company are not entitled to the constitutional their own union
right to join or form a labor organization for Recognition of the tenets of a sect should not
purposes of collective bargaining. The infringe on the basic right of self-organization
question of whether ER-EE relationship exists granted by the Constitution to workers,
is a primordial consideration before regardless of religious affiliation (Kapatiran
extending labor benefits under the sa Meat and Canning Division vs. Hon. Pura
workmen's compensation, social security, Calleja, G. R. No. L-82914, June 20, 1988)
Medicare, termination pay and labor relations
law. (Singer Sewing Machine Co. vs. Drilon, NOTE: Religious objectors also have the
G.R. No. 91307, January 24, 1991) right to vote in a certification election (Reyes
vs. Trajano, G. R. No. 84433, June 2, 1992).
Worker’s Association
Persons Not Allowed to Form, Join, or
The following are allowed to form labor Assist Labor Organizations
organizations for their mutual aid and
protection and other legitimate purposes a. In the Private Sector
except collective bargaining: i. Managerial employees; and
1. Ambulant workers; ii. Confidential employees.

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b. In the Public Sector

i. High-level employees whose The mere fact that an employee is designated
functions are normally considered as "manager" does not ipso facto make him
policymaking or managerial or whose onedesignation should be reconciled with the
duties are of a highly confidential actual job description of the employee for it
nature; is the job description that determines the
ii. Members of the Armed Forces of the nature of employment. (Asia Pacific
Philippines; Chartering (Phils.) Inc. v. Farolan, G.R. No.
iii. Police officers; 151370, December 4, 2002)
iv. Firemen; and
v. Jail guards. b. Restrictions as to Confidential
Employees
a. Restrictions as to Managerial
Employees to Join any Labor Confidential employees are those who:
Organization 1. assist or act in a confidential capacity, in
Managerial employees are not eligible to join, regard
assist or form any labor organization (Art. 2. to persons who formulate, determine, and
255, Labor Code) effectuate management policies [specially
in the field of labor relations].
Managerial Employee is one who is vested
with powers or prerogatives to lay down and The two criteria are cumulative, and both
execute management policies and/or to hire, must be met if an employee is to be
transfer, suspend, layoff, recall, discharge, considered a confidential employee — that is,
assign or discipline employees (Art. 219(m), the confidential relationship must exist
Labor Code) between the employee and his superior
officer; and that officer must handle the
There are 3 types of managerial employees: prescribed responsibilities relating to labor
1. Top Management – responsible for the relations. (Sugbuanon Rural Bank, Inc. v.
overall management of the organization. Laguesma, G.R. No. 116194, February 2,
It establishes operating policies and 2000)
guides to the organization’s interactions
with its environment. Although Article 245 of the Labor Code limits
2. Middle Management – Direct the the ineligibility to join, form and assist any
activities of other managers and labor organization to managerial employees,
sometimes also those of operating jurisprudence has extended this prohibition
employees. Their principal responsibilities to confidential employees or those who by
are to direct the activities that implement reason of their positions or nature of work are
their organization’s policies and to balance required to assist or act in a fiduciary manner
the demands of their superiors with the to managerial employees and, hence, are
capacities of their subordinates. likewise privy to sensitive and highly
3. First-Line Management (also called confidential records.
supervisory level) – Direct and
supervise work of employees only; they do Confidential employees are thus excluded
not supervise other managers. from the rank-and-file bargaining unit. The
rationale for their separate category and
The first two above are absolutely disqualification to join any labor organization
prohibited; but the third, being is similar to the inhibition for managerial
supervisors, are allowed to organize but employees, because if allowed to be affiliated
only among themselves (Chan, Bar with a union, the latter might not be assured
Reviewer on Labor Law, 2019, p. 384-385) of their loyalty in view of evident conflict of
interests and the union can also become
Job Description Determines Nature of company-denominated with the presence of
Employment managerial employees in the union

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membership. Having access to confidential incapacity to bargain does not stop them
information, confidential employees may also from forming their organization which is not
become the source of undue advantage. Said a union. Its purpose is not to collectively
employees may act as a spy or spies of either bargain with the cooperative but to extend
party to a collective bargaining agreement. aid and protection to its members. The
||| (San Miguel Foods, Inc. v. San Miguel capacity of such an association to sue the
Corp. Supervisors and Exempt Union, G.R. cooperative which forcibly required members
No. 146206, August 1, 2011) to sign applications for retirement,
resignation or separation. (Azucena,
Confidential information: Must relate to Everyone’s Labor Code 2, 2021, p. 305)
labor relations and not from a business
standpoint Government employees have the right
to self-organization but are prohibited
An employee must assist or act in a to strike
confidential capacity and obtain confidential
information relating to labor relations All government employees can form, join or
policies. Exposure to internal business assist employees' organizations of their own
operations of the company is not per se a choosing for the furtherance and protection
ground for the exclusion in the bargaining of their interests. They can also form, in
unit. (Tunay na Pagkakaisa ng Manggagawa conjunction with appropriate government
sa Asia Brewery vs. Asia Brewery, G.R. No. authorities, labor-management committees,
162025, August 3, 2010) works councils and other forms of workers'
participation schemes to achieve the same
Restrictions as to Employee-Member of objectives. (Section 2, E.O. No. 80)
Cooperative
The right to self-organization of government
Employees who at the same time are employees pertains to all branches,
members of an electric cooperative are not subdivision, instrumentalities and agencies of
entitled to form or join a union. (Central the Government, including government-
Negros Electric Cooperative, Inc. v. owned or controlled corporations (GOCCs)
Secretary, Department of Labor and with original charters. (Section 1, E.O. No.
Employment, G.R. No. 94045, September 13, 80)
1991)
Government employees’ right to
Members of cooperatives are not eligible organize is for furtherance and
even though they do not participate in the protection of their interests
actual management of the cooperative.
Irrespective of their degree of participation, The right of government employees to "form,
they are still coowners. (Benguet Electric join or assist employees organizations of their
Cooperative vs. FerrerCalleja, G.R. No. own choosing" under Executive Order No.
79025, December 29, 1989) 180 is not regarded as existing or available
for "purposes of collective bargaining," but
Exception simply "for the furtherance and protection of
their interests." (Arizala vs. CA, G.R. No.
Employees who withdrew their membership 43633-34, September 14, 1990)
from the cooperative are not entitled to form
or join a labor union for the negotiations of a Right not Extensive
Collective Bargaining Agreement. (CENECO The right of Government employees to deal
vs. DOLE, G.R. No. 94045, September 13, and negotiate with their respective employers
1991) is not quite as extensive as that of private
employees. Excluded from negotiation by
NOTE: Even as regards the employees who government employees are the "terms and
are members of the cooperative, their conditions of employment that are fixed by

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law." Only those terms and conditions not access to confidential labor relations
otherwise fixed by law are negotiable. information, there is no legal prohibition
(Azucena, Everyone’s Labor Code 2, 2021, p. against confidential employees from forming,
301) assisting, or joining a union. (Sugbuanon
Rural Bank, Inc. v. Laguesma, G.R. No.
NOTE: Employees of government 116194, February 2, 2000)
corporations established under the
Corporation Code shall have the right to In applying the doctrine of necessary
organize and to bargain collectively (Art. 254, implication, we took into consideration the
Labor Code of the Philippines) rationale behind the disqualification of
managerial employees expressed in Bulletin
Members of AFP, police officers, Publishing Corporation vs. Sanchez, thus ". .
policemen, firemen, and jail guards . if these managerial employees would belong
excluded from unionizing; Exception to or be affiliated with a Union, the latter
Section 4 of E.O. No. 180 excludes members might not be assured of their loyalty to the
of AFP, police officers, policemen, firemen, Union in view of evident conflict of interests.
and jail guards from unionizing for reasons of The Union can also become company —
security and safety. dominated with the presence of managerial
employees in Union membership." Stated
2. Doctrine of Necessary Implication differently, in the collective bargaining
The doctrine states that what is implied in a process, managerial employees are supposed
statute is as much a part thereof as that to be on the side of the employer, to act as
which is expressed. Every statute is its representatives, and to see to it that its
understood, by implication, to contain all interest are well protected. The employer is
such provisions as may be necessary to not assured of such protection if these
effectuate its object and purpose, or to make employees themselves are union members.
effective rights, powers, privileges or (Pepsi-Cola Products Philippines, Inc. v.
jurisdiction which it grants, including all such Secretary of Labor, G.R. Nos. 96663 &
collateral and subsidiary consequences as 103300, August 10, 1999)
may be fairly and logically inferred from its
terms. Ex necessitate legis. And every 3. BARGAINING UNIT
statutory grant of power, right or privilege is
deemed to include all incidental power, right “Bargaining Unit” refers to a group of
or privilege. This is so because the greater employees sharing mutual interests within a
includes the lesser, expressed in the maxim, given employer unit, comprised of all or less
in eo plus sit, simper inest et minus. than all of the entire body of employees in
(Robustum Agricultural Corp. v. Department the employer unit or any specific occupational
of Agrarian Reform, G.R. No. 221484, or geographical grouping within such
November 19, 2018) employer unit. (Holy Child Catholic School v.
Sto. Tomas, G.R. No. 179146)
Article 245 of the Labor Code does not
directly prohibit confidential employees from An appropriate bargaining unit is a group of
engaging in union activities. However, under employees of a given employer, composed of
the doctrine of necessary implication, the all or less than the entire body of employees,
disqualification of managerial which the collective interests of all the
employees equally applies to employees, consistent with equity to the
confidential employees. The employer, indicate to be best suited to serve
confidentialemployee rule justifies exclusion reciprocal rights and duties of the parties
of confidential employees because in the under the collective bargaining provisions of
normal course of their duties they become law.
aware of management policies relating to
labor relations. It must be stressed, however, Otherwise stated, it is a legal collectivity for
that when the employee does not have collective bargaining purposes whose

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members have substantially mutual Employees, G.R. No. L26736, August 18,
bargaining interests in terms and conditions 1972)
of employment as will assure to all employees
their collective bargaining rights. A unit to be Tests in determining the appropriate
appropriate must effect a grouping of collective bargaining unit
employees who have substantial, mutual 1. Community or mutuality of interest;
interests in wages, hours, working conditions 2. Globe doctrine or will of the members;
and other subjects of collective bargaining.” 3. Prior Collective bargaining history; and
(Dunlop Slazenger (Phils.), Inc. v. Secretary 4. Employment status doctrine.
of Labor and Employment, G.R. No. 131248,
December 11, 1998) Community or mutuality of interest
Law and jurisprudence, thus, provide that the
The existence of a prior collective bargaining commonality or mutuality of interest is the
history is neither decisive nor conclusive in most fundamental standard of an appropriate
the determination of what constitutes an bargaining unit. This standard requires that
appropriate bargaining unit. However, the employees in an asserted bargaining unit
employees in two corporations cannot be be similarly situated in their terms and
treated as a single bargaining unit even if the conditions of employment relations. This
businesses of the two corporations are commonality or mutuality may be
related. (Sta. Lucia East Commercial appreciated with greater certainty if their
Corporation vs. Hon. Secretary of Labor, G.R. areas of differences with other groups of
No. 162355, August 14, 2009) employees are considered. (Holy Child
Catholic School v. Sto. Tomas, G.R. No.
No Hard and Fast Rule 179146, July 23, 2013)
The basic test of a bargaining unit's
acceptability is whether it will best assure to Factors in Determining Community or
all employees the exercise of their collective Mutuality of Interest
bargaining rights, industrial experience 1. Similarity in the scale and manner of
indicates that the most efficacious bargaining determining earnings
unit is one which is comprised of constituents 2. Similarity in employment benefits, hours of
enjoying a community of interest and work and other terms and conditions of
economic or occupational unity. This employment.
community of interest is reflected in groups 3. Similarity in the kinds of work performed.
having substantial similarity of work and 4. Similarity in the qualifications, skills and
duties or similarity of compensation and training of the employees
working conditions, among others. 5. Frequency of contact or interchange
(Democratic Labor Union vs. Cebu among the employees
Stevedoring Co., G.R. No. L-10321, February 6. Geographic proximity
28, 1958) 7. Continuity or integration of production
process
The Bureau of Labor Relations enjoys a wide 8. Common supervision and determination of
discretion in determining the procedure labor-relations policy
necessary to ensure the fair and free choice 9. History of collective bargaining
of bargaining representation by employees. 10. Desires of the affected employees
Its action “in deciding upon an appropriate 11. Extent of union organization (Azucena,
unit for collective bargaining purposes is The Labor Code with Comments and Cases
discretionary and its judgment in this respect Volume I, 7th Edition, p. 461)
is entitled to almost complete finality, unless
its action is arbitrary or capricious and absent Globe doctrine
and grave abuse of discretion as to justify the The will of employees should be respected as
Court’s intervention. (Filoil Refinery Corp. vs. they had manifested their desire to be
Filoil Supervisory and Confidential represented by only one bargaining unit.

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(Holy Child Catholic School v. Sto. Tomas, thereof. Thus, the Court said that after a
G.R. No. 179146, July 23, 2013) labor organization has been registered, it
may exercise all the rights and privileges of a
Collective bargaining history doctrine legitimate labor organization. Any mingling
This principle puts a premium to the prior between supervisory and rank-and-file
collective bargaining history and affinity of employees in its membership (or, by analogy,
the employees in determining the any inclusion of workers outside the CBU)
appropriate bargaining unit. Collective cannot affect its legitimacy for that is NOT
bargaining history of a company is not among the grounds for cancellation of its
decisive of what should comprise the registration, unless such mingling was
collective bargaining unit. (San Miguel Corp. brought about by misrepresentation,
v. Laguesma, G.R. No. 100485, September false statement or fraud under Article 239
21, 1994) of the Labor Code. (SMCC-SUPER vs Charter
Chemical and Coating Corporation, G.R. No.
Employment status doctrine 169717, MArch 16, 2011)
The determination of the appropriate
bargaining unit based on the employment b. Effect of Inclusion as Members of
status of the employees is considered an Employees Outside of the Bargaining
acceptable mode. For instance, casual Unit
employees and those employed on a day-
today basis do not have the mutuality or The inclusion as union members of
community of interest with regular and employees outside the bargaining unit shall
permanent employees. Hence, their inclusion not be ground for the cancellation of the
in the bargaining unit composed of the latter registration of the union. Said employees are
is not justified. automatically deemed removed from the list
of membership of said union. (Art. 256, Labor
a. Commingling or Mixed Membership Code of the Philippines)

Commingling or mixed membership is the EXCEPTION: Unless such mingling was

inclusion of workers who are not part of the brought about by misrepresentation, false
collective bargaining unit (CBU). statement or fraud under Article 247
(Grounds for Cancellation of Union
The inclusion in a union of disqualified Registration) of the Labor Code. (SMCC-
employees is not among the grounds for Super vs. Charter Chemical and Coating
cancellation, unless such inclusion is due to Corporation, G.R. No. 169717, March 16,
misrepresentation, false statement or fraud 2011)
under the circumstances enumerated in
Sections (a) and (c) of Article 239 of the Non-Abridgement of Right to Self-
Labor Code. (Holy Child Catholic School v. Organization
Sto. Tomas, G.R. No. 179146, July 23, 2013) It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly
The mixed membership does not result in the interfere with employees and workers in their
illegitimacy of the registered labor union exercise of the right to self-organization. (Art.
unless the same was done through 257, Labor Code)
misrepresentation, false statement or fraud.
(Heritage Hotel Manila v. Secretary of Labor The 1987 Constitution provides that “the
and Employment, G.R. No. 172132, July 23, right of the people, including those employed
2014) in the public and private sectors, to form
unions, associations, or societies for purposes
While there is a prohibition against the not contrary to law shall not be abridged.”
mingling of supervisory and rank-and-file Clearly, the said right guaranteed by the
employees in one labor organization, the Constitution is subject to the condition that
Labor Code does not provide for the effects its exercise should be for purposes “not

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contrary to law”. (United Pepsi-Cola Two modes of creating a labor

Supervisory Union vs. Laguesma, G. R. No. organization
122226, March 25, 1998)
The Labor Code provides two modes of
The right to self-organization includes the creating or establishing a labor organization,
right to: through:
a. Form unions; a. Independent registration, and
b. Take part in its formation; b. Chartering of local/chartered local (Chan,
c. Join a union; Bar Reviewer on Labor Law, 2019, p. 397-
d. Collectively bargain; 398)
e. Collectively negotiate; or
f. Engage in concerted activities for mutual Trade union centers not allowed
aid and protection (Art. 253, Labor Code) Though Article 240 of the Labor Code now
includes “trade union center" as among the
Worker Should Personally Decide organizations which may register as a
Whether to Join in a Labor Union legitimate labor organization, Article 241, the
It is therefore the employee who should provision enunciating the procedure for
decide for himself whether he should join or chartering of a local chapter/chartered local,
not an association; and should he choose to does not include “trade union center" as
join, he himself makes up his mind as to among the labor organizations that is
which association he would join; and even empowered, besides the federation or
after he has joined, he still retains the liberty national union, to create such local
and the power to leave and cancel his chapter/chartered local through the process
membership with said organization at any of chartering.
time. (Bank of the Philippine Islands v. BPI
Employees Union-Davao Chapter-Federation Applying the Latin maxim expressio unius est
of Unions in BPI Unibank, G.R. No. 164301, exclusio alterius, held that trade union
August 10, 2010) centers are not allowed to charter directly a
local chapter/chartered local because the
It is clear, therefore, that the right to join a pertinent statutes and applicable
union includes the right to abstain from implementing rules do not grant such
joining any union. Inasmuch as what both the authority thereto. The power granted to labor
Constitution and the Industrial Peace Act organizations to directly create a local
have recognized, and guaranteed to the chapter/chartered local through chartering is
employee, is the 'right' to join associations of given only to a federation or national union.
his choice, it would be absurd to say that the (SMCEU-PTGWO vs. SMPPEU– PDMP, G.R.
law also imposes, in the same breath, upon No. 171153, September 12, 2007)
the employee the duty to join associations.
The law does not enjoin an employee to sign Action on Application
up with any association. (Ibid)
The Regional Office or the Bureau, as the
Right to self-organization present on case may be, shall act on all applications for
their first day of service registration or notice of change of name,
Any employee, whether employed for a affiliation, merger and consolidation within
definite period or not, shall, beginning on his one (1) day from receipt thereof, either by:
first day of service, be considered as an a. approving the application and issuing the
employee for purposes of membership in any certificate of registration/ acknowledging the
labor union. (Art. 292(c), Labor Code, as notice/report; or
amended) b. denying the application/notice for failure of
the applicant to comply with the
4. Registration of Unions, Chartering, requirements for registration/ notice. (DOLE
Cancellation of Registration DO No. 40-03-A-I)

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Denial of Registration and Appeal be entitled to all other rights and privileges of
The denial may be appealed to the Bureau if a legitimate labor organization only upon the
denial is made by the Regional Office or to submission of the following documents in
the Secretary if denial is made by the Bureau, addition to its charter certificate:
within ten (10) days from receipt of such
notice, on the ground of grave abuse of (a) The names of the chapter's officers, their
discretion or violation of these Rules. (DO No. addresses, and the principal office of the
40-03-A-I) chapter; and
(b) The chapter's constitution and by-laws:
Requirements of Registration Provided, That where the chapter's
constitution and by-laws are the same as
A federation, national union or industry or that of the federation or the national
trade union center or an independent union union, this fact shall be indicated
shall acquire legal personality and shall be accordingly.
entitled to the rights and privileges granted
by law to legitimate labor organizations upon The additional supporting requirements shall
issuance of the certificate of registration be certified under oath by the secretary or
based on the following requirements: treasurer of the chapter and attested by its
president. (Art. 241, Labor Code)
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their Cancellation of Registration
addresses, the principal address of the
labor organization, the minutes of the The certificate of registration of any
organizational meetings and the list of legitimate labor organization, whether
the workers who participated in such national or local, may be cancelled by the
meetings; Bureau, after due hearing, only on the
(c) In case the applicant is an independent grounds specified in Article 239 hereof. (Art.
union, the names of all its members 245, Labor Code of the Philippines)
comprising at least twenty percent
(20%) of all the employees in the Effect of a Petition for Cancellation of
bargaining unit where it seeks to Registration
operate; A petition for cancellation of union
(d) If the applicant union has been in registration shall not suspend the
existence for one or more years, copies proceedings for certification election nor shall
of its annual financial reports; and it prevent the filing of a petition for
(e) Four copies of the constitution and by- certification election. In case of cancellation,
laws of the applicant union, minutes of nothing herein shall restrict the right of the
its adoption or ratification, and the list of union to seek just and equitable remedies in
the members who participated in it. the appropriate courts (Art. 246, Labor Code,
(Art. 240, Labor Code of the Philippines) as amended)

Chartering and Creation of a Local Cancellation, where and who may file
Chapter. Subject to the requirements of notice and
due process, the registration of any
A duly registered federation or national union legitimate independent labor union,
may directly create a local chapter by issuing local/chapter and workers’ association may
a charter certificate indicating the be cancelled by the Regional Director upon
establishment of the local chapter. the filing of a petition for cancellation of union
registration, or application by the
The chapter shall acquire legal personality organization itself for voluntary dissolution.
only for purposes of filing a petition for
certification election from the date it was The petition for cancellation or application for
issued a charter certificate. The chapter shall voluntary dissolution shall be filed in the

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Regional Office which issued its certificate of (b) Misrepresentation, false statements or
registration or creation. fraud in connection with the election of
officers, minutes of the election of
In the case of federations, national or officers, and the list of voters;
industry unions and trade union centers, the (c) Voluntary dissolution by the members.
Bureau Director may cancel the registration (Art. 247, Labor Code of the Philippines)
upon the filing of a petition for cancellation or
application for voluntary dissolution in the Misrepresentation to be a ground for the
Bureau of Labor Relations (Sec. 1, Rule XIV, cancellation of the certificate of registration,
D.O. No. 40-03 as amended). it must be done maliciously and deliberately.
Further, the mistakes appearing in the
Any party-in-interest may commence a application or attachments must be grave or
petition for cancellation of registration, refer to significant matters. The details as to
except in actions involving violations of how the alleged fraud was committed must
Article 250 (renumbered), which can only be also be indubitably shown. (Samahan ng
commenced by members of the labor Manggagawa sa Hanjin Shipyard vs. Bureau
organization concerned. (Sec. 2, Rule XIV, of Labor Relations, G.R. No. 211145, October
D.O. No. 40-03 as amended) 14, 2015)

Voluntary Cancellation of Registration The Prohibited grounds for cancellation

registration of a legitimate labor organization The inclusion as union members of
may be canceled by the organization itself: employees who are outside the bargaining
Provided, that at least two-thirds of its unit shall not be a ground to cancel the union
general membership votes, in a meeting duly registration. The ineligible employees are
called for that purpose to dissolve the automatically deemed removed from the list
organization: Provided, further, That an of membership of the union.
application to cancel registration is thereafter
submitted by the board of the organization, The affiliation of the rank-and-file and
attested to by the president thereof. (Art. supervisory unions operating within the same
248, Labor Code, as amended) establishment to the same federation or
national union shall not be a ground to cancel
Equity of the Incumbent All existing the registration of either union. (Sec. 6, Rule
federations and national unions which meet XIV, D.O. No. 40-03 as amended)
the qualifications of a legitimate labor
organization and none of the grounds for 5. Sole and Exclusive Bargaining Agent
cancellation shall continue to maintain their
existing affiliates regardless of the nature of Bargaining representative means a legitimate
the industry and the location of the affiliates. labor organization or any officer or agent of
(Art. 249, Labor Code, as amended) such organization whether or not employed
by the employer. (Article 219(j), Labor Code)
Grounds for Cancellation of Union
Registration. Exclusive Bargaining Agent/
Representative
The following may constitute grounds for
cancellation of union registration: “Exclusive Bargaining Representative” refers
(a) Misrepresentation, false statement or to a legitimate labor union duly recognized or
fraud in connection with the adoption or certified as the sole and exclusive bargaining
ratification of the constitution and by- representative or agent of all the employees
laws or amendments thereto, the in a bargaining unit. (Section I, Article I,
minutes of ratification, and the list of Department Order No. 40-03,As amended by
members who took part in the A-I)
ratification;

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The labor organization designated or selected members. (Holy Child Catholic School v. Sto.
by the majority of the employees in an Tomas, G.R. No. 179146, July 23, 2013)
appropriate collective bargaining unit. (Article
267, Labor Code) Non-certified Union Cannot Collectively
Bargain with Employer
Only the labor organization designated or
Selection/Designation of an exclusive selected by the majority of the employees in
bargaining representative an appropriate collective bargaining unit is
the exclusive representative of the
General Rule: The labor organization employees in such unit for the purpose of
designated/selected by the majority of the collective bargaining.
employees in an Appropriate Bargaining Unit
shall be the exclusive bargaining The union is admittedly not the exclusive
representative of the employees in such unit representative of the majority of the
for the purpose of collective bargaining. (Art. employees of petitioner, hence, it could not
267, Labor Code) demand from petitioner the right to bargain
collectively in their behalf. (Philippine
EXCEPTIONS: Diamond Hotel & Resort, Inc. v. Manila
1. An individual employee or group of Diamond Hotel Employees Union, G.R. No.
employees shall have the right at any time 158075, June 30, 2006)
to present grievances to their employer.
2. Any provision of law to the contrary The designation of a SEBA does not deprive
notwithstanding, workers shall have the an individual employee or group of
right to participate in policy and decision- employees to exercise their right at any time
making processes of the establishment to present grievances to their employer, with
where they are employed insofar as said or without the intervention of the SEBA
processes will directly affect their rights, (Art. 267, Labor Code)
benefits and welfare. Workers and
employees may also form labor An individual employee or group of
management councils for the same employees cannot be allowed to submit or
purpose. In such case, its representatives refer unsettled grievances for voluntary
shall be elected by a majority of all arbitration without the participation of the
employees in said establishment. (Art. SEBA. The reason is that it is the SEBA which
267, Labor Code, as amended) is a party to the CBA which contains the
provision on voluntary arbitration. Being a
When a legitimate labor organization has party thereto, the SEBA cannot be
been certified as the sole and exclusive disregarded when a grievable issue will be
bargaining agent of the rank-and-file submitted for voluntary arbitration.
employees of a given employer, it means that
it shall remain as such during the existence In order to have legal standing, the individual
of the CBA, to the exclusion of other labor members should be shown to have been duly
organizations, and no petition questioning authorized to represent the SEBA. (Insular
the majority status of said incumbent agent Hotel Employees Union-NFL vs. Waterfront
or any certification election be conducted Insular Hotel Davao, G.R. No. 174040-41,
outside the sixty-day freedom period September 22, 2010)
immediately before the expiry date of the
CBA. (Republic Planters Bank General Modes of Determining the SEBA
Services Employees Union, G.R. No. 119675, 1. Certification election;
November 21, 1996) 2. Consent election;
3. Run-off election;
A union certified as an exclusive bargaining 4. Re-run election.
agent represents not only its members but
also other employees who are not union

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Note: Voluntary Recognition is no longer part Department Order No. 40-03, Series of
of the modes of determination of the SEBA 2003)
under the current DO 40-03-A to I.
Where two or more petitions involving the
same bargaining unit are filed in one Regional
1. Certification election Office, the same shall be automatically
"Certification Election" or "Consent Election" consolidated with the Med-Arbiter who first
refers to the process of determining through acquired jurisdiction. Where the petitions are
secret ballot the sole and exclusive filed in different Regional Offices, the
representative of the employees in an Regional Office in which the petition was first
appropriate bargaining unit for purposes of filed shall exclude all others; in which case,
collective bargaining or negotiation. (Section the latter shall indorse the petition to the
1(h), Department Order NO. 40-03, Series of former for consolidation. (Section 3, Rule
2003) VIII, Department Order No. 40-03, Series of
2003)
Most Democratic Method
The holding of a certification election is the When To File
most democratic method of determining the
employees' choice of their bargaining General Rule: A petition for certification
representative. It is the appropriate means election may be filed anytime.
whereby controversies and disputes on
representation may be laid to rest, by the Exceptions:
unequivocal vote of the employees 1. Certification year bar rule;
themselves. Indeed, it is the keystone of 2. Negotiations bar rule;
industrial democracy." (Oriental Tin Can 3. Bargaining deadlock bar rule; or
Labor Union v. Secretary of Labor and 4. Contract bar rule.
Employment, G.R. Nos. 116751 & 116779,
August 28, 1998) XPS 1. Certification year bar rule
A petition for certification election may not be
Not a Litigation Proceeding filed within 1 year from:
A certification proceeding is not a "litigation" a. Date of fact of voluntary recognition has
in the sense in which this term is commonly been entered or
understood, but a mere investigation of a b. Date a valid certification, consent or run-
non-adversarial, fact-finding character, in off election has been conducted within the
which the investigating agency plays the part bargaining unit.
of a disinterested investigator seeking merely
to ascertain the desires of the employees as Where an appeal has been filed from the
to the matter of their representation. order of the Med-Arbiter certifying the results
(Sandoval Shipyards, Inc. v. Pepito, G.R. No. of the election, the running of the one year
143428, June 25, 2001) period shall be suspended until the decision
on the appeal has become final and
Who May File executory. (Section 3(a), Rule VIII,
1. Any legitimate labor organization; Department Order No. 40-03, Series of 2003)
a. an independent union; or
b. a national union or federation which XPS 2. Negotiations bar rule
has already issued a charter certificate No petition for certification election should be
to its local chapter participating in the entertained while the sole and exclusive
certification election;96 or bargaining agent and the employer have
c. a local chapter which has been issued commenced and sustained negotiations in
a charter certificate by the national good faith within the period of one (1) year
union or federation from the date of a valid certification, consent,
2. Employer, when requested to bargain run-off or re-run election or from the date of
collectively. (Section 2, Rule VIII, voluntary recognition.

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XPS 3. Bargaining deadlock bar rule A company remains unorganized even if

A petition for certification election may not be there is a duly recognized or certified
entertained when a bargaining deadlock to bargaining agent for rank-and-file
which an incumbent or certified bargaining employees, for purposes of the petition for
agent is a party has been submitted to certification election filed by supervisors. The
conciliation or arbitration or has become the reason is that the bargaining unit composed
subject of a valid notice of strike or lockout. of supervisors is separate and distinct from
the unionized bargaining unit of rank-and-file
Collective Bargaining Deadlock is defined as employees.
"the situation between the labor and the
management of the company where there is The bargaining unit sought to be represented
failure in the collective bargaining by the appellee are the capataz employees of
negotiations resulting in a stalemate". (San the appellant. There is no other labor
Miguel Corp. v. National Labor Relations organization of capatazes within the
Commission, G.R. No. 99266, March 2, 1999) employer unit except herein appellant. Thus,
appellant is an unorganized establishment in
There is a deadlock when there is a complete so far as the bargaining unit of capatazes is
blocking or stoppage resulting from the concerned. (Lepanto Consolidated Mining Co.
action of equal and opposed forces . . . . The v. Lepanto Capataz Union, G.R. No. 157086,
word is synonymous with the word impasse, February 18, 2013)
which . . . 'presupposes reasonable effort at
good faith bargaining which, despite noble Med-Arbiter Required to Automatically
intentions, does not conclude in agreement Conduct Certification Election
between the parties. (Tabangao Shell In a petition filed by a legitimate labor
Refinery Employees Association v. Pilipinas organization involving an unorganized
Shell Petroleum Corp., G.R. No. 170007, April establishment, the Med-Arbiter shall,
7, 2014) pursuant to Article 257 of the Code,
automatically order the conduct of
XPS 4. Contract bar rule certification election after determining that
A petition for certification election may not be the petition has complied with all
filed when a CBA between the employer and requirements rules and that none of the
a duly recognized or certified bargaining grounds for dismissal thereof exists. (Ibid)
agent has been registered with the Bureau of
Labor Relations (BLR) in accordance with the Certification Election in an Organized
Labor Code. Where the CBA is duly Establishment
registered, a petition for certification election
may be filed only within the 60-day freedom The Med-Arbiter is required to automatically
period prior to its expiry. order the conduct of a certification election
by secret ballot in an organized establishment
The purpose of this rule is to ensure stability as soon as the following requisites are fully
in the relationship of the workers and the met:
employer by preventing frequent 1. That a petition questioning the majority
modifications of any CBA earlier entered into status of the incumbent bargaining
by them in good faith and for the stipulated agent is filed before the DOLE within the
original period. 60-day freedom period;
2. That such petition is verified; and
Certification Election in an Unorganized 3. That the petition is supported by the
Establishment written consent of at least twenty-five
“Unorganized establishment” is an employer percent (25%) all the employees in the
entity where there is no recognized or bargaining unit. (Article 268, Labor
certified collective bargaining union or agent. Code)

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25% written consent not strictly 4. Re-run election

enforced Re-run election refers to an election
The 25% written consent requirement is conducted to break a tie between contending
relevant if it becomes mandatory to hold a unions, including between “No Union” and
certification election. In all other instances, one of the unions. It shall likewise refer to an
discretion should be ordinarily be exercised in election conducted after a failure of election
favor of holding a certification election. This has been declared by the election officer
means the 25% requirement may not be and/or affirmed by the election Mediator-
strictly enforced. (Bar Reviewer on Labor Arbiter. (Section 2(tt), Further Amending
Law, Chan, 2019, p. 421) Department Order No. 40, Series of 2003,
Amending the Implementing Rules and
2. Consent election Regulations of Book V of the Labor Code of
A consent election is an agreed one, its the Philippines, as Amended, DOLE
purpose being merely to determine the issue Department Order No. 040-I-15)
of majority representation of all the workers
in the appropriate collective bargaining unit. Re-run Election vs Failure of Election
(Warren Manufacturing Workers Union v. Re-Run Election Failure of Election
Bureau of Labor Relations, G.R. No. 76185, There is a valid The number of votes
March 30, 1988) certification cast in the
election but certification or
It is a separate and distinct process and has because of certain consent election is
nothing to do with the import and effect of a circumstances, the less than the
certification election. Neither does it shorten election is nullified majority of the
the terms of an existing CBA nor entitle the and another one is number of eligible
participants thereof to immediately ordered to truly voters and there are
renegotiate an existing CBA although it does reflect the will and no challenged votes
not preclude the workers from exercising sentiment of the that could materially
their right to choose their sole and exclusive electorate- change the results
bargaining representative after the expiration employees in the thereof.
of the sixty (60) day freedom period. (Ibid) choice of their
bargaining
3. Run-off election representative.
"Run-off Election" refers to an election
between the labor unions receiving the two 5. BYSTANDER RULE
(2) highest number of votes in a certification
or consent election with three (3) or more Employer as bystander
choices, where such a certified or consent
results in none of the three (3) or more Subject to the provisions of Paragraph 3,
choices receiving the majority of the valid Section 1 of Rule VIII, the principle of the
votes cast; provided that the total number of employer as by-stander shall be strictly
votes for all contending unions is at least fifty observed throughout the conduct of
percent (50%) of the number of votes cast. certification election. The employer shall not
(Section 1(ss), Department Order NO. 40- 03, harass, intimidate, threat or coerce
Series of 2003) employees before, during and after elections.
(DOLE D.O. No. 40-03, Rule IX, sec. 1, as
When an election which provides for three or amended)
more choices results in no choice receiving a
majority of the valid cast, a run-off election In certification election, the employer is a
shall be conducted between the choices mere bystander with no concomitant right to
receiving the two highest number of votes." oppose the same. The employer has no
(National Association of Free Trade Unions v. standing to question the election, which is the
Bureau of Labor Relations, G.R. No. 77818, sole concern of the workers.
August 3, 1988)

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The employer's participation in such Labor Law Review, Ungos, 2021, p. 377-
proceedings shall be limited to: 378)
1. being notified or informed of petitions of
such nature; and B. Rights of Legitimate Labor
2. submitting the list of employees during Organizations
the pre-election conference should the
Mediator-Arbiter act favorably on the Legitimate Labor Organization
petition. (Coca-Cola FEMSA Philippines,
Inc. v. Coca-Cola FEMSA Phils., G.R. No. Labor Organization means any union or
238633, November 17, 2021) association of employees which exists in
whole or in part for the purpose of collective
Exceptions to the By-Stander Principle bargaining or of dealing with employers
1. Lack of ER-EE Relationship - an employer concerning terms and conditions of
can validly oppose a petition for employment (Art. 219(g), Labor Code)
certification election when the relationship
of employer and employee does not exist Legitimate labor organization means any
between the company and the employees labor organization duly registered with the
sought to be represented by the Department of Labor and Employment, and
petitioning union. includes any branch or local thereof. (Art.
2. Lack of Legitimacy - An employer can 219(h), Labor Code)
validly oppose a petition for certification
election when the petitioning union is not Affiliation/disaffiliation from national
a legitimate labor organization because it union or federation
is not listed in the Registry of Legitimate The right of the affiliate union to disaffiliate
Labor Unions or its registration has been from its mother federation or national union
cancelled with finality. is a constitutionally-guaranteed right which
3. Inappropriate Bargaining Unit - An may be invoked by the former at any time.
employer can validly oppose a petition for (Heirs of Cruz vs. CIR, G.R. No. L-23331-32,
certification election when the bargaining December 27, 1969)
unit sought to be represented by the
petitioning union is not an appropriate Reasons for Affiliation
bargaining unit. Some common reasons for affiliation:
4. Lack of 25% Consent - In an organized 1. Secure support or assistance especially
establishment, an employer can validly during the formative stage of unionization
oppose a petition for certification election 2. Utilize expertise in preparing and pursuing
when the petition is not supported by the bargaining proposals
written consent of 25% of the employees 3. To marshal mind and manpower in the
covered by the bargaining unit. course of a group action such as a strike
5. Election Year Bar and Certification Year (Azucena, Labor Code 2, 2016, p. 201)
Bar - An employer can validly oppose a
petition for certification election when the NOTE: The sole essence of affiliation is to
petition was filed within one(1) year from increase, by collective action, the common
a valid certification election or from bargaining power of local unions for the
certification of a union as bargaining unit. effective enhancement and protection of
6. Deadlock Bar and Contract Bar - An their interests (Ibid. at p. 203)
employer can validly oppose a petition for
certification election when there is a duly Nature of relationship
registered CBA, or when there is a a. Between Member and Labor Union
bargaining deadlock that has been The union may be considered the agent of its
submitted to conciliation or arbitration or members for the purpose of securing for
has become the subject of a valid notice them fair and just wages and good working
of strike or lockout. (The Fundamentals of conditions and is subject to the obligation of
giving the members as its principals all

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information relevant to union and matters registration but does not disaffiliate from its
entrusted to it. (Heirs of Teodolo M. Cruz vs. mother federation or national union, reported
Court of Industrial Relations, G.R. No. L- to the DOLE Regional Office and the Bureau
23331-32, December 27, 1969) of Labor Relations in accordance with Rule
III, Sections 6 and 7 of these Rules. (Sec.
The relationship of the members and the 1(b), Rule I, D.O. No. 40-03 as amended)
labor union is governed by their mutual
agreement, the terms and conditions of How local chapter is created
which are set forth in the union constitution A duly registered federation or national union
and by-laws and binding on the members, as may directly create a local/chapter by issuing
well as the organization itself, provided that a charter certificate indicating the
it is not against the law, morals, good establishment of a local/chapter. (Sec. 2(E),
customs, public order and public policy. Rule III, D.O. No. 40-03 as amended)
(Manggagawa sa Ang Tibay vs. Ang Tibay,
G.R. No. L-8259, December 23, 1957) Consequences:
Labor Union – Federation 1. The chapter shall acquire legal personality
Relationship between a union and the only for purposes of filing a PCE from the
federation or national union is generally date it was issued a charter certificate
understood to be that of agency, where the 2. The chapter shall be entitled to all other
local is the principal and the federation is the rights and privileges of a LLO only upon
agent. the submission of the following
documents in addition to its charter
The mother union (or Federation), acting for certificate:
and in behalf of its affiliate, has the status of a. Names of the chapter’s officers, their
an agent while the local union remains as a addresses, and the principal office of
principal – the basic unit of the association the chapter;
free to serve the common interest of all its b. Chapter’s constitution and by-laws;
members, subject only to restraints imposed c. Where the chapter’s constitution and
by the constitution and by-laws of the by- laws are the same as that of the
association (Phil. Skylanders, et. al. vs. NLRC, federation or the national union, this
et. al. G.R. No. 127374, January 21, 2002) fact shall be indicated accordingly
3. The genuineness and due execution of the
Local union does not lose its legal supporting requirements shall be Certified
personality when it affiliates with a under oath by the Secretary or Treasurer
federation of the local/chapter and attested to by its
A local union does not owe its existence to President. (Ibid.)
the federation with which it is affiliated. It is
a separate and distinct voluntary association Reportorial requirements in affiliation
owing its creation to the will of its members.
Mere affiliation does not divest the local union The report of affiliation of independently
of its own personality, neither does it give the registered labor unions with a federation or
mother federation the license to act national union shall be accompanied by the
independently of the local union. (Insular following documents:
Hotel Employees Union-NFL vs. Waterfront 1. Resolution of the labor union's board of
Insular Hotel Davao, G.R. Nos. 174040-41, directors approving the affiliation;
September 22, 2010) 2. Minutes of the general membership
meeting approving the affiliation;
Affiliate 3. The total number of members comprising
An affiliate refers to an independently the labor union and the names of
registered union that enters into an members who approved the affiliation;
agreement of affiliation with a federation or 4. The certificate of affiliation issued by the
national union; or a chartered local which federation in favor of the independently
applies for and is granted an independent registered labor union; and

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5. Written notice to the employer concerned An individual member or any number of

if the affiliating union is the incumbent members may disaffiliate from the union
bargaining (Sec. 7, Rule III, D.O. No. 40- during the 60-day “freedom period.” But
03, as amended). disaffiliating the union itself from the mother
union must be supported by the majority of
Independently registered union is the members. (Villar vs. Inciong, G.R. No. L-
required to report affiliation with the 50283-84, April 20, 1983)
Regional Office
A union affiliating with a federation or Imitation to disaffiliation
national union is required to report such To disaffiliate is a right, but to observe the
affiliation to the Regional Office that issued terms of affiliation is an obligation. (Azucena,
its certificate of registration (Sec. 6, Rule III, Labor Code with Comments and Cases, Vol.
D.O. No. 40-03, as amended) II-A, 2021, p. 167)

Disaffiliation of local union from the Disaffiliation should be in accordance with the
federation rules and procedures stated in the
G.R.: A labor union may disaffiliate from the Constitution and by-laws of the federation. A
mother union to form an independent union local union may disaffiliate with its mother
only during the 60-day freedom period federation provided that there is no
immediately preceding the expiration of the enforceable provision in the federation’s
CBA. (National Union of Bank Employees vs. constitution preventing disaffiliation of a local
Philnabank Employees Association, G.R. No. union. (Tropical Hut Employees Union vs.
174287, August 12, 2013) Tropical Hut, G.R. Nos. L43495-99, January
20, 1990)
EXCEPTION: Even before the onset of the
freedom period, disaffiliation may still be A prohibition to disaffiliate in the Federation’s
carried out, but such disaffiliation must be constitution and by-laws is valid. Therefore,
effected by the majority of the union absent any specific provisions in the
members in the bargaining unit. federation's constitution prohibiting
disaffiliation or the declaration of autonomy
Disaffiliation must be decided by the entire of a local union, a local may dissociate with
membership through secret balloting in its parent union. (Malayang Samahan ng mga
accordance with Article 250(d). Manggagawa sa M. Greenfield vs. Hon.
Ramos, G.R. No. 113907, February 28, 2000)
This happens when there is a substantial shift
in allegiance on the part of the majority of the Effect of Disaffiliation
members of the union. In such a case, 1. Union Dues – the obligation of an
however, the CBA continues to bind the employee to pay union dues is
members of the new or disaffiliated and coterminous with his affiliation or
independent union to determine the union membership
which shall administer the CBA up to the 2. Existing CBA – the CBA continues to bind
CBA’s expiration date. (ANGLO-KMU vs. the members of the new or disaffiliated
Samahan ng Manggagawang Nagkakaisasa and independent union up to the CBA’s
Manila Bay Spinning Mills at J.P. Coats, G.R. expiration date based on the
No.118562, July 5, 1996) “substitutionary doctrine”.

Disaffiliation must be by majority The pendency of an election protest

decision does not bar the valid disaffiliation of
Disaffiliation has to be decided by the entire the local union which was supported by
membership through secret balloting in the majority of its members.
accordance with Art. 250(d) of the Labor The right of a local union to disaffiliate with
Code, as amended. the federation in the absence of any
stipulation in the Constitution and by-laws of

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the federation prohibiting disaffiliation is well The “substitutionary” doctrine only provided
settled. Local unions remain as the basic unit that the employees cannot revoke the validly
of association, free to serve their own interest executed collective bargaining contract with
subject to the restraints imposed by the their employer by simple expedient of
Constitution and bylaws of national changing their bargaining agent. And it is in
federation and are free to renounce such the light of this that the phrase “said new
affiliation upon the terms and conditions laid agent would have to respect said contract”
down in the agreement which brought such must be understood, it only means that the
affiliation to existence. In the case at bar, no employees, thru their new bargaining agent,
prohibition existed under the Constitution cannot renege on their collective bargaining
and by-laws of the federation. Hence, the contract, except of course to negotiate with
union may freely disaffiliate with the management for the shortening thereof.
federation. (Philippine Skylanders vs. NLRC, (Benguet Consolidated vs. BCI Employees
G.R. No. 127374, January 31, 2002) and Workers Union–PAFLU, G.R. No. L24711,
April 30, 1968)
Substitutionary Doctrine
This doctrine holds that the employees In case of change of bargaining agent under
cannot revoke the validly executed collective the substitutionary doctrine, the new
bargaining contract with their employer by bargaining agent is not bound by the
the simple expedient of changing their personal undertakings of the deposed union
bargaining agent. The new agent must like the “no strike, no lockout” clause in the
respect the contract. The employees, thru CBA which is the personal undertaking of the
their new bargaining agent, cannot renege bargaining unit which negotiated it. (Ibid)
on the collective bargaining contract, except
to negotiate with the management for the The "substitutionary" doctrine, therefore,
shortening thereof. (Elisco-Elirol Labor Union cannot be invoked to support the contention
vs. Noriel et al., G.R. No. L-41955, December that a newly certified collective bargaining
29, 1977) agent automatically assumes all the personal
undertakings — like the no-strike stipulation
In formulating the "substitutionary" doctrine, here — in the collective bargaining
the only consideration involved as the agreement made by the deposed union.
employees' interest in the existing bargaining (Ibid)
agreement. The agent's interest never
entered the picture. In fact, the justification RIGHTS OF LABOR ORGANIZATIONS
for said doctrine was: ... that the majority of
the employees, as an entity under the A legitimate labor organization shall have the
statute, is the true party in interest to the right:
contract, holding rights through the agency a. To act as the representative of its
of the union representative. Thus, any members for the purpose of collective
exclusive interest claimed by the agent is bargaining;
defeasible at the will of the principal. (Elisco- b. To be certified as the exclusive
Elirol Labor Union vs. Noriel et al., G.R. No. representative of all the employees in an
L-41955, December 29, 1977) appropriate bargaining unit for purposes of
collective bargaining;
Change of Bargaining Representative c. To be furnished by the employer, upon
during the life of a CBA written request, with its annual audited
This refers to the substitution of the financial statements, including the balance
bargaining agent by a newly certified agent. sheet and the profit and loss statement,
As a new bargaining agent, it is duty-bound within thirty (30) calendar days from the date
to respect the existing CBA but it can of receipt of the request, after the union has
renegotiate for new terms and conditions been duly recognized by the employer or
therein. certified as the sole and exclusive bargaining
representative of the employees in the

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bargaining unit, or within sixty (60) calendar 1. Change in name – It shall not affect its
days before the expiration of the existing legal personality. All the rights and
collective bargaining agreement, or during obligations of a labor organization under
the collective bargaining negotiation; its old name shall continue to be exercised
d. To own property, real or personal, for the by the labor organization under its new
use and benefit of the labor organization and name. (Sec. 9, Rule IV, D.O. No. 40-03 as
its members; amended)
e. To sue and be sued in its registered name; 2. Merger of labor organizations – The
f. To undertake all other activities designed legal existence of the absorbed labor
to benefit the organization and its members, organization(s) ceases, while the legal
including cooperative, housing, welfare and existence of the absorbing labor
other projects not contrary to law; and organization subsists. All the rights,
g. Right to draw up their constitutions and interests and obligations of the absorbed
rules to elect their representatives in full labor organizations are transferred to the
freedom, to organize their administration and absorbing organization. (Sec. 10, Rule IV,
activities and to formulate their programs. D.O. No. 40-03 as amended)
(Minette Baptista, et al. v. Rosario Villanueva, 3. Consolidation of labor organizations
et al., G.R. No. 194709 2013) – The legal existence of the consolidating
labor organizations shall cease and a new
Notwithstanding any provision of a general or labor organization is created. The newly
special law to the contrary, the income and created labor organization shall acquire all
the properties of legitimate labor the rights, interests and obligations of the
organizations, including grants, endowments, consolidating labor organizations. (Ibid.)
gifts, donations and contributions they may
receive from fraternal and similar Reportorial requirements of labor
organizations, local or foreign, which are unions and workers’ associations
actually, directly and exclusively used for
their lawful purposes, shall be free from It shall be the duty of every legitimate labor
taxes, duties and other assessments. The unions and workers’ association to submit to
exemptions provided herein may be the Regional Office or the Bureau which
withdrawn only by a special law expressly issued its certificate of registration or
repealing this provision. (Art. 251, Labor certificate of creation of local/chapter, as the
Code) case may be, two (2) copies of each of the
following documents:
Nature of the legal personality of a a. its constitution and by-laws or
legitimate labor organization and its amendments thereto, the minutes of
effects in certain circumstances adoption or ratification and the list of
The labor union or workers’ association shall members who took part therein, within
be deemed registered and vested with legal thirty (30) days from its adoption or
personality on the date of issuance of its ratification;
certificate of registration or certificate of b. its list of elected and appointed officers
creation of chartered local. (Sec. 8, Rule IV, and agents entrusted with the handling of
D.O. No. 40-03 as amended) union funds, the minutes of election of
officers, and the list of voters, within thirty
NOTE: Such legal personality may be (30) days from the date of election or
questioned only through an independent appointment;
petition for cancellation of union registration c. its annual financial report within thirty
in accordance with Rule XIV of these Rules, (30) days after the close of every fiscal
and not by way of collateral attack in petition year; and
for certification election proceedings under d. its list of members at least once a year or
Rule VIII. (Ibid) whenever required by the Bureau.

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The fiscal year of a labor organization shall to a subversive organization or who is

coincide with the calendar year unless a engaged directly or indirectly in any
different period is provided in its constitution subversive activity;
and by-laws. (Sec. 1, Rule V, D.O. No. 40-03 f. No person who has been convicted of a
as amended) crime involving moral turpitude shall be
eligible for election as a union officer or
Rights and conditions of membership in for appointment to any position in the
legitimate labor organizations union;
The following are the rights and conditions of g. No officer, agent or member of a labor
membership in a labor organization: organization shall collect any fees, dues,
a. No arbitrary or excessive initiation fees or other contributions in its behalf or make
shall be required of the members of a any disbursement of its money or funds
legitimate labor organization nor shall unless he is duly authorized pursuant to
arbitrary, excessive or oppressive fine and its constitution and by-laws;
forfeiture be imposed; h. Every payment of fees, dues or other
b. The members shall be entitled to full and contributions by a member shall be
detailed reports from their officers and evidenced by a receipt signed by the
representatives of all financial officer or agent making the collection and
transactions as provided for in the entered into the record of the organization
constitution and bylaws of the to be kept and maintained for the
organization; purpose;
c. The members shall directly elect their i. The funds of the organization shall not be
officers in the local union, as well as their applied for any purpose or object other
national officers in the national union or than those expressly provided by its
federation to which they or their local constitution and by-laws or those
union is affiliated, by secret ballot at expressly authorized by written resolution
intervals of five (5) years. No qualification adopted by the majority of the members
requirement for candidacy to any position at a general meeting duly called for the
shall be imposed other than membership purpose;
in good standing in subject labor j. Every income or revenue of the
organization. The secretary or any other organization shall be evidenced by a
responsible union officer shall furnish the record showing its source, and every
Secretary of Labor and Employment with expenditure of its funds shall be evidenced
a list of the newlyelected officers, together by a receipt from the person to whom the
with the appointive officers or agents who payment is made, which shall state the
are entrusted with the handling of funds date, place and purpose of such payment.
within thirty (30) calendar days after the Such record or receipt shall form part of
election of officers or from the occurrence the financial records of the organization.
of any change in the list of officers of the Any action involving the funds of the
labor organization; organization shall prescribe after three (3)
d. The members shall determine by secret years from the date of submission of the
ballot, after due deliberation, any question annual financial report to the Department
of major policy affecting the entire of Labor and Employment or from the date
membership of the organization, unless the same should have been submitted as
the nature of the organization or force required by law, whichever comes earlier:
majeure renders such secret ballot Provided, That this provision shall apply
impractical, in which case, the board of only to a legitimate labor organization
directors of the organization may make which has submitted the financial report
the decision in behalf of the general requirements under this Code: Provided,
membership; further, That failure of any labor
e. No labor organization shall knowingly organization to comply with the periodic
admit as members or continue in financial reports required by law and such
membership any individual who belongs rules and regulations promulgated

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thereunder six (6) months after the members of a labor organization unless
effectivity of this Act shall automatically authorized by a written resolution of a
result in the cancellation of union majority of all the members in a general
registration of such labor organization; membership meeting duly called for the
k. The officers of any labor organization shall purpose. The secretary of the organization
not be paid any compensation other than shall record the minutes of the meeting
the salaries and expenses due to their including the list of all members present,
positions as specifically provided for in its the votes cast, the purpose of the special
constitution and by-laws, or in a written assessment or fees and the recipient of
resolution duly authorized by a majority of such assessment or fees. The record shall
all the members at a general membership be attested to by the president.
meeting duly called for the purpose. The o. Other than for mandatory activities under
minutes of the meeting and the list of the Code, no special assessments,
participants and ballots cast shall be attorney’s fees, negotiation fees or any
subject to inspection by the Secretary of other extraordinary fees may be checked
Labor or his duly authorized off from any amount due to an employee
representatives. Any irregularities in the without an individual written authorization
approval of the resolutions shall be a duly signed by the employee. The
ground for impeachment or expulsion authorization should specifically state the
from the organization; amount, purpose and beneficiary of the
l. The treasurer of any labor organization deduction; and
and every officer thereof who is p. It shall be the duty of any labor
responsible for the account of such organization and its officers to inform its
organization or for the collection, members on the provisions of its
management, disbursement, custody or constitution and by-laws, collective
control of the funds, moneys and other bargaining agreement, the prevailing
properties of the organization, shall labor relations system and all their rights
render to the organization and to its and obligations under existing labor laws.
members a true and correct account of all
moneys received and paid by him since he For this purpose, registered labor
assumed office or since the last day on organizations may assess reasonable dues to
which he rendered such account, and of finance labor relations seminars and other
all bonds, securities and other properties labor education activities.
of the organization entrusted to his
custody or under his control. The Any violation of the above rights and
rendering of such account shall be made: conditions of membership shall be a ground
i. At least once a year within thirty (30) for cancellation of union registration or
days after the close of its fiscal year; expulsion of officers from office, whichever is
ii. At such other times as may be appropriate. At least thirty percent (30%) of
required by a resolution of the the members of a union or any member or
majority of the members of the members specially concerned may report
organization; and such violation to the Bureau. The Bureau
iii. Upon vacating his office. The account shall have the power to hear and decide any
shall be duly audited and verified by reported violation to mete the appropriate
affidavit and a copy thereof shall be penalty.
furnished the Secretary of Labor.
m. The books of accounts and other records Criminal and civil liabilities arising from
of the financial activities of any labor violations of above rights and conditions of
organization shall be open to inspection by membership shall continue to be under the
any officer or member thereof during jurisdiction of ordinary courts (Art. 250, Labor
office hours; Code, as amended).
n. No special assessment or other
extraordinary fees may be levied upon the

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The rights of union members under Article other labor education activities (Id., p.
250 may be summarized as follows: (PRRD) 395)
1. Political rights
2. Right over money matters (fiscal rights) Right to information
3. Right to information Right to information includes the following:
4. Deliberative and decision-making right 1. Right to require the treasurer and the
other officers of the union responsible for
Political rights the account of the union as well as for the
It includes: collection, management, disbursement,
1. Right to vote and be voted for as an officer custody or control of the funds, moneys
of the union, subject to the qualifications and and other properties, to render a true and
disqualifications mentioned in Article 250 of correct account thereof, at least once a
the Labor Code; and year within thirty (30) days after close of
2. Right to be appointed to appointive its fiscal year and at such other times as
positions in the organization, subject to the may be required by a resolution of the
qualifications and disqualifications mentioned majority of members of the union and
in Article 250 of the Code. (Chan, Bar upon vacating his office;
Reviewer on Labor Law, 2019, p. 396) 2. Right to require that the account be duly
Right over money matters (Fiscal audited and verified by affidavit and a
Rights) copy thereof be furnished to the DOLE
Financial rights including the following: Secretary;
1. Right against arbitrary, oppressive or 3. Right to inspect the books of accounts and
excessive fees, fines and forfeitures other financial records of the union and to
2. Right to full and detailed reports on all require full and detailed reports from their
financial transactions in accordance with officers and representatives on all
the constitution and by-laws of the union; financial transactions as provided for in
3. Right against unauthorized collection of the constitution and by-laws of the
any fees, dues or other contributions; organization;
4. Right to claim receipt for every payment 4. Right to be informed of the provisions of
of fees, dues or other contributions; the constitution and by-laws, CBA, the
5. Right to prevent funds of the organization prevailing labor relations system and all
from being applied for any purpose or their rights and obligations under existing
object other than those expressly labor laws through the medium of labor
provided by the union's constitution and relations seminars or other labor
by-laws or allowed expressly by written education activities; and
resolution adopted by the majority of the 5. Right to seek investigation of any
members at a general meeting duly called irregularity (Ibid.)
for the purpose;
6. Right to or require that every income or It shall be unlawful for any person to make
revenue as well as every expenditure of any statement, report, or record filed or kept
the union shall be recorded or receipted, pursuant to the provisions of this Code
which record or receipt shall form part of knowing such statement, report or record to
the financial records of the union; be false in any material respect. (Art. 119,
7. Right against unauthorized check-off for Labor Code, as amended)
special assessments, attorney’s fees,
negotiation fees or any other Deliberative and decision-making right
extraordinary fees without an individual The right to participate in decision-making
authorization duly signed by the process includes the following:
employee; 1. Right to vote by secret ballot on any
8. Right to vote on the compensation of question of major policy affecting the
union officers; and enüe membership of the organization; and
9. Right against unreasonable assessments 2. Right to initiate and participate in
to finance labor relations seminars and impeachment or expulsion proceedings

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against an erring officer or of the union. The minority union, not being the collective
(Chan, Bar Reviewer on Labor Law, 2019, bargaining agent, has no such right. The
p. 396) employer therefore is not under any legal
obligation to check-off any union dues and
1. Check Off, Assessment, and Agency assessments for the minority union. (Chan,
Fees Bar Reviewer on Labor Law, 2019, p. 452)

All unions are authorized to collect Two (2) Kinds of Check-Off

reasonable amounts of: 1. Collection of union dues, special
1. membership fees; assessments, and fees (such as attorney’s
2. union dues; fees, negotiation fees or any other
3. assessments; extraordinary fees) by the SEBA from its
4. Fines; members; and
5. contributions for labor education and 2. Collection of agency fees from
research, mutual death and nonmembers of the SEBA but covered by and
hospitalization benefits, welfare fund, included in the Collective Bargaining Unit who
strike fund and credit and cooperative accept the benefits provided in the CBA.
undertakings; and
6. agency fees. (Article 292(a), 259(e), Distinction: The first kind mentioned above
Labor Code) requires for its validity, the execution by the
employees of individual written authorization
CHECK-OFF which should specifically state the amount,
A check-off is a process or device whereby purpose and beneficiary of the deduction; but
the employer, on agreement with the Union, the second kind does not require any such
recognized as the proper bargaining authorization since the law itself recognizes
representative, or on prior authorization from and allows it upon the non-SEBA member’s
its employees, deducts union dues or agency acceptance of benefits resulting from the CBA
fees from the latter's wages and remits them (Holy Cross of Davao College, Inc. vs.
directly to the union. Joaquin, G.R. No. 110007, October 18, 1996)

The legal basis of check-off is found in stature Requisites for validity of union dues and
or in contract. Statutory limitations on special assessments
checkoffs generally require written
authorization from each employee to deduct No special assessment or other extraordinary
wages; however, a resolution approved and fees may be levied upon the members of a
adopted by a majority to the union members labor organization unless;
at a general meeting will suffice when the 1. Authorized by a written resolution of a
right to check-off has been recognized by the majority of all the members in a general
employer, including collection of reasonable membership meeting duly called for the
assessments in connection with mandatory purpose.
activities of the union, or other special 2. The secretary of the organization shall
assessments and extraordinary fees. (In Re: record the minutes of the meeting
Petition to Declare the Officers of the Medical including: a. the list of all members
City Employees Association Guilty of Article present; b. the votes cast; c. the purpose
241, Paragraph (g), (n), and (o), in Relation of the special assessment or fees; and d.
to Paragraph (B) Article 222 of the Labor the recipient of such assessment or fees.
Code of the Philippines, as Amended, BLR-A- 3. The record shall be attested to by the
TR-11-2-2- 12 (NCR-P-IN-03-31-1-11) president. (Art. 250(n), Labor Code, as
(Resolution), November 28, 2014) amended)

Right to check-off, available only to the Authorization to effect a check-off of union

SEBA (sole and exclusive bargaining dues is co-terminous with the union affiliation
agent) or membership of employees. (Holy Cross of

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Davao College, Inc. v. Joaquin, G.R. No. No special assessment, attorney's fees,
110007, October 18, 1996) negotiation fees or any other extraordinary
fees may be checked off from any amount
Non-Union Members May Not Unjustly due to an employee without an individual
Enriched Themselves written authorization duly signed by the
The collection of agency fees in an amount employees.
equivalent to union dues and fees, from
employees who are not union members, is The authorization should specifically state the
recognized by Article 248 (e) of the Labor amount, purpose and beneficiary of the
Code. No requirement of written deduction."
authorization from the non-union employee is
imposed. The employee's acceptance of Article 241 has three (3) requisites for the
benefits resulting from a collective bargaining validity of the special assessment for union's
agreement justifies the deduction of agency incidental expenses, attorney's fees and
fees from his pay and the union's entitlement representation expenses. These are:
thereto. In this aspect, the legal basis of the 1. authorization by a written resolution of the
union's right to agency fees is neither majority of all the members at the general
contractual nor statutory, but quasi- membership meeting called for the
contractual, deriving from the established purpose;
principle that non-union employees may not 2. secretary's record of the minutes of the
unjustly enrich themselves by benefiting from meeting; and
employment conditions negotiated by the 3. individual written authorization for check
bargaining union. (Holy Cross of Davao off duly signed by the employees
College, Inc. v. Joaquin, G.R. No. 110007, concerned.
October 18, 1996)
Clearly, attorney's fees may not be deducted
Assessment for Attorney’s Fees, or checked off from any amount due to an
Negotiation Fees and Similar Charges employee without his written consent.
Article 222(b) of the Labor Code prohibits the (Gabriel v. Secretary of Labor and
payment of attorney's fees only when it is Employment, G.R. No. 115949, March 16,
effected through forced contributions from 2000)
the employees from their own funds as
distinguished from union funds. Hence, the Express consent of employees is required,
general rule is that attorney's fees, and this consent must be obtained in
negotiation fees, and other similar charges accordance with the steps outlined by law,
may only be collected from union funds, not which must be followed to the letter. No
from the amounts that pertain to individual shortcuts are allowed. (Gabriel v. Secretary
union members. As an exception to the of Labor and Employment, G.R. No. 115949,
general rule, special assessments or other March 16, 2000)
extraordinary fees may be levied upon or
checked off from any amount due an Purpose: To protect the employees from
employee for as long as there is proper unwarranted practices which diminish their
authorization by the employee. (In Re: compensation without their knowledge or
Petition to Declare the Officers of the Medical consent.
City Employees Association Guilty of Article
241, Paragraph (g), (n), and (o), in Relation The purpose of the provision is to prevent
to Paragraph (B) Article 222 of the Labor imposition on the workers of the duty to
Code of the Philippines, as Amended, BLR-A- individually contribute their respective shares
TR-11-2-2-12 (NCR-P-IN-03-31-1-11) in the fee to be paid the attorney for his
(Resolution), November 28, 2014) services on behalf of the union in its
negotiations with management. The
Individual Written Authorization, obligation to pay the attorney's fees belongs
WHEN REQUIRED to the union and cannot be shunted to the

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workers as their direct responsibility. Neither benefits, welfare fund, strike fund and credit
the lawyer nor the union itself may require and cooperative undertakings. (Article
the individual worker to assume the 292(a), Labor Code, as amended)
obligation to pay attorney's fees from their
own pockets. So categorical is this intent that Every payment of fees, dues or other
the law makes it clear that any agreement to contributions by a member shall be
the contrary shall be null and void ab initio." evidenced by a receipt signed by the officer
(Gabriel v. Secretary of Labor and or agent making the collection and entered
Employment, G.R. No. 115949, March 16, into the record of the organization to be kept
2000) and maintained for the purpose. (Article
250(h), Labor Code)
Individual Written Authorization,
WHEN NOT REQUIRED Right of union to collect dues and
a. Assessment from non-members of the agency fees despite the pendency of a
bargaining agent of “agency fees” which representation case
should be equivalent to the dues and The incumbent bargaining agent shall
other fees paid by members of the continue to be entitled to check-off and
recognized bargaining agent, if such non- collect dues and agency fees despite the
members accept the benefits under the pendency of a representation case, other
CBA. (Article 259(e), Labor Code, as inter/intra-union disputes or related labor
amended) relations disputes. (Sec. 1, Rule XIII, D.O.
b. Deductions for fees for mandatory No. 40-03, as amended)
activities such as labor relations seminars
and labor education activities. AGENCY FEES
c. Deductions for withholding tax mandated The recognized collective bargaining union
under the National Internal Revenue which successfully negotiated the CBA with
Code. the employer is given the right to collect a
d. Deductions for withholding of wages reasonable fee called "agency fee" from
because of employee’s debt to the nonunion members who are employees of
employer which is already due. the appropriate bargaining unit, in an amount
e. Deductions made pursuant to a judgment equivalent to the dues and other fees paid by
against the worker under circumstances union members, in case they accept the
where the wages may be the subject of benefits under the CBA.
attachment or execution but only for debts
incurred for food, clothing, shelter and It is called “agency fees” because by availing
medical attendance. of the benefits of the CBA, they, in effect,
f. Deductions from wages ordered by the recognize and accept the bargaining union as
court. their “agent” as well. (Chan, Labor Law
g. Deductions authorized by law such as for Reviewer, Chapter 7, p.24)
premiums for PhilHealth, SSS, PAG-IBIG,
employees’ compensation and the like. While the collection of agency fees is
(Id., p. 455-456) recognized by Article 259, the legal basis of
the union's right to agency fees is neither
UNION DUES contractual nor statutory, but
Union dues are payments to meet the union’s quasicontractual, deriving from the
general and current obligations. The payment established principle that non-union
must be regular, periodic, and uniform. employees may not unjustly enrich
themselves by benefiting from employment
All unions are authorized to collect conditions negotiated by the bargaining
reasonable membership fees, union dues, union. (Peninsula Employees Union v.
assessments and fines and other Esquivel, G.R. No. 218454, [December 1,
contributions for labor education and 2016], 801 PHIL 667-679)
research, mutual death and hospitalization

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Requisites: moment the non-bargaining union member

a. He is a member of the bargaining unit as a accepts and receives the benefits from the
rank-and-file employee; CBA. This is the operative fact that would
b. He avails of the benefits of the existing trigger such liability. (Sec. 4, Rule XXV, D.O.
CBA; and No. 40-03 as amended)
c. He is not a member of any union.
No Individual Written Authorization by
A non-SEBA member has right to accept Non-Members Required to check-off
or not the benefits of CBA To effect the check-off of agency fees, no
There is no law that compels a non-SEBA individual written authorization from the
member to accept the benefits provided in nonbargaining union members who accept
the CBA. He has the freedom to choose the benefits resulting from the CBA is
between accepting and rejecting the CBA necessary. (Del Pilar Academy vs. Del Pilar
itself or the benefits flowing therefrom. Academy Employees Union, G.R. No. 170112,
Consequently, if a non-SEBA member does April 30, 2008)
not accept or refuses to avail of the CBA-
based benefits, he is not under any obligation Employer’s Duty to Check-off Agency
to pay the agency fees to the SEBA since, in Fees
effect, he does not recognize the status of the It is the duty of the employer to deduct or
SEBA as his agent. (Chan, Bar Reviewer on “check-off” the sum equivalent to the amount
Labor Law, 2019, p. 458) of agency fees from the non-bargaining union
members’ wages for direct remittance to the
Limitations on the Amount of Agency bargaining union. (Holy Cross of Davao
fee: College Inc. vs. Joaquin, G.R. No. 110007,
The bargaining union cannot capriciously fix October 18, 1996)
the amount of agency fees it may collect from
its non-members. Article 259(e) of the Labor Minority Union Cannot Demand from
Code expressly sets forth the limitation in the Employer to Grant it the Right to
fixing the amount of the agency fees, thus: Checkoff of Union Dues and
a. It should be reasonable in amount; Assessments from the Members
b. It should be equivalent to the dues and The obligation on the part of the employer to
other fees paid by members of the undertake the duty to check-off union dues
recognized collective bargaining agent. (Sec. and special assessments holds and applies
4, Rule XXV, D.O. No. 40-03 as amended) only to the bargaining agent and not to any
Thus, any agency fee collected in excess of other union/s (called “Minority Union/s).
this limitation is a nullity (Chan, Bar Reviewer (Chan, Bar Reviewer on Labor Law, 2019, p.
on Labor Law, 2019, p. 458) 456)

Non-members of the Certified 2. Collective Bargaining

Bargaining Agent Need Not Become
Members Thereof The code defines “to bargain collectively” as
The employees who are not members of the the the performance of a mutual obligation
certified bargaining agent which successfully to meet and convene promptly and
concluded the CBA are not required to expeditiously in good faith for the
become members of the latter. Their purpose of negotiating an agreement
acceptance of the benefits flowing from the with respect to wages, hours of work,
CBA and their act of paying the agency fees and all other terms and conditions of
do not make them members thereof. (Ibid) employment, including proposals for
adjusting any grievances or questions arising
Accrual of Right of Bargaining Union to under such agreement and executing a
Demand Check-off of Agency Fees contract incorporating such agreements if
The right of the bargaining union to demand requested by either party but such duty does
check-off of agency fees accrues from the not compel any party to agree to a proposal

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or make any concession. (Article 263, Labor itor-leave-it" offer in a negotiation, with no
Code) further concessions or discussion. Employer’s
bargaining proposal on a rigid “fairand-firm”
CBA - Contract Between the Parties offer or on a “take-it of leave-it” basis is
Collective bargaining agreement refers to the illegal, known as Boulwareism. This Collective
contract between a legitimate labor union bargaining technique provides that the
and the employer concerning wages, hours “fairand firm offer” on the table or “take-it or
or work, and all other terms and conditions leaveit” proposal for the union “to accept it or
of employment in a bargaining unit. (Del reject it,” cannot be changed unless “a new
Monte Land Transport Bus Labor Union- information will show that the employer was
Association of Genuine Labor Organizations indeed wrong.” (Labor Relations and Law on
v. Del Monte Land Transport Bus Labor Dismissal with Notes and Comments, Poquiz,
Union-Philippine Trade and General Workers 2018, p. 252) "Although the law cannot open
Organization, BLR-A-CCBA-31-28-10-17 a man's mind, it can at least compel him to
(NCR-MPFO-DC-05-2017-001), November conduct himself as if he were trying to
17, 2017) persuade and were willing to be persuaded.
To offer the union a contract saying, 'Take it
Collective bargaining agreement refers to the or leave it,' is not bargaining collectively
negotiated contract between a duly within the meaning of the act." These are
recognized or certified exclusive bargaining among the indicia referred to by him to
agent of workers and the employer concern indicate lack of good faith: "Stalling the
of wages, hours of work and all other terms negotiations by unexplained delays in
and conditions of employment in the answering correspondence and …
appropriate bargaining unit, including unnecessary postponement of meetings."|||
mandatory provisions for grievances and (Herald Delivery Carriers Union v. Herald
arbitration machineries. (Sagara Metro Plastic Publication, Inc., G.R. No. L29966, February
Industrial Corp. v. Samahan ng Manggagawa 28, 1974) Jurisdictional preconditions of
sa Sagara-National Mine and Allied Workers' collective bargaining: The mechanics of
Union Local 180, BLR-A-TR-23-17-08-16 collective bargaining are set in motion only
(Resolution), November 17, 2016) when the following jurisdictional
preconditions are present: 1. Possession of
Characteristics of Collective Bargaining the status of majority representation of the
1. Continuing legal relations employees’ representative in accordance with
2. Process of adjustment any of the means of selection or designation
3. Contract of reasonable benefits provided for by the Labor Code; 2. Proof of
4. Contract of relative equality majority representation; and 3. A demand to
5. Agency of participatory democracy bargain (Kiok Loy vs. NLRC, G.R. No. L-
54334, January 22, 1986) Procedure in
a. Procedure in Bargaining Collective Bargaining a. When there is no CBA
yet: 1. In accordance with any agreement or
Procedure/steps in collective voluntary arrangement between the
bargaining employer and the bargaining agent; or 2. In
a. Preliminary process; the absence of any agreement, in accordance
b. Negotiation; with the provisions of Art. 250 of the Labor
c. Execution; Code. Procedure under Article 261 of the
d. Publication; Labor Code a. Party desiring to negotiate an
e. Ratification; agreement shall serve written notice upon
f. Registration; the other party with a statement of its
g. Administration; and proposals; A demand to bargain should be in
h. Interpretation and Enforcement writing. When a party desires to negotiate an
agreement, it should be expressed through a
Boulwarism, an unfair labor practice written notice upon other party with a
Boulwarism is the tactic of making a "take- statement of its proposals (American

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President Lines v. Clave, 114 SCRA 866) b. prior to its expiration date, otherwise known
Other party replies not later than 10 calendar as the Freedom Period.
days from receipt of such notice; c. If
difference arises on the basis of the notice b. Duty to Bargain Collectively
and reply, either party may request for a The duty to bargain collectively means the
conference; Conference shall begin no later performance of a mutual obligation to meet
than ten (10) calendar days from the date of and convene promptly and expeditiously in
request. d. If the dispute is not settled, the good faith for the purpose of negotiating an
NCMB shall intervene upon request of either agreement with respect to wages, hours of
or both parties or at its own initiative. i. NCMB work and all other terms and conditions of
shall immediately call parties to conciliation employment including proposals for adjusting
meetings. ii. NCMB has the power to issue any grievances or questions arising under
subpoena requiring attendance of the such agreement and executing a contract
parties. iii. Duty of the parties to participate incorporating such agreements if requested
fully and promptly in the conciliation by either party but such duty does not compel
meetings. e. During the conciliation any party to agree to a proposal or to make
proceedings, parties are prohibited from any concession. (Article 263, Labor Code)
doing any act which may disrupt or impede
the early settlement of the dispute; f. Board Bargaining in Bad Faith / Good Faith
shall exert all efforts to settle disputes There is no per se test of good faith in
amicably and encourage the parties to submit bargaining. Good faith or bad faith is an
their case to a voluntary arbitrator. (Labor inference to be drawn from the facts. To
Laws and Social Legislations, Duka, 2016, p. some degree, the question of good faith may
548) Employer’s failure to timely reply be a question of credibility. The effect of an
indicative of bad faith Employer’s failure to employer's or a union's actions individually is
make a timely reply to the proposals not the test of good-faith bargaining, but the
presented by the union is indicative of its impact of all such occasions or actions,
utter lack of interest in bargaining with the considered as a whole, and the inferences
union. (General Milling Corp.-Independent fairly drawn therefrom. (Hongkong and
Labor Union v. General Milling Corp., G.R. Shanghai Banking Corp. Employees Union vs.
Nos. 183122 & 183889, June 15, 2011) Utter NLRC, G.R. No. 125038, November 6, 1997)
lack of interest in bargaining with the union
is obvious in its failure to make a timely reply There is no per se test of good faith in
to the proposals presented by the latter. More bargaining, it was held that bad faith cannot
than a month after the proposals were be imputed on an employer which simply
submitted by the union, petitioner still had refused to negotiate over the company’s
not made any counter-proposals. (Colegio de retirement program. It is but natural that the
San Juan de Letran v. Association of management and labor adopt proposals and
Employees and Faculty of Letran, G.R. No. counterproposals during negotiations (Union
141471, September 18, 2000) Its refusal to Filipro Employees vs Nestle Philippines, G.R.
make a counter-proposal for the CBA Nos. 158930-31, March 3, 2008).
negotiation is an indication of its bad faith
and it is clear evasion of the duty to bargain Standards followed in collective bargaining
collectively which is an unfair labor practice
(General Milling Corp. v. Hon. C.A., G.R. No. The definition of collective bargaining
146728, 11 February 2004) b. When there is provided under the law established the
a CBA – when there is CBA, the duty to standards to be followed:
bargain collectively shall mean that neither a. The obligation to bargain collectively is
party shall terminate nor modify such mutual;
agreement during its lifetime. However, b. The parties are required to meet and
either party can serve a written notice to confer promptly and expeditiously and in
terminate the agreement at least 60 days good faith;

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c. The parties are required to bargain on a In the absence of an agreement or other

reasonable terms and conditions of voluntary arrangement providing for a more
employment; expeditious manner of collective bargaining,
d. They are required in good faith to it shall be the duty of employer and the
negotiate an agreement; representatives of the employees to bargain
e. They must execute a contract collectively in accordance with the provisions
incorporating the agreement reached by the of this Code.||(Art. 262, Labor Code)
parties. (PNEI v. NLRC, 259 SCRA 161); and
f. The duty to bargain does not compel any 2) Duty to bargain where a CBA exists
party to agree to a proposal or to make any When there is a collective bargaining
concession (Article 263, Labor Code) agreement, the duty to bargain collectively
shall also mean that neither party shall
Employer’s duty to bargain exists only with terminate nor modify such agreement during
SEBA its lifetime. However, either party can serve
The duty to bargain collectively does not exist a written notice to terminate or modify the
when the majority status of the employees’ agreement at least sixty (60) days prior to its
representative is not established. The expiration date. It shall be the duty of both
employer has no such duty to bargain with parties to keep the status quo and to
the individual workers or with the minority continue in full force and effect the terms and
union. (Lakas ng Manggagawang Makabayan conditions of the existing agreement during
vs. Marcelo Enterprises, G.R. No. L-38258, the 60-day period and/or until a new
November 19, 1982) agreement is reached by the parties. (Art.
264, Labor Code)
The duty does not compel any party to agree
blindly to a proposal nor to make concession. DUTY TO BARGAIN
While the law imposes on both the employer DUTY TO BARGAIN
and the bargaining union the mutual duty to No CBA CBA exists
bargain collectively, the employer is not The mutual The mutual
under any legal obligation to initiate collective obligation of the obligation of the
bargaining negotiations. (Union of Filipro employer and the employer and the
Employees-Drug, Food and Allied Industries employees’ majority employees’ majority
UnionsKilusang Mayo Uno [UFE-DFA-KMU] union to meet and union to meet and
vs. Nestle Philippines, Inc., G.R. Nos. convene. convene and,
158930-31, March 3, 2008) additionally, the
obligation not to
Purpose: To stabilize the relation between terminate or modify
labor and management and to create a the CBA during its
climate of sound and stable industrial peace lifetime.
(Kiok Loy vs. NLRC G.R. No. L-54334, January
22, 1986) It is a mutual responsibility of the While it is a mutual obligation of the parties
employer and the Union and is characterized to bargain, the employer, however, is not
as a legal obligation (Kiok Loy vs. NLRC G.R. under any legal duty to initiate contract
No. L-54334, January 22, 1986). negotiation. (Kiok Loy vs. NLRC, G.R. No. L-
54334, January 22, 1986)
Two (2) Situations Contemplated when
the duty to bargain exist: Proposal embodied in minutes of the
1. Duty to bargain collectively in the absence negotiation do not form part of the CBA.
of CBA (Art. 262, Labor Code); and (Samahang Manggagawa sa Top Farm vs.
2. Duty to bargain collectively when there is NLRC, G.R. No. 113856, September 7, 1998)
an existing CBA (Art. 264, Labor Code)
Duty to bargain “does not compel either
1) Duty to bargain collectively in the party to agree to a proposal”
absence of CBA

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The duty to bargain “does not compel either e. Mandatory Provisions in the
party to agree to a proposal or require the Collective Bargaining Agreement
making of a concession. (Standard Chartered (CBA)
Bank Employees Union v. Confesor, G.R. No.
114974, June 16, 2004) A CBA refers to the negotiated contract
between a duly certified SEBA of workers and
Duty to bargain does not compel any party to the employer incorporating the agreement
accept a proposal, or make any concession, reached after negotiations with respect to
as recognized by Article 252 of the Labor wages, hours of work, and all other terms
Code. The purpose of collective bargaining is and conditions of employment in the
the reaching of an agreement resulting in a appropriate bargaining unit, including
contract binding on the parties; however, the mandatory provisions for grievances and
failure to reach an agreement after arbitration machineries. (Sec. 1(f), Rule II,
negotiations continued for a reasonable NCMB Revised Procedural Guidelines in the
period does not establish a lack of good faith. Conduct of Voluntary Arbitration
The laws invite and contemplate a collective Proceedings, October 15, 2014)
bargaining contract, but they do not compel
one. The duty to bargain does not include the Primary Purpose
obligation to reach an agreement. Thus, the The primary purpose of a CBA is the
Company's insistence on a bargaining stabilization of labor-management
position to the point of stalemate does not relations in order to create a climate of
establish bad faith. (Tabangao Shell Refinery a sound and stable industrial peace. In
Employees Association v. Pilipinas Shell construing a CBA, the courts must be
Petroleum Corp., G.R. No. 170007, April 7, practical and realistic and give due
2014) consideration to the context in which it is
negotiated and the purpose which it is
Ratification by the majority of the intended to serve. (Insular Hotel Employees
members of the bargaining Union-NFL v. Waterfront Insular Hotel Davao,
The law requires the CBA to be ratified by the G.R. No. 174040-41, September 22, 2010)
majority of the members of the bargaining
unit which is represented by the collective Essential Requisites of a CBA
bargaining agent in the bargaining 1. Employer-employee relationship between
negotiations. the employer and the members of the
bargaining unit being represented by the
c. Economic Terms and Conditions bargaining agent;
Economic provisions refer to those that have 2. Bargaining agent must have the majority
direct and measurable monetary cost support of the members of the bargaining
consequences such as wage rates, paid unit;
vacations, pensions, health and welfare 3. A lawful demand to bargain is made in
plans, and other fringe benefits. (No. 9, accordance with law. (Chan, Pre-Week
NCMB Primer on Grievance Settlement and Notes for Labor Law, 2019, p. 60)
Voluntary Arbitration)
Employees entitled to a CBA
d. Non-economic Terms and Conditions 1. Members of the bargaining union;
Non-economic provisions refer to those 2. Non-member of the bargaining union but
whose monetary cost cannot be directly members of the bargaining unit;
computed such as the no-strike no-lockout, 3. Members of minority union/s who paid
union security and check-off clauses, agency fees to the bargaining union; and
grievance procedures, etc. (No. 9, NCMB 4. Employees hired after the expiration of
Primer on Grievance Settlement and the CBA. (Bar Reviewer on Labor Law,
Voluntary Arbitration) Chan, 2019, p. 475)

CBA extends to Non-Members

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When a collective bargaining contract is It is a well-settled rule firmly entrenched in

entered into by the union representing the the annals of our jurisprudence that the
employees and the employer, even the terms and conditions of a collective
nonmember employees are entitled to the bargaining contract constitute the law
benefits of the contract. To accord its between the contracting parties. (In Re:
benefits only to members of the union Voluntary Arbitration of the Labor Dispute
without any valid reason would constitute Between Alencor Workers Union-Federation
undue discrimination against nonmembers. of Free Workers and Alen Engineering
(New Pacific Timber & Supply Co., Inc. v. Corporation, Unnumbered Case, October 14,
National Labor Relations Commission, G.R. 1991)
No. 124224, March 17, 2000)
In fact, it has been rightly said that a
A laborer can claim benefits from a CBA collective bargaining agreement entered into
entered into between the company and the by Officers of a Union, as agent of the
union of which he is a member at the time of member, and an employer, gives rise to valid
the conclusion of the agreement, after he has enforceable contractual relations,
resigned from said union. (Ibid) against the individual Union members in the
matter that affect them peculiarly, the Union
To exclude them would constitute undue in matters that affect the entire membership.
discrimination and deprive them of monetary (Ibid)
benefits they would otherwise be entitled to
under a new collective bargaining contract to A Union member who is employed under an
which they would have been parties. Since in agreement between the union and his
this particular case, no new agreement had employer is bound by the provision thereof,
been entered into after the CBA's stipulated since it is a joint and several contract of the
term, it is only fair and just that the members of the Union entered into by the
employees hired thereafter be included in the Union and their agent. (Ibid)
existing CBA.
Ratification of the CBA by majority of all the
This is in consonance with our ruling that the workers in the bargaining unit makes the
terms and conditions of a collective same binding on all employees therein. (Art.
bargaining agreement continue to have force 237, Labor Code)
and effect beyond the stipulated term when
no new agreement is executed by and Mandatory provisions of CBA
between the parties to avoid or prevent the a. Grievance Procedure
situation where no collective bargaining b. Voluntary Arbitration
agreement at all would govern between the c. No Strike-No Lockout Clause
employer company and its employees.(Ibid) d. Labor Management Council

Generally, a wage increase not included in a. GRIEVANCE PROCEDURE

the CBA is not demandable. However, if it Legally speaking, the grievance procedure is
was withheld by the employer as part of its an appeal procedure and is a "must"
unfair labor practice against the union provision in every collective agreement. It is
members, this benefit should be granted. By that part of the agreement which provides for
granting this increase, SC is eliminating the a peaceful way of settling differences and
discrimination against them, which was a misunderstanding between the parties.
result of an unfair labor practice. (Sonedco (Primer on Grievance Settlement and
Workers Free Labor Union vs. Universal Voluntary Arbitration)
Robina Corporation, G.R. No 220383, July 5,
2017) The grievance procedure is the series of
formal steps that parties to a collective
CBA- Law Between the Parties bargaining agreement agreed to take for the
adjustment of grievances or questions arising

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out of the interpretation or implementation of Faculty Union vs. UST, G.R. No. 203957, July
the CBA or company personnel policies 30, 2014).
including voluntary arbitration as the terminal
step. (Ibid) • Gross violation of the CBA is defined as
flagrant and/or malicious refusal by a
The grievance procedure provides the parties party thereto to comply with the economic
a first crack in addressing problems in CBA provisions thereof. (Art. 261, LC, as
administration and its use is an essential amended).
requisite before a voluntary arbitrator can
take cognizance of the unresolved grievance. • Any violation of the economic or
(Ibid) noneconomic provisions of the CBA, may
constitute a grievance and is often
It usually consists of a multi-step procedure referred to as “rights dispute”. However, it
starting from a discussion of the grievance must be pointed out that when the
between the employee and/or the Union violation of the CBA consists in the
Steward on the one-hand and the foreman flagrant and/or malicious refusal to
and supervisor on the other hand, and ending comply with the economic provisions, the
with the highest decision-making officials of same shall not be considered as ULP and
the company, reflecting the hierarchy of therefore, not a grievable issue that is
command or responsibility. (Ibid) properly cognizable under the grievance
machinery of the CBA. (Bar Reviewer on
Grievance or Grievable Issue – any Labor Law, Chan, 2019, p. 475).
question raised by either employer or the
union regarding any of the following issues or Grievance Machinery - the mechanism for
controversies: the adjustment and resolution of grievance
1. Interpretation or implementation of the arising from the interpretation or
CBA; implementation of a CBA and those arising
2. Interpretation or enforcement of company from the interpretation or implementation of
personnel policies; the CBA and those arising from the
3. Any claim by either party that the other interpretation and enforcement of company
party is violating any provisions of the CBA or personnel policies. (Art. 273, Labor Code)
company personnel policies. (Ibid)
The parties to a CBA shall include therein
Grievance procedure is part of the provisions that will ensure the mutual
continuous process of collective observance of its terms and conditions. They
bargaining. (Master Iron Labor Union v. shall establish a machinery for the
National Labor Relations Commission, G.R. adjustment and resolution off grievances
No. 92009, February 17, 1993) arising from the interpretation or
implementation or enforcement of company
It is intended to promote a friendly dialogue personnel policies (Ibid)
between labor and management as a means
of maintaining industrial peace. The A grievance procedure is part of the
Corporation's refusal to heed petitioners' continuous process of collective bargaining.
request to undergo the grievance procedure It intends to promote a friendly dialogue
clearly demonstrated its lack of intent to between labor and management as a means
abide by the terms of the CBA. (Ibid) of maintaining industrial peace. (Master Iron
Labor Union vs. G.R. No. 92009, February 17,
In order to be grievable, violations of a 1993)
Collective Bargaining Agreement, except
those which are gross in character, shall no No particular grievance machinery is
longer be treated as unfair labor practice and mandated by law. (Caltex Refinery
shall be resolved as grievances under the Employees Association vs. Brilliantes, G.R.
Collective Bargaining Agreement. (UST No. 123782, September 16, 1997)

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Conduct of Voluntary Arbitration

A CBA will not be registered with the Proceedings)
Department of Labor and Employment if it
does not contain a provision on grievance Where the parties themselves agree to
procedure/machinery which is a “must” submit their issue or issues to a third person
provision required of all CBAs. In the event or board and accept the arbitration award as
that a CBA without such provision is final and binding, the procedure is known as
submitted for registration, the registrar voluntary arbitration. If it is imposed upon
should advise the parties to include a them by the government, then the technique
grievance procedure/machinery therein is known as compulsory arbitration. The
before it is considered duly registered. latter is a government coercive intervention
(Azucena, Labor Code 2, 2016, p. 537) (Labor Relations and Law on Dismissal with
Notes and Comments, Poquiz, 2018, p. 334)
In the absence of a specific provision in the
CBA or existing company practice prescribing Voluntary Arbitrator – refers to any person
for the procedures in handling grievance, the who has been accredited by the Board as
following shall apply: such, or any person named or designated in
a. An employee shall present this grievance the collective bargaining agreement by the
or complaint orally or in writing to the shop parties as their voluntary arbitrator, or one
steward. Upon receipt thereof, the shop chosen by the parties with or without the
steward shall verify the facts and determine assistance of the BOARD, pursuant to a
whether the grievance is valid. selection procedure agreed upon in the CBA
b. If the grievance is valid, the shop steward or one appointed by the board in case either
shall immediately bring the complaint to the of the parties to the CBA refuses to submit to
employee’s immediate supervisor. The shop Voluntary Arbitration. (Section 1e, Rule II,
steward, the employee and his immediate 2004 NCMB Revised Procedural Guidelines in
supervisor shall exert efforts to settle the the Conduct of Voluntary Arbitration
grievance at their level. Proceedings)
c. If no settlement is reached, the grievance
shall be referred to the grievance committee Designation made by parties
which shall have ten (10) days to decide the Parties to a collective bargaining agreement
case. shall name and designate in advance, a
voluntary arbitrator or panel of voluntary
Where the issue involves or arises from the arbitrators, or include in the agreement, a
interpretation or implementation of a procedure for the selection of such voluntary
provision in the collective bargaining arbitrator or panel of voluntary arbitrators
agreement, or from any order, duly accredited by the NCMB. (Labor
memorandum, circular or assignment issued Relations and Law on Dismissal with Notes
by the appropriate authority in the and Comments, Poquiz, 2018, p. 334)
establishment, and such issue cannot be
resolved at the level of the shop steward or In case the parties fail to select a voluntary
the supervisor, the same may be referred arbitrator or panel of voluntary arbitrators,
immediately to the grievance committee. the NCMB shall designate the voluntary
(Rule XIX, D.O. 40-03) arbitrator or panel of voluntary arbitrators, as
may be necessary, pursuant to the selection
b. VOLUNTARY ARBITRATION procedure agreed upon in the collective
Voluntary Arbitration refers to the mode of bargaining agreement, which shall act with
settling labor-management disputes by which the same force and effect as if the voluntary
the parties select a competent, trained and arbitrator or panel of voluntary arbitrators
impartial third person who shall decide on the have been selected by the parties.
merits of the case and whose decision is final
AND executory.|||(Section 1d, Rule II, 2004 Kinds of Voluntary Arbitrations
NCMB Revised Procedural Guidelines in the

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1. Permanent Arbitrator – named or unfair labor practice. (Guagua National

designated person in the CBA by the Colleges v. Guagua National Colleges Faculty
parties Labor Union, G.R. No. 204693, July 13, 2016)
2. Ad-Hoc Arbitrator – chosen by the
parties in accordance with the established A strike may be held as invalid although the
procedure in the CBA or one appointed by LU complied with strict requirements as
the NCMB in case there is failure in the provided for Art. 263 when the same is
selection or in case either party to the CBA contrary to an existing agreement such as
refuses to submit to voluntary arbitration. “no strike – no lockout” clause in CBA. (C.
(Section 1e, Rule II, 2004 NCMB Revised Alcantara & Sons, Inc. vs. CA, G.R. No.
Procedural Guidelines in the Conduct of 155109, September 29, 2010)
Voluntary Arbitration Proceedings)
Effects of Non-Registration of the CBA
When the Labor Arbiter renders his decision, A CBA that is not registered as mandated by
compulsory arbitration is deemed terminated Art 237 remains valid and binding between
because by then the hearing and the parties, however, it may not be used to
determination of the controversy has ended. apply the contract bar rule as provided in
Any appeal raised by an aggrieved party from Article 238 and prevent any legitimate labor
the Labor Arbiter's decision is already beyond union from filing a petition for certification
the scope of arbitration since in the appeal election. (Duka, Labor Laws and Social
stage, the NLRC en banc merely reviews the Legislations, 2016, p. 556)
Labor Arbiter's decision for errors of fact or
law and no longer duplicates the proceedings d. LABOR MANAGEMENT COUNCIL
before the Labor Arbiter. Thus, the clause
"pending final resolution of the case by Workers shall have the right, subject to
arbitration/ should be understood to be such rules and regulations as the Secretary of
limited only to the proceedings before the Labor and Employment may promulgate, to
Labor Arbiter, such that when the latter participate in policy and decision-
rendered his decision, the case was finally making processes of the establishment
resolved by arbitration. (Philippine Airlines, where they are employed insofar as
Inc. v. National Labor Relations Commission, said processes will directly affect their
G.R. No. 55159, December 22, 1989) rights, benefits and welfare. For this
purpose, workers and employers may form
c. NO STRIKE – NO LOCKOUT CLAUSE labormanagement councils. (Article 267,
Labor Code)
“No Strike, No Lockout” Clause in the
Collective Bargaining Agreement (CBA) is an An LMC, either as council or committee or
expression of the firm commitment of the cooperation program, can serve as a forum
parties thereto that, on the part of the union, where management and employees may air
it will not conduct a strike during the their concerns, short of collective bargaining.
effectivity of the CBA, and on the part of the It is largely a communication mechanism for
employer, it will not a stage a lockout during myriad purposes including prevention or
the lifetime thereof. (Chan, Bar Reviewer on resolution of disputes. It can even act as a
Labor Law, 3rd Revised edition, ChanRobles grievance machinery. (Azucena, Everyone’s
Publishing Company, 2017, p.557) Labor Code, 2021, p.333)

A "no strike, no lock-out" provision in the CBA The Department shall promote the formation
"may only be invoked by an employer when of labor-management councils in organized
the strike is economic in nature or one which and unorganized establishments to enable
is conducted to force wage or other the workers to participate in policy and
agreements from the employer that are not decision-making processes in the
mandated to be granted by law. It is not establishment, insofar as said processes will
applicable when the strike is grounded on directly affect their rights, benefits and

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welfare, except those which are covered by November 21, 1996) When there is an
collective bargaining agreements or are existing CBA, the parties thereto are bound
traditional areas of bargaining. (Sec. 1, Rule to observe the terms and conditions therein
XXI, D.O. No. 40-03 as amended) set forth until its expiration. Neither party is
allowed to terminate or modify such
The Department shall promote other labor- agreement during its lifetime. The only time
management cooperation schemes and, the parties are allowed to terminate or modify
upon its own initiative or upon the request of such agreement is within the 60-day freedom
both parties, may assist in the formulation period. (Art. 264, Labor Code) It is also the
and development of programs and projects time when the majority status of the SEBA
on productivity, occupational safety and may be challenged by another union by filing
health, improvement of quality of work life, the appropriate petition for certification
product quality improvement, and other election. (MRR Yard Crew vs. PNR, G.R. No.
similar scheme. (Ibid.) L33621, July 26, 1976)

Function: A LMC, since it is not a union, is Automatic Renewal Clause

versatile and can exist where there is no The automatic renewal clause is deemed
union or co-exist with a union. But an LMC incorporated in all CBA's. The automatic
CANNOT replace a union. An LMC can renewal clause mandates the parties to keep
represent employees across the enterprise, the status quo and to continue in full force
present grievances regardless of the and effect the terms and conditions of the
grievant’s rank, and proffer proposals existing agreement during the sixty-day
unhindered by formalities. It can also handle period prior to the expiration of the old CBA
projects and programs whoever is the and/or until a new agreement is reached by
proponent, form committees for myriad the parties.||| (In Re: Petition for
purposes, instill discipline, and improve Certification Election Among the Rankand-
productivity. All these activities the LMC may File Monthly Employees of Contract
do without having to face internecine strifes Packaging Corporation of the Philippines, OS-
arising from periodic inter-union contests for A-15-5-12 (NCRC-CE-02-30-01-12), [October
dominance. In short, the LMC can deal with 29, 2012])
the employer on matters affecting the
employees’ rights, benefits, and welfare. The CBA shall remain effective and
(Azucena, Labor Code with Comments and enforceable even after the expiration of the
Cases, Vol. II-A, 2021, p. 387) period fixed by the parties as long as no new
agreement is reached by them and no
f. 60-day Freedom Period petition for certification is filed. (Labor Laws
and Social Legislations, Duka, 2016, p. 561)
The last sixty (60) days of the 5-year lifetime
of a CBA immediately prior to its expiration is Disaffiliation Prior to the Freedom
called the “freedom period”. This is the time Period
when the parties may terminate or modify A Labor union may disaffiliate from the
the terms and conditions of the CBA. No mother union to form a local or independent
petition for certification election may be union only during the sixty (60)-day freedom
entertained if filed outside the sixty-day period immediately preceding the expiration
period immediately before the expiration of of the CBA. (Ibid, p. 570)
the collective bargaining agreement. The
purpose of the prohibition against the filing Disaffiliation may be carried out when there
of a petition for certification election outside is a shift of allegiance on the part of the
the so called freedom period is to ensure majority of the members of the union.
industrial peace between the employer and (Alliance of Nationalist and Genuine Labor
its employees during the existence of the Organization vs. Samahan ng mga
CBA. (Republic Planters Bank General Manggagawang Nagkakaisa sa Manila Bay
Services Employees Union, G.R. No. 119675,

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Spinning Mills at J.P. Coats, G.R. No. 118562, employee from the union.” (Slord
July 05, 1996) Development Corporation v. Benerando
M. Noya, G.R. No. 232687, February 04,
g. Union Security Clause 2019)

Nothing in the Code or in any other law shall C. Unfair Labor Practices
stop the parties from requiring membership
in a recognized collective bargaining agent as Nature and Aspect
a condition for employment, except those Unfair labor practice refers to acts that violate
employees who are already members of the workers' right to organize. To hold an
another union at the time of the signing of employer liable for the same, the alleging
the collective bargaining agreement. (Art. party has the burden to prove that the acts
259, Labor Code) of the former negatively affects in whatever
manner the right of his or her employees to
It is the policy of the State to promote self-organize. (Ilaw at Buklod ng
unionism to enable the workers to negotiate Manggagawa sa General Milling Corp. v.
with management on the same level and with General Milling Corp., G.R. No. 216787
more persuasiveness than if they were to (Notice), February 15, 2022)
individually and independently bargain for
the improvement of their respective The prohibited acts are related to the
conditions. It is for this reason that the law workers‘ right to self-organization and to the
has sanctioned stipulations for the union observance of a Collective Bargaining
shop and the closed shop as a means of Agreement. Without that element, the acts,
encouraging the workers to join and support no matter how unfair, are not unfair labor
the labor union of their own choice as their practices. (Philcom Employees Union vs.
representative in the negotiation of their Philippine Global Communications, G.R. No.
demands and the protection of their interest 144315, July 17, 2006)
vis-a-vis the employer. (Liberty Flour Mills
Employees vs. Liberty Flour Mills, Inc., G.R. Concept of ULP
No. 58768-70, December 29, 1980)
ULP is an act of an employer or union – or
The purpose of a union shop or other union their agents, which violates the right of
security arrangement is to guarantee the workers to self-organization, which includes
continued existence of the union through the right:
enforced membership for the benefit of the a. To form a union;
workers. (Bank of the Philippine Islands vs. b. To take part in its formation;
BPI Employees Union-Davao Chapter- c. To join or assist a union of their own
Federation of Unions in BPI Unibank, G.R. No. choosing for purpose of Collective
164301, August 10, 2010) bargaining and negotiating; and
d. To engage in concerted activities for
Requisites for enforcement of union mutual help and protection
security clauses
Unfair labor practices violate the
To validly terminate the employment of an constitutional right of workers and
employee through the enforcement of the employees to self organization, are
union security clause, the following requisites inimical to the legitimate interests of both
must concur: labor and management, including their right
1) the union security clause is applicable; to bargain collectively and otherwise deal
2) the union is requesting for the with each other in atmosphere of freedom
enforcement of the union security and mutual respect, disrupt industrial peace
provision in the CBA; and and hinder the promotion of healthy and
3) there is sufficient evidence to support the stable labormanagement relations. (Art. 258,
decision of the union to expel the Labor Code)

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Aspects of ULP
Not all unfair labor acts constitute ULP ULP has two (2) aspects:
While an act or decision of an employer may 1. Civil aspect; and
be unfair, certainly not every unfair act or 2. Criminal aspect.
decision constitute ULP as defined and
enumerated under Labor Code. (Great Pacific The civil aspect of ULP includes claims for
Life Employees Union vs. Great Pacific Life actual, moral and exemplary damages,
Insurance Corp. G.R 126717, February 11, attorney‘s fees and other affirmative reliefs
1999) (Art. 258, Labor Code)

Unfair labor practices are those expressly Generally, these civil claims should be
enumerated in Arts. 259 and 260 of the Labor asserted in the labor case before the Labor
Code. Any act that does not fall in the Arbiters who have original and exclusive
enumerations provided is not an unfair labor jurisdiction over ULP cases. (Art. 224, Labor
practice. As a general rule, an unfair labor Code)
practice can be committed only if there exists
employer-employee relationship. However, The civil aspect can be committed by the
there are instances when it can be committed officers and agents of the employers or
against a non-employee such as in yellow- officers and agents of the labor organization.
dog contract. In view of this disqualification This aspect of ULP is cognizable and falls
of managerial employees from joining a within the jurisdiction of the Labor Arbiter.
union, an unfair labor practice act cannot be The quantum of proof required is only
committed by or against them unless they are substantial evidence and the prescriptive
acting as agents of the employer in the period is one year from the accrual of ULP.
commission of an ULP. (Labor Relations and (Duka, Labor Laws and Social Legislation,
Law on Dismissal with Notes and Comments, hereinafter Duka, 2019, p. 524)
Poquiz, 2018, p. 215)
The criminal aspect, on the other hand, can
Elements of ULP: be committed by the agents and officers of
1. There must be an employer-employee the employer who participated, authorized
relationship between the offender and and/or ratified the act. This ULP falls within
offended party; the jurisdiction of the regular trial courts and
2. The act complained of must be expressly the quantum of proof required is beyond
mentioned and defined in the Labor Code reasonable doubt. The prescriptive period is
as ULP; within one year from the accrual of the act of
3. The act complained of as ULP must have ULP.
a proximate and casual connection with
any of the following 3 rights: The criminal proceeding is suspended once
a. Exercise of the right to the civil or administrative aspect is filed. The
selforganization; criminal proceeding will only continue once
b. Exercise of the right to collective the administrative case has attained finality.
bargaining; or The final judgment in the administrative
c. Compliance with the CBA. proceeding (civil aspect) finding ULP is a
prerequisite in the filing of the criminal case
EXCEPTION: The only ULP that may or may for ULP. However, the final judgment in the
not be related to the exercise of the right to civil case is only a condition precedent for the
self-organization and collective bargaining is filing of the criminal case and is not binding
the act described under Art. 259 (248(f) i.e. and cannot be used as evidence in the
to dismiss, discharge, or otherwise prejudice criminal case for ULP. (Ibid, pp. 524-525)
or discriminate against an employee for
having given or being about to give testimony Kinds of ULP
under the Labor Code. 1. Acts violative of the right of self-
organization

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a. Interference, restraint, and coercion e. Discriminate in terms and conditions of

Non-Union (or Withdrawal from) employment to encourage or
Membership as Condition for discourage membership in any labor
Employment organization;
b. Contracting Out to Discourage f. Dismiss, discharge or discriminate an
Unionism Company Dominated Union employee for having given or being
c. Discriminating to encourage/ about to give testimony under this
discourage unionism code;
d. Retaliation for testimony against g. Violate the duty to bargain collectively;
employer h. Pay negotiation or attorney‘s fees to
e. Exaction – Featherbedding the union or its officers or agents as
part of the settlement of any issue in
2. Acts violative of the right to collective collective bargaining or any other
bargaining disputes; or
a. Violation of the duty to bargain i. Flagrant or gross refusal to comply with
b. Negotiation of Attorney‘s Fees the economic terms of CBA.
c. Violation of the CBA j. Interfere, restrain or coerce employees
d. Failure to make a timely reply to the in their right to self-organization;
proposals; within ten (10) calendar
days (General Milling Corp. vs. CA, GR Test of Interference or Coercion
No. 146728, February 11, 2004) Whether the employer has engaged in
conduct which may reasonably tend to
Parties who may be liable for ULP interfere with the free exercise of employees‘
1. Officers and agents of the company who twin rights to self-organization and collective
have actually participated in, ratified, or bargaining (Insular Life Employees
authorized that act of ULP. Association vs. Insular Life, G.R. No. L-25291,
2. Union Officers, members of the governing January 30, 1971)
boards, representatives or agents or
members of labor associations or It is the prerogative of the company to
organizations who have actually promote, transfer, or even demote its
participated in or authorized or ratified the employees to other positions when the
ULP. interests of the company reasonably demand
it. Unless there are circumstances which
There must be a final judgment finding that directly point to interference by the company
ULP was committed in the civil or with the employee‘s right to self-
administrative case before a criminal case organization, the transfer of an employee
can be pursued. Such decision is not binding should be considered as within the bounds
in the criminal case and its findings cannot be allowed by law, e.g. despite transfer to a
considered as evidence of guilt but merely as lower position, his original rank and salary
proof of compliance (Art. 258, Labor Code, as remained undiminished. (Rubberworld Phils.
amended) vs. NLRC, G.R. No. 75704, July 19, 1989)

1. By employers *Exception to ULP of Interference:

a. Interfere, restrain or coerce employees Union Security Agreements
in their right to self-organization;
b. Require a person not to join a union; Other examples of acts of interference
Discourage Unionism; e. Outright and unconcealed intimidation;
c. Contract out services or functions f. An employer who interfered with the right
being performed by union members; to self-organization before a union is
d. Initiate, dominate, assist or otherwise registered can be held guilty of ULP
interfere with formation or (Samahan ng mga Manggagawa sa
administration of any union; BandolinoLMLC vs. NLRC, G.R.No.
125195, July 17, 1997).

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g. When the act of a company president in unfair labor practice when the circumstances
writing letters to strikers urging them to clearly negate prima facie showing to warrant
return to work is an interference with the such belief. (Tiu vs. NLRC, G. R. No. 123276,
right to collective bargaining; Individual Aug. 18, 1997)
solicitation is also interference. (The
Insular Life Assurance NATU vs. The The judicial dictum is that any act of
Insular Life Co. Ltd, G.R. No. L‐25291, interference by the employer in the exercise
Jan. 30, 1971) by employees of their right to self-
organization constitutes an unfair labor
Totality of Conduct Doctrine practice. (Chan, PreWeek Bar Exam Notes on
It states that the culpability of an employer's Labor Law, 2018, p. 96)
remarks is to be evaluated not only on the
basis of their implications, but against the Require a person not to join a union;
background of and in conjunction with Discourage Unionism
collateral circumstances.
Yellow Dog Contract
Under this doctrine, expressions of opinion by In Article 259(b), ULP is committed when an
an Employer, though innocent in themselves, employer requires as a condition of
frequently were held to be ULP because of: employment that a person or an employee
1. The circumstances under which they shall not join a labor organization or shall
were uttered; withdraw from one to which he belongs. This
2. The history of the particular Employer‘s is known as a yellow dog contract.
labor relations or anti-union bias;
3. Their connection with an established A yellow dog contract is an undertaking by
collateral plan of coercion or the employees that as a condition for
interference. employment they will not join, assist, form or
even attempt to foster a union for the
Expressions of opinion by an employer which, duration of their employment with the
though innocent in themselves, frequently employer. This is a void undertaking. (Duka,
were held to be culpable because of the Labor Laws and Social Legislation, 2019, p.
circumstances under which they are uttered; 529)
the history of the particular employer‘s
relations or anti-union bias because of their Common stipulations in a Yellow Dog
connection with an established collateral plan Contract A typical yellow dog contract
of coercion or interference. An expression embodies the following stipulations:
which may be permissibly uttered by one 3. A representation by the employee that he
employer, might, in the mouth of a more is not a member of a labor organization;
hostile employer, be deemed improper and 4. A promise by the employee that he will not
consequently actionable as an unfair labor join a union; and
practice. (The Insular Life Assurance NATU 5. A promise by the employee that upon
vs. The Insular Life Co. Ltd, G.R. No. L‐ joining a labor organization, he will quit his
25291, Jan. 30, 1971) 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 Contract out services or functions being
of unfair labor practices committed by the performed by union members;
employer. It is not enough that the union Subcontracting is a ULP when the contracting
believed that the employer committed acts of out of a job, work or service being performed

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by union members will interfere with, restrain Discrimination is not ULP per se, it only
or coerce employees in the exercise of their becomes as such when it
right to self-organization that it shall encourages/discourages unionism. (Azucena,
constitute an unfair labor practice. Labor Code 2, 2016, p. 337)

Thus, it is not unfair labor practice to contract Test of discrimination: When the
out work for reasons of business decline, discharge of an employee was motivated by
inadequacy of facilities and equipment, his involvement with the union. Such
reduction of cost and similar reasonable inference must be based on evidence, direct
grounds. The court usually refuses to or circumstantial, not upon mere suspicion.
substitute its judgment for that of the (Azucena, Labor Code 2, 2016, p. 342-344)
business decision of the employer in
ascertaining the validity or legality of the Dismiss, discharge or discriminate an
motivation for the contracting out of services employee for having given or being
(Azucena, Labor Code 2, 2016, p. 330). about to give testimony under this
code;
It is important to note, however, that not all
acts of the employer in contracting out the Dismissal of employees after they have
work which is otherwise performed by union organized their union and about to start with
members can be classified as ULP. Such the effort at having it certified as their SEBA.
contracting out becomes unfair labor practice (Samahan ng Manggagawa sa Binondo-LMLC
if and when it interferes with, restrains or vs. NLRC, G.R. No. 126195, July 17, 1997)
coerces the employees in the exercise of their
rights to self-organization. (Duka, Labor Laws Consequently, to dismiss union members in
and Social Legislation, 2019, pp. 529-530) order to ensure the defeat if the union in the
certification election is ULP. (Samahang
Contracting out of services is not ULP per se. Manggagawa ng Via Mare vs. Noriel, G.R. No.
It is ULP only when the following conditions L52169, June, 30, 1980)
exist: the services contracted out are being
performed by union members and such Dismissal of union officers which threatens
contracting-out interferes with, restrains, or the existence of the union constitutes
coerces employees in the exercise of their unionbusting of ULP. (Art. 278 [c], Labor
right to self-organization (Duka, Labor Laws Code)
and Social Legislation, 2019, pp. 529-530).
Violate the duly to bargain collectively;
Initiate, dominate, assist or otherwise
interfere with formation or To be a ULP, violation should be gross in
administration of any union; character.

It is an unfair labor practice to initiate, The crucial question whether or not a party
dominate, assist or otherwise interfere with has met his statutory duty to bargain in good
the formation or administration of any labor faith typically depends on the facts in the
organization, including the giving of financial individual case. There is no per se test of
or other support to it or its organizers or good faith in bargaining. Good faith or bad
supporters. (Duka, Labor Laws and Social faith is an interference to be drawn from the
Legislation, 2019, p. 530) facts (HSBC Employees Union vs. NLRC, G.R.
No. 125038, November 6, 1996)
Discriminate in terms and conditions of
employment to encourage or Runaway Shop - is defined as an industrial
discourage membership in any labor plant moved by its owners from one location
organization; to another to escape union labor regulations
or state laws, but the term is also used to
describe a plant removed to a new location in

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order to discriminate against employees at Confesor, et al., G.R. No.114974, June 16,
the old plant because of their union activities. 2004)
It is one wherein the employer moves its
business to another location or it temporarily It is not necessary that there be direct
closes its business for anti-union purposes. A evidence that an employee was in fact
"runaway shop" in this sense, is a relocation intimidated or coerced by statements of
motivated by anti-union animus rather than threats of employer if there is a reasonable
for business reasons. (Complex Electronics inference that anti-union conduct of the
Employees Association vs. NLRC, G.R. No. employer has an adverse effect on self-
121315, July 19, 1999) organization and collective bargaining. (The
Insular Life Assurance Co., LTD., Employees
Blue-Sky Bargaining – is the act of making Association-NATU vs. The Insular Life
exaggerated or unreasonable proposals. Assurance Co., LTD., FGU insurance Group,
(Duka, Labor Laws and Social Legislation, G.R. No. L-25291, January 30, 1971, citing
2019, p. 533) Francisco, Labor Laws 1956, Vol. II, p. 323)

Surface Bargaining - is defined as "going 2. By labor organizations

through the motions of negotiating" without a. Restrain or coerce employees in the
any legal intent to reach an agreement. The exercise of their right to
resolution of surface bargaining allegations selforganization;
never presents an easy issue. The b. Cause or attempt to cause an employer
determination of whether a party has to discriminate an employee;
engaged in unlawful surface bargaining is c. Violate the duty or refuse to bargain
usually a difficult one because it involves, at collectively with the employer;
bottom, a question of the intent of the party d. An employer to pay or deliver any
in question, and usually such intent can only money or other things of valve, in the
be inferred from the totality of the challenged nature of an exaction, for services
party’s conduct both at and away from the which are not performed or not to be
bargaining table. It involves the question of performed;
whether an employer’s conduct e. Ask for negotiation or attorney‘s fees
demonstrates an unwillingness to bargain in from employers as part of the
good faith or is merely hard bargaining. settlement of any issue in collective
(Standard Chartered Bank vs. Confesor, G.R. bargaining or any other dispute; or
No. 114974, June 16, 2004) f. Violation of the CBA

Pay negotiation or attorney’s fees to a. Restrain or coerce employees in the

the union or its officers or agents as exercise of their right to self-organization
part of the settlement of any issue in Labor organization shall have the right to
collective bargaining or any other prescribe its own rules with respect to the
disputes; or i. Flagrant or gross refusal acquisition or retention of membership. The
to comply with the economic terms of labor organization, its officers, agents or
CBA. representatives are granted license by the
Labor Code to interfere with the exercise by
If an employer interferes in the selection of the employees‘ of their right to self-
the negotiators or coerces the Union to organization. Without such, no labor
exclude from its panel of negotiators a organization can be formed as the act of
representative of the Union, and if it can be recruiting and convincing the employees is an
inferred that the employer adopted the said act of inference. (Chan, PreWeek Notes on
act to yield adverse effects on the free Labor Law, 2019, p. 63)
exercise to right to self-organization or on the b. Cause or attempt to cause an employer to
right to collective bargaining of the discriminate an employee Includes
employees. ULP is committed. (Standard discrimination against an employee with
Chartered Bank Employees Union vs. respect to whom membership in such

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 PURPLE NOTES 2024 – LABOR LAW

organization has been denied or to terminate c. Blue Sky Bargaining - unrealistic and
an employee on any ground other than the unreasonable demands in negotiations by
usual terms and conditions of membership or either or both labor and management,
continuation of membership is made where neither concedes anything and
available to other members. In determining demands the impossible.It actually is not
whether a discharge is discriminatory, the collective bargaining at all. (Harold S.
true reason for the discharge must be Roberts, Roberts Dictionary of Industrial
established. While union activity is no bar to Relations. (Revised Edition, 1971, p. 51,
a discharge, the existence of a lawful cause as cited in Standard Chartered Bank
for discharge is no defense if the employee Employees Union vs Confesor, GR No.
was actually discharged for union activity. 114974, June 16, 2004)
(Phil. Metal Foundries vs. CIR, G.R. No.
34948-49 May 15, 1979) d. Surface Bargaining - going through the
c. Violate the duty or refuse to bargain motions of negotiating without any legal
collectively with the employer; Requisites: 1. intent to reach an agreement. It involves
The union is a duly certified SEBA (Lakas ng the question of whether or not the
Manggagawang Makabayan vs. Marcelo employer’s conduct demonstrates an
Enterprises, GR No. L-38258, November 19, unwillingness to bargain in good faith or is
1982); and 2. It commits any of the merely hard bargaining (Standard
following: a. It violates the duty to bargain Chartered Bank Employees Union vs.
collectively; or b. It refuses to bargain Confesor, GR No. 114974, June 16, 2004)
collectively with the employer.
d. An employer to pay or deliver any money
Unfair Labor Practice in Collective or other things of value, in the nature of
Bargaining an exaction, for services which are not
a. Bargaining in bad faith - The crucial performed or not to be performed
question whether or not a party has met
his statutory duty to bargain in good faith This ULP is known as featherbedding. It is
typically depends on the facts in the in nature of exaction, for services which
individual case. There is no per se test of are not performed or not to be performed,
good faith in bargaining. Good faith or bad as when a union demands that the
faith is an interference to be drawn from employer maintain personnel in excess of
the facts. (HSBC Employees Union vs. the latter’s requirements. It is an unfair
NLRC, G.R. No. 125038, November 6, labor practice of the union through
1996) coercive means for exacting or attempting
to exact the employers for services not
b. Refusal to Bargain - An employer is rendered or not intended to be rendered.
guilty of ULP in refusing to bargain with
the representative of a majority of his However, there is no featherbedding if the
employees. To bargain in good faith, an paid work is performed no matter how
employer must not only meet and confer unnecessary or useless it may be to the
with the union which represents his employer. (Duka, Labor Laws and Social
employees, but also must recognize the Legislation, 2019, p. 535)
union for the purpose of collective
bargaining. Additionally, he must The anti-featherbedding provision has
recognize the union as the bargaining been held not to bar a union from
unit, even if they are not all members of demanding payment for work for which
the union. A union can also be guilty of the employer has already paid another
ULP for refusing to bargain collectively. person. A union is not guilty of ULP in
(Azucena, Labor Code with Comments and demanding payment for an amount equal
Cases, Vol. II-A, 2021, p. 325) to the wages paid by the employer to a
non-union employee for work which the
union‘s members were entitled to. If the

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work is actually done by employees, there Plywood Corporation, et al. vs. Abelgas,
can be no conflict with the anti- G.R. No. 148532, April 14, 2004)
featherbedding provision, regardless of
whether or not the persons receiving f. Violation of the CBA It must be noted that
payment are the ones who performed the under Article 261 of the Labor Code,
work. (Rabouin vs. NLRB [CA2] 195 F2d violation of the CBA is generally
906) considered merely a grievable issue. It
becomes unfair labor practice only if the
Requisites: violation is gross in character which
1. The labor organization, its officers, means that there is flagrant and/or
agents or representatives have caused malicious refusal to comply with the
or attempted to cause an employer economic stipulations in the CBA. (Chan,
either: Pre-Week Bar Exam Notes on Labor Law,
2. To pay or agree to pay any money, 2018, p. 100)
including the demand for fee for union
negotiations; or Featherbedding activities (make work
3. To deliver or agree to deliver any activities)
things of value; It is an unfair labor practice of a union
4. Such demand for payment of money or through coercive practices such as strikes, or
delivery of things of value is in the extortion for exacting or attempting to exact
nature of an exaction; and from an employer, compensation for services
5. The services contemplated in exchange not rendered or not intended to be rendered.
for the exaction are not actually Simply this is an extortion of money of other
performed or will not be performed. things of value for services performed or
(Chan, Pre-Week Bar Exam Notes on unperformed by the labor union. There is no
Labor Law, 2018, p. 99) illegal featherbedding, however, where the
union demands payment of damages for
e. Ask for negotiation or attorney’s fees from breach of contract, under color of rights.
employers as part of the settlement of any (Labor Relations and Law on Dismissal with
issue in collective bargaining or any other Notes and Comments, Poquiz, 2018, p. 236)
dispute;
PARTIES LIABLE FOR UNFAIR LABOR
It is ULP for a labor organization, its PRACTICE
officers, agents or representatives to ask CIVIL CASE CRIMINAL CASE
for or accept negotiation fees or attorney’s PARTIES LIABLE
fees from employers as part of the For ULP of Employer For ULP Employer
settlement of any issue in collective Officers and agents Officers and agents
bargaining or any other dispute (Chan, of employer. of corporations,
Pre-Week Bar Exam Notes on Labor Law, associations, or
2018, p. 100) partnership who
may have actually
Sweetheart Contract - A labor participated the
organization asks for or accepts a ULP.
negotiation or attorney’s fees from the For ULP Of Labor For ULP of Labor
employer in settling a bargaining issue or Organization Organization
dispute. Officers and agents Officers, members
of Labor of governing
The obligation to pay attorney’s fees Organizations. boards,
belongs to the union and cannot be representatives or
shunted to the individual workers as their agents, or members
direct responsibility. The law has made of labor associations
clear that any agreement to the contrary who may have
shall be null and void ab initio (EMCO actually

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participated, of an industrial or labor dispute. (Art. 219(o),

authorized, or Labor Code)
ratified the ULP.
Who has Jurisdiction A strike is the most powerful weapon of
Labor Arbiter MTC or RTC as the workers in coming to an agreement with
case may be, management as to the terms and conditions
provided that no of employment. Premised on the concept of
criminal prosecution economic war between labor and
for ULP may be management, staging a strike either gives life
instituted without to or destroys the labor union and its
first obtaining a members, as well as affect management and
final judgment in its members. (Ilagan v. Manila Electric Co.,
the administrative G.R. Nos. 211746 & 212077 (Notice), January
proceedings before 22, 2020)
the Labor Arbiter
that ULP has been Valid Strike vs. Illegal Strike
committed.
Quantum of Proof Needed VALID STRIKE ILLEGAL STRIKE
Substantial Guilt beyond It is a strike that is A strike staged for a
Evidence reasonable doubt. staged for a valid purpose not
purpose and recognized by law,
D. Peaceful Concerted Activities conducted through or, if for a valid
means allowed by purpose, conducted
Workers shall have the right to engage in law. violative of the law.
concerted activities for purposes of collective
bargaining or for their mutual benefit and Valid Strike
protection. The right of legitimate labor To be legitimate, a strike should not be
organizations to strike and picket and of antithetical to public welfare, and must
employers to lockout, consistent with the be pursued within legal bounds.
national interest, shall continue to be
recognized and respected. However, no labor The right to strike as a means of attaining
union may strike and no employer may social justice is never meant to oppress or
declare a lockout on grounds involving inter- destroy anyone, least of all, the employer.
union or intra-union disputes. (Art. 278(b), Since strikes affect not only the relationship
Labor Code) between labor and management, but also the
general peace and progress of the
The term ―” concerted activities” is defined community, the law has provided limitations
as the activities of two or more employees for on the right to strike. (Ilagan v. Manila
the purpose of securing benefits or changes Electric Co., G.R. Nos. 211746 & 212077
in terms and conditions of employment, or for (Notice), January 22, 2020)
mutual aid or protection with respect to their
collective interest as employee. Grounds for a Valid Strike

Forms of Concerted Activities The Labor Code and the IRR limit the grounds
1. By Labor Organizations for a valid strike to:
a. Strike 1. a bargaining deadlock in the course of
b. Picket collective bargaining, or
2. By Employers 2. the conduct of unfair labor practices by the
a. Lockout employer.

a) Strikes (Valid vs. Illegal) Only a certified or duly recognized bargaining

Any temporary stoppage of work by the representative may declare a strike in case of
concerted action of the employees as a result a bargaining deadlock. However, in cases of

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unfair labor practices, the strike may be compromise agreements to prevent the
declared by any legitimate labor organization. strike. In case of unfair labor practice, the
(Bigg's, Inc. v. Boncacas, G.R. Nos. 200487 & period of notice is shortened to 15 days; in
200636, March 6, 2019) case of union busting, the "cooling-off
period" does not apply and the union may
Mandatory procedural requirements immediately conduct the strike after the
a. notice of strike be filed with the NCMB 30 strike vote and after submitting the results
days before the intended date thereof, or 15 thereof to the regional arbitration branch of
days in case of unfair labor practice; the NCMB at least seven days before the
b. a strike vote be approved by a majority of intended strike.
the total union membership in the bargaining
unit concerned, obtained by secret ballot in a Thus, in a strike grounded on unfair labor
meeting called for that purpose; and practice, the following are the requirements:
c. a notice be given to the NCMB of the (1) the strike may be declared by the duly
results of the voting at least seven days certified bargaining agent or legitimate labor
before the intended strike. These organization; (2) the conduct of the strike
requirements are mandatory, and the union's vote in accordance with the notice and
failure to comply renders the strike illegal. reportorial requirements to the NCMB and
(Ergonomic Systems Philippines, Inc. v. subject to the seven-day waiting period; (3)
Enaje, G.R. No. 195163, December 13, 2017) notice of strike filed with the NCMB and copy
furnished to the employer, subject to the 15-
Bargaining Deadlock vs ULP day cooling-off period. In cases of union
busting, the 15-day cooling-off period shall
Bargaining Unfair Labor not apply. (Bigg's, Inc. v. Boncacas, G.R. Nos.
Deadlock Practice 200487 & 200636, March 6, 2019)
Who Only a certified duly certified
may or duly bargaining Not Valid Grounds for a Strike
file recognized agent or a. Violations of CBAs (except those that are
bargaining legitimate gross in character);
representative labor b. Inter-union and internal union disputes
organization c. Issues brought to voluntary or compulsory
When at least 30 days at least 15 arbitration;
before the days before d. Legislated wage orders; and e. Labor
intended date the intended standard cases
of the strike date of the
strike Forms and classification of strikes
Where regional branch NCMB and 1. As to nature
of the NCMB serve a copy a. Legal strike - one that is staged for a
and serve a of the notice valid purpose and conducted through
copy of the on the means allowed by law. (Duka, Labor
notice on the employer Laws and Social Legislation, 2019,
employer p.649)
b. Illegal strike - one staged for a purpose
In both instances, the mandatory procedural not recognized by law or, if for a valid
requirements must be complied with. purpose, it is conducted through
means not sanctioned by law. (Duka,
In a strike due to bargaining deadlocks, the Labor Laws and Social Legislation,
union must file a notice of strike or lockout 2019, p.649)
with the regional branch of the NCMB at least c. Economic strike - one declared to
30 days before the intended date of the strike demand higher wages, overtime pay,
and serve a copy of the notice on the holiday pay, vacation pay, etc. It is one
employer. This is the so-called "cooling-off which is declared for the purpose of
period" when the parties may enter into forcing wage or other concessions from

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the employer for which he is not (Duka, Labor Laws and Social
required by law to grant. (Master Iron Legislation, 2019, p.651)
Labor Union vs. NLRC, G.R. No. 92009, h. Sit-down strike - one where the
February 17, 1993) workers stop working but do not leave
d. Unfair labor practice (ULP) or political their place of work. (Duka, Labor Laws
strike - one called to protest against and Social Legislation, 2019, p.651)
the employer‘s unfair labor practices i. Overtime boycott – one involving the
enumerated in Article 248 of the Labor act of the workers in refusing to render
Code, including gross violation of the overtime work in violation of the CBA,
CBA under Article 261 and union- resorted to as a means to coerce the
busting. (Duka, Labor Laws and Social employer to yield to their demands.
Legislation, 2019, p.648) j. Boycott of products – one which
e. Slowdown strike - one staged without involves the concerted refusal to
the workers quitting their work but by patronize an employer's goods or
merely slackening or reducing their services and to persuade others to a
normal work output. It is also called “a like refusal.
strike on the installment plan.” (Poquiz,
Labor Relations and Law on Dismissal 2. As to extent
with Comments and Notes, 2018, p. a. General strike – one which covers and
367) extends over a whole province or
country.
Nothing in the law requires that a b. Particular strike – one which covers a
slowdown be carefully planned and particular enterprise, locality, or
that it be participated in by a large occupation; it usually involves only one
number of workers. The essence of this union or only one industry. (Azucena,
kind of strike is that the workers do not Labor Code with Comments and Cases,
quit their work but simply reduce the Vol. II-A, 2021, p. 490)
rate of work in order to restrict the
output or delay the production of the 3. As to purpose
employer. It has been held that while a a. Economic strike – intended to force
cessation of work by the concerted wage and other concessions from the
action of a large number of employees employer; which he is not required by
may more easily accomplish the object law to grant; or
of the work stoppage than if it is by one b. Unfair labor practice strike – a strike
person, there is, in fact no fundamental called against unfair labor practices of
difference in the principle involved as the employer, usually for the purpose
far as the number of persons involved of making him desist from further
is concerned, and thus, if the act is the committing such practices. (Ibid)
same, and the purpose to be
accomplished is the same, there is a 4. As to the nature of the strikers’
strike, whether one or more than one action
have ceased to work. (Ramirez vs. a. Partial strike – brief and unannounced
Polyson Industries, Inc. G.R. No. temporary work stoppage, including
207898, October 19, 2016) slowdowns, unauthorized extension of
f. Mass leaves - One in which workers rest periods, and walkouts for portions
collectively abandon or boycott regular of a shift or for entire shifts;
work causing temporary stoppage of b. Sit-down strike – a combination of the
work. (Solidbank Corp. vs. EU Gamier, strike plus a refusal of the strikers to
G.R. No. 159460-61, November 15, leave the plant and machines, and a
2010) refusal to permit the latter to be
g. Wildcat strike - one declared and operated; and
staged without the majority approval of c. Slowdown strike – It is a willful
the recognized bargaining agent. reduction in the rate of work by a group

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of employees for the purpose of continue albeit in a state of belligerent

restricting the output of the employer. suspension;
(Azucena, Labor Code 2, 2016, p. 580) e. There is stoppage of work, which
stoppage is temporary;
5. As to the extent of the interest of f. The striking group is a legitimate labor
strikers organization, and in case of bargaining
a. Primary strike – refers to a strike deadlock, is the employees‘ sole
conducted by the workers against their bargaining representative. (Azucena, Jr.,
employer, involving a labor dispute The Labor Code with Comments and
directly affecting them; Cases, 8th Edition, 2013, p. 552)
b. Secondary strike – refers to a strike
staged by the workers of an employer Strike Area
involving an issue which does not The establishment, warehouse, depots,
directly concern or affect their plants or offices, including the sites or
relationship but rather, by some premises unused as runaway shops of the
circumstances affecting the workers employer struck against, as well as the
such as when the employer persists to immediate vicinity actually used by picketing
deal with a third person against whom strikers in moving to and from before all
the workers have an existing points of entrance to and exit said
grievance. Workers stage this kind of establishment (Art. 219(s), Labor Code, as
strike to secure the economic amended)
assistance of their employer to force
the third person to yield to the union Strike-breaker
on the issues involving it and said third Any person who obstructs, impedes, or
person; and interferes with by force, violence, coercion,
c. Sympathy strike – a kind of strike threats or intimidation any peaceful picketing
staged by the workers of one company affecting wages, hours or conditions work or
to make common cause with the in the exercise of the right to self-
strikers of other companies without organization or collective bargaining, also
demands or grievances of their own called a “scab” (Art. 219(r), Labor Code, as
against their employer. This is an illegal amended)
strike because there is no labor dispute
between the workers who are joining When the respondent offered reinstatement
the strikes and the latter’s employer. and attempted to “bribe” the strikers with
(Duka, Labor Laws and Social “comfortable cots,” “free coffee and
Legislation, 2019, p.651) occasional movies,” “overtime” pay for “work
performed in excess of eight hours,” and
Characteristics of a Strike Activity “arrangements” for their families, so they
a. There must be an established relationship would abandon the strike and return to work,
between the strikers and the person or they were guilty of strikebreaking and/or
persons against the strike is called; union-busting and, consequently, of unfair
b. The relationship must be one of employer labor practice. It is equivalent to an attempt
and employee; to break a strike for an employer to offer
c. The existence of a dispute between the reinstatement to striking employees
parties and the utilization by labor of the individually, when they are represented by a
weapon of concerted refusal to work as union, since the employees thus offered
means of persuading, or coercing reinstatement are unable to determine what
compliance with the working men’s the consequences of returning to work would
demands; be. (Insular Life Employees Association vs.
d. The contention advanced by the workers Insular Life, G.R. No. L-25291, January 30,
that although work ceases, the 1971)
employment relation is deemed to

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The 7-day waiting period or strike ban is a the latter’s employer. (Duka, Labor Laws
distinct and separate requirement from the and Social Legislation, 2019, p.651)
cooling-off period. The latter cannot be 4. Secondary Strikes – occurs when a group
substituted for the former and vice-versa. of employees refuse in concert to remain
Both must be complied with separately and at work for an employer, not because of
distinctly from each other. In the event the any complaint over their labor standards
result of the strike/lockout vote ballot is filed under him, but because he persists in
within the cooling-off period, the 7-day dealing with a third person against whom
requirement shall be counted from the day they have a grievance (Azucena, Labor
following the expiration of the cooling-off Code with Comments and Cases, Vol. II-
period (NCMB Primer on Strike, Picketing and A, 2021, p. 491)
Lockout 2nd Edition, December 1995) 5. Welgang Bayan – Work stoppage affecting
numerous (if not all) employers, including
A legal strike can be changed into an illegal a particular employer who has no dispute
strike when a ULP occurs. (Consolidated with his employees regarding their terms
Labor Assn. of the Phils vs. Marsman, G.R. and conditions of employment. (Ibid, at p.
No. L-17038, July 31, 1964) 494)
6. Slow Down – it is considered to be a strike
There is non-conversion between strike or on “installment plan.” There is a slowdown
lockout or vice-versa because it is different when the workers, without a complete
from each other. It can however, happen at stoppage of work, retard production or
the same time. (Rizal Cement vs. CIR, G.R. their performance of duties and functions
No. L-18442, November 30, 1962) to compel management to grant their
demands. (Poquiz, Labor Relations and
Since strikes affect not only the relationship Law on Dismissal with Comments and
between labor and management but also the Notes, 2018, p. 367)
general peace and progress of the
community, the law has provided limitations A slowdown is inherently illicit and
on the right to strike. Procedurally, for a unjustifiable, because while the
strike to be valid, it must comply with Article employees "continue to work and remain
278 of the Labor Code. These requirements at their positions and accept the wages
are mandatory, and the unions failure to paid to them," they at the same time
comply renders the strike illegal. (Piñero vs. select what part of their allotted tasks they
NLRC, G.R. No. 149610, August 20, 2004) care to perform. In other words, they
"work on their own terms (Ilaw at Buklod
Examples of Illegal Strikes ng Manggagawa vs. NLRC, G.R. No.
1. Sit-Down Strike – one where the workers 125561, June 27, 1998)
stop working but do not leave their place
of work (Duka, Labor Laws and Social Prohibited acts during strike
Legislation, 2019, p.651) 1. By anyone. No person shall obstruct,
2. Wildcat Strike – one declared and staged impede, or interfere with, by force,
without the majority approval of the violence, coercion, threats, or
recognized bargaining agent (Duka, Labor intimidation, any peaceful picketing by
Laws and Social Legislation, 2019, p.651) employees [Art.279(b), Labor Code, as
3. Sympathetic Strike – a kind of strike amended];
staged by the workers of one company to
make common cause with the strikers of • Blocking the free ingress to/ egress from
other companies without demands or work premises for lawful purposes
grievances of their own against their • Obstruction of public thoroughfares
employer. This is an illegal strike because • Threatening, coercing and intimidating
there is no labor dispute between the non-striking employees, officers,
workers who are joining the strikes and suppliers and customers

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• Resistance and defiance of assumption termination of his employment even if a

of jurisdiction by the Labor Secretary or replacement has already been hired by the
an injunction employer during such lawful strike. (Chan,
• Acts of violence (Association of Bar Reviewer on Labor Law, 2019, p. 582)
Independent Unions in the Philippines
(AIUP), et. al. vs. NLRC, G.R. No. Liability for Participation in Illegal
120505, March, 25, 1999) Strike
In the determination of the consequences of
The violence must be pervasive and illegal strikes, the law makes a distinction
widespread, consistently and deliberately between union members and union officers.
resorted to as a matter of policy (Shell Oil The services of an ordinary union member
Workers vs. Shell Company of the Phil., 39 cannot be terminated for mere participation
SCRA 276 1971) (if violence was resorted in an illegal strike; proof must be adduced
to by both sides, such violence cannot be showing that he or she committed illegal acts
a ground for declaring the strike as illegal) during the strike. A union officer, on the other
(Malayang Samahan ng Manggagawa sa hand, may be dismissed, not only when he
M. Greenfield vs. Ramos, G.R. No. actually commits an illegal act during a strike,
113907, February 28, 2000) but also if he knowingly participates in an
illegal strike. (Ergonomic Systems Philippines,
2. By employer. No employer shall use or Inc. v. Enaje, G.R. No. 195163, December 13,
employ any strike-breaker, nor shall any 2017)
person be employed as a strike-breaker.
(Art. 279(c), Labor Code, as amended) a. By union officers
3. By public official or police force. No public The mere declaration of illegality of the strike
official or employee, including officers and will result in the termination of all union
personnel of the New Armed Forces of the officers who knowingly participated in the
Philippines or the Integrated National illegal strike. (Lapanday Workers Union vs.
Police, or armed person, shall bring in, NLRC, G.R. No. 95494- 97, September 07,
introduce or escort in any manner, any 1995) Unlike ordinary members, it is not
individual who seeks to replace strikers in required, for purposes of termination, that
entering or leaving the premises of a strike the officers should be proven to have
area, or work in place of the strikers. (Art. committed illegal acts during the strike in
279(d), Labor Code, as amended) order to be held liable (Phimco Industries,
Inc. vs. Phimco Industries Labor Association,
Participation in Lawful Strike G. R. No. 178030, August 11, 2010)
Mere participation in a lawful strike is not a
sufficient ground for termination of the b. By ordinary union members
services of a union member. The Labor Code For union members, what is required is that
protects ordinary, rank-and-file union they knowingly participated in the
members who participated in a strike from commission of illegal acts during the strike for
losing their jobs provided that they did not there to be sufficient ground for termination
commit illegal acts during the strike. The of employment. (Bigg's, Inc. v. Boncacas,
Labor Code does at the same time hold G.R. Nos. 200487 & 200636, March 6, 2019)
accountable union officers who knowingly
participated in an illegal strike. (Philippine Liability for Commission of Illegal Acts
Telegraph and Telephone Corp. v. National While the law protects the right of workers to
Labor Relations Commission, G.R. No. engage in concerted activities for the purpose
109281 (Resolution), December 7, 1995) of collective bargaining or to seek redress for
unfair labor practices, this right must be
An employee who participates in a lawful exercised in accordance with the law. (Bigg's,
strike is not deemed to have abandoned his Inc. v. Boncacas, G.R. Nos. 200487 &
employment. Such participation should not 200636, March 6, 2019)
constitute sufficient ground for the

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As far as liability for commission of illegal acts c. The ingress to or egress from the
during the strike is concerned, the issue of company premises should not be
legality or illegality of the strike is irrelevant. obstructed; and
As long as the union officer or member d. Public thoroughfares should not be
commits an illegal act in the course of the impeded.
strike, be it legal or illegal, his employment
can be validly terminated. (Chan, Bar Elements:
Reviewer on Labor Law, 2019, p. 585) a. There must be a labor issue;
b. It must be a concerted activity of the
Illegal Acts union; and
c. Characterized by the peaceful marching to
The term “illegal acts” under Article 264(a) and from at the employee’s premises with
may encompass a number of acts that violate placards to appraise the employer and the
existing labor or criminal laws, such as the public of their demands.
following:
1. Violation of Article 264(e) of the Labor Strike Picketing
Code which provides that “[n]o person To withhold or to Picketing outside of
engaged in picketing shall commit any act stop work by the the company
of violence, coercion or intimidation or concerted action of compound usually
obstruct the free ingress to or egress from employees as a accompanies the
the employer’s premises for lawful result of an work stoppage
purposes, or obstruct public industrial or labor
thoroughfares.” dispute
2. Commission of crimes and other unlawful Focuses on the Focuses on
acts in carrying out the strike. stoppage of work publicizing the labor
3. Violation of any order, prohibition, or dispute and its
injunction issued by the DOLE Secretary or incidents to inform
NLRC in connection with the assumption the public of what is
of jurisdiction or certification order under happening in the
Article 263(g) of the Labor Code This company
enumeration is not exclusive as Refers to the actual Simply means
jurisprudence abounds where the term stoppage of work marching to and
“illegal acts” has been interpreted and from in front of the
construed to cover other breaches of employer‘s
existing laws. premises, usually
accompanied by the
b. Picketing display of placards
A picket simply means to march to and from and other signs;
the employer's premises, usually separate and
accompanied by the display of placards and different from the
other signs making known the facts involved actual stoppage of
in a labor dispute. (Phimco Industries, Inc. v. work
Phimco Industries Labor Association, G.R. Guaranteed under Right to picket
No. 170830, August 11, 2010) the Constitutional guaranteed under
provision on the the freedom of
Requisites for lawful picketing right of workers to speech and of
a. The picket should be peacefully carried conduct peaceful expression and to
out; concerted activities peaceably assemble
b. There should be no act of violence,
coercion or intimidation attendant What is definitive of whether the action
thereto; staged by petitioner is a strike and not merely
a picket is the totality of the circumstances
surrounding the situation. (Santa Rosa Coca-

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Cola Plant Employees Union vs. Coca-Cola status quo ante and bringing the parties back
Bottlers Phils., Inc., G.R. Nos. 164302-03, to the respective positions before the illegal
January 24, 2007) strike and illegal lockout. (Chan, Bar
Reviewer on Labor Law, 2019, p. 598-599)
While the right of employees to publicize their
dispute falls within the protection of freedom 2. Assumption of Jurisdiction by the
of expression and the right to peaceably DOLE Secretary
assemble to air grievances, these rights are
by no means absolute. Protected picketing The Secretary of Labor is empowered to do
does not extend to blocking ingress to and either of the following:
egress from the company premises. That the a. Assume jurisdiction over the labor dispute
picket was moving, was peaceful and was not and decide it himself; or
attended by actual violence may not free it b. Certify the same to the NLRC for
from taints of illegality if the picket effectively compulsory arbitration, in which case it
blocked entry to and exit from the company will be the NLRC which shall hear and
premises. (Phimco Industries, Inc. v. Phimco decide it. (Article 278(g), Labor Code)
Industries Labor Association, G.R. No.
170830, August 11, 2010) Industries Indispensable to National
Interest
Innocent third-party rule in picketing The determination of specific industries
An innocent third party shall not be adversely indispensable to the national interest is left to
affected by the picketing. The lawful ingress the discretion of the DOLE Secretary.
and egress of passage of an innocent third
party cannot be blocked. Under Article 278 (g) of the Labor Code,
when in the opinion of the DOLE Secretary,
c. Lockouts the labor dispute causes or will likely cause in
The temporary refusal of an employer to a strike or lockout in an industry
furnish work as a result of an industrial or indispensable to the national interest The
labor dispute. (Art. 219p, Labor Code) power of assumption of jurisdiction or
certification by the Secretary of Labor is in
Grounds for lockout the NATURE OF A POLICE POWER MEASURE.
A lockout must be based on any or both of
the following two (2) exclusive grounds: The following industries/services are hereby
a. Unfair Labor Practice (political); recognized as deemed indispensable to the
b. Collective bargaining deadlock national interest:
(economic). (Sec. 5, Rule XXII, D.O. No. a. Hospital Sector;
40- 03, as amended by A-I) b. Electric Power Industry;
c. Water Supply Services, to exclude small
Mandatory procedural requirements water supply services such as Bottling and
If an injunction is subsequently ordered, Refilling Stations;
lockout must cease. d. Air Traffic Control; and
e. Such other industries as maybe
Effect of illegal lockout recommended by the National Tripartite
Any worker whose employment has been Industrial Peace Council (NTIPC). (Sec.
terminated as a consequence of an unlawful 16, Rule XXII, D.O. No. 40-03 as
lockout shall be entitled to reinstatement with amended)
full back wages. (Art. 279(a), Labor Code)
In the instant case, stoppage of work in the
Both parties in pari delicto 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 particularly, it is the national economy that
union is culpable for illegal strike, such will suffer because of the resultant reduction
situation warrants the restoration of the in export earnings and dollar reserves, not to

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mention possible cancellation of the contracts issue to enforce the same (Chan, Pre-
of the company with foreign importers. It was Week Bar Exam Notes on Labor Law,
particularly for the purpose of avoiding such 2018, p. 107)
a development that the labor dispute was
certified to the NLRC, with the return-to-work Return-to-Work Order
order following as a matter of course under Always a part of the Assumption or
the law. (Asian Transmission, Corporation vs. Certification Order even if not expressly
NLRC, G.R. No. 75271- 73, GR L-77567, June stated therein. The return-to-work order is
27, 1988) compulsory and immediately executory
(Chan, Pre-Week Bar Exam Notes on Labor
Power of the President Over National Law, 2018, pp. 107-108).
Interest Cases
Notwithstanding the power granted to the Assumption of jurisdiction over a labor
DOLE Secretary to assume jurisdiction over dispute, always coexists with an order for
national interest labor disputes or to certify workers to return to work immediately and
them to the NLRC for compulsory arbitration, for employers to readmit all workers under
the President of the Philippines shall not be the same terms and conditions prevailing
precluded from doing any of the following: before the strike or lockout (Trans-Asia
a. To determine the industries that, in his Shipping Line Inc. – Unlicensed Crew
opinion, are indispensable to the national Employees Union of Appeals, et al., GR No.
interest; or 145428, July 7, 2004)
b. To intervene at any time and assume
jurisdiction over any such labor dispute in The Secretary of Labor may also exercise
order to settle or terminate it. (Article 278 such power to assume jurisdiction in labor
[g], Labor Code) dispute adversely affecting the continued
operation of such hospitals, clinics, or
Effects of Assumption of Jurisdiction medical institutions.
1. Automatically enjoins the intended or
impending strike or lockout as specified in the Return-to-work and reinstatement orders are
assumption or certification order; both immediately executory; however, a
2. If one has already commenced at the time return-to-work order is interlocutory in
of assumption or certification, automatically nature, and is merely meant to maintain
prohibits its continuation; and status quo while the main issue is being
3. The mere issuance of an assumption or threshed out in the proper forum. In contrast,
certification order automatically carries with an order of reinstatement is a judgment on
it a return-to-work order which is compulsory the merits handed down by the Labor Arbiter
and immediately executor; pursuant to the original and exclusive
4. The employer shall immediately resume jurisdiction provided for under Article 224(a)
operations and re-admit all workers under of the Labor Code (Manggagawa ng
the same terms and conditions prevailing Komunikasyon sa Pilipinas vs. Philippine Long
before the strike or lockout. (Article 278 [g], Distance Telephone Company incorporated,
Labor Code) G.R. No. 190389, April 19, 2017)

Principles on the Assumption/Certification Nature of Assumption Order or

Power of the DOLE Secretary: Certification Order
1. Prior notice and hearing are not required The secretary’s assumption and certification
in the issuance of assumption or orders being executory in character are to be
certification order. strictly complied with by the parties even
2. The DOLE Secretary may seek the during the pendency of any petition
assistance of law enforcement agencies questioning their validity for this
like the Philippine National Police to extraordinary authority given by law to the
ensure compliance with the provision Secretary of Labor is aimed at arriving at
thereof as well as with such orders he may peaceful and speedy solution to labor

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dispute, without jeopardizing national So imperative is the order in fact that it is not
interest. (Philtread tire & Rubber Corp vs. even considered violative of the right against
NLRC, GR No. 102185, February 15, 1993) involuntary servitude, as this Court held in
Kaisahan ng Mga Manggagawa sa Kahoy vs.
Police Power Measure Gotamco Sawmills. The worker can of course
The power to issue assumption or give up his work, thus severing his ties with
certification orders is an extraordinary the company, if he does not want to obey the
authority granted to the President and his order, but the order must be obeyed if he
alter ego, the DOLE Secretary, the exercise wants to retain his work even if his inclination
of which should be strictly limited to national is to strike (Asian Transmission Corp. vs.
interest cases. This is done in promotion of NLRC, G.R. No. 88725, November 22, 1989)
the common good considering that a
prolonged strike or lockout can be inimical to Employees engaged in Strike are
the national economy (Chan, Pre-Week Bar generally entitled to reinstatement
Exam Notes on Labor Law, 2018, p. 108)
In Economic Strike
Defiance of assumption or certification Employees engaged in economic strike are
orders shall be considered as an illegal entitled to reinstatement provided the
act employer has not yet hired permanent
Non-compliance with the certification order replacements. (Consolidated Labor
of the Secretary of Labor and Employment Association vs. Marsman, GR No. L-17038,
shall be considered as an illegal act July 31, 1964)
committed in the course of the strike or
lockout, and shall authorize the NLRC to In ULP strike
enforce the same under the pain of Employees engaged in ULP Strike are entitled
immediate disciplinary action, including to reinstatement even if the employer may
dismissal or loss of employment status or have already hired replacements. (Cromwell
payment by the locking-out employer of Employees Union vs. CIR, GR No. L-19778,
backwages, damages and/or other September 30, 1964)
affirmative relief, even criminal prosecution
against the liable parties (Sec. 4, Rule VIII, Arrest or Detention of Union Members
2005 NLRC Revised Rules of Procedure) or Union Organizers for Union Activities

Justifications: GENERAL RULE: A police officer cannot

1. A strike that is undertaken after the arrest or detain a union member for union
issuance by the DOLE Secretary of an activities without previous consultations with
assumption or certification order becomes the Secretary of Labor.
a prohibited activity and thus illegal. The
defiant striking union officers and EXCEPTION: On the grounds of national
members, as a result, are deemed to have security, public peace, or commission of
lost their employment status for having crime (Article 281, Labor Code)
knowingly participated in an illegal strike.
2. From the moment the worker defies a General Rule: “No-work no-pay” principle
return-to-work order, he is deemed to applied in strike
have abandoned his job.
3. By so defying, the workers have forfeited In an economic strike, the strikers are not
their right to be readmitted to work (Chan, entitled to backwages, since the employer
Pre-Week Bar Exam Notes on Labor Law, should get the equivalent day’s work for what
2018, p. 108) he pays his employees. (Consolidated Labor
Association of the Phils. vs. Marsman and Co.
Not a violation of right against Inc., GR No. L-17038, July 31, 1964)
involuntary servitude

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On the other hand, even after the labor Requisites for labor injunctions
tribunal has made a finding of an unfair labor Restraining orders and injunctions are not
practice, it shall have the discretion to issued ex parte but only upon compliance
determine whether or not to grant with the following requisites:
backwages. (Ibid) 1. Hearing held after due and personal notice
to parties affected;
The stoppage of their work was not the direct 2. Reception of evidence and the opportunity
consequence of the company’s unfair labor of cross examination;
practice. Hence, their economic loss should 3. Findings of fact by the Commission that:
not be shifted to the employer. (Cromwell a. Prohibited or unlawful acts have been
Commercial Employees and Laborers Union threatened and committed and will be
vs. CIR, GR No. L19778, September 30, continued until restrained;
1964). b. Substantial or irreparable injury to
complainant‘s property will follow;
Injunction in Strikes and Lockouts c. That as to each item of relief to be
granted, greater injury will be inflicted
GENERAL RULE: Strikes and lockouts that by the denial;
are validly declared enjoy the protection of d. Complainant has no other remedy in
the law and cannot be enjoined unless illegal law; or Public officials charged with
acts are committed or threatened to be duty to protect complainant‘s property
committed in the course thereof. are unable or unwilling to furnish
adequate protection. (Sec. 1, Rule X,
EXCEPTION: Injunction may be issued not 2011 NLRC Rules of Procedure as
only against the commission of illegal acts but amended)
against the strike itself because the notice of
strike filed by the union has been converted Innocent Bystander Rule
into a preventive mediation case. Having so Under the “Innocent Bystander Rule,” the
been converted, a strike can no longer be thirdparty employers or “innocent
staged based on said notice. Upon such bystanders” who have no employer-
conversion, the legal effect is that there is no employee relationship with the picketing
more notice of strike to speak of. (San Miguel strikers, may apply for injunction with the
Corporation vs. NLRC, G.R. No. 119293, June regular courts to enjoin the conduct of the
10, 2003) picket. Because of the absence of such
employer-employee relationship, the NLRC
Injunction in Picketing Cases cannot entertain such application for
injunction from innocent bystanders. (Chan,
GENERAL RULE: Injunction cannot be Bar Reviewer on Labor Law, 2019, p. 619)
issued against the conduct of picketing of
workers. As guaranteed by the Constitution, The right to picket is not an absolute one. The
picketing is considered a part of the Freedom right may be regulated at the instance of
of Speech. third parties or "innocent bystanders" if it
appears that the inevitable result of its
EXCEPTIONS: NLRC may enjoin the exercise is to create an impression that a
picketing under the following circumstances: labor dispute with which they have no
1. Where picketing is carried out through the connection or interest exists between them
use of illegal means; and the picketing union or constitute an
2. Where picketing involves the use of invasion of their rights. (MSF Tire & Rubber,
violence and other illegal acts; Inc. v. Court of Appeals, G.R. No. 128632,
3. Where picketing affects the rights of third August 5, 1999)
parties and injunction becomes necessary
to protect such rights. (Chan, Bar In one case the Court upheld a trial court's
Reviewer on Labor Law, 2019, p. 618-619) injunction prohibiting the union from blocking
the entrance to a feed mill located within the

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compound of a flour mill with which the union Republic Act No. 6727)
had a dispute. Although sustained on a 3. Contested cases under the exception
different ground, no connection was found clause in Article 128(b) of the Labor
between the two mills owned by two different Code.
corporations other than their being situated 4. Enforcement of compromise
in the same premises. It is to be noted that agreements when there is non-
in the instances cited, peaceful picketing has compliance by any of the parties
not been totally banned but merely thereto (Art. 233, Labor Code as
regulated. (Republic Flour Mills Workers amended)
Association vs. Reyes, GR No. L-21378, 5. Issuance of writ of execution to
November 28, 1966) enforce decision of voluntary
arbitrators or panel of voluntary
VIII. JURISDICTION AND arbitrators in case of their absence or
REMEDIES incapacity for any reason.
A. Labor Arbiter 6. Money claims of OFWs arising out of
ER-EE relationship or by virtue of any
Original and Exclusive Jurisdiction of law or contract, including death and
Labor Arbiter involving all workers, whether disability benefits and for actual,
agricultural/non-agricultural: moral, exemplary and other forms of
1. Under Article 224 of the Labor Code: damages (Sec. 7, RA 10022, Migrant
a. Unfair labor practice (ULP) cases; Workers and Overseas Filipino Act)
b. Termination disputes (illegal 7. Other cases may be provided by law.
dismissal cases);
c. If accompanied with a claim for Exceptions to the Original and
reinstatement, those cases that Exclusive Jurisdiction of Labor
workers may file involving wages, Arbiters.
rates of pay, hours of work and
other terms and conditions of Labor Arbiters do not have jurisdiction over
employment; the following cases:
d. Claims for actual, moral,
exemplary and other forms of 1. When the DOLE Secretary or the
damages arising from the ER-EE President exercises his power to
relationship; assume jurisdiction over national
interest cases and decide them
e. Cases arising from any violation of
himself. (Art. 278[g], Labor Code, as
Article 264 of the Labor Code,
amended)
including questions involving the
legality of strikes and lockouts;
2. When the NLRC exercises its power of
f. Except claims for Employees
compulsory arbitration over similar
Compensation, Social Security,
national interest cases that are
Medicare and Maternity Benefits,
certified to it by the DOLE Secretary
all other money claims exceeding
pursuant to the exercise by the latter
P5,000 arising from ER-EE
of his certification power. (Art. 278[g],
relationship, including those of
Labor Code, as amended)
persons in domestic service,
3. Cases arising from the interpretation
regardless if accompanied with a
or implementation of CBA and from
claim for reinstatement.
the interpretation and enforcement of
company personnel policies which
2. Disputes involving legislated wage shall be disposed of by the Labor
increases and wage distortion in Arbitrator by referring the same to the
unorganized establishments not grievance machinery or voluntary
voluntarily settled by the parties (Art. arbitration, as may be provided in said
124, Labor Code, as amended by agreements. (Art. 224(c), Sec. 1, Rule

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V, 2011 NLRC Rules of Procedure) exceed

4. Cases Submitted for Voluntary P5,000;
Arbitration. 2. Arising out of 2. Arising out
ER-EE of ER-EE
Jurisdiction over ULPs relationship; relationship
1. Labor Arbiter has jurisdiction over all ;
ULPs whether committed by the
employers or the labor organizations; 3. WHETHER 3. DOES NOT
2. The law gives utmost priority to the OR NOT seek
resolution of ULP cases; seeks reinstateme
3. The Labor Arbiter has jurisdiction only reinstatemen nt.
over the civil aspect of the ULP. t.
As to Decides a case Initiated by
Jurisdiction over Termination Cases Handling within 30 sworn
1. The Labor Arbiter has jurisdiction of Cases calendar days statements
whether the dismissal is for just cause after filed by any
or authorized cause; submission of interested
2. In case of conflict of jurisdiction the case by the party.
between Labor Arbiter and the parties for
Voluntary Arbitrator, the Labor decision.
Arbiter’s jurisdiction shall prevail.
Appeals Appealable to the NLRC
Jurisdiction over Money Claims
I. Classification of Money Claims
1. Any money claim, regardless of Labor Arbiter vs. Voluntary Arbitrators
amount, if accompanied with a claim
for reinstatement; Labor Voluntary
2. Any money claim exceeding the Arbiter Arbitrator
amount of P5,000 per claimant on Limited Arising from the
regardless if accompanied with a claim MONEY only to interpretation
for reinstatement. CLAIMS those or
a. If the amount does not arising from implementation
exceed P5,000, the Regional statutes or of the CBA and
Director of the DOLE or his contracts those arising
duly authorized hearing other than from the
officers have jurisdiction. CBA. interpretation
or enforcement
1. Jurisdiction of Labor Arbiter vs. of company
Jurisdiction of Regional Director personnel
policies.
Regional
Labor Arbiter Jurisdiction over Claims for Damages
Director

As to (Art 224, Labor (Art. 129, The grant of jurisdiction to the Labor Arbiter
Jurisdiction Code, as Labor Code) by the Labor Code is sufficiently
on MONEY amended) comprehensive to include claims for moral
CLAIMS 1. Aggregate 1. Aggregate and exemplary damages sought to be
money claim money recovered from an employer by an employee
EXCEEDS claim of upon the theory of his illegal dismissal.
P5,000; each (Primero vs IAC, G.R. No. 72644, December
employee 14, 1987)
DOES NOT

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Labor Arbiters shall have original and a. If there is prima facie

exclusive jurisdiction over claims of OFWs evidence of abuse of
arising out of ER-EE relationship or by virtue discretion on the part of the
of any law or contract, including death and Labor Arbiter or Regional
disability benefits and for actual, moral, Director;
exemplary and other forms of damages. (Sec. b. If the Decision, Resolution, or
7, RA 10022, Migrant Workers and Overseas Order was secured through
Filipino Act) fraud or coercion, including
graft and corruption;
2. Requisites to Perfect an Appeal c. If made purely on questions of
With the National Labor Relations law; or
Commission d. If serious errors in the findings
of fact are raised, which if
1.Observance of the Reglementary not corrected, would cause
Period. (Art. 229, Labor Code, as grave or irreparable injury to
amended) the appellant

Decisions, awards, or Orders of the 3. Reinstatement and/or Execution Pending

Labor Arbiter shall be final and Appeal
executory unless appealed to the
NLRC by any or both parties, within Note: In Mcburnie vs. Ganzon (G.R. No.
10 calendar days from receipt. 229579, November 14, 2018) the Supreme
Court laid down the guidelines for the NLRC
2.Filing of a Memorandum of Appeal. to treat motions to reduce the bond:
(Art. 229, Labor Code, as amended) 1) Reasonable ground; and
2) Reasonable amount of the appeal
Appellant shall furnish a copy of the bond posted
Memorandum of Appeal to the other
party, who shall file an answer not A. Order of Reinstatement Pending
later than 10 calendar days from Appeal of the Labor Arbiter
receipt thereof.
The decision of the Labor Arbiter reinstating
3.Posting of: Cash Deposit, Property a dismissed or separated employee, insofar
or Surety Bond, in case of monetary as the reinstatement aspect is concerned,
awards. (Art. 229, Labor Code, as shall immediately be executory, even
amended) pending appeal. (Art. 229, Labor Code, as
amended)
Only monetary awards (such as
unpaid wages, backwages, In any event, the decision of the Labor
separation pay, 13th month pay, Arbiter reinstating a dismissed or separated
etc.) are required to be covererd by employee, insofar as the reinstatement
the bond. aspect is concerned, shall immediately be
executory, even pending appeal. The
Moral and exemplary damages and employee shall either be admitted back to
attorney’s fees are excluded. work under the same terms and conditions
prevailing prior to his dismissal or separation
4. Appeals must be verified and or, at the option of the employer, merely
certified against forum shopping by reinstated in the payroll. The posting of a
the parties themselves. (Antonio B. bond by the employer shall not stay the
Salenga, et al. vs. CA, G.R. No. execution for reinstatement provided herein.
174941, February 1, 2012) (Pioneer Texturizing Corp. vs. NLRC, G.R. No.
5. Grounds: (Art. 229, Labor Code, as 18651, October 16, 1997)
amended)

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This interpretation is more in consonance Reckoning Period by Accrued

with the constitutional protection to labor Reinstatement Wages
(Section 3, Art. XIII, 1987 Constitution). The
right of a person to his labor is deemed to be Settled is the rule that an employee who was
property within the meaning of the illegally dismissed from work is entitled to
constitutional guaranty that no one shall be reinstatement without loss of seniority rights,
deprived of life, liberty, and property without and other privileges, as well as to full
due process of law. Therefore, he should be backwages, inclusive of allowances, and to
protected against any arbitrary and unjust other benefits or their monetary equivalent
deprivation of his job. computed from the time his
compensation was withheld from him
Options of the Employer: (Art. 229, Labor up to the time of his actual
Code, as amended) reinstatement. Since reinstatement is no
1. Actual Reinstatement – reinstated longer feasible as Lopez' former position no
to his position which he occupies prior to his longer exists, his backwages shall be
illegal dismissal under the same terms and computed from the time of illegal dismissal
conditions prevailing prior to his dismissal or up to the finality of the decision. Backwages
separation or, if no longer available, to a include the whole amount of salaries plus all
substantially-equivalent position; or other benefits and bonuses and general
increases to which he would have been
2. Payroll Reinstatement – normally entitled had he not been illegally
reinstated in the payroll of the company dismissed, such as the legally mandated
without requiring him to report back to his Emergency Cost of Living Allowance (ECOLA)
work. and thirteenth (13th) month pay, and the
meal and transportation allowances prayed
If the reinstatement order is issued by the for. (Dumapis vs. Lepanto Consolidated
NLRC on appeal, or by CA or SC, there is a Mining Company, G.R. No. 204060,
need to secure a writ of execution from LA of September 15, 2022)Employees ordered
origin to enforce the reinstatement of the reinstated by the Labor Arbiter are entitled to
employee whose dismissal is declared illegal. accrued reinstatement wages only:
(Retrieved February 02, 2023, from From: the time when the employer received
https://nlrc.dole.gov.ph/FAQS) a
copy of the LA’s decision declaring the
Unless there is a restraining order, it is employees’ termination illegal and the order
ministerial upon the LA to implement the of reinstatement.
Order of Reinstatement, and mandatory on
the part of the employer to comply therewith. Until: the time when the higher tribunal
(Garcia vs. PAL, G.R. No. 164856, January reversed such LA’s decision.
20, 2009)
The employee, in turn, is not required to
B. Effect of NLRC Reversal of Labor return the wages that he had received prior
Arbiter’s Order of Reinstatement to the reversal of the LA’s decision.
(Bergonio, Jr. v. South East Asian Airlines,
The reversal by a higher tribunal of the LA’s April 21, 2014)
finding (of illegal dismissal), notwithstanding,
an employer, who, despite the LA’s order of Garcia Doctrine: The test to determine the
reinstatement, did not reinstate the liability of the ER (who did not reinstate the
employee during the pendency of the appeal EE pending appeal) to pay the wages of the
up to the reversal by a higher tribunal may dismissed EE covering the period from the
still be held liable for the accrued wages of time he was ordered reinstated by the LA to
the employee. (Bergonio, Jr. v. South East the reversal of the LA‘s decision is two-fold:
Asian Airlines, April 21, 2014)

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 PURPLE NOTES 2024 – LABOR LAW

1. There must be actual delay or the fact 2. 23 Members, called “Commissioners”

that the order of reinstatement pending a. Eight (8) Members each of whom
appeal was not executed prior to its reversal; shall be chosen only from among the
nominees of the workers and Employer’s
2. Delay must not be due to the EE‘s organization.
unjustified act or omission (Garcia vs. PAL, b. The Chairman and the seven (7)
G.R. No. 164856, January 20, 2009) remaining members shall come from the
public sector, with the latter to be chosen
If a complaint is brought before the DOLE to preferably from among the incumbent labor
give effect to the labor standards provisions arbiters.
of the Labor Code or other labor legislation, c. Upon assumption into office, the
members nominated by the workers and
and there is a finding by the DOLE that there
Employers organization shall divest
is an existing ER-EE relationship, the DOLE themselves of any affiliation with or interest
exercises jurisdiction to the exclusion of the in the federation or association to which they
NLRC. If the DOLE finds that there is no ER- belong. (Art. 220, Labor Code, as amended)
EE relationship, the jurisdiction is properly
with the NLRC. If a complaint is filed with the There is no need for the Commission on
DOLE, and it is accompanied by a claim for Appointments to confirm the positions in the
NLRC. Such a requirement has no
reinstatement, the jurisdiction is properly
constitutional basis. (Calderon vs. Carale,
with the Labor Arbiter, under Art. 217 (3) of G.R. No. 91636, April 23, 1992)
the Labor Code, which provides that the
Labor Arbiter has original and exclusive Powers and Functions
jurisdiction over those cases involving wages, 1. En Banc
rates of pay, hours of work, and other terms The chairman and the 23 members may sit in
en banc and have the following powers and
and conditions of employment, if
functions;
accompanied by a claim for reinstatement. If
a. Promulgate rules and regulations,
a complaint is filed with the NLRC, and there and govern the hearings and disposition of
is still an existing ER-EE relationship, the cases;
jurisdiction is properly with the DOLE. The b. Formulate policies affecting its
findings of the DOLE, however, may still be administration and operations;
questioned through a petition for certiorari c. En banc may on temporary or
emergency basis, allow cases within the
under Rule 65 of the Rules of Court. (Del
jurisdiction of any division to be heard and
Monte Land Transport Bus, Co. v. Armenta, decided by any other division, whose docket
G.R. No. 240144, February 3, 2021) allows the additional workload and such
transfer will not expose litigants to
B. National Labor Relations
unnecessary additional expense.
Commission d. Recommend the appointment of
labor arbiters (Art. 222, Labor Code, as
National Labor Relations Commission is
amended)
an administrative body with quasi-
e. Recommend the extension of the
judicial functions, and is the principal
services of the Commissioner and Labor
government agency that hears and
arbiters (Ibid.)
decides labor- management disputes. It
is attached to the DOLE solely for
The Commission shall exercise its
program and policy coordination. (Art.
adjudicatory and all other powers, functions,
220, Labor Code, as amended)
and duties through its divisions. (Art. 220,
Labor Code, as amended)
Composition of the NLRC
1. One (1) Chairman

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2. Division (8 Divisions with 3 Jurisdiction of NLRC:

members) 1. Exclusive Original Jurisdiction over:
The Commission shall be composed of eight a. Certified labor disputes causing or
(8) divisions each composed of three (3) likely to cause a strike or lockout in an
members. Each division shall have one (1) industry indispensable to national interest,
representative from the Employer’s sector, certified by the Secretary of DOLE or the
Employee’s sector, and public sector. Each President of the Philippines for compulsory
division shall have the following powers and arbitration; (Art. 278(g), Labor Code, as
functions: amended)
a. The representative from the public b. Injunction in ordinary labor
sector will act as the Presiding Commissioner. disputes to enjoin or restrain any actual or
b. Adjudicatory powers threatened commission of any or all
c. All other powers, functions, and prohibited or unlawful acts, or to require
duties performance of a particular act in any labor
d. Have exclusive appellate jurisdiction dispute which, if not restrained or performed
over cases within their respective territorial therewith, may cause grave or irreparable
jurisdiction (Ibid.) damage to any party; (Art. 225(e), Labor
Code, as amended)
Individual Commissioner does not have c. Injunction in strikes or
Adjudicatory Powers lockouts under Art. 279 of the Labor Code;
d. Petition for extraordinary remedies
Qualifications of the Chairman and the from orders or resolutions of Labor Arbiters
Commissioners (including those issued during execution
1. Member of the Philippine Bar; proceedings). (Rule XII, Sec. 1, 2011 NLRC
2. Engaged in the practice of law in the Rules of Procedure, as amended by En Banc
Philippines for at least 15 years; Resolution No. 07-14, Series of 2014; En
3. At least 5 years of experience or Banc Resolution No. 01- 17, Series of 2017)
exposure in handling labor management 2. Exclusive Appellate Jurisdiction over:
relations; a. All cases decided by the LA under Art. 224
4. Preferably a resident of the region of the Labor Code, as amended and Sec. 10
where he is to hold office. (Art. 222, Labor of R.A. No. 8042 (Migrant Worker’s Act);
Code, as amended)
Cases decided by the Regional Offices of the
Qualifications of a Labor Arbiter (LA) DOLE, in the exercise of its adjudicatory
1. Member of the Philippine Bar; function over monetary claims of workers,
2. Engaged in the practice of law in the amounting to not more than P5,000 and not
Philippines for at least 10 years; accompanied by a claim for reinstatement;
3. At least 5 years of experience or
exposure in handling labor management Contempt cases decided by the LA.
relations. (Ibid) 2. No Appellate Jurisdiction
over Decisions rendered by:
Terms of Office of the Chairman, a. Voluntary Arbitrator;
Commissioners, and Labor Arbiters b. Secretary of DOLE;
They shall hold office during good behavior c. BLR Director, on cases appealed from
until they reach the age of sixty-five (65), the DOLE Regional Offices
unless removed for causes as provided by law
or become incapacitated to discharge the Jurisdiction of Labor Arbiter vs. NLRC
function of his office. (Ibid.) Basis Labor NLRC
Provided however, that the President of the Arbiter
Philippines may extend the services of the Jurisdictio Can hear and NLRC
Commissioners and LAs up to a maximum n resolve cases reviews
age of 70 years upon the recommendation of under Art. 224 the
the Commission En Banc. (Ibid.) of the Labor decisions

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 PURPLE NOTES 2024 – LABOR LAW

Code, money rendered served upon the parties) (Art. 220, Labor
claims under by the Code, as amended)
Sec. 7 of RA LA;
10022; and decisions Powers of the NLRC
referred or orders
wage rendered 1. Rule-Making Power Promulgation of
distortion by the rules and regulations:
disputes Regional a. Governing disposition of cases before
Directors any of its division/regional offices;
in under b. Pertaining to its internal functions;
unorganized Art c. As may be necessary to carry out the
establishment . purposes of the Labor Code
s, as well as 129 of the 2. Power to issue compulsory processes
the Labor (administer oaths, summon parties, issue
enforcement Code; and subpoenas)
of conducts 3. Power to investigate matters and
compromise compulsor hear disputes within its jurisdiction
agreements y (adjudication power – original and appellate
pursuant to arbitration jurisdiction over cases)
the 2011 in certified 4. Contempt power
NLRC Rules of cases 5. Ocular inspection
Procedure, as 6. Power to issue injunctions and
amended restraining orders (Art. 225, Labor Code, as
Issuance Cannot issue Can issue amended)
of Labor an injunctive an
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 reinstated
division, where a concurrence of 2 votes is
needed for a valid judgment. (Art. 220, Labor After reversal of the Labor Arbiter‘s decision,
Code, as amended). the employer‘s duty to reinstate the
dismissed employee in the actual service or
Whenever the required membership in a in the payroll is effectively terminated. The
division is not complete and the concurrence employee, in turn, is not required to return
of the Commissioners to arrive at a judgment the wages that he had received prior to the
or resolution cannot be obtained, the reversal of the LA‘s decision. (Bergonio, Jr.
Chairman shall designate such number of vs. South East Asian Airlines, G.R. No.
additional Commissioners from the other 195227, April 21, 2014)
divisions as may be necessary.
2. It shall be mandatory for the division 2. If employee was neither
to meet for purposes of consultation reinstated to his former position nor in
the payroll
The conclusion of a division on any case
submitted to it for decision should be reached When an employee is ordered reinstated by
in consultation before the case is assigned to the LA and the employer fails or refuses to
a member for the writing of the opinion. obey the reinstatement order but initiates an
appeal, the employer‘s success in having the
3. A certification that a consultation has decision of the LA reversed on appeal will not
been conducted, signed by the presiding exculpate him from the liability to pay the
commissioner of the division, shall be issued reinstatement wages of the employee from
(copy attached to the record of the case and the time he was reinstated until the date of

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reversal on appeal (Roquero vs. PAL, G.R. NLRC, G.R. No. 130866, Sep. 16,
No. 152329, April 22 2003) 1998)

The test to determine the liability of the ER 2. Requisites for Perfection of

(who did not reinstate the EE pending Appeal to the CA (Rule VI, 2011
appeal) to pay the wages of the dismissed EE NLRC Rules of Procedure)
covering the period from the time he was a. Appeal shall be:
ordered reinstated by the LA to the reversal i. Filed within the reglementary period;
of the LA‘s decision is two-fold: ii. Verified by the appellant himself in
1. There must be actual delay or accordance with Sec. 4, Rule 7 of the Rules
the fact that the order of reinstatement of Court;
pending appeal was not executed prior to its iii. In the form of a memorandum of
reversal; appeal which shall state the grounds relied
2. Delay must not be due to the EE‘s upon and the arguments in support thereof,
unjustified act or omission (Garcia vs. PAL, the relief prayed for, and with a statement of
G.R. No. 164856, January 20, 2009) the date the appellant received the appealed
decision, resolution or order;
Roquero Doctrine was reaffirmed but with the iv. In three (3) legibly typewritten or
modification that ― after the LA‘s decision is printed copies; and
reversed by a higher tribunal, the employee v. Accompanied by:
may be barred from collecting the accrued 1. Proof of payment of the required
wages, if it is shown that the delay in appeal fee;
enforcing the reinstatement pending appeal 2. Posting of a cash or surety bond as
was without fault on the part of the employer provided in Sec. 6 of the NLRC Rules;
(Roquero vs. PAL, G.R. No. 152329, April 22, 3. Proof of service upon the other
2003) parties

Reckoning Period for Computation of b. A mere Notice of Appeal, without

the Amount of accrued Reinstatement complying with the other requisites
Wages aforestated shall not stop the running
From the time the ER received a copy of the of the period for perfecting an appeal
decision of the Labor Arbiter declaring the c. The appellee may file with the
EE‘s termination illegal and ordering their Regional Arbitration Branch or Regional
reinstatement up to the date of the NLRC Office where the appeal was filed, his answer
resolution overturning that of the Labor or reply to appellant’s memorandum of
Arbiter. (ISLRIZ Trading/Victor Hugo Lu vs. appeal, not later than 10 calendar days from
Efren Capada, et. al, G.R. No. 168501, receipt thereof
January 31, 2011)
Failure on the part of the appellee who was
Remedies properly furnished with a copy of the appeal
to file his answer or reply within the said
1. Appeal period may be construed as a waiver on his
2Decisions of the NLRC are not part to file the same.
appealable. However, judicial review a. Subject to the provisions of Art. 225 of the
of the NLRC’s decision is available Labor Code, once the appeal is perfected in
through Petition for Certiorari under accordance with these Rules, the Commission
Rule 65, a special civil action. The shall limit itself to reviewing and deciding only
special civil action should initially be the specific issues that were elevated on
filed with the CA in strict observance appeal
of the Doctrine of Hierarchy of Courts
as the appropriate forum for the relief Extraordinary Remedies
desired (St. Martin Funeral Home vs. Extraordinary remedies are found under Rule
XII of the 2011 NLRC Rules of Procedure.

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It is not equivalent to nor a substitute for

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

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Effects of Defiance the judgment in the certified case (Sec. 5,

Rule VIII, 2011 NLRC Rules and Procedures)
Non-compliance with the Certification order
of the Secretary of DOLE shall: C. Court of Appeals;
a. Be considered as an illegal act committed Requisites
in the course of the strike or lockout; and
b. Authorize the Commission to enforce the A Judicial Review of NLRC’s decisions is
same under pain of immediate disciplinary available through a Petition for Certiorari
action, including: under Rule 65, which should initially be filed
i. Dismissal or loss of employment with the CA, in strict observance of the
status; or doctrine of Hierarchy of Courts, as the
ii. Payment by the locking-out employer appropriate forum for the relief desired. The
of backwages, damages; and/or iii. CA is procedurally equipped to resolve
Other affirmative relief, even criminal unclear or ambiguous factual findings, aside
prosecution against the liable parties from the increased number of its component
(Sec. 4, Rule VIII, NLRC 2011 Rules) divisions. (St. Martin Funeral Home vs. NLRC,
c. The Commission may also seek the G.R. No. 130866, Sep. 16, 1998)
assistance of law enforcement agencies to
ensure compliance and enforcement of its The judicial review of NLRC’s decision is to
orders and resolutions (Ibid) determine whether the latter committed
grave abuse of discretion. However, where
Procedure in Certified Cases the LAs and NLRCs make contradictory
1. When there is no need to conduct a factual findings, it becomes incumbent upon
clarificatory hearing, the Commission shall the Court of Appeals to re-examine these
resolve all certified cases within 30 findings in order to resolve the issue of
calendar days from receipt by the whether the NLRC did or did not commit
assigned Commissioner of the complete grave abuse of discretion. (Hubilla vs. HSY
records, which shall include the position Marketing Ltd., Co., G.R. No. 207354,
papers of the parties and the order of the January 10, 2018)
SOLE denying the motion for
reconsideration of the certification order, Under Rule 65
if any (Sec. 5, Rule VIII, 2011 NLRC Rules 1. General Rule: Decisions of the DOLE
and Procedures) Secretary, NLRC and BLR, in its appellate
2. Where a clarificatory hearing is needed, jurisdiction are NOT APPEALABLE to the
the Commission shall, within 5 calendar CA; however, their decisions may be
days from receipt of the records, issue a elevated to the CA via a Petition for
notice to be served on the parties through Certiorari under Rule 66.
the fastest means available, requiring
them to appear and submit additional A petition for certiorari does not normally
evidence, if any. All certified cases shall be include an inquiry into the correctness of
resolved by the Commission within 60 its evaluation of the evidence. Errors of
calendar days from receipt of the judgment, as distinguished from errors of
complete records by the assigned jurisdiction, are not within the province of
Commissioner. (Ibid) a special civil action for certiorari, which is
merely confined to issues of jurisdiction or
No Motion for Extension or Postponement grave abuse of discretion. It is, thus,
shall be entertained (Sec. 5, Rule VIII, 2011 incumbent upon petitioners to
NLRC Rules and Procedures) satisfactorily establish that the NLRC acted
capriciously and whimsically in order that
Execution of Judgment the extraordinary writ of certiorari will lie.
Upon issuance of the entry of judgment, the By grave abuse of discretion is meant such
Commission motu proprio or upon motion by capricious and whimsical exercise of
the proper party, may cause the execution of judgment as is equivalent to lack of

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jurisdiction, and it must be shown that the motion for reconsideration. (Asian
discretion was exercised arbitrarily or Transmission Corp. v. CA, G.R. No. 144664,
despotically. (Philippine National Bank v. March 15, 2004)
Gregorio, G.R. No. 194944, September 18,
2017) A petition for certiorari under Rule 65 cannot
be a substitute for lost appeal under Rule 45
2. Exception: Rule 43 of the Rules of Court in case the aggrieved party fails to file an
Orders or Awards of the Voluntary appeal within the reglementary period.
Arbitrator (VA) may be appealed to the CA (Malayang Manggagawa ng Staylast PHL.
via a Petition for Review under Rule 43 Inc. v. NLRC, G.R. No. 155306, August 28,
The judicial review of NLRC’s decision is to 2013).
determine whether the latter committed
grave abuse of discretion. However, Under Rule 45
where the LAs and NLRCs make A party desiring to appeal by certiorari from
contradictory factual findings, it becomes a judgment or final order or resolution of the
incumbent upon the Court of Appeals to Court of Appeals, the Sandiganbayan, the
re-examine these findings in order to Regional Trial Court or other courts whenever
resolve the issue of whether the NLRC did authorized by law, may file with the Supreme
or did not commit grave abuse of Court a verified petition for review on
discretion. certiorari. The petition shall raise only
questions of law which must be distinctly set
D. Supreme Court; forth. (Sec. 1, Rule 45, Revised Rules of
Requisites Court)

Supreme Court (SC) The petition shall be filed within 15 days from
All references in the amended Sec. 9 of B.P. Notice of the Judgment, Final Order, or
No. 129 to supposed appeals from the NLRC Resolution appealed from, or of the denial of
to the Supreme Court are interpreted and the petition for new trial or reconsideration
hereby declared to mean and refer to filed in due time.
petitions for certiorari under Rule 65.
Since the Court of Appeals had jurisdiction
Consequently, all such petitions should over the petition under Rule 65, any alleged
henceforth be initially filed in the Court of errors committed by it in the exercise of its
Appeals, in strict observance of the doctrine jurisdiction would be errors of judgment
on the hierarchy of courts, as the appropriate which are reviewable by timely appeal, and
forum for the relief desired (St. Martin not by a special civil action;
Funeral Home vs. NLRC, G.R. No. 130866,
September 16, 1998) If the aggrieved party fails to do so within the
reglementary period, and the decision
Such appeal from a final disposition of the accordingly becomes final and executory, he
Court of Appeals is a petition for review on cannot avail himself of the writ of certiorari,
certiorari UNDER Rule 45, and not a special his predicament being the effect of his
civil action of certiorari under Rule 65 of the deliberate inaction (Tirazona vs. Phil EDS
Rules of Court. Rule 45 is clear that the Techno-Service Inc., G.R. No. 169712,
decisions, final orders or resolutions of the January 20, 2009)
Court of Appeals in any case, i.e., regardless
of the nature of the action or proceeding Review of Decisions
involved, may be appealed to the Supreme Review of decisions of the NLRC shall be done
Court by filing a petition for review, which through (in order):
would be but a continuation of the appellate a. Motion for Reconsideration
process over the original case. Under Rule 45, b. Rule 65 to the CA
the reglementary period to appeal is 15 days c. Rule 45 to the SC
from notice of judgment or denial of the

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Supreme Court policy as to Appeals in 2. formulate regulatory and developmental

Labor Cases policies, standards, guidelines and
The Supreme Court is very strict regarding programs promoting the right to organize,
appeals filed outside the reglementary period including collective bargaining and
for filing the same. To extend the period of improvement of the income of workers
the appeal is to delay the case, a and their organizations;
circumstance which could give the employer 3. act as lead agency in workers and
the chance to wear out the efforts and employers education;
meager resources of the worker that the 4. adjudicate inter- and intra-union disputes;
latter is constrained to give up for less than 5. promote bipartism and tripartism; and
what is due him. (Firestone Tire and Rubber 6. formulate and implement programs that
Co. of the Philippines vs. Firestone Tire and strengthen trade unionism to achieve
Rubber Co. Employees Union, G.R. No. industrial peace.
75363, August 4, 1992)
EXCLUSIVE ORIGINAL JURISDICTION
Fresh Period Rule 1. All inter-union and intra-union conflicts,
To standardize the appeal periods provided in and
the Rules and to afford litigants fair 2. All disputes, grievances or problems
opportunity to appeal their cases, the Court arising from or affecting labor-
deems it practical to allow a fresh period of management relations in all workplaces,
15 days within which to file the notice of whether agricultural or nonagricultural,
appeal in the Regional Trial Court, counted except those arising from implementation
from receipt of the order dismissing a motion or interpretation of collective bargaining
for a new trial or motion for reconsideration. agreements which shall be the subject of
grievance procedure and/or voluntary
The Neypes Doctrine “fresh period rule” shall arbitration. (Article 232, Labor Code, as
also apply to Rule 40 governing appeals from amended)
the Municipal Trial courts to the Regional Trial
Courts; Rule 43 on petitions for review from BLR has the original and exclusive jurisdiction
the Regional Trial courts to the Court of on all inter-union and intra-union conflicts. An
Appeals; Rule 43 on appeals from quasi- intra-union conflict would refer to a conflict
judicial agencies to the Court of Appeals and within or inside a labor union, and an
Rule 45 governing appeals by certiorari to the interunion controversy or dispute, one
Supreme Court. The new rule aims to occurring or carried on between or among
regiment or make the appeal period uniform, unions. (Bautista v. Court of Appeals, G.R.
to be counted from receipt of the order No. 123375, February 28, 2005)
denying the motion for new trial, motion for
reconsideration (whether full or partial) or Inter-union disputes include:
any final order or resolution. (Gagui vs. a. Validity/invalidity of SEBA, certification
Dejero, G.R. No. 196036, October 23, 2013) election, consent election, run-off election
or re-run election;
E. Bureau of Labor b. Such other disputes or conflicts involving
Relations; Jurisdiction the rights to self-organization, union
and Procedure membership and collective bargaining
between and among legitimate labor
Serves as the planning, policy making, organizations (D.O 40-03 series 2003; D.O
consultative and advisory body in the 40- 1- 15, series of 2015)
promotion and maintenance of industrial
peace. Intra-union disputes include:
a. Conduct or nullification of election of
It has the mandate to: officers of union and workers’ associate;
1. act as national registry of unions and b. Audit or accounts examination of union or
CBAs; workers’ association funds;

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c. Deregistration of collective bargaining unions, trade union centers and their local
agreements; chapters, affiliates and members of
d. validity /invalidity of union affiliation or organization;
disaffiliation; 2. Request for examinations of books of
e. Validity/invalidity of accounts of said labor organizations under
acceptance/nonacceptance for union Art 250 of the Labor Code;
membership; 3. Intra-union disputes involving said labor
f. Opposition to application for union or CBA organizations;
registration; 4. Registration of multi-employer CBAs or
g. Violations of or disagreements over any petitions for deregistration; and
provision in the constitution and by-laws
of a union or workers’ association; 5. Contempt cases BLR Director has
h. Disagreements over chartering or Exclusive Appellate Jurisdiction
registration of labor organizations and over:
collective bargaining agreements; 1. All decisions of the Med-Arbiter in:
i. Violations of the rights and conditions of a. Intra union disputes, and
membership in a union or workers’ b. other related labor relation disputes
association; (Sec. 1[1], Rule III, NCMB Manual
j. Violations of the rights of legitimate labor of Procedures for Conciliation and
organizations, except interpretation of Preventive Mediation Cases)
CBAs; 2. Decisions by the DOLE Regional
k. Validity/invalidity of Directors in the following cases
impeachment/expulsion/suspension or relevant and related to labor relations:
any disciplinary action noted against any a. Visitorial cases under Art. 289
officer and member, including those [274], involving examination of
arising from non-compliance with books of accounts of independent
reportorial requirement; and unions, local chapters/chartered
l. Such other disputes or conflicts involving local and workers’ associations
the rights to self-organization, union (Rule II, Rules of Procedure on
membership and collective bargaining Mediation-Arbitration)
between and among legitimate labor b. Union registration-related cases
organizations. (Ibid) such as denial of application under
Art. 243 [236] (Labor Code), and
Other related labor relations disputes revocation or cancellation (Art. 245
Related Labor Relations Dispute pertains to [238], Labor Code) of registration of
any conflict between a labor union and the said unions
employer or any individual, entity or group c. Notice of merger, consolidation,
that is not a labor union or workers’ affiliation, and change of name of
association. It covers the following: said unions and or petition for denial
a. any conflict between a labor union and the thereof (Sec. 5, Rule IV, Book V,
employer or any individual, entity or group Rules to Implement the labor Code,
that is not a labor organization or worker’s as amended)
association;
b. cancellation of registration of unions and Rule on Appeal on Unorganized
workers associations; and Establishments
c. a petition for interpleader (Sec. 2, Rule XI, Appeal may only be made to the DOLE
D.O. No. 40-03) Secretary in case of denial of the petition
within 10 days from the receipt of the
BLR’s Director has Original and decision of denial (D.O. 40-F-03, Series of
Exclusive Jurisdiction over: 2008)
1. Complaints and petitions involving the
registration of cancellation of registration Rule on Appeal
of federations, national unions, industry

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On denial of On revocation or attached to DOLE principally in-charge of the

application for cancellation of settlement of labor disputes through
union union conciliation, mediation, and promotion of
registration registration voluntary approaches to labor dispute
Denial is made by Decision of the RD prevention and settlement. (Rule III(23),
the Regional office in the cases which 2017 Revised National Conciliation and
in cases involving he has original Mediation Board Manual of Procedures for
application for jurisdiction — Conciliation and Preventive Mediation Cases)
registration of appealable to the
independent BLR Director by any NCMB is not a quasi-judicial agency
unions, local of the parties within exercising quasi-judicial functions but merely
chapters and 10 days from a conciliatory body for the purpose of
workers’ receipt thereof facilitating settlement of disputes between
associations — parties. Its decisions or that of its authorized
appealable to the officer cannot be appealed either through a
BLR Director petition for review under Rule 43 or under
Denial is made by Decision of the BLR Rule 65 of the Revised Rules of Court.
the BLR Director in Director in the (Tabigue et. al. vs. International Copra
case involving exercise of his Export Corporation, G.R. No. 183335,
federations, original jurisdiction December 23, 2009)
national unions, — appealable to the
industry unions and DOLE Secretary by Jurisdiction
trade union centers any party within the The NCMB has the following jurisdiction:
— appealable to the period of 10 days 1. Collective Bargaining Disputes;
DOLE Secretary 2. Notice of Strike or Lockout; and
3. Preventive Mediation.
Rules on appeal on CBA registration
Single-enterprise Multi-employer Conciliator-Mediator
CBAs — denial by CBAs — denial of An official of the NCMB whose principal
the Regional the BLR Director function is to settle and dispose of potential
Director may be may be appealed to and actual labor disputes through preventive
appealed to the BLR the DOLE Secretary mediation and conciliation including the
Director within 10 within 10 days from promotion of voluntary approaches to labor
days from receipt of receipt of notice of disputes prevention and settlement. (Rule
the notice of denial denial III(5), 2017 Revised National Conciliation and
Mediation Board Manual of Procedures for
Appeal to the BLR Conciliation and Preventive Mediation Cases)
1. The decision of the Med-Arbiter and
Regional Director may be appealed to the Conciliation-mediation is a mode of dispute
BLR by any of the parties within 10 days settlement that brings together two disputing
from receipt thereof. (Sec. 16, Rule XI, parties to negotiate and settle their
Book V, D.O. 40-F-03, Series of 2003) differences. It is a process of rational and
2. The decision of the Bureau Director in the orderly discussion of differences between the
exercise of his original jurisdiction may be parties to a dispute under the guidance of a
appealed to the office of the DOLE Conciliator-Mediator.
Secretary by any party within the same
period (Ibid.) Conciliation vs. Mediation
Conciliation Mediation
F. National Conciliation and Nature
Mediation Board Both are mild forms of intervention by a
neutral third party
The National Conciliation and Mediation Role of Conciliator-Mediator “Con-
Board (NCMB) refers to the agency Med”

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The Con-Med, takes The Con-Med does not owe its existence to the federation
an active role in advises the parties with which it is affiliated.
assisting parties by: or offers solutions
• trying to keep or alternatives to Mere affiliation does not divest the local union
disputants talking, the problems with of its own personality, neither does it give the
• facilitating other the end in view of mother federation the license to act
procedural niceties, assisting them independently of the union. (Insular Hotel
• carrying messages towards voluntarily Employees Union-NFL vs. Waterfront Insular
back and forth reaching their own Hotel Davao, G.R. Nos. 174040-41,
between the mutually September 22, 2010)
parties, and acceptable
• keeping things calm settlement of the Notice of Lockout
and forward-looking dispute. Refers to the notification filed by an employer
in a tense situation. with the appropriate Regional Branch
(Rule III (4 and 22), 2017 Revised National informing the latter of its intention to
Conciliation and Mediation Board Manual of temporarily cease its operation due to alleged
Procedures for Conciliation and Preventive commission by a registered labor union of
Mediation Cases) unfair labor practice act/s or a deadlock in
collective bargaining negotiations. (Rule III
Conciliation-Mediation Case — refers to a (25), The Revised National Conciliation and
request for preventive mediation, notice of Mediation Board Manual of Procedures for
strike or lockout and actual strike or lockout. Conciliation and Preventive Mediation Cases,
(Rule III (5), The Revised National 2017 Ed)
Conciliation and Mediation Board Manual of
Procedures for Conciliation and Preventive Notice of Strike
Mediation Cases, 2017 Ed). Refers to the notification filed by a registered
labor union with the appropriate Regional
Preventive Mediation Branch informing the latter of its intention to
Refers to the potential labor dispute subject go on strike due to alleged commission by the
for conciliation and mediation assistance employer of unfair labor practice act/s or a
sought by either or both parties or upon the deadlock in collective bargaining
initiative of the NCMB to avoid the occurrence negotiations. (Rule III (26), 2017 Revised
of actual labor dispute. (Rule III (28), The National Conciliation and Mediation Board
Revised National Conciliation and Mediation Manual of Procedures for Conciliation and
Board Manual of Procedures for Conciliation Preventive Mediation Cases)
and Preventive Mediation Cases, 2017 Ed)
Who may file a request for Preventive
How Initiated Mediation, Notice of Strike or Lockout
By Filing a Notice or Request of Preventive
Mediation, as distinguished from a Notice of The following may file a request for
Strike/Lockout; or preventive mediation, notice of strike or
lockout:
By Conversion of the Notice of Strike or a. The president or any authorized
Lockout into a Preventive Mediation case. representative of a certified or duly
(Chan, Bar Reviewer on Labor Law, 4th recognized bargaining representative in
Revised Edition, 2019, p939) cases of bargaining deadlocks and unfair
labor practices.
Notice or Request for Preventive b. In the absence of a certified or duly
Mediation cannot be filed by the recognized bargaining representative, the
Federation president or any authorized representative
The Notice or Request for Preventive of a legitimate labor organization in the
Mediation cannot be filed by the Federation establishment on grounds of unfair labor
on behalf of its local chapter; a local union practice.

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c. The employer or any authorized • The party which filed the Notice
representative in cases of bargaining voluntarily asks for the conversion
deadlocks and unfair labor practices. • Both parties to a labor dispute mutually
(Section 3, Rule IV, 2017 Revised National agree to have it subjected to Preventive
Conciliation and Mediation Board Manual Mediation (Chan, Bar Reviewer on Labor
of Procedures for Conciliation and Law, 4th Revised Edition, 2019, p.940)
Preventive Mediation Cases)
Any strike/lockout subsequently staged after
Where to file a Request for Conciliation the said conversion is deemed illegal, since it
and Mediation does not comply with the requirements of a
A request for preventive mediation, notice of valid strike/lockout. (Philippine Airlines Inc.
strike or lockout shall be filed through vs. Secretary of Labor, G.R. No. 88210,
personal service or by registered mail/private January 23, 1991)
couriers with the Regional Branch having
jurisdiction over the workplace of the union Action on Notices Involving Issue/s
members. (Section 4, Rule IV, 2017 Revised Cognizable by Grievance Machinery,
National Conciliation and Mediation Board Voluntary Arbitration or the National
Manual of Procedures for Conciliation and Labor Relations Commission
Preventive Mediation Cases)
When it appears that the issues raised in the
Service of Notice notice of strike or lockout are proper subjects
The party filing the notice shall serve the of the grievance machinery, the conciliator-
other party/ies with a copy/ies of the notice mediator shall exert effort to convince the
either through personal service or by filer to withdraw the case and take them up
registered mail/private couriers. instead in the grievance machinery/voluntary
arbitration or compulsory arbitration.
Any notice which does not conform with the (Section 6, Rule V, The Revised National
procedural requirements of this and the Conciliation and Mediation Board Manual of
foregoing sections shall be deemed as not Procedures for Conciliation and Preventive
having been filed and the party concerned Mediation Cases, 2017 Ed)
shall be so informed by the Regional Branch
of the Board. (Section 5, Rule IV, 2017 G. DOLE Regional Directors;
Revised National Conciliation and Mediation Jurisdiction
Board Manual of Procedures for Conciliation
and Preventive Mediation Cases) Regional Directors - They are duly
authorized representatives of the DOLE
Parties are bound by the Agreement Secretary in the DOLE regional offices. They
entered into are in charge of the administration and
Parties are bound to honor any agreement enforcement of labor standards within their
entered into by them, as it is the result of the respective territorial jurisdictions.
painstaking efforts made by the union,
management, and the Conciliator-Mediator. Original and Exclusive Jurisdiction over
(Conciliation-mediation. National Conciliation the following cases:
and Mediation Board. (n.d.). Retrieved 1. Small money claims cases arising from
February 10, 2023, from labor standards violations in an amount
https://ncmb.gov.ph/services/conciliationme not exceeding P 5,000.00 and not
diation/) accompanied with a claim for
reinstatement under Article 129;
Cases when the NCMB has the authority 2. Labor standards enforcement cases under
to convert a Notice of Strike/Lockout Article 128;
into a Preventive Mediation case 3. Occupational safety and health violations;
• Issues raised in the Notice of 4. Registration of unions and cancellation
Strike/Lockout are not strikable; thereof, cases filed against unions and

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other labor relations related cases; The adjudicatory power provided by

5. Complaints against private recruitment Article 129 to the DOLE Regional Director
and placement agencies (PRPAs) for local may not be exercised by him where the
employment; and employer contests the labor regulation
6. Cases submitted to them for voluntary officers' findings and raises issues which
arbitration in their capacity as ExOfficio cannot be resolved without considering
Voluntary Arbitrators (EVAs) under evidentiary matters not verifiable in the
Department Order No. 83-07, Series of normal course of inspection.
2007.
In such an event, the case will have to be
1. Small money claim cases arising from referred to the corresponding Labor
labor standards violations in an amount Arbiter for adjudication, since it falls within
not exceeding P5,000.00 and not the latter's exclusive original jurisdiction.
accompanied with a claim for (Brokenshire Memorial Hospital, Inc., vs.
reinstatement. (Art. 129, Labor Code, as Minister of Labor and Employment, et. al.,
amended) G.R. No. 74621, February 7, 1990)

Jurisdiction of the DOLE Regional 2. Visitorial Power

Director under Art. 129 The DOLE Regional Directors shall have:
a. access to employer’s records and
Under Article 129, the Regional Director or premises at any time of the day or
any of the duly authorized hearing officers night, whenever work is being
of DOLE has jurisdiction over claims for undertaken therein; and
recovery of wages, simple money claims b. the right:
and other benefits, provided that the claim i. to copy from said records;
is filed by an employee or person ii. to question any employee and
employed in domestic or household investigate any fact, condition or
service or house helper and the following matter which may be necessary to
must concur: determine violations or which may
1. The claim must arise from ER-EE aid in the enforcement of the Labor
relationship; Code and of any labor law, wage
2. The claimant is no longer employed order, or rules and regulations
and does not seek reinstatement; issued pursuant thereto.
3. The aggregate money claim of each
employee or domestic worker or The DOLE Regional Director, in cases where
kasambahay does not exceed the employer-employee relationship still
P5,000.00. exists, shall have the power:
a. to issue compliance orders to give effect
In the absence of any of the three (3) to the labor standards provisions of the
requisites, the Labor Arbiters have Labor Code and other labor legislations
exclusive original jurisdiction over all based on the findings of labor
claims arising from ER-EE relations, other employment and enforcement officers or
than claims for employee's compensation, industrial safety engineers made in the
social security, medicare and maternity course of inspection.
benefits. (Brokenshire Memorial Hospital, b. to issue writs of execution to the
Inc., vs. Minister of Labor and appropriate authority for the enforcement
Employment, et. al., G.R. No. 74621, of their orders, except in cases where the
February 7, 1990) employer contests the findings of the
labor employment and enforcement
Jurisdiction of DOLE Regional officer and raises issues supported by
Director if the employer contests the documentary proofs which were not
order considered in the course of inspection, in
which case, the contested case shall fall

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under the jurisdiction of the Labor Arbiter voluntarily corrected by the employer
to whom it should be endorsed by the within a reasonable period.
Regional Director.
c. to order stoppage of work or suspension 4. Union registration-related cases:
of operations of any unit or department of d. Applications for union
an establishment when non-compliance registration of independent
with the law or implementing rules and unions, local chapters and
regulations poses grave and imminent workers’ associations
danger to the health and safety of workers (Section 3, Rule III of the
in the workplace. Within 24 hours, a Mediation-Arbitration Rules)
hearing shall be conducted to determine e. Petition for denial of
whether an order for the stoppage of work application for registration for
or suspension of operations shall be lifted said unions (Art. 243 [238],
or not. In case the violation is attributable Labor Code, as amended)
to the fault of the employer, he shall pay f. Petitions for revocation or
the employees concerned their salaries or cancellation of registration of
wages during the period of such stoppage said unions (Art. 245 [236],
of work or suspension of operation. Labor Code, as amended)
d. to require employers, by appropriate
regulations, to keep and maintain such 5. Complaints against PRPAs for Local
employment records as may be necessary Employment
in aid of his visitorial and enforcement
powers under the Labor Code. The DOLE Regional Directors have original
jurisdiction over complaints against a
For the valid exercise of the visitorial and licensee and/or its authorized
enforcement powers provided under Article representative/s which are filed in writing
128, the following three (3) requisites should and under oath with the
concur: Regional/District/Provincial Office having
1. The employer-employee relationship still jurisdiction over the place:
exists at the time of the initiation of the 1. where the Private Recruitment and
action; Placement Agencies (PRPAs) /Branch
2. The findings in question were made in the Office is located, or
course of inspection, regardless of 2. where the prohibited act was
whether it was initiated by complaint or committed, or
routine inspection; and 3. at complainant’s place of residence, at
3. The employees have not yet initiated any the option of the complainant;
claim or complaint with the DOLE Regional provided, that the Regional Office
Director under Article 129 (Small money which first acquires jurisdiction over
claims not exceeding P 5,000.00) , or the the case shall do so to the exclusion of
Labor Arbiter, under Article 217 (Money the others.
claims exceeding P 5,000.00)
6. Denial of registration of single-enterprise
3. Occupational Safety and Health CBAs or petitions for deregistration
Violations thereof (Sec. 5, Rule XVII DO No. 40-03
The DOLE Regional Director has original as amended)
jurisdiction to issue 7. Request for SEBA certification when made
1. order of stoppage of work or in an unorganized establishment with only
2. suspension of operation of any unit or 1 legitimate union (Sec. 4, Rule VII, DO
department or the establishment if No. 40-03 as amended)
there exists in the workplace a 8. Operational safety and health conditions
condition that poses grave and (can order stoppage or suspension of
imminent danger to the health and operations) (Art. 128; Book. IV, Rule II,
safety of the workers which cannot be Sec. 8)

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hearing officers of
9. Cases related to private recruitment DOLE
and placement agencies (PRPAs) for ER-EE relationship is ER-EE relationship
local employment, such as: a required is severed
g. Applications for license or • inspection of • power to hear
denial; (Sec. 8, DO 141-14, establishments and decide any
Series of 2014) and claim for
h. Complaints for suspension or • the issuance of recovery of
cancellation of license by orders to compel wages, simple
reason of administrative compliance with (small) money
offenses; (Sec. 54, in relation o labor claims, and other
to Sec. 51, DO 141-14, Series standards, benefits
of 2014) o wage orders
i. Complaints for illegal and
recruitment; (Sec.45, DO o other labor
141-14, Series of 2014) and laws and
j. Petition for closure of agency regulations
(Sec. 47, DO 141-14, Series
of 2014) Appeal from the orders of DOLE
Regional Director
If the decision of the DOLE Regional Director
10. Cases submitted for voluntary is issued pursuant to Article 128 which
arbitration in their capacity as Ex-Officio basically involves an inspection case, the
Voluntary Arbitrators (EVAs) appeal should be made to the DOLE
Secretary. But if the decision of the DOLE
Jurisdiction of Regional Directors and Regional Director is made in accordance with
Assistant Regional Directors for Article 129 which does not involve an
Voluntary Arbitration in their capacity inspection case, the appeal should be made
as Ex-Officio Voluntary Arbitrators: to the NLRC.
1. All grievances arising from the
interpretation or implementation of the H. DOLE Secretary
CBA
2. All grievances arising from the 1. Jurisdiction
interpretation or enforcement of company
personnel policies which remain Original Jurisdiction of DOLE Secretary
unresolved after exhaustion of the 1. Petition to assume jurisdiction over labor
grievance procedure; disputes affecting industries indispensable
3. Cases referred to them by the DOLE to the national interest.
Secretary under the DOLE’s Administrative 2. Petition to certify national interest cases to
Intervention for Dispute Avoidance (AIDA) the NLRC for compulsory arbitration.(Art.
initiative; and 278(g), Labor Code)
4. Upon agreement of the parties, any other 3. Petition to suspend effects of termination
labor dispute may be submitted to the (Art 292(g), Labor Code, as amended)
EVAs for voluntary arbitration.) (D.O. 83- 4. Administrative Intervention for Dispute
17, Series of 2007). Avoidance (AIDA) cases (DOLE Circular No
1, Series of 2006) –
Article 128 vs Article 129
Article 128 Article 129 This is a new form of dispute settlement
visitorial and adjudication power introduced by the DOLE Secretary under
enforcement powers of the Regional DOLE Circular No. 1, Series of 2006,
of the DOLE Directors or any issued on August 11, 2006 by former
Secretary or DOLE duly authorized DOLE Secretary Arturo D. Brion, later a
Regional Directors

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distinguished member of the Highest brought directly to the CA under Rule 43

Court. of the Rules of Court; and
f. Those rendered by Voluntary Arbitrators
This was issued in line with the objectives which are appealable directly to the CA
of R.A. No. 9285, otherwise known as the under Rule 43 of the Rules of Court.
“Alternative Dispute Resolution Act of
2004” [approved on April 2, 2004], 2. Visitorial and Enforcement Powers
Executive Order No. 523 dated April 07, 1. Visitorial Power
2006 and the mandate of the DOLE to a. Access to employer‘s records and
promote industrial peace. premises at any time of the day or
night, whenever work is being
5. Voluntary arbitration cases (DOLE Circular undertaken;
No 1, Series of 2006) b. To copy from said records
6. Contempt cases (Art 231 [255]) c. Question any employee and
investigate any fact, condition, or
Art 231 [255]. Contempt powers of the matter which may be necessary to
Secretary of Labor. In the exercise of his determine violations or which may
powers under this Code, the secretary of aid in the enforcement of the Labor
Labor may hold any person in direct or Code and of any wage order, rules,
indirect contempt and impose the and regulations issued pursuant
appropriate penalties therefor. thereto.

Appellate Jurisdiction of DOLE 2. Enforcement Power

Secretary a. Issue compliance orders
Offices from which appeals may originate b. Issue writs of execution for the
a. DOLE Regional Directors enforcement of their orders, except
b. Med-Arbiters in cases where the Employer
c. Director of the Bureau of Labor Relations contests the findings of the labor
(BLR) officer and raise issues supported
d. Philippine Overseas Employment by documentary proof which were
Administration (POEA) not considered in the course of
inspection
Cases Not Appealable to the DOLE c. Order stoppage of work or
Secretary suspension of operation when non-
a. Those rendered by Labor Arbiters that are compliance with the law or
appealable to the Commission (NLRC) implementing rules and regulations
which has exclusive appellate jurisdiction poses grave and imminent danger
thereover; to health and safety of workers in
b. Those rendered by the Commission the workplace.
(NLRC) since they can be elevated directly d. Require Employers to keep and
to the CA by way of a Rule 65 certiorari maintain such employment records
petition; as may be necessary in aid to the
c. Those rendered by the BLR Director in the visitorial and enforcement powers.
exercise of his appellate jurisdiction since e. Conduct hearings within 24 hours to
they can be brought directly to the CA determine whether:
under Rule 65 certiorari petition; i. An order for stoppage of work or
d. Those rendered by DOLE Regional suspension of operations shall be
Directors under Article 129 of the Labor lifter or not; and
Code since they are appealable to the ii. Employer shall pay the
NLRC; concerned Employees their
e. Those issued by DOLE Regional Directors salaries in case the violation is
in their capacity as Ex-Officio Voluntary attributable to his fault (As
Arbitrators (EVAs) since they can be amended by RA 7730); (Guico

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vs. Secretary, G.R. No. 131750, therefor, provided such labor

November 16, 1998). disputes will cause or likely to
cause strikes or lockouts in
3. Power to Suspend Effects of industries indispensable to the
Termination national interest.
1. Grounds - The DOLE Sec may b. Second, the former requires
suspend the effects of termination the conduct of preliminary
pending resolution of the dispute determination of the existence
in the event of a prima facie of prima facie evidence that the
finding by the appropriate official termination may cause a
of the DOLE before whom the serious labor dispute or is in
dispute is pending that: a. The implementation of a mass lay-
termination may cause a serious off to be conducted by the
labor dispute; and/or b. The appropriate official of the DOLE
termination is in implementation before whom the termination
of a mass lay-off. dispute is pending; while the
2. Rationale - To bring parties to the latter does not require such
status quo ante litem (state of preliminary prima facie
relationship before termination) - determination. In fact, prior
workers will be litigating the issue notice and hearing are not
of the validity or legality of their required before the DOLE
termination on more or less equal Secretary may issue an
footing with the employer since assumption or certification
they will be immediately order.
reinstated and accordingly not be c. Third, the “serious labor
deprived of their wages while the dispute” contemplated under
litigation is on-going; the former may or may not
3. Suspension of the effects of involve a strike or lockout;
termination will necessarily result while the labor dispute referred
in the immediate reinstatement of to in the latter will cause or
the terminated employees. An likely to cause a strike or
order of reinstatement pending lockout.
resolution of the case may thus be d. Fourth, the former may be
issued by the DOLE Secretary exercised in cases of
pursuant to this power; termination of employment for
4. Power of the DOLE Secretary as long as any of the two (2)
granted under Article 277(b) grounds mentioned in Article
distinguished from his power to 277(b) exists, irrespective of
assume or certify labor disputes the nature of the business of
involving industries indispensable the employer; while the latter
to the national interest under may only be exercised in
Article 263(g) industries indispensable to the
a. First, the exercise of the power national interest.
to suspend the effects of e. Fifth, the remedy under the
termination involves only the former is immediate
issue of termination of reinstatement pending
employment which may cause resolution of the termination
a serious labor dispute or is in case; while in the latter, the
implementation of a mass lay- remedy is the automatic return
off; while the power to assume to work of the strikers or
or certify labor disputes is locked-out employees, if the
applicable to all labor disputes, strike or lock-out is on-going at
irrespective of the grounds the time of the issuance of the

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assumption/certification order
or the enjoining of the strike or Who is a Voluntary Arbitrator
lockout, if one has not taken 1. Any person who has been accredited by
place, pending the resolution of the National Conciliation and Mediation
the issues raised in the notice Board (“NCMB” or “Board”) as such or;
of strike or lockout. 2. Any person named or designated in the
CBA by the parties as their Voluntary
4. Remedies Arbitrator; or
The aggrieved party from a decision of the 3. A person chosen by the parties with or
SOLE may file one motion for without the assistance of the NCMB,
reconsideration within ten (10) days from pursuant to a voluntary arbitration
receipt thereof. (PIDLTRANCO Service 4. One appointed by the NCMB in case either
Enterprises Inc v. PWU – AGLO, G.R. No. of the parties to the CBA refuses to submit
180962 (2014) to voluntary arbitration.

If the motion for reconsideration is denied, Generally, the arbitrator is expected to decide
the party may appeal via Rule 65 to the CA only those questions expressly delineated by
60 days from receipt of the denial. Upon the submission agreement. Nevertheless, the
denial, the party may proceed via Rule 45 to arbitrator can assume that he has the
the SC. (Rule 65, ROC; St. Martin Funeral necessary power to make a final settlement
Home v. NLRC, G.R. No. 130866 (1998) since arbitration is the final resort for the
adjudication of the disputes. (Ludo and Luym
Clearly, before a petition for certiorari under Corp. vs. Saornido, G.R.No. 140960, January
Rule 65 of the Rules of Court may be availed 20, 2003)
of, the filing of a motion for reconsideration
is a condition sine qua non to afford an Voluntary Arbitrator v. Mediator
opportunity for the correction of the error or A mediator is a disinterested third party who
mistake complained of. So also, considering helps settle disputes involving terms and
that a decision of the Secretary of Labor is conditions of a CBA. He/she is assigned and
subject to judicial review only through a paid by the State and is not selected by the
special civil action of certiorari and, as a rule, parties. He/she renders no final and binding
cannot be resorted to without the aggrieved decision, but merely suggests solutions.
party having exhausted administrative
remedies through a motion for Voluntary arbitrators have no tenure of office
reconsideration, the aggrieved party, must be and are not politically appointed or elected.
allowed to move for a reconsideration of the Their primary function is to provide for a
same so that he can bring a special civil process for the orderly labor-management
action for certiorari before the Supreme relations. (CHAN, Reviewer, supra, at 780)
Court. (PIDLTRANCO Service Enterprises Inc,
supra.) Minimum Requirements to be
accredited as a Voluntary Arbitrator
I. Voluntary Arbitrator; (I.B.1. NCMB Revised Guidelines in the
Jurisdiction and Accreditation and Delisting of Voluntary
Procedure Arbitrators)
1. Filipino citizen residing in the PH;
Voluntary Arbitration 2. Bachelor‘s degree holder;
A mode of settling labor-management 3. At least 5 years of experience in the field
disputes in which the parties select a of Industrial Relations;
competent, trained and impartial third person 4. NO pending criminal case involving moral
who is tasked to decide on the merits of the turpitude;
case and whose decision is final and 5. Completion of training on voluntary
executory. (Grievance Machinery and arbitration by the NCMB.
Voluntary Arbitration – DOLE)

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Powers of Voluntary Arbitrators c. Violations of the CBA which are not

1. Adjudicatory power - power to hold gross in character. d.
hearings, receive evidence and take d. Other labor disputes, including unfair
whatever action is necessary to resolve labor practices and bargaining
the issues subject of the dispute (No. 64, deadlocks, upon agreement of the
NCMB Primer on Grievance on Settlement parties. e.
and Voluntary Arbitration); e. National interest cases. f.
2. Compulsory Power - power to compel the f. Wage distortion issues arising from the
attendance of witnesses in a hearing application of any wage orders in
called for the purpose. They can issue organized establishments. g.
subpoena ad testificandum or duces g. Unresolved grievances arising from the
tecum (No. 80, ibid); interpretation and implementation of
3. Power to conciliate and mediate - the the Productivity Incentive Programs
Voluntary Arbitrator should exert his best under R.A. No. 6971.
efforts to conciliate or mediate in order to
aid the parties in reaching a voluntary • Rights Disputes
settlement of the dispute (No. 65, ibid); 4. Unresolved grievances arising from
Power to encourage the parties to enter the interpretation or
into a stipulation of facts (Sec. 2, Rule V, implementation of the CBA,
NCMB Revised Procedural Guidelines in unresolved grievances arising from
the Conduct of Voluntary Arbitration interpretation or enforcement of
Proceedings) company personnel policies, as well
Violations of the CBA which are not
Voluntary Arbitrator in Quasi-judicial gross in character are called ―”
Capacity rights disputes” These disputes
A voluntary arbitrator by the nature of her contemplate the existence of a CBA
functions acts in a quasi-judicial capacity. already concluded or a situation in
(Guagua National Colleges v. Court of which no effort is made to bring
Appeals, G.R. No. 188492, August 28, 2018) about a formal change in its terms
or to create a new one. The dispute
Although not a part of a government unit or relates either to the meaning or
personnel of the Department of Labor and proper application of a particular
Employment, a Voluntary Arbitrator, by the provision therein with reference to a
nature of his functions, acts in a quasi-judicial specific situation or to an omitted
capacity. He is a means by which the case.
government acts, or by which a certain
government act or function is performed. He • Interest Disputes
performs a state function pursuant to a Bargaining deadlocks are often
governmental power delegated to him under called interest disputes. Disputes
the Labor Code. (Luzon Development Bank over the formation of collective
vs. Association of Luzon Development Bank agreements or efforts to secure
Employees, G.R. No. 120319, October 6, them. They arise where there is no
1995) such agreement or where it is
sought to change the terms of one
Jurisdiction and therefore the issue is not
whether an existing agreement
1. Original and Exclusive Jurisdiction controls the controversy
a. Unresolved grievances arising from the
interpretation or implementation of the 2. Jurisdiction over other Labor
CBA. b. Disputes
b. Unresolved grievances arising from the The Voluntary Arbitrator panel of
interpretation or enforcement of Voluntary Arbitrators may also hear and
company personnel policies. c. decide all other labor disputes, including

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unfair labor practices, and bargaining Cases cognizable by Voluntary Arbitrators but
deadlocks. (Art. 275, Labor Code) That is filed with regular courts should be dismissed.
why before or at any stage of the The well-entrenched rule is that when a case
compulsory arbitration process, parties to does not involve the parties to a CBA
a labor dispute may agree to submit their (referring to the employer and the bargaining
case to voluntary arbitration. union), it is not subject to voluntary
arbitration. While individual or group of
3. Jurisdiction over National Interest employees, without the participation of the
Cases union, are granted the right to bring
SOLE‘s power of assumption of jurisdiction grievances directly to the employer, they
or certification to the NLRC of labor cannot submit the same grievance, if
disputes affecting industries indispensable unresolved by the employer, for voluntary
to the national interest provides that arbitration without the union’s approval and
before or at any stage of the compulsory participation. It is the union which is the party
arbitration process, the parties may opt to to the CBA, and not the individual or group of
submit their dispute to voluntary employees. (Tabigue vs. International Copra
arbitration. (Art. 278, Labor Code) This Export Corporation, G.R. No. 183335,
means that even if the case has already December 23, 2009)
been assumed by the DOLE Secretary or
certified to the NLRC for compulsory Pursuant to Article 260 of the Labor Code, the
arbitration, or even during its pendency parties to a CBA shall name or designate their
therewith, the parties thereto may still respective representatives to the grievance
withdraw the case from the SOLE or machinery and if the grievance is unsettled in
NLRC, as the case may be, and submit it that level, it shall automatically be referred to
to a Voluntary Arbitrator for voluntary the voluntary arbitrators designated in
arbitration purposes. advance by parties to a CBA. Consequently,
only disputes involving the union and
4. Jurisdiction over Wage Distortion the company shall be referred to the
Cases grievance machinery or voluntary
In organized establishments, the arbitrators.”
employer and the union are required to
negotiate to correct the wage distortion. Generally, the arbitrator is expected to decide
Any dispute arising from such wage only those questions expressly delineated by
distortion should be resolved through the the submission agreement. Nevertheless, the
grievance procedure under the CBA and if arbitrator can assume that he has the
it remains unresolved, through voluntary necessary power to make a final settlement
arbitration (Art 124, Labor Code, as since arbitration is the final resort for the
amended) In unorganized establishments, adjudication of disputes. A voluntary
where there are no CBAs or recognized or arbitrator is not part of the governmental unit
certified collective bargaining unions, the or labor department's personnel, said
jurisdiction is with the Labor Arbiter. (Art arbitrator renders arbitration services
124, Labor Code) provided for under labor laws. (Ludo & Luym
Corp. u. Saornido, G.R. No. 140960, January,
Some Principles 20, 2003)
Cases cognizable by Voluntary Arbitrators in
their original jurisdiction but ERRONEOUSLY Decision of Voluntary Arbitrator is
filed with Labor Arbiters, DOLE Regional Appealable
Offices or NCMB should be disposed of by
referring them to the Voluntary Arbitrators or The decisions and awards of Voluntary
panel of Voluntary Arbitrators mutually Arbitrators, albeit immediately final and
chosen by the parties. executory, remained subject to judicial
review in appropriate cases through petitions
for certiorari. (Guagua National Colleges v.

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Court of Appeals, G.R. No. 188492, August of DOLE

28, 2018) (< P
5,000)
The mode of appeal from the Voluntary Unfair Labor 1 year from Labor
Arbitrator to the Court of Appeals is governed Practice the time the Arbiter
by Rule 43 of the Rules of Court. (Samahan acts
ng Manggagawa sa Hyatt vs. Buenaventura, complained RTC
G.R. No. 164939, June 6, 2011) of were (criminal)
committed
Other 3 years from Labor
Offenses in the time of Arbiter
the Labor commission
Code
Simple Illegal 5 years RTC
Recruitment
Illegal
Recruitment 20 years
involving
economic
sabotage
SSS 10 years SSS
1. Disability
benefit claim
2. Refusal or 20 years
neglect by the
employer in
The 10-day period stated in Article 276 the
should be understood as the period within remittance of
which the party adversely affected by the contributions
ruling of the Voluntary Arbitrators or Panel of to the SSS
Arbitrators may file a motion for GSIS GSIS
reconsideration. Only after the resolution of 1. Claims for Imprescriptibl
the motion for reconsideration may the life and e
aggrieved party appeal to the CA by filing the retirement
petition for review under Rule 43 of the Rules benefits
of Court within 15 days from notice pursuant 2. Other 4 years
to Section 4 of Rule 43. (Guagua National claims for
Colleges v. Court of Appeals, G.R. No. benefits
188492, August 28, 2018) Employee’s 3 years ECC
Compensation
J. Prescription of Actions
The three-year prescriptive period for service
Cause of Prescriptive Where incentive leave commences, not at the end of
Action Period to the year when the employee becomes
initiate entitled to the commutation of his service
Money claims 3 years from Arbiter incentive leave, but from the time when the
arising from accrual of employer refuses to pay its monetary
ER-EE cause of equivalent after demand of commutation or
relationship action Labor upon termination of the employee's services,
Illegal 4 years from Labor as the case may be. (Santos v. Bicol Apparel
Dismissal/ accrual of Arbiter Corp., G.R. No. 226259, October 19, 2022)
Illegal cause of Regional
Termination action Director

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 PURPLE NOTES 2024 – LABOR LAW

General Rule: Criminal offenses penalized Promissory Estoppel which may arise from
under the Labor Code and its implementing the making of a promise even though without
rules and regulations prescribes in three (3) consideration, if it was intended that the
years from the date of commission of the promise should be relied upon. If in fact it
violation or from discovery thereof. It may be was relied on, a refusal to enforce it would
reckoned from the institution of judicial virtually sanction the perpetration of fraud or
investigation and punishment. (People vs would result in other injustice. It presupposes
Duque, GR No. 100285, August 13, 1992) the existence of a promise on the part of one
against whom estoppel is claimed. The
Exception: ULP prescribes in one (1) year promise must be plain and unambiguous and
form the date of commission; otherwise, they sufficiently specific so that the court can
shall be forever barred. However, the running understand the obligation assumed and
of the one-year period is interrupted during enforce the promise according to its terms.
the pendency of the labor case (Art. 305, (Accessories Specialist, Inc. vs. Alabanza,
Labor Code). G.R. No. 168985, July 23, 2008)

1. MONEY CLAIMS In order to make out a claim of promissory

estoppel, a party bears the burden of
Money claims under Art. 306 of the Labor establishing the following elements: (1) a
Code, as amended, include those arising promise was reasonably expected to induce
from: action or forbearance; (2) such promise did,
• Laws in fact, induce such action or forbearance;
• Incremental proceeds from tuition and (3) the party suffered detriment as a
increases result. (Ibid)
• Overseas employment of OFWS.
5. ILLEGAL DISMISSAL
Article 306 of the Labor Code covers claims
for: The prescriptive period of illegal
• overtime pay, dismissal is four (4) years. The legal
• holiday pay, basis is not Art. 306 of the Labor
• service incentive leave pay, Code, as amended, but Art. 114 of
• bonuses, the Civil Code. (Callanta vs. Carnation
• salary differentials, Philippines, G.R. No. 70615, February
• and illegal deductions by an employer. 29, 1986)

It does not cover amounts which were merely 6. UNFAIR LABOR PRACTICES
retained by the employer from the
employees' wages as security deposits to The prescriptive period of illegal dismissal
answer for future obligations such as is four (4) years. The legal basis is not Art.
deficiencies in boundary payments, because 306 of the Labor Code, as amended, but
these amounts remained to be the Art. 114 of the Civil Code. (Callanta vs.
employees' money, unless utilized for its Carnation Philippines, G.R. No. 70615,
purpose in accordance with the law. (Hyatt February 29, 1986)
Taxi Services, Inc. v. Rull, Jr., G.R. No.
246256, June 16, 2021) 7. OFFENSES UNDER THE LABOR CODE

Exception Offenses penalized under the Labor Code

and the rules and regulations issued
The prescriptive period would be counted pursuant thereto shall prescribe in three
from the date of last promise to pay under (3) years. (Article 305, Labor Code)
the Doctrine of Promissory Estoppel.
8. ILLEGAL RECRUITMENT

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Illegal recruitment prescribes in five (5)

years, except in illegal recruitment The three-year period may be interrupted
constituting economic sabotage such as when (1) a complaint is filed, (2) a written
syndicated or large-scale which prescribes extrajudicial demand is made, or (3) the
in twenty (20) years. (Section 7, R.A. employer makes a written acknowledgment
10022) of its debt. (Santos v. Bicol Apparel Corp.,
G.R. No. 226259, October 19, 2022)
General Law on Prescription
For ULP cases, the running of the one (1)
The general law on prescription under Article year prescriptive period is interrupted during
1150 of the Civil Code applies: the pendency of the labor proceeding.

Article 1150. The time for

prescription for all kinds of actions,
when there is no special provision
which ordains otherwise, shall be
counted from the day they may be
brought.

Commencement of Prescriptive Period

On Monetary Claims

The three-year prescriptive period to file the

complaint for money claims arising from an
employer-employee relationship shall
commence from the time that the claim
becomes a legal possibility, or when the claim
was unlawfully withheld by the employer.

For the unpaid wage differentials, overtime

pay, and holiday pay, petitioners' cause of
action accrued the day after they received
their respective wages, since that is when the
claim had ripened into a legal possibility. As
for the 13th month pay, the cause of action
for payment ripens every 25th of December,
since PD No. 851, as amended, provides that
it shall be paid not later than December 24 of
every year.

On Other Claims

If the employees failed to allege that they

had made previous demands to their
employers for payment of their claims. The
commencement of the prescription period
shall be reckoned from the time the
employer-employee relationship is severed.
(Santos v. Bicol Apparel Corp., G.R. No.
226259, October 19, 2022)

Subject to Interruption

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