Labor legislation – statues, regulations & jurisprudence Social Justice as the Aim

governing relations bet capital & labor, by providing

for certain standards of terms & conditions of EENT Social justice – humanization of laws & the equalization
or providing a legal framework w/in w/c these terms of social & economic forces by the State so that
& conditions & the EENT relationship may be social justice in its rational & objectively secular
negotiated, adjusted & administered. conception may at leas be approximated

2 Divisions of Labor Legislation - promotion of the welfare of the ppl,

the adoption by the Govt of measures calculated to
1. Labor Standards – sets out the minimum terms, insure economic stability of all the component
conditions & benefits of EENT that EERS must elements of society through the maintenance of
provide or comply w/ & to w/c EES are entitled as a proper economic & social equilibrium in the
matter of legal right. interrelations of the members of the community,
constitutionally, through the adoption of measures
- minimum requirements prescribed by legally justifiable, or extra-constitutionally, through
existing laws, rules & regulations relating to wages, the exercise of powers underlying the existence of all
hrs of work, cost-of-living allowance and other govts.
monetary & welfare benefits, including occupational
safety & health standards. 1987 Consti: protects the rights of workers & promote
their welfare
- material or substance to be
processed Basic rights of workers guaranteed by the Constitution

2. Labor Relations – defines the status, rights & duties 1. to organize themselves
and the institutional mechanisms, that govern the 2. to conduct collective bargaining/negotiation w/
indiv & collective interactions of EERS, EES, or their mgt;
representatives. 3. to engage in peaceful concerted activities,
including to strike in accordance w/ law; and
- mechanism that processes the 4. to participate in policy & decision-making
substance processes affecting rights & benefits

Other Consti provisions that protect the Rs/promote the

welfare of workers
Labor – physical toil although it does not necessarily
exclude the application of skill (thus “skilled” &  R to form unions, assocs or societies for
“unskilled” labor) purposes not contrary to law
 R of self-org even for govt EES.. No officer/Ee of
Skill – the familiar knowledge of any art/science, united
the Civil Service shall be removed/suspended 
w/ readiness & dexterity in execution/performance
for cause. Temporary EES of the Govt shall be
or in the application of the art/science to practical
given such protection as may be provided by
purposes.
law
Work – (broader than labor) – covers all forms of  Regular farmworkers shall have the R to own
physical/mental exertion, or both combined, for the directly/collectively the lands they till. Landless
attainment of some obj other than farmworkers may be resettled by the govt in its
recreation/amusement per se. own agri estates.
 Continuing program of urban land reform &
Worker – (broader than EE) – may refer to self- housing
employed people & those working in the service &  Protection for working women taking into acct
under the control of another, regardless of rank, title, their maternal functions, etc
or nature of work.  Labor sector is entitled to seats to party list
 Goal: more equitable distribution of
- any member of the labor force whether opportunities, income & wealth.
employed/unemployed  Agency to promote the viability & growth of
cooperatives as instruments for social justice &
Employee – a salaried person working for another who
economic dev’t
controls or supervises the means, manner or method
 Govt shall increase the salary scales of the
of doing the work.
other officials & EES
Labor Law & Social Legislation  Career civil service EES shall be entitled to
separation pay & retirement benefits, OR may
Social legislation – includes laws that provide particular be considered for reemployment in the govt
kinds of protection/benefits to society in furtherance
of social justice. Consti – prol-labor, but recognizes the indispensable role
of the private sector, encourages private enterprise
 Labor laws are necessarily social legislation and provides incentives to needed investments

Police Power as the Basis

1
 - the power of the govt to enact laws, w/in  Pd #21 created the NLRC ( to investigate, decide
Constitutional limits to promote the order, & settle all disputes bet EERS & EES
safety, health, morals & general welfare of  RA # 875: The Industrial Peace Act (the Magna
society Carta of Labor)
- power inherent in govt to protect itself & all its  RA #946: Blue Sunday Law – forbids commercial,
constituents, & for this purpose to hold the industrial or agri enterprises to open on any
govt immune so far as necessary, from any Sunday, Xmas Day, New Year’s Day, Holy Thurs
limitatins imposed in the past. & Good Friday.
- An imposition of restraint upon liberty or  RA #1787: The Termination Pay Law –
property in order to foster the common good. enumerated the just causes for terminating an
EENT w/o a definite period and allowed EERS to
separate an EE by serving a 15-day notice per yr
of service or, by paying an equivalent
Birth of the LC
separation pay.
Blas Ople - father of the LC

LC – designed to be a dynamic & growing body of laws Significance of Other Laws

w/c will reflect continually the lessons of practical
1. Foreign Decisions – numerous LC provisions are
application & experience
substantially similar to the Industrial Peace Act
7 Principles Underlying the code 2. The Civil Code – describes the nature of labor
mgt relations:
1. Labor relations must be made both responsive “The relations bet capital & labor are not
& responsible to national devt merely contractual. They are so impressed w/
2. Labor laws/labor relations during a period of public interest that labor contracts must yield
national emergency must substitute rationality to the common good. such contracts are subj.
for confrontation; strikes or lockouts give way to the special laws on labor unions, collective
to a rational process w/c is arbitration bargaining, strikes & lockouts, closed shop,
3. Laggard justice in the labor field is injurious to wages, working conditions, hrs of labor &
the workers, the EERS & the public; labor justice similar subjs.” —Art 1700
can be made expeditious w/o sacrificing due “Neither capital nor labor shall act oppressively
process. against the other, or impair the interest or
4. Manpower devt & EENT must be regarded as a convenience of the public” –Art 1701.
major dimension of labor policy, for there can 3. RPC – punishes the use of violence or threats by
be no real equality of bargaining power under either EER or EE.
conditions of severe mass unemployment. 4. Special Laws – (SSS law, GSIS law, Agrarian
th
5. There is a global labor market available to Reform law, the 13 -month pay law, the Magna
qualified Filipinos, esp those who are Carta for Public Health Workers)
unemployed or whose EENT is tantamount to
unemployment bcoz of their very little earnings.
6. Labor laws must command adequate resources
Art 3. [Declaration of Basic Polici] The State shall afford
& acquire a capable machinery for effective &
protection to labor, promote full EENT, ensure
sustained implementation; when labor laws
equal work opportunities regardless of sex, race or
cannot be enforced, both EERS & the workers
creed, and regulate the relations bet workers &
are penalized, & only a corrupt few (those who
EERS. The State shall assure the rights of workers to
are in charge of implementation) may get the
self-org, collective bargaining, security of tenure,
reward they don’t deserve.
and just & humane conditions of work.
7. There shld be popular participation in national
policy-making through what is now called Balanced Approach – shared responsibility. Worker &
tripartism. EER sectors are interdependent.

Some Labor Laws before the Passage of the Code Art4. [Construction in Favor of Labor] All doubts in the
implementation & interpretation of the provisions of
 Act #1874: EER’S Liability Act,
this Code, including its IRRs, shall be resolved in favor
 Act #2549: prohibited payment of wages in
of labor.
non-cash form
 Act #2071: prohibiting slavery/involuntary Interpretation & Construction – policy is to extend the
servitude decree’s applicability to a greater number of EES to
 R #1054: requiring emergency medical treatmt enable them to avail of the benefits under the law
for EES (Liberal approach is adopted)
 CA # 444: 8-hr labor law
 CA #103 created the Court of Industrial Concern for the Lowly Worker – SC reaffirms its concern
Relations (CIR) for the lowly worker who, often at his EER’s mercy,

2
 must look up to the law for his protection. (Reason: deemed owner of apportion constituting a family-
the EER stands on higher footing than the EE: (1,) size farm of 5 hectares if not irrigated & 3 hectares if
There is greater supply than demand for labor; (2) irrigated..
the need for EENT by labor comes from vital & even
desperate necessity.) In all cases, the landowners may retain an area
of not more than 7 hectares if such landowner is
Mgt Rights – entitled to respect & enforcement in the cultivating such area or will now cultivate it.
interest of simple fair play.
Art 9. [Determination of Land Value] For the purpose of
1. R to manage, control, and use his property & determining the cost of the land to be transferred to
conduct business in a manner satisfactory to the tentant-farmer, the value of the land shall be
himself (just discrimination in the rate of wages equivalent to 2 & ½ times the average harvest of 3
paid to the skillful & to the unskillful, to the normal crop yrs immediately preceding the
efficient & inefficient.) promulgation of PD 27 (OCT 21, 1972).
2. R to prescribe rules (they become part of the
contract of EENT) The total cost of the land, including interest at
3. R to select EES & to decide when to engage the rate of 6% per annum, shall be pd by the tenant
them, except as restricted by statute or valid in 15 yrs of 15 equal annual amortizations.
contract, at a wage & under conditions
agreeable to them. In case of default, the amortizations due shall
4. R to transfer & discharge EES in order to be pd by the farmers’ cooperative in w/c the
minimize expenses & to insure stability of the defaulting tenant-farmer is a member, w/ the coop
business & even to close the business, provided having a right of recourse against him.
it is done in good faith & due to causes beyond
The govt shall guarantee such amortizations w/
control.
shares of stock in govt-owned & -controlled corps.
Art 5. [Rules & Regulations] the DOLE & other govt
Art 10. [Conditions of Ownership] No title to the land
agencies charged w/ the administration &
acquired by the tenant-farmer under PD 27 shall be
enforcement of this Code or any of its parts shall
actually issued to him unless & until he has become a
promulgate the necessary IRRs. Such RRs shall
full-fledged member of a duly recognized farmers’
become effective 15 days after announcement of
coop.
their adoption in the newspapers of gen. circulation.
Title to the land acquired pursuant to PD 27 or
the Land Reform Program of the Govt shall not be
Art 6. [Applicability] All Rs & benefits granted to workers transferable except by hereditary succession or to
under this Code shall, except as may otherwise be the Govt in accdance w/ the provisions of PD 27, the
provided herein, apply alike to all workers, whether Code of Agrarian Reforms & other existing laws &
agricultural or non-agricultural. regulations.

- also applies to a govt corp incorporated under Art 11. [Implementing Agency] The Dept of Agrarian
the Corporation Code. Reform shall promulgate the necessary rules &
- Test WON a govt-owned/-controlled corp is regulations to implement the provisions of this
subj to CS Law is the manner of its creation. Chapter.
Govt corps created by special charter are subj
*Land for the landless – battlecry dramatizing the
to its provisions, while those incorporated
increasingly urgent demand of the dispossessed for a
under the gen Corp Law are not w/in the
plot of earth as their place under the sun.
coverage of the CS law.
 PNOC-EDC – incorp under the Corp Law  subj *CARP Law – signed by Cory, declaring full land
to LC ownership in favor of the beneficiaries of the PD 27.
 NHA – incorp under Act 1459, the former corp
law  LC Share tenancy – abolished, put the agricultural leasehold
 Govt agencies – Ees covered by CS Law sys in its stead, geared towards eventual ownership
of land by its tillers

Consti - State shall undertake an Agrarian Reform

CH. 2: EMANCIPATION OF TENANTS Program, and encourage & undertake the just
distribution of all agri lands, subj to such priorities &
Art 7 [Statement of Objectives] … it has become reasonable retention limits as the Congress may
imperative to start reformation w/ the emancipation prescribe,
of the tiller of the soil from his bondage.
Compensation scheme: Sec 18 of CARP: Title to all
Art 8: [Transfer of Lands to Tenant-workers] … tenant- expropriated properties shall be transferred to the
farmers on private agri lands primarily devoted to State only upon full payment of compensation of
rice & corn under a sys of share crop or lease tenancy their respective owners.
whether classified as landed estate or not shall be

3
Retention Limits – provided for by RA 6657 :  as - The demand for those who live by wages 
otherwise provided.. no person may own/retain necessarily increases w/ the increase of the
directly/indirectly, any public/private agri land, the revenue & stock of every country and cannot
size of w/c shall vary accdg to factors governing a increase w/o it. The increase of revenue & stock
viable family-sized farm, such as commodity is the increase of national wealth.
produced, terrain, infrastructure, & soil fertility as
determined by the Presidential Agrarian Reform “An Exploited Class” – J. Reynato Puno
Council (PARC).
- Overseas workers constitute an exploited class.
3 hectares – may be awarded to each child of the Their unfortunate circumstance makes them
landowner, subj to the ff qualifications: (1.) he is at easy prey to avaricious EERs. They will work
least 15 y/o, and (2) he is actually tilling the land or under subhuman conditions & accept salaries
directly managing the farm; Provided, that below the minimum.
landowners whose lands have been covered b PD 27
shall be allowed to keep the area originally retained “9% of Filipinos are Based Overseas”—Ph Star
by them thereunder; Provided further, that orig
homestead grantees or direct compulsory heirs who
still own the org homestead at the time of the RA 6657 Comprehensive Agrarian Reform Program
approval of this Act shall retain the same areas as
long as the continue to cultivate said homestead. Aim: A more equitable distribution & ownership of land,
w/ due regard to the rights of landowners to just
Lands not covered compensation & to the ecological needs of the
nation
1. Lands obtained through homestead patent:
Homestead Act – gives a needy citizen a piece Basis: the R of farmers & regular farm workers, who are
of land where he may build a modest house for landless, to own directly or collectively the lands they
himself & family & plant what is necessary for till or, in the case of other farm workers, to receive a
subsistence & for the satisfaction of life’s other share of the fruits thereof
needs.
- superior over the rights of The State:
tenants
- shall respect the R of small landowners & shall
2. Residential Subdivisions – not considered agricultural. provide incentives for voluntary land-sharing
An agricultural leasehold cannot be established on - shall recognize the R of farmers, farm workers
land w/c has ceased to be devoted to cultivation or & landowners, as well as cooperatives & other
farming bcoz of its conversion into a residential subd. independent farmers org, to participate in the
planning, org, & mgt of the program & shall
3. Livestock, poultry & Swine raising lands: Sec 2 of RA provide support to agriculture though tech &
6657 w/c includes “private agri lands devoted to research & financial, production, marketing &
commercial livestock, poultry & swine raising” in the other support services
definition of “commercial farms” is invalid. They are - may resettle landless farmers & farm workers in
covered by the agrarian reform prog of the State. its own agricultural estates
- shall encourage the formation & maintenance
“The Greatest Blessing…The Worst Crime” – Frederick
of economic-sized family farms to be
Taylor
constituted by indiv beneficiaries & small
- an increased output invariably gives more work landowners
to more men, & never in the history of the - shall protect the Rs of subsistence fishermen to
world has it more than temporarily, and then the preferential use of communal marine &
for only a very short time, diminished by the fishing resources both inland & offshore
number of men at work in any trade - shall provide support to such fishermen thru
appropriate tech & research, adequate financial,
production & marketing assistance
- shall protect offshore fishing grounds of
“The Greatest Exploiter” – Blas Ople subsistence fishermen against foreign intrusion.
Fisherworkers shall redeive a just share from
- unemployment is the greatest exploiter of labor. their labor in the utilization of marine & fishing
Mass unemployment tends to leave the EER all- resources
powerful and the worker defenseless - owners of agri land have the oblig to cultivate
directly or thru labor admin the lands they own
“More Capital Means More Jobs” – Adam Smith & thereby make the land productive.
- Shall provide incentives to landowners to invest
- 2 kinds of funds: (1) the Revenue – w/c is over
the proceeds of the agrarian reform prog to
& above what is necessary for the maintenance;
promote industrialization, EENT & privatization
and (2) the Stock – w/c is over & above shat is
of pub sector enterprises
necessary for the EENT of their masters.

4
 - May lease undeveloped lands of pub domain to 7. Farmworker – a netural person who renders service
qualified entities for the devt of capital- for value as an EE or laborer in an agricultural
intensive farms, traditional & pioneering crops enterprise or farm
esp those for export (subj. to Rs of
beneficiaries) 8. Regular Farmworker – a natural person who is
employed on a permanent basis by an agricultural
enterprise or farm
Definitions
9. Season Farmworker – a natural person who is
1. Agrarian Reform – the redistribution of lands, employed on a recurrent, periodic or intermittent
regardless of crops/fruits produced, to farmers basis by an agricultural enterprise or farm
& regular farm workers who are landless,
irrespective of tenurial arrangemt, to include h. Cooperatives – orgs composed primarily of small agri
the totality of factors & support services producers, farmers, farmworkers or other agrarian
designed to lift the economic status of the reform beneficiaries who voluntarily organize
beneficiaries and all other arrangemts themselves for the purpose of pooling land, human,
alternative to the physical redistribution of technological, financial or other economic resources
lands (production or profit-sharing, labor admin, & operated on the principle of one member, one
distribution of shares of stock) vote. ( a juridical person may be a member of a coop,
2. Agriculture, Agricultural Enterprise or w/ the same Rs & duties as a natural person.
Agricultural Activity – the cultivation of the soil,
planting of crops, growing of fruit trees, incl. Scope: all public & private agricultural lands, incl. other
the harvesting of such farm products, & other lands of the pub domain suitable for agriculture
farm activities
1. All alienable & disposable lands of the pub
3. Agricultural land – land devoted to agricultural
domain devoted to or suitable for agriculture
activity, and NOT classified as mineral, forest,
2. All lands of the pub domain in excess to the
residential, commercial or industrial land
specific limits as determined by Congress
4. Agrarian Dispute – any controversy relating to
3. All other lands owned by the Govt devoted to
tenurial arrangements, whether leasehold,
or suitable for agri
tenancy, stewardship or otherwise, over lands
4. All private lands devoted to or suitable for agri
devoted to agri
regardless of the agri products raised/can be
- including disputes raised thereon
concerning farm workers assocs, or
Schedule of Implementation: w/in 10 yrs from effectivity
representation of persons in negotiating, fixing,
maintaining, changing or seeking to arrange Retention Limits: no person may own or retain, directly,
terms of conditions of such tenurial any pub or private agricultural land, the size of w/c
arrangements shall vary accdg to factors governing a viable family-
sized farm
- including controversy
relating to compensation of lands acquired - landowner may retain only 5 hectares.
under this Act & other terms & conditions of - 3 hectares: each child of landowner, that is
transfer of ownership from landowners to farm 15y/o, and is actually tilling the land or directly
workers, tenants & other agrarian reform managing the farm
beneficiaries - landowners whose lands have been covered by
PD 27 shall be allowed to keep the area
5. Idle / Abandoned Land – any agricultural land not
originally retained by them thereunder
cultivated, tilled or developed to produce any crop
- the original homestead grantees or direct
nor devoted to any specific economic purpose
compulsory heirs who still own the orig
continuously for a period of 3 yrs immediately prior
homestead shall retain the same areas as long
to the receipt of notice of acquisition by the govt
as they continue to cultivate said homestead
- but does NOT include land that has - the R to choose the area to be retained belongs
become permanently or regularly devoted to non- to the landowner.  However: (a) in case the
agricultural purposes area selected by landowner is tenanted, the
tenant shall have the option whether to remain
- does NOT include land w/c has therein, be a beneficiary of the same, or
become unproductive by reason of force majeure or F another agri land w/ similar/comparable
event features; (b) in case the tenant chooses to
remain in the retained ares, he shall be
6. Farmer – a natural person whose primary livelihood is considered a leaseholder & shall lose his R as a
cultivation of land or the production of agri crops leaseholder to the land retained by the
either by himself, or primarily w/ the assistance of landowner. The tenant must exercise this
his immediate farm household, whether the land is option w/in 1 yr fr the time the landowner
owned by him, or by another person under a manifests his choice of the area for retention.
leasehold or tenancy agreement

5
 - Upon Act’s effectivity, any sale, disposition, Procedure for Acquisition of Private Lands
lease, mgt contract or transfer of position of
private lands executed by the orig landowner in 1. After having identified the land, the landowners
violation of this Act shall be null & void. & beneficiaries, DAR shall send its notice to
Provided, that those executed prior to this Act acquire the land to the owners;
shall be valid only when registered w the Reg of 2. w/in 30 days from date of receipt, landowners
Deeds w/in 3 months after effectivity. shall inform the DAR of his
acceptance/rejection of the offer;
a. if landowner accepts the offer, the LBP
shall pay the landowner of the
Presidental Agrarian Reform Council (PARC) – shall purchase price of the land w/in 30
provide the implementing rules days after he executes & delivers a
deed of transfer in favor of the Govt
- upon recommendation by the and surrenders the Cert of Title
Provincial Agrarian Reform coordinating Committee, b. in case of rejection or failure to reply,
may declare certain provinces/regions as priority DAR shall conduct summary admin
land reform areas proceedings to determine
compensation of the land
3. upon receipt of the landowner of the payment,
Multinational Corps – all lands of the pub domain leased, or in case of rejection or no response fr the
held, or possessed by multi corps or assocs, and landowner, upon the deposit w/ an accessible
other lands owned by the govt, or govt-owned/- bank or the compensation, the DAR shall take
controlled corps, assocs, institutions or entities, immediate possession of the land & shall
devoted to existing & operational agribusiness or request the Register of Deeds to issue a TCT in
agro-industrial enterprises, operated by multicorps the name of the RP.
shall be programmed for acquisition & distribution 4. Any party who disagrees w/ the decision may
immediately upon effictivity bring the matter to the court

Ancestral Lands – shall include, but not limited to, lands

in the actual, continuous & open possession &
Determination of Just Compensation
occupation of the community and its members,
provided that the Torrens System shall be respected - cost of acquisition of the land
- current value of like properties,
- shall be protected to ensure their economic,
- its nature, actual used and income
social & cultural well-being
- the sworn valuation by the owner,
- in the autonomous regions, the respective
- tax declarations
legislature may enact their own laws on
- assessment made by the govt assessors
ancestral domain subj to the provisions of the
Consti, this Act and other national laws.

Exemptions & Exclusions Incentives for voluntary offers of sale – addt’l 5% cash
1. Lands actually, directly & exclusively used for Priority of Qualified Beneficiaries
parks, wildlife, forest reserves, reforestation,
fish sanctuaries and breeding grounds, 1. Agricultural lessees & share tenants
watersheds and mangroves 2. Regular farmworkers
2. Private lands actually, directly & exclusively 3. Seasonal farmworkers
used for prawn farms & fishponds (provided 4. Other farm workers
that said prawn farms & fishponds have not 5. Actual tillers/occupants of public lands
been distributed and Cert of Land Ownership 6. Collective or cooperatives of the above
Award issued to ARP. beneficiaries
3. Lands actually, directly & exclusively used & 7. Others directly working on the land
found to be necessary for national defense,
school sites & campuses, incl experimental farm *Provided: children of landowners who are qualified
stations operated by pub/private schools for shall be given preference in the distribution of the
educational purposes, seeds and seedlings land of their parents
research and pilot production center, church
sites & convents apputenat therety, mosque *Provided further: actual tenant-tillers in the
sites & Islamic centers appurtenant thereto, landholding shall not be ejected/removed therefrom.
communal burial grounds & cemeteries, penal
colonies & penal farms actually worked by
inmates, got & private research & quarantine
Transferability of Acquired lands by beneficiaries – may
centers and all lands w/ 18% slope and over, 
not be sold, transferred or conveyed  except thru
except those already developed
hereditary succession, or to the govt, or to the LBP,
or to other qualified beneficiaries for 10 yrs

6
*Provided, that the children/spouse of the transferor 2. Landless beneficiary – one who owns less than
shall have a R to repurchase the land fr the govt/LBP 3 hectares of agri land
w/in 2 yrs

Added Exception to Retention Limits

Standing crops at the time of acquisition – shall be
retained by the landowner, Dar shall give a - Provincial, city & mun govt units acquiring private agri
reasonable time to harvest the same lands by expropriation to be used for actual, direct &
exclusive pub purposes, such as roads & bridges, pub
markets, school sites, resettlement sites, local govt
facilities, pub parks & brgy plazas or squares
Corporate Farms consistent shall not be subj to the 5-hectare
retention limit
- in case land cannot be divided directly, shall be
owned collectively by the worker-beneficiaries Order of Priority
who shall form a workers cooperative or assoc
st
w/c will deal w/ the corp - 3 hectares each to the 1 2 beneficiaries
- indiv members of the coop shall be provided w/ - only when these beneficiaries have rcvd 3
homelots or small farmlots for their family use hectares each, shall the remaining portion of
taken fr the land owned by the coop the landholding, if any, be distributed to other
beneficiaries

Production-sharing - pending final land transfer

Support Services Payment by Beneficiaries – payable to LBP in 30 annual

amortizations at 6% interest per annum
1. irrigation facilities
2. infrastructure devt & pub works projects
3. govt subsidies for the use of irrig facilities
Support shall be extended equally to women & men
beneficiaries

RA 9700 – Act Strengthening the CARP, extending the

acquisition & distribution of all agricultural lands,
instituting necessary reforms, amending for the  Landicho v Sia
purpose certain provisions of RA 6657
Facts:
- State shall protect Filipino enterprises against
unfair foreign competition & trade practices  3 parcels of land were originally owned by the
- State recognizes that there is not enough Aragons, tenanted by the late Arcadio Landicho
agricultural land to be divided & distributed to from 1949 until his death in 1972, afterwhich, his
each farmer & regular farmworker so that each tenancy rights were succeded by his son, petitioner
one can own his economic-size family farm. Francisco Landicho (the other petitioners were
- Answer: simultaneous industrialization aimed Buenaventura (Francisco’s son), and Federico
at developing a self-reliant & independent (Francisco’s brother), helped him cultivate the land
national economy effectively controlled by  in 1976, Francisco voluntarily surrendered his
Filipinos tenancy Rs over the land to the Aragons through a
- State may, in the interest of national welfare or notarized “kasulatan” for a consideration of P1,000,
defense, establish & operate vital industries but petitioners continued cultivating the land until
- Implementation of the prog shall be 1987 when Francisco executed another notarized
community-based “kasulatan” thru w/c he surrendered his tenancy
- State shall recognize & enforce the Rs of rural rights for a consideration of P3,000.
women to own & control land  On the same day as the execution of the 1987
- State shall provide incentives to landowners to kasulatan, the lands were sold by the Aragons for
invest the proceeds of the agrarian reform prog P50,000 to respondent Felix Sia, who in turn
to promote industrialization, EENT & converted the same to a residential subd w/o a
privatization of the pub sector enterprises DAR clearance and ejected the petitioners
therefrom.
Added Definition  Peitioners filed a protest before the DAR alleging
that they are the tenants of the lands and claimed
1. Rural women – women who are engaged that they are entitled to a disturbance
directly/indirectly in farming and/or fishing as compensation. They alleged that they were fooled
their source of livelihood, whether paid or into signing over their tenancy rights thru the
unpaid, regular or seasonal, or in food machinations of the Aragons.
preparation, managing the household, caring
for the children, & other similar activities

7
 The respondents in their answer, denied such bank and designated as Acting Asst. VP and OIC
allegation and added that the petitioners are in June of 1998.
barred by estoppel, laches and prescription  Respondent bank is a banking institution
originally known as Royal Savings Bank. In 1983-
Issue 1: WON petitioners are tenants of the land 84, it underwent serious liquidity problems and
was placed under receivership by the Central
Held: A tenant is defined as a person who, himself and Bank, which ordered its closure in July of 1984.
w/ the aid available from w/in his immediate farm After 2 months, the respondent bank was
household, cultivates the land belonging to, or reopened under the control & mgt of
possessed by another, w/ the latter’s consent for Comsavings Bank.
purposes of production, sharing the produce w/ the
 In 1987, the GSIS acquired the interest of the
landholder under the share tenancy system, or respondent bank and took over the control &
paying to the landholder a price certain or
mgt of the bank and renamed it as GSIS Family
ascertainable in produce or in money or both, under Savings Bank.
the leasehold tenancy system
 The designation of the petitioner as OIC &
For a tenancy relationship to exist, all of the ff caretaker was recalled, however his
essential requisites must be present: appointment as Acting Asst VP was retained.
 In line w/ its policy to attain financial stability,
1) the parties are the landowner & the tenant the respondent bank adopted measures, one of
2) the subj matter is agricultural land w/c is an early retirement program.
3) there is consent bet the parties  In april of 2001, petitioner opted to avail
4) the purpose is agricultural production himself of this retirement package, (supposedly
5) there is personal cultivation by the tenant under protest) & received the amt of P1,342M
6) there is sharing of the harvests bet the parties as retirement pay.
 In july 2002, petitioner filed a complaint against
Under the definition, only Francisco possesses the resp bank for constructive dismissal &
th
requisites of a tenant. Petitioners Federico and underpayment of wages, 13 month pay &
Buenaventura are not tenants because consent retirement benefits before the Labor Arbiter.
(#3) by the landowners is lacking. They are He alleged discrimination & unfair treatment,
merely farm helpers of Francisco as part of his and intense pressure on the part of the resp
immediate farm household. There was also no bank forced him to retire at the prime of his life
evidence to show that they gave a share of their
harvest to the Aragons (#6). Issue 1: WON there was constructive dismissal

Issue 2: WON the respondents took advantage of Held: No.

Francisco’s old age & illiteracy and employed
fraudulent schemes in order to deceive him into Constructive dismissal – quitting because continued
signing the Kasulatans EENT is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank & a
Held: As the legal tenant of the lands, Francisco had dimunition in pay. May also mean an act of clear
voluntarily surrendered his tenancy rights when he discrimination, insensibility or disdain by an EER may
knowingly & freely executed the 1987 Kasulatan. become so unbearable on the part of the EE so as to
There was no showing of foul play, because the foreclose any choice on his part except to resign
Kasulatan was in Filipino, a language spoken &
understood by Francisco and was couched in plain Petitioner claims he was discriminated against as new
and clear terms. Such kasulatan was also duly hires were given higher salaries than he was
notarized and are considered as public documents receiving.
executed w/ all the legal formalities which afford it
Discrimination – failure to treat all persons equally when
the legal presumption of regularity and legality abent
no reasonable distinction can be found bet those
full, clear and convincing evidence to the contrary.
favored & those not favored. It must be clearly
Final ruling: Petitioners have no cause of action and the established that (1) there is no reasonable distinction
same has prescribed. for classification that can be obtained bet persons
belonging to the same class, and (2) persons
belonging to the same class have not been treated
alike
 Portuguez v GSIS Family Bank and CA
Petitioner failed to established that he possessed the
Facts: same skills, competencies & expertise as those newly
hired to eliminate the possibility of substantial
 Petitioner was employed by the respondent distinction that may warrant unequal treatment bet
bank as utility clerk in 1971. Since then, he had them.
been promoted repeatedly up to 1998 when he
was temporarily assigned as caretaker of the Petitioner contends that in cases of constructive
dismissal, the burden of proof rests on the EER to

8
 show that the EE was dismissed on a valid & just
cause. But this legal principle presupposes that there
is indeed an involuntary separation from EENT & the RECRUITMENT & PLACEMENT OF WORKERS
facts attendant to such forced separation was clearly
established, w/c the petitioner failed to do. It was Art 13. Definitions
him who availed of the voluntary retirement
Worker – any member of the labor force whether
program. And absent the showing of duress, the
employed or unemployed.
presumption is that it was done by him voluntarily.
Recruitment & placement – any act of canvassing,
While the state promotes the utmost protection of labor
enlisting, contracting, transporting, utilizing, hiring,
against capital, it does not mean that the working
or procuring workers and includes referrals, contract
class is upheld in all labor dispute. The law also
services, promising or advertising for EENT, locally or
recognizes the rights of management.
abroad, whether for profit or not: provided, that any
person or entity w/c, in any manner, offers or
promises for a fee EENT to 2/more persons shall be
PRE-EMPLOYMENT deemed engaged in recruitment & placement

Art 12. It is the policy of the State: Private fee-charging EEnt Agency – any person/ entity
engaged in the recruitment & placement of workers
1. to promote and maintain a state of full for a fee w/c is charged directly/indirectly from the
employment through improved manpower workers or employers or both
training, allocation and utilization;
2. to protect every citizen desiring to work License – a document issued by the DOLE authorizing a
locally/overseas by securing for him the best person/entity to operate a private EENT agency
possible terms and condition of employment;
3. to facilitate a free choice of available Private recruitment entity – any person/assoc engaged
employment by persons seeking work in in the recruitment & placement of workers,
conformity with the national interest; locally/overseas without charging, directly/indirectly
4. to facilitate & regulate the movement of any fee from the workers or employers.
workers in conformity w/ the national interest;
Authority – a document issued by the DOLE authorizing
5. to regulate the employment of aliens, including
a person/assoc to engage in recruitment &
the establishment of a registration and/or work
placement activities as a private recruitment entity
permit system;
6. to strengthen the network of public Seaman – any person employed in a vessel engaged in
employment offices and rationalize the maritime navigation
participation of the private sector in the
recruitment and placement of workers, locally Overseas EENT – EENT of a worker outside the PH
and overseas, to serve national development
objectives; Emigrant – any person, worker or otherwise, who
7. to insure careful selection of Filipino workers emigrates to a foreign country by virtue of an
for overseas employment in order to protect immigrant visa or resident permit to its equivalent in
the good name of the PH abroad. the country of destination

The DOLE Art 14. EMPLOYMENT PROMOTION

- by Administrative Code of 1987 (EO 292) The Sec of Labor shall have the power & authority:
- the primary policy-making, programming,
coordinating and administrative entity of the 1. to organize & establish new EENT offices in
Executive branch of the govt in the field of labor addition to existing EENT offices under the
and employment DOLE as the need arises;
2. to organize & establish a nationwide job
Its Primary responsibilities: clearance & information system to inform
applicants registering w/ a particular EENT
1. The promotion of gainful EENT opportunities office of job opportunities in other parts of the
and the optimization of the devt & utilization of country as well as job opportunities abroad;
the country’s manpower resources; 3. to develop & organize a program that will
2. The advancement of workers’ welfare by facilitate occupational industrial and
providing for just and humane working geographical mobility of labor and provide
conditions and terms of EENT; assistance in the relocation of workers from
3. The maintenance of industrial peace by one area to another; and
promoting harmonious, equitable and stable 4. to require any person, establishment, org, or
EENT, relations that assure protection for the Rs institution to submit such EENT information as
of all concerned parties. may be prescribed by the Sec of Labor.

9
Bureau of Local Employment (BLE) – assigned the of the objectives of the BES, subj to the provisions
effective allocation of manpower resources in local of Sec 40 of PD 1177.

Ph Overseas Employment Administration (POEA) – for  PD 850 – replaced BES w/ BLE, and created
overseas employment POEA
 AO 186 – made licensing of local recruitment
agencies and the issuance of work permits to
non-resident aliens and EENT registration
Art 15. BUREAU OF EMPLOYMENT SERVICES (now BLE)
certificates to resident aliens a function of the
- primarily responsible for developing & regional offices of DOLE
monitoring a comprehensive EENT program.  RA 8795 – required the establishment of a
Public Employment Service Office (PESO) in
Powers & Duties: capital towns, cities and other strategic areas
o PESO - serves as EENT service &
1. To formulate & develop plans & programs to information center
implement the EENT promotion objectives of - Regularly obtains lists of job
this Title; vacancies from EERS,
2. To establish & maintain a registration and/or publicizes them, invites and
licensing system to regulate private sector evaluates applicants, and
participation in the recruitment & placement of refers them for probable
workers, locally & overseas, and to secure the hiring
best possible terms & conditions of EENT for - Provides training and
Filipino contract workers and compliance educational guidance and
therewith under such rules & regulations as EENT counseling services
may be issued by the DOLE; - Also renders special services
3. To formulate & develop EENT programs to the public such as holding
designed to benefit disadvantaged groups & of jobfairs, livelihood and self-
communities; employment bazaars
4. To establish & maintain a registration and/or - Special credit assistance for
work permit system to regulate the EENT of placed overseas workers
aliens; - Special program for EENT of
5. To develop a labor market information system students (SPES) during
in aid of proper manpower and development summer or semestral breaks
planning; - Work appreciation seminars
6. To develop a responsible vocational guidance & & conferences and
testing system in aid of proper human - Hiring of workers in
resources allocation; and infrastructure projects (WHIP)
7. To maintain a central registry of skills, except  Ra 6885 – created WHIP, a program w/c
seamen requires the DPWH and private contractors to
hire 30% of skilled and 50% unskilled labor
requirements from the area where the project
Original & Exclusive Jurisdiction of the regional is being undertaken
offices of DOLE

- over all matters/cases involving EE-EER Art 16. PRIVATE RECRUITMENT:

relations including money claims, arising out of
or by virtue of any law or contracts involving GR: No person/entity other than the public EENT offices,
Filipino workers for overseas EENT  except shall engage in the recruitment & placement of
seamen: Provided, thet the Bureau of workers.
Employment Services (BES) (now BLE) may, in
the case of the NCR, exercise such power, : Exceptions
whenever the DOLE deems it appropriate.
1. Public EEnt offices
The decisions of the regional offices of the BES if so 2. Private recruitment entities
authorized by the Sec of DOLE shall be appealable 3. Private EENT agencies
to the NLRC upon the same grounds provided in Art 4. Shipping or manning agents or representatives
233 hereof. 5. The POEA
6. Construction contractors if authorized to
The decisions of the NLRC shall be final & operate by DOLE and the Construction Industry
unappealable. Authority
7. Members of the diplomatic corps although
Minister of Labor – has the power to impose & collect hirings done by them have to be processed
fees, based on rates recommended by the BES. Such through the POEA
fees shall be deposited in the National Treasury as a 8. Other persons/entities as may be authorized by
special acct of the General Fund, for the promotion the Sec of DOLE

10
 1. Administrative cases involving violations of
licensing rules & regulations and registration of
Art 17. OVERSEAS EMPLOYMENT DEVT BOARD recruitment and EEnt agencies/entities; and
2. Disciplinary action cases and other special cases
POEA – has taken over the functions of the Overseas w/c are administrative in character, involving
Employment Development Board (OEDB) and the employers, principals, contracting partners and
National Seamen Board (NSB) Filipino migrant workers.
OFW – a Filipino worker who is to be engaged, is Jurisdiction of POEA
engaged or has been engaged in a renumenerated
activity in a country of which he/shee is not a legal 1. all cases w/c are administrative in character,
resident involving or arising out of violations of rules &
regulations relating to licensing & registration
2 Classifications of recruitment and employment
agencies/entities; and
1. Land-based – contract workers other than a
2. disciplinary action cases and other special cases
seaman including workers ingaged in offshore
w/c are administrative in character, involving
activities whose occupation requires that
EERS, principals, contracting partners and
majority of his working/gainful hrs are spent on
Filipino migrant workers
land
3. NO jurisdiction to enforce foreign judgment
2. Sea-based – those employed in a vessel
(must be brought before the regular courts).
engaged in maritime navigation
POEA is an administrative (not a court),
Principal Functions of the POEA exercising adjudicatory or quasi-judicial
functions
1. Formulation, implementation and monitoring of 4. NO jurisdiction over torts
overseas employment of Filipino workers;
2. Protection of their rights to fair and equitable Grounds for Disciplinary Action
employment practices;
1. Commission of a felony punishable by Ph laws
3. Deployment of Filipino workers through govt-
or by the laws of the host country;
to-govt hiring
2. Drug addiction/possession or trafficking of
Regulatory Functions prohibited drugs;
3. Desertion or abandonment;
1. Regulate private sector participation in the 4. Drunkenness, esp where the laws of the host
recruitment & overseas placement of workers country prohibit intoxicating drinks;
through its licensing and registration system; 5. Gambling, esp where the laws of the host
2. Formulate & implement, in coordination w/ country prohibits the same;
appropriate entities concerned, when 6. Initiating/joining a strike or work stoppage
necessary, a system for promoting and where thelaws of the host country prohibit
monitoring the overseas EEnt of Filipino strikes or similar actions;
workers taking into consideration their welfare 7. Creating trouble at the worksite or in the
and the domestic manpower requirements; vessel;
3. Inform migrant workers not only of their rights 8. Embezzlement of company funds or of moneys
as workers but also of their rights as human and properties of a fellow worker entrusted for
beings; delivery to kins or relatives in the PH;
4. Instruct and guide the workers how to assert 9. Theft/robbery;
their rights and provide the available 10. Prostitution;
mechanism to redress violation of their rights; 11. Vandalism or destroying company property;
5. In the recruitment & placement of workers to 12. Gunrunning or possession of deadly weapons;
service the requirements for trained and 13. Unjust refusal to depart for the worksite after
competent Filipino workers of foreign govts and all employment and travel documents have
their instrumentalities, and such other been duly approved by the approp govt
employers as public interest may require, agency/ies; and
deploy only to countries: 14. Violation/s of the laws and sacred practices of
a. Where the PH has concluded Bilateral the host country and unjustified breach of govt-
labor agreements or arrangements; approved EENT contract by a worker
b. Observing and/or complying w/ the
international laws and standards of COMPROMISE AGREEMENT
migrant workers;
-consistent w/ the policy encouraging amicable
c. Guaranteeing to protect the rights of
settlement of labor disputes Sec 10 of RA 8042 allows
Filipino migrant workers.
resolution by compromise of cases filed w/ the NLRC
Adjudicatory Functions
- any compromise agreement on money claims inclusive
of damages shall be paid w/in 4 months from the
approval of the settlement

11
 Penalties for Non-compliance of the mandatory In disability compensation, it is not the injury w/c is
period for resolution of cases compensated, but rather it is the incapacity to work
resulting in the impairment of one’s earning capacity
1. The salary of such official who fails to
render his decision/resolution w/in the Disability benefits by seamen – a matter governed not
prescribed pd shall be, or caused to be, only by medical findings but by law & contract
st
withheld until such official complies - shall be paid beginning on the 1 day of such
therewith; disability. If caused by an injury/sickness it shall not
2. Suspension for not more than 90 days; or be paid longer than 120 consec days  except where
3. Dismissal w/ disqualification to hold any such injury/sickness still requires medical attendance
appointive public office for 5 yrs beyond 120 days but not to exceed 240 days from
onset of disability in w/c case benefit for temporary
total disability shall be paid.
EER/EE Relations Cases In case of differing medical assessment
a.) when a seafarer sustains a work-related
 Millares & Lagda v NLRC: SC: seafarers are contractual
illness/injury while on board, his
EES
fitness/unfitness to work shall be determined
Premature Termination of Contract by the company-designated physician.
b.) If the physician appointed by the seafarer
If EE is terminated before end of contract w/o just cause, disagrees w/ the company-designated
rd
EERS will be ordered to pay their salaries physician’s assessment, the opinion of a 3
corresponding to the unexpired portion of their EENT doctor may be agreed jointly bet the EER and
contract the seafarer to be the decision final and binding
on them
Pretermination Under RA 8042

A worker dismissed from overseas EENT w/o just cause Agencies Given the Duty to promote the welfare & rights
as defined by law/contract is entitled to “full of migrant workers:
reimbursement of his placement fee w/ interest at 1. DFA
12% per annum, plus the salary for the unexpired 2. DOLE
portion of their EENT contract. 3. POEA
4. OWWA – Overseas Workers Welfare
Due Process required to terminate employment
Administration – provides social & welfare
Ex: in case of seamen – must be given written notice of
services including insurance coverage, legal
the charges against him, and afforded a formal
assistance, placement assistance and
investigation where he can defend himself or thru a
remittance services to Filipino overseas workers.
representative before he can be dismissed &
Under RA8042, it shall provide the Filipino
disembarked. The EER is required to furnish him w/ 2
migrant worker & his faily assistance in the
notices: (1) written notice of charge; and (2) written
enforcement of contractual obligs by agencies,
notice of dismissal
entities and/or their principals;
Contracted but not Deployed: Perfected Contract 5. RPM - Re-Placement and Monitoring Center –
develops livelihood programs for the returning
Death benefits of Seafarers workers to reintegrate the returning migrant
- entitled to death and other benefits under w/c workers to the Ph society;
ever is higher (foreign law or Ph law) 6. NLRC – tasked w/ the settlement/adjudication
- entitled to death benefits if death occurs during of labor disputes
the term of his contract of employment, even if
death is not work-related  death is caused by
their own doing
Art 18: BAN ON DIRECT HIRING
GR: Direct hiring of Filipino workers for overseas EENT is
Disability – loss or impairment of a physical or mental
not allowed
function resulting from injury/sickness
 Exceptions:
Permanent disability – the inability of a worker to 1. Members of Diplomatic corps;
perform his job for more than 120 days, regardless of 2. International organizations;
WON he loses the use of any part of his body 3. Other employers as may be allowed by DOLE;
and
Total Disability – disablement of an EE to earn wages in 4. Name hires – individual workers who are able
the same kind of work of similar nature that he was to secure contracts for overseas EENT on their
trained for or accustomed to perform, or any kind of own efforts and representations w/o
work w/c a person of his mentality and attainments assistance/participation of any agency. Their
could do. It does not mean absolute helplessness. hiring nonetheless, shall pass through the POEA
for processing purposes

12
Rationale of the Prohibition 2. Private recruitment agencies;
1. To assure the best possible terms & conditions 3. Shipping or manning agencies;
of work to the EE; and 4. Such other persons as may be authorized by the
2. To assure the foreign EER that he hires only Sec of DOLE; and
qualified Filipino workers 5. Construction contractors w/ a duly issued
authority to operate private recruitment
Art 19: COMMISSION ON FILIPINO OVERSEAS entities
CFO – attached to the DFA; replaced the Office of
Emigrant Affairs. Qualifications for Participation
- assists in the formulation of policies affecting 1. Citizenship requirement
Filipinos overseas and formulates an integrated a. Filipino citizens; or
program that promotes the welfare of Filipinos b. Corporations, partnerships or entities
overseas at least 75% of the authorized and
voting capital stock of w/c is owned &
Art 21. FOREIGN SERVICE ROLE AND PARTICIPATION controlled by Filipino citizens.
- necessary to monitor the status of OFWs in 2. Capitalization
their respective areas of assignment and insure a. Private EENT agency for local EENT
that they are not exploited or abused by their i. For single proprietorship or
foreign principal EERS partnership – minimum net
worth of 200k pesos
Art 22. MANDATORY REMITTANE OF FOREIGN ii. For corporations – a minimum
EXCHANGE EARNINGS paid up capital of 5ook pesos
- All OFWs are required to remit a portion of their b. Private recruitment or manning agency
foreign exchange earnings ranging from 50% - 80% for overseas EENT
depending on the worker’s kind of job, to their i. For single proprietorship or
families, dependents, and/or beneficiaries. partnership – P2M minimum
Seamen/Mariners – 80% capital
Workers for Filipino Contractors & Construction ii. For corps – P2M minimum
companies – 70% paid up capital, Provided, that
Professionals whose EENT contract provide for lodging those w/ existing licenses
facilities – 70% shall, w/in 4 yrs from
Professionals w/o Board & Lodging – 50% effectivity hereof, increase
Domestic and other service workers – 50% their capitalization or paid-up
capital, as the case may be, to
 Exceptions to Mandatory Remittance P2M at the rate of 250K every
1. Fil servicemen working in US military yr.
installations; 3. Those not otherwise disqualified by law or
2. Where the worker’s immediate family members, other govt regulations to engage in the
dependents, or beneficiaries are residing w/ recruitment & placement of workers for
him abroad; overseas EENT
3. Immigrants and Fil professionals and EEs
working w/ UN agencies or specialized bodies Disqualified from Recruitment & Placement of Workers
Effects of Failure to Remit for Overseas EEnt whether for profit or not
1. Workers who fail to comply w/ the mandatory 1. Travel agencies & sales agencies of airline
remittance reqment shall be companies;
suspended/excluded from the list of eligible 2. Officers/members of the board of any corp or
workers for overseas EENT. Subsequent members in a partnership engaged in the
violations shall warrant his repatriation. business of a travel agency;
2. EERS who fail to comply shall be excluded from 3. Corps & partnerships, when any of its officers,
the overseas EENT program. Private EENT members of the board or partners, is also an
agencies/entities shall face cancellation or officer, member of the board or partner of a
revocation of their licenses or authority to corp or partnership engaged in the business of
recruit, w/o prejudice to other liabilities under a travel agency (interlocking officers)
existing laws and regulations 4. Persons, partnerships or corps which have
derogatory records, such as but not limited to:
a. Those certified to have derogatory
CH 2: REGULATION OF RECRUITMENT & PLACEMENT record/info by the NBI or by the Anti-
ACTIVITIES illegal Recruitment Branch of the
POEA;
Art 25: PRIVATE SECTOR PARTICIPATION IN THE b. Those against whom probable cause or
RECRUITMENT & PLACEMENT OF WORKERS prima facie finding of guilt for illegal
recruitment or other related cases
Private Sectors that can participate exists;
1. Private EENT agencies;

13
 c. Those convicted of cases and/or  The applicant can be charged w/ fees only after
crimes involving moral turpitude; he has obtained EENT or has actually
d. Those agencies whose licenses have commenced EENT
been previously cancelled or revoked  Fees paid shall always be covered w/ the
by POEA for violation of RA 8042, PD approp receipt clearly showing the amount paid.
442 as amended and their IRR as well POEA has the power to:
as the Labor Code’s IRR 1. Suspend/cancel the license; and
e. Officials/EES of the DOLE or other govt 2. Order the refund/reimbursement of such
agencies directly involved in overseas illegally collected fees
EENT program and their relatives w/in
th
the 4 degree of consanguinity or Prohibition on Charging Fees
affinity; and 1. Placement fees cannot be collected from a
f. Those whose License have been hired worker until he has signed the EENT
previously cancelled o revoked contract & shall be covered by receipts clearly
showing the amt paid
Art 29: NON-TRANSFERABILITY OF LICENSE AUTHORITY 2. Manning agencies shall not charge any fee from
1. It may be used only b the one in whose favor it seafarer-applicants for its recruitment &
was issued; hence, it cannot be assigned, placement services. All expenses for hiring
conveyed or transferred to any other seamen shall be shouldered by foreign shipping
person/entity. principals.
2. It must be used only in the place stated in the 3. No other fees/charges, including processing
license. Thus, could only undertake recruitment fees shall be imposed against any worker.
& placement activities in the region where the
license was granted. Art 34 & Section 6 RA 8042: PROHIBITED PRACTICES:
3. The recruitment & placement activities must be It shall be unlawful for any indiv, entity, licensee or
undertaken at their authorized official holder of authority:
addresses. 1. To charge greater amt than that specified in the
4. Provincial recruitment and/or job fairs may be schedule of allowable fees (illegal exaction);
allowed only when authorized by POEA in 2. To furnish any false info in relation to
writing. recruitment/EENT (false information);
3. To give any false notice, testimony, etc. or
* Change of ownership of single proprietorship licensed commit any act of misrepresentation to secure
to engage in overseas EENT shall cause the automatic a license or authority (false statements);
revocation of the license. 4. To induce or attempt to induce a worker to quit
his job in lieu of another offer unless it is
Art 30: BONDS designed to liberate the worker from
The Sec of Labor shall promulgate a schedule of fees for oppressive terms of EENT (pirating);
the registration of all applicants for license or 5. To influence of attempt to influence any
authority. person/entity no to employ any worker who
has not applied for EENT through his agency
Art 31. BONDS (influencing not to employ);
All applicants for license/authority shall post such cash 6. To engage in the recruitment/placement of jobs
and surety bonds as determined by the Sec of Labor harmful to public health, morality or to the
including escrow deposits. dignity of the PH (harmful jobs);
Purposes: 7. To obstruct or attempt to obstruct inspection
1. To guarantee compliance w/ prescribed by the Labor Sec or his authorized reps
recruitment procedures, rules & regulations, (obstruct inspection);
and terms & conditions of EENT; and 8. To fail to file reports on the status of EENT,
2. To ensure prompt & effective recourse against placement, etc. and such other matters as may
such companies when held liable for be required by the Sec of Labor (failure to
applicants/workers’ claim comply w/ rules & regulations);
Exemption from Garnishment 9. To substitute or alter EENT contracts w/o the
 Cash bond filed by applicants for approval of the Sec of Labor (alteration of
license/authority is not subj to garnishment by contracts);
a judgment creditor of the agency. 10. To become an officer or member of the board
 Should the bond/deposit in escrow or any part of any corp engaged in the mgt of a travel
thereof be garnished, the same should be agency; and
replenished by the agency w/in 15 days from 11. To withhold travel docs from applicant workers
notice from the POEA. Failure to replenish the before departure for unauthorized monetary
same w/in the said pd shall cause the considerations (withholding documents).
suspension of the license
Note: POEA has the power to enforce liability under cash
& surety bonds.
Art 32: FEES TO BE PAID BY WORKERS

14
Art 35: SUSPENSION AND/OR CANCELLATION OF
LICENSE OR AUTHORITY Suability of Foreign Corps
 A foreign corp that, thru unlicensed agents,
Non License or Non-Holder of Authority – any recruits workers in the country may be suid in
person/corp/entity w/c has not been issued a valid and found liable by Ph courts
license or authority to engage in recruitment &
placement by the Sec of Labor, or whose license or
authority has been suspended, revoked or cancelled CH 3: MISCELLANEOUS PROVISIONS (as amended by RA
by the POEA and the Secretary. 8042)
Illegal Recruitment – any act of (CETCHUP) canvassing,
Grounds for Revocation of License enlisting, transporting, contracting, utilizing, or
1. Incurring an accumulated 3 counts of procuring workers and includes (CRAP) contract
suspension by an agency based on final and services, referrals, or advertising, promising for
executor orders w/in the validity period of its employment abroad, whether for profit or not, when
license; undertaken by a non-licensee or non-holder of
2. Violation/s of the conditions of license; authority; Provided that any such non-licensee or
3. Engaging in acts of misrepresentation for the non-holder of authority who in any manner, offers or
purpose of securing a license or renewal promises for a fee employment abroad to 2 or more
thereof; and persons shall be deemed so engaged. Also includes
4. Engaging in the recruitment or placement of the act of reprocessing workers through a job order
workers to jobs harmful to the public health or that pertains to nonexistent work, work different
morality or to the dignity of the RP from the actual overseas work, or work w/ a
different EER whether registered or not w/ the POEA
Grounds for Suspension/Cancellation of License  It shall likewise include the commission of the ff
1. The acts prohibited under Art 34; prohibited acts whether committed by a non-
2. Charging a fee before the worker is employed licensee or non-holder of authority or a licensee
or in excess of the authorized amt; or a holder of authority:
3. Doing recruitment in places outside its 1. Those prohibited practices under
authorized area; Art 34;
4. Deploying workers w/o processing through the 2. Failure to actually deploy w/o
POEA; and valid reason as determined by
5. Publishing job announcements w/o POEA’s DOLE;
prior approval 3. Failure to reimburse expenses
incurred by the worker in
Jurisdiction connection w/ his documentation
The DOLE Sec and the POEA Admin have concurrent & processing for purposes of
jurisdiction to suspend or cancel a license deployment, in cases where the
deployment does not actually take
Liability of Recruitment Agency place w/o the worker’s fault; and
 Solidarily liable w/ the foreign principal for 4. Recruitment & placement
unpaid salaries of a worker it recruited. Before activities of agents or
recruiting, the agency is required to submit a representatives appointed by a
doc containing its power to sue and be sued licensee, whose appointments
jointly and solidarily w/ the principal or foreign- were not previously authorized by
based employer for any of the violations of the the POEA shall likewise constitute
recruitment agreement, and the contracts of illegal recruitment.
employment
Note: The recruitment agency may still be sued Elements of Illegal Recruitment
even if agency agreement bet recruitment 1. The offender is a licensee/non-licensee or
agency & principal is already severed if no notice holder/non-holder of authority engaged in the
of the termination was given to the EE recruitment & placement of workers; and
2. The offender undertakes either any recruitment
Exception to Liability of Recruitment agency activities devided under Art 13 (b) or any
 When workers themselves insisted for the prohibited practices in Art 34
recruitment agency to send them back to their
foreign EER despite their knowledge of its Simple Illegal Recruitment – Where a person:
inability to pay their wages 1. undertakes any recruitment activity defined
under Art 13(b) or any prohibited practice
Contract by Prncipal enumerated under Arts 34 & 38 of the LC; and
 Even if it was the principal of the manning 2. does not have a license or authority to lawfully
agency who entered into contract w/ the EE, engage in the recruitment & placement of any
the manning agent in the PH is jointly & workers.
solidarily liable w/ the principal

15
 rd
Illegal Recruitment in Large Scale – further requires a 3 Liability of Company Engaged in Illegal Recruitment –
element: may be held as principal, together his EER, if it is
3. The offense is committed against 3/more shown that he actively & consciously participated in
persons, individually or as a group illegal recruitment
Issuance of search warrant/warrant of arrest
 Art 38 is unconstitutional inasmuch as it gives
the Sec of Labor the power to issue search or
Illegal Recruitment as Economic Sabotage: arrest warrants
1. When illegal recruitment is committed by a  The  exception is in cases of deportation
syndicate (when 3/more persons conspire or whom the President or the Commissioner of
confederate w/ one another in carrying out an Immigration may order arrested, following a
unlawful or illegal transaction, enterprise or final roder of deportation
scheme); Note: the Sec of Labor may order closure of illegal
2. When illegal recruitment is committed in a recruitment establishments because it is only
large scale (if committed against 3/more administrative & regulatory in nature
persons individually or as a group
TITLE 2: EMPLOYMENT OF NON-RESIDENT ALIENS
Consequences of Conviction Alien Employment Permit (AEP) – required for entry into
1. Automatic revocation of license/authority; the country for employment purposes and is issued
2. Forfeiture of the cash & surety bonds; after determination of the non-availability of a
3. Conviction for the crime of estafa, if found person in the pH who is competent, able and willing
guilty thereof at the time of application to perform the services for
w/c the alien is desired
Illegal Recruitment vs Estafa  All foreign nationals who intend to engage in
 Illegal recruitment is malum prohibitum, gainful EENT in the PH shall apply for AEP
 whereas estafa is malum in se (criminal intent
necessary for conviction) Employment Permit Required
 a person may be charged & convicted for both 1. all foreign nationals seeking admission to the
PH for the purpose of EENT;
Acts Constituting Estafa 2. all non-resident foreign nationals already
- the accused represented themselves to complainants working in the PH;
to have the capacity to send workers abroad 3. non-resident foreign nationals admitted to the
although they did not have any authority or license, PH on non-working visas and who wish to seek
enabling them to obtain placement fee EENT; and
4. missionaries or religious workers who intend to
Venue of criminal action arising from Illegal Recruitment engage in gainful EENT.
The complainant may, at his option file at the RTC of the Note: AEP should be secured regardless of the
province/city: source of compensation and duration of the
a.) where the offense was committed; or EENT, whether the EENT is part-time or temp
b.) where the offended party resides at the time of
the commission of the offense An AEP is issued based on the ff:
1. Compliance by the applicant EER or the foreign
Prescriptive Period Imprisonment Fine national w/ the substantive & documentary
Simple 5 yrs 12-20 yrs P1-2M
requirements;
Economic Sabotage 20 yrs Life P2-5M
2. Determination of DOLE Sec that there is no
Note: Max penalty if the person illegally recruited is less available Filipino national who is competent,
than 18 y/o or committed by a non-licensee or non- able and willing to do the job for the EER; and
holder of authority 3. Assessment of the DOLE Sec that the EENT of
the foreign national will redound to national
Absence of receipts evidencing payment, not fatal to benefit
prosecution’s case for illegal recruitment – as long as Note: Understudy Training Program is no longer a
the witnesses can positively show through their requirement in the issuance of AEP and the EEr
respective testimonies that the accused is the one has now the option to implement transfer of
involved in prohibited recruitment technology

Liability of Local EEnt agency – solidarily liable w/ the Requisite for EENT of Resident Aliens:
foreigh principal for unpaid salaries of a worker  Immigrants & resident aliens are not required
recruited. Before recruiting, the agency is required to to secure a working permit. They are required
submit a doc containing its power to sue and be sued to secure their Alien Employment Registration
jointly and solidarily w/ the principal or foreign- Cert (AERC)
based EER for any of the violations of the Exemption from Permit
recruitment agreement and the contracts of EEnt 1. All members of the Diplomatic service and
foreign govt officials accredited by and w/
reciprocity arrangement w/ the Ph govt;

16
 2. Officers and staff of international orgs of w/c or assocs whose capital should be at least 60% Fil-
the PH is a member, and their legitimate owned
spouses desiring to work in the PH;  Exceptions:
3. Foreign nationals elected as members of 1. Where the Sec of Justice specifically authorizes
Governing Board who do not occupy any other the EEnt of technical personnel;
position, but have only voting rights in the corp; 2. Aliens who are members of the Board of
4. All foreign nationals granted exemption by law; directors of corps in proportion to their
5. Owners & representatives of foreign nationals allowable participation in the capital of such
whose companies are accredited by the POEA entities; and
who come to the PH for a limited period and 3. Enterprises registered under the Omnibus
solely for the purpose of interviewing Filipino Investment Code in case of technical,
applicants for EENT abroad; supervisory or advisory positions, but for a
6. Foreign nationals who come to the PH to teach, limited pd.
present and/or conduct research studies in
univs and colleges as visiting, exchange or Art 41. PROHIBITION AGAINST TRANSFER OF EENT
adjunct professors under formal agreements 1. Aliens shall not transfer to another job or
bet the univs or colleges in the PH an foreign change his EER w/o prior approval of the Sec of
univs or colleges; or bet the Ph govt and foreign Labor;
govt; provided that the exemption is on a 2. Non-resident aliens shall not take up EENT in
reciprocal basis; and violation of the provisions of the Code.
7. Resident foreign nationals. Note: Violations of the abovementioned acts will
subj the alien to the punishment in Art 289 &
Grounds for denial of Application of AEP 290 and to deportation after service of sentence
1. Misrepresentation of facts in the application;
2. Submission of falsified docs; BOOK 2: HUMAN RESOURCES
3. The foreign national has a derogatory record; or TITLE 1: NATIONAL MANPOWER DEVT PROGRAM
4. Availability of a Fil who is competent, able and CH 1: NATIONAL POLICIES & ADMINISTRATIVE
willing to the job intended for the alien. MACHINERY FOR THEIR IMPLEMENTATION

Grounds for suspension of AEP Art 43-56 TECHNICAL EDUCATION AND SKILLS DEVT
1. The continued stay of the foreign national my AUTHORITY (TESDA)
result in damage to the interest of the industry - replaced the National Manpower & Youth Council
of the country; and under RA 7796
2. the EENT of the alien is suspended by the EER
or by the order of the court Statement of Goals & Objectives
1. To attain international competitiveness;
Grounds for revocation of AEP 2. To meet demands for quality middle-level
1. Non-compliance w/ any of the manpower;
requirement/conditions for w/c the AEP was 3. To disseminate scientific & technical knowledge
issued; base;
2. Misrepresentation of facts in the application; 4. To recognize & encourage the complementary
3. Submission of falsified docs; roles of pub & private institutions; and
4. Meritorious objection or information against 5. To inculcate desirable values.
the EENT of foreign national as determined by
the Regional Dir; Middle-level Manpower
5. Foreign national has a derogatory record; and 1. Those who have acquired practical skills &
6. EER has terminated the EENT of the foreign knowledge through formal or non-formal educ
national. & training equivalent to at least a secondary
educ but preferably a post-secondary educ w/ a
Validity of EENT Permit corresponding degree/diploma; or
 1 yr, unless the EENT contract, consultancy 2. Skilled workers who have become highly
services or other modes of engagement competent in their trade or craft as attested by
provides otherwise, w/c shall in no case exceed industry.
5yrs
 fine for working w/o or with an expired AEP TITLE 2: TRAINING & EMPLOYMENT OF SPECIAL
P10K for every year or a fraction thereof. WORKERS
CH1: TYPES OF SPECIAL WORKERS
Rule on Nationalized Business 1. Apprentice
GR: Foreigners may NOT be employed in certain 2. Learner
nationalized business. 3. Handicapped
Anti-Dummy Law 2-A prohibits the EENT of aliens in
entities engaged in business whose exercise or Art 57 STATEMENT OF OBJECTIVES FOR THE TRAINING &
enjoyment is reserved only to Fils or to corporations EENT OF SPECIAL WORKERS

17
 1. To help meet the demand of the economy for 4. Apprenticeship program must be approved by
trained manpower; the TESDA; otherwise the apprentice shall be
2. To establish a national apprenticeship program; deemed a regular EE;
and 5. Period of apprenticeship shall not exceed 6
3. To establish apprenticeship standards for the months
protection of apprentices. Note: at the termination of the apprenticeship, the
EER is not required to continue the EENT
Art 58: DEFINITION OF TERMS
There is no valid apprenticeship if:
Apprenticeship – practical training on the job 1. The agreemt submitted to the TESDA was made
supplemented by related theoretical instruction, for long after the workers started undergoing
a highly skilled or technical instruction for a period of apprenticeship;
3-6 months 2. The work performed by the apprenticeship was
Apprentice – a person undergoing training for an different from those allegedly approved by
approved apprenticeable occupation during an TESDA;
established period assured by an apprenticeship 3. The workers undergoing apprenticeship are
agreemt already skilled workers;
Apprenticeable Occupation – an occupation officially 4. The workers were required to continue
endorsed by a tripartite body and approved for undergoing apprenticeship beyond 6mos.
apprenticeship by the TESDA (no longer the Sec of
Labor) Art 61: CONTENTS OF APPRENTICESHIP AGREEMENT
Apprenticeship Agreement – an EENT contract wherein 1. Full name & address of the contracting parties;
the EER binds himself to train the apprentice and the 2. Date of birth of the apprentice;
apprentice in turn accepts the terms of training 3. Name of trade, occupation or job in w/c the
On-the-job training – practical work experience through apprentice shall be trained and the dates on
actual participation in productive activities given to w/c such training will begin and will proximately
or acquired by an apprentice end;
Highly technical industries – a trade, business, enterprise, 4. Approp number of hrs of OJT w/ compulsory
industry or other activity, w/c is engaged in the theoretical instruction w/c the apprentice shall
application of advanced technology undergo during his training;
5. Schedule of the work processes of the
Art 59: QUALIFICATIONS OF APPRENTICES trade/occupation in w/c the apprentice shall be
1. At least 15 y/o, provided that if below 18 y/o, trained and the approx. time to be spent on the
he shall not be eligible for hazardous job in each process;
occupation; 6. Graduated scale of wages to be paid to the
2. Physically fit for the occupation in w/c he apprentice;
desires to be trained; 7. Probationary pd of the apprentice during wc
3. Possess vocational aptitude and capacity for the either party ay summarily terminate their
particular occupation as established through agreemt; and
appropriate tests; and 8. A clause that if the EER is unable to fulfill his
4. Possess the ability to comprehend and follow training oblig, he may transfer the agreemt, w/
oral & written instructions. the consent of the apprentice to any other EER
Note: Total physical fitness is not required of the who is willing to assume such oblig.
apprentice-applicant unless it is essential to the
expeditious and effective learning of the Working Hrs – shall not exceed the max number of hrs
occupation. Only physical defects w/c constitute prescribed by law, if any, for a worker of his age and
real impediments to effective perf as sex. Time spent in compulsorily theoretical
determined by the plant apprenticeship instruction shall be considered hrs of work. An
committee may dispqualify an applicant apprentice not otherwise barred by law from
working 8hrs may be requisted by his EER to work
Art 60: EMPLOYMENT OF APPRENTICES overtime and paid accordingly.
Qualifications to be met by EER:
1. Only EERS in highly technical industries may Art 62: SIGNING OF APPRENTICESHIP AGREEMENT
employ apprentices; and Who signs:
2. Only in apprenticeable occupations as 1. The apprentice, if of age, otherwise, by his
determined by the TESDA. parent or guardian, or in the latter’s absence,
Requisites for a Valid apprenticeship by an authorized rep of TESDA; and
1. Qualifications of apprentice are met; 2. EER or his duly authorized rep
2. Apprentice earns not less than 75% of the
prescribed minimum salary; Art 63: VENUE OF APPRENTICESHIP PROGRAM
3. Apprenticeship agreemt duly executed & 1. Within the sponsoring firm, establishment or
signed; entity; or
2. Within a DOLE training center or other public
training institutions; or

18
 3. Initial training in trade fundamentals in a  The decision of an authorized agency of the
training center or other institutions w/ DOLE may be appealed to the Sec of Labor w/in
subsequent actual work participation w/in the 5 days form rcpt of the adverse decision.
sponsoring firm or entity during the final stage  The decision of the Sec of Labor shall be final &
of training. executor.

Art 64: SPONSORING OF APPRENTICESHIP PROGRAMS Art 67 Exhaustion of Administrative Remedies

BY: 1. The exhaustion of administrative remedies is a
1. The plant, shop or premises of the EER or firm condition precedent to the institution of action.
concerned if the apprenticeship program is 2. The plant apprenticeship committee shall have
organized by an indiv EER or firm; initial responsibility for settling differences
2. The premises of one or several firms designated arising out of apprenticeship agreements.
for the purpose by the organizer of the program
if such organizer is an assoc of EERS, civic group Art 68: APTITUDE TESTS
and the like; and
3. DOLE Training Center or other public training
institutions w/ w/c the TESDA has made approp ANTONIO M. SERRANO VS. GALLANT MARITIME
arrangements. SERVICES, INC.

Art 65-67: VIOLATION OF APPRENTICESHIP AGREEMENT

FACTS:
Art 65: Investigation of violation of apprenticeship
agreement
Petitioner Antonio Serrano was hired by respondents
1. Either party to an agreemt may terminate the
Gallant Maritime Services, Inc. and Marlow Navigation
same after the probationary pd only for a valid
Co., Inc., under a POEA-approved contract of
cause.
employment for 12 months, as Chief Officer, with the
2. Action may be initiated upon complaint of any
basic monthly salary of US$1,400, plus $700/month
interested person or upon DOLE’s own initiative.
overtime pay, and 7 days paid vacation leave per month.

On the date of his departure, Serrano was constrained

Valid Cause to terminate agreement to accept a downgraded employment contract upon the
1. By the EER: assurance and representation of respondents that he
a. Habitual absenteeism in OJT and would be Chief Officer by the end of April 1998.
related theoretical instructions;
b. Willful disobedience of company rules
or insubordination to lawful order of a Respondents did not deliver on their promise to make
superior; Serrano Chief Officer.
c. Poor physical condition, permanent
disability or prolonged illness w/c
incapacitates the apprentice from Hence, Serrano refused to stay on as second Officer and
working; was repatriated to the Philippines, serving only two
d. Theft or malicious destruction of months and 7 days, leaving an unexpired portion of nine
company property and/or equipment months and twenty-three days.
e. Poor efficiency or perf on the job or in
the classroom for a prolonged period Upon complaint filed by Serrano before the Labor
despite warnings duly given to the
Arbiter (LA), the dismissal was declared illegal.
apprentice; and
f. Engaging in violence or other forms of
gross misconduct inside the EER’s On appeal, the NLRC modified the LA decision based on
premises the provision of RA 8042.
2. By the apprentice:
a. Substandard or deleterious working
conditions w/in the EER’s premises; Serrano filed a Motion for Partial Reconsideration, but
b. Repeated violations by the EER of the this time he questioned the constitutionality of the last
terms of the apprenticeship agreemt; clause in the 5th paragraph of Section 10 of RA 8042.
c. Cruel or inhumane treatment by the
EER or his subordinates;
ISSUES:
d. Personal problem s/c in the opinion of
the apprentice shall prevent him from
a satisfactory perf of his job; and 1. Whether or not the subject clause violates Section 10,
e. Bad health or continuing illness. Article III of the Constitution on non-impairment of
contracts;
Art 66: Appeal

19
2. Whether or not the subject clause violate Section 1, The subject clause “or for three months for every year of
Article III of the Constitution, and Section 18, Article II the unexpired term, whichever is less” in the 5th
and Section 3, Article XIII on labor as a protected sector. paragraph of Section 10 of Republic Act No. 8042 is
DECLARED UNCONSTITUTIONAL.

HELD: People of the Philippines (petitioner) v Jamilosa

(repondent)
GR No. 169076 January 23, 2007
On the first issue. Callejo, Sr.,:

The answer is in the negative. Petitioner’s claim that the FACTS:

subject clause unduly interferes with the stipulations in Sometime in the months of January to February,
his contract on the term of his employment and the 1996, representing to have the capacity, authority or
fixed salary package he will receive is not tenable. license to contract, enlist and deploy or transport
workers for overseas employment, did then and there,
willfully, unlawfully and criminally recruit, contract and
The subject clause may not be declared unconstitutional promise to deploy, for a fee the herein complainants,
on the ground that it impinges on the impairment clause, namely, Imelda D. Bamba, Geraldine M. Lagman and
for the law was enacted in the exercise of the police Alma E. Singh, for work or employment in Los Angeles,
power of the State to regulate a business, profession or California, U.S.A. in Nursing Home and Care Center.
calling, particularly the recruitment and deployment of Prosecution presented three witnesses, namely
OFWs, with the noble end in view of ensuring respect for Imelda Bamba, Geraldine Lagman and Alma Singh.
the dignity and well-being of OFWs wherever they may According to Bamba, she met the appellant on a
be employed. bus. She was on her way to SM North Edsa where she
was a company nurse. Appellant introduced himself as a
recruiter of workers for employment abroad. Appellant
On the second issue. told her he could help her get employed as nurse.
Appellant gave his pager number and instructed her to
contact him is she’s interested. Sometime in January
The answer is in the affirmative.
1996, appellant fetched her at her office, went to her
house and gave him the necessary documents and
To Filipino workers, the rights guaranteed under the handed to appellant the amount of US$300.00 and the
foregoing constitutional provisions translate to latter showed her a photocopy of her supposed US visa.
economic security and parity. However, the appellant did not issue a receipt for the
said money. Thereafter, appellant told her to resign
from her work because she was booked with Northwest
Upon cursory reading, the subject clause appears facially Airlines and to leave for USA on Feb, 1996. On the
neutral, for it applies to all OFWs. However, a closer scheduled departure, appellant failed to show up.
examination reveals that the subject clause has a Instead, called and informed her that he failed to give
discriminatory intent against, and an invidious impact on, the passport and US visa because she had to go to
OFWs at two levels: province because his wife died. Trying to contact him to
the supposed residence and hotel where he temporarily
resided, but to no avail.
First, OFWs with employment contracts of less than one Winess Lagman testified that she is a registered
year vis-à-vis OFWs with employment contracts of one nurse. In January 1996, she went to SM North Edsa to
year or more; visit her cousin Bamba. At that time Bamba informed her
that she was going to meet to appellant. Bamba invited
Second, among OFWs with employment contracts of Lagman to go with her. The appellant convinced them of
more than one year; and his ability to send them abroad. On their next meeting,
Lagman handed to the latter the necessary documents
and an amount of US$300.00 and 2 bottles of black label
Third, OFWs vis-à-vis local workers with fixed-period without any receipt issued by the appellant. Four days
employment; after their meeting, a telephone company called her
because her number was appearing in appellants cell
phone documents. The caller is trying to locate him as
The subject clause singles out one classification of OFWs he was a swindler. She became suspicious and told
and burdens it with a peculiar disadvantage. Bamba about the matter. One week before her
scheduled flight, appellant told her he could not meet
them because his mother passed away.
Thus, the subject clause in the 5th paragraph of Section
Lastly, Alma Singh, who is also a registered
10 of R.A. No. 8042 is violative of the right of petitioner
nurse, declared that she first met the appellant at SM
and other OFWs to equal protection.
North Edsa when Imelda Bamba introduced the latter to
her. Appellant told her that he is an undercover agent of
FBI and he could fix her US visa. On their next meeting,
she gave all the pertinent documents. Thereafter, she

20
gave P10,000 to the appellant covering half price of her absence of money or other valuables given as
plane ticket. They paged the appellant through his consideration for the "services" of appellant, the
beeper to set up another appointment but the appellant latter is considered as being engaged in recruitment
avoided them as he had many things to do. activities. It
The accused Jamilosa testified on direct can be gleaned from the language of Article 13(b) of
examination that he never told Bamba that he could get the Labor Code that the act of recruitment may be
her a job in USA, the truth being that she wanted to for profit or not. It is sufficient that the accused
leave SM as company nurse because she was having a promises or offers for a fee employment to warrant
problem thereat. Bamba called him several times, conviction for illegal recruit
seeking advices from him. He started courting Bamba CONDITIONS OF EMPLOYMENT
and went out dating until latter became his girlfriend. He WORKING CONDITIONS & REST PERIODS
met Lagman and Singh thru Bamba. As complainants
seeking advice on how to apply for jobs abroad, lest he Art 82. COVERAGE
be charged as a recruiter, he made Bamba, Lagman and a. ALL employees in all establishments &
Singh sign separate certifications, all to effect that he undertakings whether for profit or not
never recruited them and no money was involved. b. Such standards apply only if there
Bamba filed an illegal recruitment case against him exists EER-EE relationship
because they quarreled and separated.  EXCEPTIONS on Conditions of EEnt
RTC rendered judgment finding accused guilty i. Government employees 
beyond reasonable doubt of illegal recruitment in large EES of govt agencies & govt
scale. corps
ISSUE: Illegal Recruitment in a large scale? ii. Managerial employees –
HELD: “Recruitment and placement" refers to any act of those whose primary duty
canvassing, enlisting, contracting, transporting, utilizing, consists of the mgt of the
hiring, or procuring workers, and includes referrals, establishment in w/c they
contract services, promising or advertising for are employed or of a
employment, locally or abroad, whether for profit or not. dept/subd thereof, and to
Provided, That any person or entity which, in any other officers/members of
manner, offers or promises for a fee employment to two the managerial staff
or more persons shall be deemed engaged in - under the direct supervision of the EER, and
recruitment and placement. assist in the planning, organizing, staffing,
Illegal recruitment shall mean any act of directing controlling, communicating and in
canvassing, enlisting, contracting, transporting, utilizing, making decisions in attaining the company’s set
hiring, or procuring workers and includes referring, goals & objectives
contract services, promising or advertising for a. Includes
employment abroad, whether for profit or not, when supervisiors (only
undertaken by a non-licensee or non-holder of authority. as regards Art 82)
Provided, That any such non-licensee or non-holder who, – likewise
in any manner, offers or promises for a fee employment responsible for the
abroad to two or more persons shall be deemed so effective &
engaged. efficient operation
To prove illegal recruitment in large scale, the of their respective
prosecution is burdened to prove three (3) essential depts
elements, to wit: (1) the person charged undertook a iii. Field personnel – non-
recruitment activity under Article 13(b) or any agricultural employees who
prohibited practice under Article 34 of the Labor Code; regularly perform their
(2) accused did not have the license or the authority to duties away from the
lawfully engage in the recruitment and placement of principal place of business
workers; and (3) accused committed the same against or branch office of the
three or more persons individually or as a group. As employer and whose actual
gleaned from the collective testimonies of the hours of work in the field
complaining witnesses which the trial court and the cannot be determined w/
appellate court found to be credible and deserving of full reasonable certainty
probative weight, the prosecution mustered the c. those whose performance of their
requisite quantum of evidence to prove the guilt of job/service is not supervised by the ER or his
accused beyond reasonable doubt for the crime charged. rep, the workplace being away from the
Indeed, the findings of the trial court, affirmed on principal office and whose hours & days of
appeal by the CA, are conclusive on this Court absent work cannot be determined w reasonable
evidence that the tribunals ignored, misunderstood, or certainty; hence they are paid specific
misapplied substantial fact or other circumstance. amount for rendering specific service or
The failure of the prosecution to adduce in evidence performing specific work.
any receipt or document signed by appellant where a.  drivers that are required
he acknowledged to have received money and liquor to be at specific places at
does not free him from criminal liability. Even in the

21
 specific times are not field
personnel ELEMENTS OF EE-EER RELSHIP (Four-fold Test)
b.  in case of fishermen i. the selection and engagement of the EE;
although performing non-agri ii. the payment of wages;
work away from the office, iii. the power of dismissal;
the fact that they have no iv. the employer’s power to control the EE w/
choice but to remain on board respect to the means & methods by w/c
the vessel, they are still under the work is to be accomplished (most
constant supervision by the important)
ER thru the vessel’s
patron/master Independent contractors – can employ others to work &
accomplish contemplated result w/o consent of
iv. Employer’s family members contractee, while EE cannot substitute another in his
who are dependent on him place w/o consent of his EER.
for support
v. Domestic helpers 2. The Economic Dependence Test – observes the need
 house personnel hired by a ranking to consider the existing conditions bet the parties
company official, a foreigner, but paid for by
the company itself, to maintain a staff house Best approach: Apply the two-tiered test involving:
provided for the officialregular EE 1. the putative employer’s power to control the EE
vi. Persons in the personal w/ respect to the means and methods by w/c
service of another the work is to be accomplished; and
vii. Workers paid by result – 2. the underlying economic realities of the activity
per piece/per task or relationship
- laborer/EE w/ no fixed salary, wag, or a. the extent to w/c the services
renumeration but receiving a compensation performed are an integral part of the
from his ER an uncertain & variable amount employer’s business;
depending upon the work done or the result of b. to the extent of the worker’s
said work (piece work), irrespective of the time investment in equipment and facilities;
employed c. the nature and degree of control
exercised by the employer;
EER-EE Relationship – is not dependent upon the d. the worker’s opportunity for profit and
agreement of the parties. The characterization by loss;
law prevails over that in the contract.  the e. the amount of initiative, skill,
existence of an EER-EE relshp is not a matter of judgment or foresight required for the
stipulation but a question of law success of the claimed independent
d. depends on the facts of each case enterprise;
f. the permanency and duration of the
Core/Non-core Jobs relationship between the worker and
e. EER-EE relship may comver core/non- the employer; and
core activities of the EER’s business. g. the degree of dependency of the
f. The kind of work is not the definitive worker upon the employer for his
test of whether the worker is an EE or continued employment in that line of
not. business
Standard of economic dependence – whether the
Employer – any person, natural or juridical, domestic or worker is dependent on the alleged employer for his
foreign, who carries on in the PH any trade, business, continued employment in that line of business
industry, undertaking or activity of any kind and uses
the services of another person who is under his order Evidence of employment
as regards employment i. id card
Employee – any person who performs services for an ii. vouchers of salaries
EER in w/c either or both mental & physical efforts iii. sss registration
are used and who receives compensation for such iv. memorandum
services, where there is an EER-EE relationship
 Absence of EE’s name in payroll does not mean he is
TESTS OF EENT Relship: not an EE
i. Right of Control Test – where the person  Mode of Compensation – not a test of EEnt status;
for whim the services are performed pakyaw basis does not mean workers are
reserves a right to control not only the end independent contractors
to be achieved but also the means to be
sued in reaching such end. Independent contractors- generally rely on their own
Plus: the courts added the existing economic conditions resources
prevailing bet the parties (like payrolls) in * Unions and unregistered associations can be EERs of
determining the existence of EER-EE Relship. the persons who work for them

22
GR: An employee is not a contractor; a contractor is not Art 83. NORMAL HOURS OF WORK
an employee.  shall not exceed 8 hrs/day
GR: While EE-ER relationship exists bet a job contractor
and the workers that he hires, no such relationship Purpose of 8-hr Labor law – not only to safeguard the
exists bet those workers and the job contractee, the health & welfare of the laborer/EE, but in a way to
contractor’s client. minimize unemployment by forcing ERs, in cases
 Labor-only contractor – serve as an agent of the true where more than 8-hr operation is necessary, to
employer by merely recruiting & supplying people utilize different shifts to laborers/EEs working only
(prohibited). for 8 hrs each
Part-time Work – not prohibited. (What the law
Conditions of Employment – laid down by law or by regulates is work exceeding 8hrs)
contract concluded individually w/ an EE or GR: Wage & benefits of a part-timer are in
collectively w/ a group proportion to the number of hrs worked.
 may also arise from established
practice in the enterprise Work hrs of Health Personnel
2 Kinds of Employment Conditions Health personnel – shall include, but not limited to,
a. Statutory – provided for by law resident physicians, nurses, nutritionists, dieticians,
b. Voluntary – initiated by the ER pharmacists, social workers, lab technicians,
unilaterally or by contractual paramedics, psychologists, midwives, attendants,
stipulation and all other hospital & clinic personnel like medical
An employer is free to regulate, accdg to his own secretaries
discretion & judgment, all aspects of EENT, including
hiring, work assignments, working methods, time, Resident physicians – customary practice to work for 24
place and manner of work, tools to be used, hrs a day violates the limitations in Art 83.  when
processes to be followed, supervision of workers, they are under training program/agreement bet the
working regulations, transfer of EES, work residents and the hospital accredited by the govt
supervision, lay-off of workers and discipline,
dismissal and recall of workers. Hospital EEs – are entitled to a full weekly salary w/ apid
 Employers have the right to exercise 2 days off if they have completed the 40hr/5day
management prerogatives to workweek (7days pay for 5 days work)
strengthen his business
competitiveness  unlawful/ Health personnel in Govt service – covered by RA 7305
unjust/unfair; so long as they are
exercised in GF for the advancement of 12-hr Workshift with Overtime
his interest and not for the purpose of - through a contract freely entered into, workshift may
defeating/circumventing the Rs of the exceed 8hrs w/ corresponding overtime pay.
EES
a. May devise & implement new
salary scales applicable only Art 84. HOURS WORKED shall include:
to future EES. (salary 1. all time during w/c an EE is required to be on duty or
distortion) to be at a prescribed workplace, and
2. all time during w/c an EE is suffered or permitted to
Members/Officers of the Managerial Staff: Duties & work
Responsibilities
1. Their primary duty consists of the Rest periods of short duration during work hrs shall be
performance of work directly related to counted as hours worked
mgt policies of their ER;
2. They customarily & regularly exercise Principles in Determining Hours Wrked
discretion and independent judgment; 1. All hrs are hrs worked w/c the EE is
3. They regularly & directly assist the required to give to his ER, regardless of
managerial EE whose primary duty consists WON such hrs are spent in productive
of the mgt of a dept of the establishment in labor or involve physical/mental exertion;
w/c they are employed; 2. An EE need not leave the premises of the
4. They execute, under gen supervision, work workplace in order that his rest period shall
along specialized/technical lines requiring not be counted, it being enough that he
special training, experience or knowledge; stops working, may rest completely and
5. They execute, under gen supervision, may leave his workplace, to go elsewhere,
special assignments and tasks; and they do whether w/in or outside the premises of
not devote more than 20% of their hours his workplace;
worked in a work-week to activities w/c are 3. If the work performed was necessary, or it
not directly & clearly related to the benefited the ER, or the EE could not
performance of their work abandon his work at the end of his normal
working hrs because he had no

23
 replacement, all time spent for such work
shall be considered as hrs worked, if the On Call
work was w/in the knowledge of his  although EE can rest completely and may not be
ER/immediate supervisor; actually at work, if they are required to be in
4. The time during w/c an EE is inactive by their place of work before/after the regular
reason of interruptions in his work beyond working hrs and w/in the call of their ERs, the
his control shall be considered time either time they stay in the place of work sould not be
if the imminence of the resumption of discounted from their working hrs
work requires the EE’s presence at the  EE cannot use the time effectively for his own
place of work or if the interval is too brief purposes is working while on call.
to be utilized effectively & gainfully in the  Not on call: EE is not required to remain on the
EE’s own interest. ER’s premises but is merely required to leave
work at his home or w/ company officials where
he may be reached
Pre/Postliminary Activities  Public health workers’ On call status – refers to a
 Preliminary (before work) and condition when public health workers are called
postliminary (after actual work) upon to respond to urgent or immediate need
activities are deemed performed for health/medical assistance or relief work
during working hrs, where such during emergencies such that he/she cannot
activities are controlled/required by devote the time for his/her own use.
the ER and are pursued necessarily &
primarily for the ER’s benefit With Cellular phone or Other Contact Device
 if EE is kept “w/in reach” through a cell
Waiting Time phone, he is NOT on call
 whether waiting time constitutes working time
depends on the circumstances on each Travel Time – time spent walking, riding, or traveling
particular case to/from place of work
 controlling factor is WON time spent in idleness is a. Travel from home to work – not
so spent predominantly for the ER’s benefit or worktime  when EE receives an
for the EE’s emergency call outside his regular
1. Engaged to Wait – waiting time working hrs and is required to travel to
spent by EE shall be considered as his regular place of business or some
working time if waiting is other worksiteworking time
considered an integral part of his b. Travel that is all in a day’s work – time
work or if the EE is spent by an EE in travel as part of his
required/engaged by an ER to wait principal activityhrs worked
2. Waiting to Engage – idle time is c. Travel away from home – travel that
not work time keeps an EE away from home overnight
worktime when it cuts across the EE’s
Working While Eating workday
GR: EE must be completely relieved from duty for the
purpose of eating regular meals. The meal time is not Lectures, Meetings and Training Programs – not
compensable if he is completely free from duties worktime if:
during his meal period even though he remains in a. Attendance is outside of the EE’s regular
the workplace. working hrs;
 EE is not relieved if he is required to perform his b. Attendance is in fact voluntary; and
duties whether active/inactive, while eating (ex. c. The EE does not perform any productive
Stand-by for emergency work) work during such attendance.
* must meet all criteria
Working While Sleeping
GR: Sleeping time may be considered working time if it is Grievance Meeting – time spent in adjusting grievance
subj to serious interruption or takes place under bet ER & Ee during the time the EEs are required by
conditions substantially less desirable than would be the ER to be on the premiseshrs worked
likely to exist at the EE’s home.  if a bona fide union is involved depends on the
 if there is an opportunity for comparatively CBA or the custom practice under the CBA
uninterrupted sleep under fairly desirable conditions,
event though EE is required to remain on or near the Semestral Break – hrs worked by teachers in private
ER’s premises and must hold himself in readiness for schools
a call to action ENT.
 depends upon the express/implied WORK HOURS OF SEAMEN
agreement of the parties, or in  they need not leave the boat in order
absence of an agreement, upon the that his rest period not be counted
nature of the service and its relation to Requisites for non-counted rest period
the working time. a. he ceases to work

24
 b. may rest completely
c. leave or may leave at his will the spot Art 86 NIGHT SHIFT DIFFERENTIAL
where he actually stays while working, - at least 10% of his regular wage for each hr of
to go somewhere else, whether w/in work performed bet 10PM and 6AM
or outside the ship - given as premium for working at a time for sleep
& rest
HOURS WORKED: EVIDENCE & DOUBT - in addition to the exceptions in Art 82, NSD is
GR: When an ER alleges that his EE works less than the n/a to EEs of retail and service establishments
normal hrs of ENT as provided for in law, he bears the regularly employing 5 employees and below
burden of proving his allegation w/ clear & satisfactory -  if work done from 10pm-6am is OT work, then
evidence the 10% night shift differential should be based
on the OT rate
- not waivable (founded on public policy)
Art 85. MEAL PERIODS - the receipt of OT pay will not preclude payment
 must be at least 60minutes time-off of NSD pay
for regular meals - burden of proof of payment of NSD - ER
GR: not compensable
Exceptions: Art 87. OVERTIME WORK
1. where the lunch period or mealtime is
predominantly spent for the ER’s benefit Overtime Pay – additional compensation for work
(considered overtime) ;or performed beyond 8hrs w/in the worker’s 24-hr
2. where it is less than 60 minutes (but not workday regardless whether the work covers 2
less than 20minutes) must be with full pay calendar days
when: Basis – cash wage only, w/o any deduction
 where work is non-manual (does Rates
not involve strenuous physical 1. OT on a regular work day – at least 25% thereof
exertion); 2. OT on a holiday or rest day – at least 30% thereof
 where the establishment regularly * CBA may stipulate higher OT pay rate
operates not less than 16hrs a day
3. in cases of actual or impending Actual Work Days as Divisor
emergencies or there is urgent work to be PALEA v PAL (1976) – PALEA & PAL Supervisors Assoc
performed on machineries, equipment or (PALSA), commenced an action v PAL in the CIR
installations to avoid serious loss w/c the praying that the latter be ordered to revise the
ER would otherwise suffer; method of computing the basic daily & hourly rates
4. where the work is necessary to prevent of its monthly-salaried EEs and necessarily to pay
serious loss of perishable goods them their accrued salary differentials
 If less than 20 minutes it becomes
only a rest period and is thus PAL’s Formula:
considered work time monthly salary x 12/365 days in a yr = Basic daily rate
Note: Meal periods during overtime work is not given basic daily rate/8 – Basic hourly rate
to workers performing OT bcoz OT is usually for a
short period Proposed Formula:
Monthly salary x 12/actual working days = BDR
Shortened Meal Break Upon EE’s request BDR/8 = BHR
 EEs may request that their meal pd be
shortened so that they can leave work
earlier not compensable
Requisites Paid Unworked days of a monthly-paid EE
1. EEs voluntarily agree in writing and waive their OT - ER may stipulate that EE’s monthly salary
pay; constitutes payment for all the days of the
2. No diminution in the salary and other fringe benefits month incl rest days & holidays if when
of the EEs already existing; converted into its daily equivalent would still
3. Work is not physically strenuous and they are meet minimum wagelegal
provided w/ adequate coffee breaks in the morning
& afternoon; How “work day” is counted
4. Value of benefits is equal to the compensation due A day – the 24-hr period w/c commences from the time
them; the EE regularly starts to work
5. OT pay will become due and demandable if they are - regardless of the day of the week or hr of the day
permitted/made to work beyond 4:30 pm; and - any work in excess of the 8hrs w/in the 24-hr pd
6. The arrangement is of temporary duration. is considered as OT regardless of whether the
work covers 2 calendar days
Note: The 8-hr work period does not include the meal - any work in excess of 8 hrs not falling w/in the
break. EE’s may leave the company premises as long 24-hr pd is not considered as OT work
as they return to their posts on time.

25
a. Broken Hrs of Work – the minimum normal working certification is needed from an accredited
hrs need not be continuous to constitute as the legal safety org or the firm’s safety committee that
working day of 8 hrs as long as the 8 hrs is w/in a work beyond 8hrs is w/in the limits/levels of
work day exposure set by DOLE’s occupational safety &
b. Work in Different Shifts in a Work day – work in health standards;
excess of 8hrs w/in a work day is considered as OT 3. The DOLE Regional Office is notified.
regardless of whether this is performed in a work
shift other than at w/c the EE regularly works Effects of a Compressed Workweek
 EE’s shift is 10pm-6am. He is asked to take a shift 1. Unless there is a ore favorable practice
of another EE who is absent from 2pm-10pm existing in the firm, work beyond 8hrs will
(his regular work day would be from 10pm- not be compensable by OT premium,
10pm)  the 2 shift is considered OT because
nd
provided the total number of hrs worked
it is still w/in his work day per day shall not exceed 12hrs. (Work
performed beyond 12hrs a day or 48hrs a
GR: An express instruction from the ER to the EE to weekOT)
render OT work is not required for the EE to be 2. EE’s under a CWW scheme are entitled to
entitled to OT pay. It is sufficient that the EE is meal periods of at least 60 minutes. The R of
permitted or suffered to work. Neither is an express EEs to restday, holiday pay, rest day pay or
approval by a supervisor needed. leave in accdance w/ law/CBA/company
practice shall not be impaired.
: On rest days & holidays, written authority after office 3. Adoption of the CW scheme shall in no case
hrs is required for the EE to be entitled to result in diminution of existing benefits.
compensation Reversion to the normal 8-hr work day shall
 A verbal instruction to render OT work prevails not constitute diminution of benefits.
over a memorandum prohibiting such work. (Reversion is considered a legitimate
 OT claim is not justified for days where no work exercise of mgt prerogative, provided that
was required and no work could be done (i.e. the ER shall give the EEs prior notice of such
brownout, machine repair, lack of rawmats) reversion w/in a reasonable period of time.
* EE may validly waive the R to OT under a CWW
OT Work of Seamen – whether or not the sailors are program, provided he did so voluntarily, w/ full
entitled to OT pay is not whether they were on board understanding of what he was doing and in
and cannot leave ship beyond the regular 8 working consideration for the quit claim is credible &
hrs a day, but whether they actually rendered service reasonable.
in excess of 8 hrs Note: EE’s promoted from rank-and-file to supervisory
 OT work must be proven by factual & legal basis lose their OT pay and other benefits under Art 82-96

Action to Recover Compensation Illustrations of OT Computations

- estoppel & laches cannot be invoked against EEs 1. Regular Workdays
bcoz that would be contrary to the spirit of the Reg Basic Wage + 25% thereof
8-hr Labor Law, under w/c the laborers cannot 2. Legal or Regular Holidays
waive their R to extra compensation Holiday Wage Rate (200%) + 30% thereof
- OT pay in arrears retroacts to the date when 3. Rest Days or Special Holidays
services were actually rendered Rest day/Special Holiday wage rate (130%) +
GR: Waiver or quitclaim – not a waiver of OT pay. Any 30% thereof
stipulation in the contract that the laborer shall work 4. Scheduled Rest Day w/c is also a Special Holiday
beyond the regular 8 hrs w/o addtl compensation for Rest day & special holiday wage rate (150%) +
the extra hrs is contrary to law and null and void 30% thereof
5. Scheduled rest day w/c is also a legal or regular
Waiver of OT Pay holiday
GR: OT pay cannot be waived expressly or impliedly. Any Rest day & legal holiday wage rate (260%) +
contrary stipulation is null and void. 30% thereof
 Exeptions 6. Double holiday
1. When the waiver is made in consideration of benefits Double holiday wage rate (400%) + 30% thereof
& privileges w/c may be more than what will accrue  EE will receive 200% of his regular daily
to them in OT pay; and wage when both regular holidays fall on
2. Compressed workweek (CWW)– the number of work the same day and he does not work (Law
days is reduced but the number of work hrs in a day provides that he shall get his regular
is increased to more than 8, but no OT pay may be daily wage of each regular holiday)
claimed.  100% of Araw ng Kagitingan, 100% Good
Requisites of Compressed Workweek to be valid: Friday. If he works on that day, he gets
1. The scheme is expressly and voluntarily 400%
supported by majority of the EEs affected; OT pay integrated in Basic Salary – (composite/package
2. In firms using substances, or operating in pay/all-inclusive salary) – not illegal nor unusual for
conditions that are hazardous to health, a executives or managers

26
  But for non-managerial EEs, there must be: 6. When it is necessary to avail of favorable weather
1. A clear written agreement or environmental conditions where
2. Agreed legal wage rate and OT pay computed performance or quality f work is dependent
separately are equal or higher than the thereon.
separate amounts legally due
FLEXIBLE WORK ARRANGEMENTS Art 90. COMPUTATION OF ADDTL COMPENSATION
- alternative work arrangements or schedules “cash wage” – excludes noncash value of facilities
other than the traditional or standard work hrs, - if only cash wage is the basis of OT rate, it is
workdays or workweek. ERs may adopt them unfair to the worker because as defined in Art
after due consultation w/ EEs, taking into acct 97, “wage” includes the value of facilities,
the adverse consequence of the situation on hence the value of facilities should not be
the performance and financial condition of the excluded when computing OT pay
company. -  OT rate should be based on the “regular wage”
- Its effectivity and implementation shall be (include the value of facilities)
temporary.
- Should be threshed out by the ER and EE
- DOLE Reg Ofc must be notified prior to
implementation
- In addition to CWW, the FWAs include:
1. Reduction of workdays – where Ch. 2 WEEKLY REST PERIODS
normal workdays per week are Art 91. RIGHT TO WEEKLY REST DAY
reduced but should not last for more Duration: at least 24 consecutive hrs after every 6
than 6 months consecutive normal work days
2. Rotation of workers – where the EEs - all establishments & enterprises may operate or open
are rotated/alternately provided work for business on Sundays & holidays provided that the
w/in the workweek EEs are given the weekly rest day & the benefits
3. Forced leave – EEs are required to go provided under the law
on leave for several days or weeks, Who Determines: The ER determines and schedules the
utilizing their leave credits if there are weekly rest period subj to the ff:
any 1. CBA;
4. Broken-time schedule – the work 2. Rules & regulations issued by the Sec of Labor;
schedule is not continuous but the and
number of hrs w/in the day or week is 3. EE’s preference based on religious grounds.
not reduced (When such preference will prejudice the
5. Flexi-holiday schedule – Ees agree to business of the ER, and no other remedial
avail themselves of the holidays at measures are available, the weekly rest pd may
some other days, provided that there be scheduled to meed the EE’s choice for at
is no diminution of existing benefits as least 2 days a month
a result of such arrangement
Art 92. WHEN THE ER MAY REQUIRE WORK ON A REST
Art 88. UNDERTIME NOT OFFSET BY OVERTIME DAY
- Whether on the same day or any other day is GR: The ER may not require the EEs to work on a rest
prohibited by law day
- Permission given to the EE to go on leave o some : Exceptions
other day of the week shall not exempt ER from 1. In cases of urgent work to be performed on the
paying the addtl compensation machinery, equipment or installation;
Reason: EE’s hourly rate is not equivalent to OT rate 2. To prevent loss or damage to perishable goods;
Proper method: Deduct the UT from the accrued 3. In case of actual/impending emergencies caused
leave, if any by force majeure to prevent loss of life and
property, or imminent danger to public safety;
Art 89. EMERGENCY OT WORK 4. Where the nature of work requires continuous
GR: EEs cannot be compelled to render OT work against operations and the stoppage of work may result
their will in irreparable injury/loss to the ER;
 Exceptions: 5. In the event of abnormal pressure of work due to
1. In times of war or any national or local special circumstances, where the ER cannot
emergency declared by Congress/Chief Exec; ordinarily be expected to resort to other
2. To prevent loss or damage to life or property due measures; and
to emergencies and force majeure; 6. Under the circumstances analogous to the
3. When there is urgent work needed on machines foregoing as determined by the Sec of Labor.
& equipment; Note: The failure to work during an EE’s rest day does
4. When work is necessary to preserve perishable not justify disciplinary sanction of outright dismissal,
goods; more so when justifiable grounds exist for the said
5. To prevent serious obstruction or prejudice to the failure.
business or operations of the ER; and

27
Note: When an EE volunteers to work on his rest day 8. Bonifacio Day
under other circumstances, he may be allowed to do 9. Christmas Day
so, provided he expresses such desire in writing and 10. Rizal Day
he is paid the addtl compensation for working on his
rest day B. Special (Non-working)Days
1. Black Saturday
Art 93. COMPENSATION FOR REST DAY, SUNDAY OR 2. Ninoy Aquino Day
HOLIDAY WORK 3. All Saints Day
4. Nov 2
Premium pay or Differential compensation – addtl 5. Dec 24
compensation for work rendered by the EE on days 6. Last Day of the Year
when normally he should not be working such as
special holidays and weekly rest days C. Special Holiday (for all schools)
Note: This article does not prohibit a CBA stipulation for EDSA Revolution Anniversary
higher benefits
D. Local Holiday
Formulas to Compute Wages on Holidays Those declared by law or ordinance
1. For REGULAR HOLIDAYS
a. If it is an EE’s regular workday Regular Holiday Special Day
i. If unworked – 100% Compensable even if Not compensable if
ii. If worked unworked subj to certain unworked
st
1. 1 8hrs – 200% conditions
2. excess of 8hrs – Plus Limited to the list Not exclusive since a law
30% of hourly rate of enumeration or ordinance may
said day provide for other special
b. if it is an EE’s rest day holidays
i. if unworked – 100% Rate is 200% of the Rate is 130% of the
ii. if worked regular rate if worked regular wage if worked
st
1. 1 8hrs – plus 30% of 200%
2. excess of 8 hrs – plus 30% Addtl Compensation for Work on a Rest day, Sunday or
of hourly rate of said day Holiday
2. For declared SPECIAL DAYS such as Special Non- Day Rate of Addtl
Working Day, Special Public Holiday, Special Compensation
National Holiday and nationwide special days Work on a scheduled 30% of regular wage
1. If unworked – no pay, unless there rest day
is a favorable company policy, No regular workdays and 30% of regular wage for
practice or CBA granting payment no specific rest days work performed on
of wages on special days even if Sundays & holidays
unworked Work on Sunday when it 30%
2. If worked is his established rest
st
a. 1 8hrs – plus 30% of the day
daily rate of 100% Work on special holiday 30%
b. excess of 8hrs – plus 30%
Work on special holiday 50%
of hourly rate on said day
falling on scheduled rest
3. Falling on the EE’s rest day and if
day
worked
st Work on regular holiday 260% of regular wage
a. 1 8hrs – plus 50% of the
falling on scheduled rest
daily rate of 100%
day
b. excess of 8hrs – plus 30%
of hourly rate on said day
3. For those declared as SPECIAL WORKING HOLIDAY
Art 94. RIGHT TO HOLIDAY PAY
- for work performed an EE is entitled only to his
Holiday pay – a day’s pay given by law to an EE even if
basic rate
he does not work on a regular holiday.
- It is limited to the regular/legal holidays listed by
List of Special Days Proc. 459
law.
- EE should not have been absent w/o pay on the
A. Regular Holidays
working day preceding the regular holiday
1. New Year’s Day
Note: In addition to the Exceptions in Art 82, Holiday
2. Maundy Thursday
pay is n/a to EEs of retail and service establishments
3. Good Friday
regularly employing 10 workers or less
4. Araw ng Kagitingan
5. Labor Day
Rule on Compensability – compensable whether worked
6. Independence Day
or unworked subj to certain conditions.
7. National Heroes Day

28
  Legal holiday falling on a Sunday does not Ch 95. RIGHT TO SERVICE INCENTIVE LEAVE (SIL)
create an addtl oblig for the ER to pay extra, Concept: 5 days leave w/ pay for every EE who has
aside from the usual holiday pay to its rendered at least 1 yr of service
montly paid EEs 1 yr of service – service w/in 12 months, whether
continuous or broken, reckoned from the date the EE
Holiday pay of Monthly paid EEs started working including authorized absences and
GR: for the company w/ a 6-day working schedule, the paid regular holidays unless the number of working
divisor 314 already means that the legal holidays are days in the establishment as a matter of
included in the monthly pay of the EE. The divisor is practice/policy is less than 12 months
arrived at by subtracting all Sundays from the total
number of calendar days in a yr SIL is N/A to the ff:
GR: for a company w/ a 5-day working schedule, the 1. EEs of the Govt
divisor 261 means that the holiday pay is already 2. Domestic helpers and persons in the personal
included in the montly salary of the EE service of another;
3. Managerial EEs
Holiday pay of Teaching Personnel Paid per Lecture Hr 4. Field personnel whose performance is
- not entitled to payment of holiday pay since they unsupervised or those who are paid a fixed amt
are paid by the hrs worked; and “no class days” for performing work irrespective of the time
means no work for them consumed in the performance thereof
- entitled to their regular hourly rate on days 5. Those already enjoying the said benefits
declared as special holidays or when classes are 6. Those already enjoying vacation leave w/ pay for
called off or shortened on acct of typhoons, at least 5 days;
floods rallies, and the like 7. Those employed in establishments regularly
employing less than 10 EEs
Double Holiday Pay (Araw ng Kagitingan & Good Friday * EEs engaged on task/contract basis or paid purely
on the same day) commission basis are not automatically exempted
1. 200% of the basic wage from the SEL unless they fall under the classification
a. entitled even if said holiday is of field personnel.
unworked
b. to give EE only 100% would reduce the Conversion to Monetary Equivalent
number of holidays under the law SIL is COMMUTABLE or convertible to cash if not used or
2. 400% if he worked on 2 regular holidays falling on exhausted at the end of the yr
the same day Basis of conversion: the salary rate at the date of
3. 520% if he worked on 2 regular holidays falling on commutation
the same day and at the same time falling on a
scheduled rest day ALSO Entitled to SIL
1. EE illegally dismissed
Single Holiday Rule: provided that the EE 2. Part-time workers
1. worked; 3. Piece-rate workers:
2. was on leave w/ pay; or a. Working inside the premises of ER &
3. was on authorized absence on the day prior to thus are under direct supervision of
the regular holiday. the ER  entitled
b. Working outside the premises of the
Successive Regular Holidays: to be entitled to 2 ER whose hours of work cannot be
successive holidays, the EE must: ascertained w/ reasonable certainty
1. be present on the day immediately preceding the and thus are not under the direct
first holiday; or supervision of the ERnot entitiled
2. be on leave w/ pay.
 Otherwise, he must work on the first holiday EEs w/ salaries above Min Wage: the difference bet the
to be entitled to holiday pay on the second min wage and the actual salary received by the EEs
th
regular holiday cannot be deemed as their 13 month pay and SIL
pay

Effects of Business Closure on Holiday Pay Vacation & Sick Leave

If regular holiday occurs during: - not statutorily required but is a matter of
1. Temporary or periodic shutdown and temporary management discretion or CBA
cessation of work of an establishment the GR: Benefits are non-cumulative and non-
regular holidays falling w/in the period shall be commutative; must be enjoyed by the EE w/in 1yr
compensated. otherwise forfeited
2. Cessation of operation of an enterprise due to : when the labor law contract or the established
business reverses as authorized by the Sec of practice of the ER provides otherwise
Labor the regular holiday may not be paid by
ER

29
 SIL VL/SL - the basis of the amt to be integrated shall be the
Mandatory Art 95 Voluntary grant (ER’s average share of each EE for the past 12
policy or CBA) months immediately preceding the abolition
Intended to alleviate the Intended to afford a
economic condition of laborer a chance to get a Pooled Tips
the workers for it acts as much needed rest to - where an establishment does not collect service
replacement for regular replenish his energy and charges but has a practice/policy of pooling tips
income that would not renew his efficiency given voluntarily by its customers, the pooled tips
be earned during such should be monitored, accounted for and distributed
instance in the same manner as the service charges
Cannot be waived Must be demanded in its
opportune time; silence Title 2 WAGES
is waiver Ch 1
Commutable Not commutable Art 97. Definitions
Person – an individual, partnership, assoc, corp, business
Parental (Solo-parent) Leave trust, legal rep, or any organized group of persons
- not more than 7 working days every yr Employer – any person acting directly/indirectly in the
- rendered to an EE who has rendered service at interest of an ER in relation to an EE & shall include
least 1yr the Govt & all its branches, subd, & instrumentalities,
- no ER shall discriminate against any solo parent all govt-owned/-controlled corps & institutions, as
EE w/ respect to terms & conditions of ENT on well as non-profit private institutions/orgs.
acct of his/her status Employee - any indiv employed by an ER
- a change in the status/circ of the parent claiming Agriculture – includes farming in all its branches, and
benefits under this Act such that he/she is no among other things, includes the cultivation & tillage
longer alone w/ responsibility of parenthood of soil, dairying, the production, cultivation, growing
shall terminate his/her eligibility for these & harvesting of any agricultural & horticultural
benefits commodities, the raising of livestock or poultry, and
- not convertible to cash unless otherwise agreed any practices performed by a famer on a farm as an
incident to or in conjunction with such farming
Battered woman leave operations, but does not include the manufacturing
- female EE who is a victim of violence is entitled to or processing of sugar, coconuts, abaca, tobacco,
paid leave of 10 days in addition to other paid pineapples or other farm products.
leaves. Employ – includes to suffer or permit to work
- Extendible when necessity arises
- EE has to submit certification from the punong Wage – paid to any EE; shall mean the renumeration or
brgy, kagawad, prosecutor or clerk of court earnings, however designated, capable of being
than an action under RA 9262 has been filed expressed in terms of money, whether fixed or
and is pending ascertained on a time, task, piece, or commission
basis, or other method of calculating the same, w/c is
Maternity & Paternity Leave payable by and ER to an EE under a
written/unwritten contract of ENT for work done or
Art 96. SERVICE CHARGES to be done, or for services rendered and includes the
Concept: All service charges collected by hotels, fair and reasonable value, as determined by the Sec
restaurants, and similar establishments shall be of Labor, of board, lodging, or other facilities
distributed as follows: customarily furnished by the ER ro the EE.
1. 85% for all covered EEs to be equally distributed  Includes commissions – the recompense
among them compensation/reward of an agent,
2. 15% for disposition by mgt to answer for losses salesman, executor, trustee, receiver, factor,
and breakages and distribution to EEs receiving broker or bailee, when the same is
more than P2k amonth at the discretion of the calculated as a percentage on the amt of his
mgt in the latter case transactions or on the profit of the principal
Coverage: only to hotels, restaurants, and similar
- all EEs are covered, regardless of their position, Sonco v NLRC: Zuelig was made to pay the
designation, ENT status, irrespective of the terminated EE (due to retrenchment),
method by w/c their wages are paid, except separation pay based not only on the basic
managerial EEs salary, but also on the commissions, transpo
Distribution – distributed to paid EEs at least once every & emergency living allowances.
2 weeks or 2x a month at interval of at least 16 days Even if commissions were in the form of
Rule in case of abolition incentives or encouragement, still these
- in case the service charge is abolished, the share commissions are direct renumerations for
of the covered EEs shall be considered services rendered w/c contributed to the
integrated in their wages increase of income of the ER. The nature of
work of a salesman & the reason for such
type of renumeration for services rendered

30
 demonstrate that commissions are part of restricted to sums paid as
their wage or salary. (Some salesmen do not hire or reward to
receive any basic salary but depend on domestic or menial
commissions & allowances or commissions servants and to sums
alone, although an EE-ER relationship exists). paid to artisans,
mechanics, laborers, and
 Includes facilities or commodities – fair & other EEs of like class
reasonable value of board, lodging, or other In many situations, however, and as the SC states,
facilities customarily furnished by the ER to they are in essence synonymous
the EE.

An ER may provide, for instance, food & FACILITIES SUPPLEMENTS

housing to his EEs but he may deduct their Include articles or
values from the EES’ wages to be services for the benefit
determined by the Sec of Labor. of the EE or his family
but shall NOT include
Snacks tools of the trade or
70% - deducted from wages (must be articles or service
authorized in writing) primarily for the benefit
30% - subsidized by the ER of the ER or necessary to
the conduct of the ER’s
Lodging facility – the cost of operation & business
maintenance, including adequate Wage-deductible Not wage-deductible
depreciation plus amt of capital invested by Benefit/privilege part of Benefit/privilege given to
the ER, provided that if the total is more the laborer’s basic the EE w/c constitutes an
than the fair rental value ( or the fair price wages, extra renumeration
of the commodities or facilities offered for above & over his basic or
sale) ordinary earning or wage
The distinction bet a facility & a supplement is in the
Fair rental value -shall be the reasonable purpose, (not the kind) of the item.
cost of the operation & maintenance.
 State Marine Corp & Royal Line, Inc. v Cebu Seamen’s
Rate of depreciation & depreciated amt – Assoc, inc: The vessel crew were provided w/ free
those arrived at under good accounting meals by the ship owners (petitioner), not part of
practices their wages but as a necessary matter in the
maintenance of the health & efficiency of the crew
Good accounting practices – shall NOT during the voyage. They should not be deducted
include accounting practices w/c have been from their wages. The deductions should be returned
rejected by the BIR for IT purposes to them.
 Atok-Big Wedge Assoc v Atok-Big Wedge:
Depreciation – shall include obsolescence
Supplements constitute extra renumeration or
special privileges or wages, while facilities on the
 In order that the cost of facilities furnished other hand, are items of expense necessary for the
by the ER may be charged against an EE, his laborer’s & his family’s existence & substinence, so
acceptance of such facilities must be that by express provision of law, they form part of
voluntary the wage and when furnished by the ER are
 Excludes allowances - deductible therefrom, since if they are not so
furnished, the laborer would spend and pay for them
Fair & reasonable value – shall NOT include any profit to just the same.
the ER or to any person affiliated w/ the ER
WAGES SALARY Requirements for Deducting Value of Facilities
Compensation for Denotes a higher degree 1. Proof must be shown that such facilities are
manual labor, of ENT, or a superior customarily furnished by the trade (ex.
skilled/unskilled, paid at grade of services, and Company policy or guideline showing that the
stated times, and implies a position or meal & lodging are part of the salary);
measured by the day, office 2. The provision of deductible facilities must be
week, month, or season voluntarily accepted in writing by the EE;
Indicates considerable Suggestive of a larger 3. Facilities must be charged at fair & reasonable
pay for a lower and less and more permanent or value.
responsible character of fixed compensation for
ENT more important service Mabeza v NLRC: The ER failed to meet any of the
Has a less extensive Compensation of clerks, requirements. More significantly, the food & lodging
meaning than salary; officers of pub corps, or the electricity & water consumed by the EE were
being ordinarily and pub offices not facilities, but supplements. Hotel workers are

31
 required to work different shifts and are expected to  Planting & harvesting sugar cane & other
be available at various odd hours, their ready chores incidental to ordinary farming
availability is a necessary matter in the operations of operations
respondent’s hotel.  Tillage of the soil, raising of crops including
discovery of plant pests and their
Gratuity - Given freely or w/o recompense; a gift; eradication by means of insecticides
something voluntarily given in return for a favor or  Fishpond business
services; a bounty; a tip.   farmhands employed to cultivate the
- gratuity pay is not intended to pay a worker for vegetable garden of a non-agricultural corp
actual services rendered. It is a money benefit are not agricultural workers
given to the workers whose purpose is “to
reward EEs who have rendered satisfactory & Art 98. This title shall NOT apply to:
efficient service to the company.” 1. Farm tenancy or leasehold;
- Not mandatory &  not part of labor standard 2. Domestic service
law 3. Persons working in their respective homes in
needle work or
“A fair day’s wage for fair day’s labor.” – if there is no 4. In any cottage industry duly registered in
work performed by the EE, there can be no wage or accordance w/ law.
pay unless the laborer was able, willing and ready
to work but was prevented by the mgt or was Ch 2 MINIMUM WAGE RATES
illegally locked out, suspended or dismissed.
Art 99. The minimum wage rates for agricultural and
“Equal pay for equal work.” – EEs working in the PH, if non-agricultural EEs and workers in each and every
they are performing similar functions & region of the country shall be those prescribed by
responsibilities under similar working conditions, the Regional Tripartite Wages and Productivity
should be paid under the principle of “equal pay for Boards
equal work.
Statutory Minimum Wage – the lowest wage rate fixed
International School Alliance of Educators v by law that an ER can pay his workers. Compensation
Quisumbing: IS hires as members of the faculty, w/c is less than such minimum rate is considered an
1)foreign-hires and 2) local-hires. The school grants underpayment that violates the law.
foreign-hires salary of 25% more than that of local- - determined for each region by the regional wage
hires due to a) the dislocation factor, and b) limited boards
tenure. SC: If an ER accords EEs the same position & - provided w/ margin to take care of
rank, the presumption is that these EEs perform contingencies, such as increase of prices of
equal work. There is no showing that foreign-hires commodities and increase in wants and to
perform 25% more efficiently or effectively than the provide means for a desirable improvement in
local-hires. Both groups have similar functions & EE’s mode of living (A person’s needs increase as
responsibilities w/c they perform under similar his means increase.)
working conditions. The “dislocation factor” and Effects:
“limited tenure” cannot serve as valid bases for the 1. benefits all wage earners by setting a floor
distinction in salary rates, and are adequately below w/c their pay cannot fall
compensated by certain benefits accorded them w/c 2. raises the standard of competition among
are not enjoyed by local-hires (housing, transpo, ERs, since it would protect the fair-minded
shipping, taxes, home leave allowance). ER from the competition of the ER who pays
his workers a wage below subsistence;
Agricultural Work Industrial Work 3. is a prereq to the adoption of the SSS, w/c
Work on the soil and its When the harvests are requires contributions from EEs themselves
harvests processed into finished Ability to pay immaterial
product or transformed - ER cannot exempt himself from liability to pay
to another product minimum wages because of poor financial
Lower rate Higher rate condition of the company
(Agricultural EEs) (industrial EEs) - Lack of funds is not a valid defense because the
payment of minimum wage is a mandatory
Agricultural Activities statutory obligation
 Preparation of the soil, planting of ramie EEs not estopped to sue for difference in amount of
stalks and transporting them to the wages
stripping sheds, stripping the fibers w/ the - the acceptance by an EE of the wages paid him w/o
use of decorticating machines run by objection does not give rise to estoppel precluding
electricity, drying the wet fibers, passing him from suing for the difference bet the amt
them through the brusher to cleanse them received and the amt he should have received
of impurities and baling the fiers for the pursuant to a valid minimum wage law
market Exemptions to the coverage of the Rule on minimum
wages

32
 1. Household or domestic helpers, including family So that the rule against diminution of
drivers and persons in the personal service of supplements/benefits may apply, it must be shown
another; that:
2. Homeworkers engaged in needle-work; 1. The grant of the benefit is founded on a policy
3. Workers employed in any establishment duly or has ripened into a practice over a long
registered w/ the National Cottage Industries period;
and Devt Authority in accordance w/ RA 3470 2. The practice is consistent and deliberate;
provided that such workers perform the work in 3. The practice is not due to error in the
their respective homes; construction or application of a doubtful or
4. Workers in any duly registered cooperative difficult question of law; and
when so recommended by the Bureau of 4. The diminution or discontinuance is done
Cooperative Devt and upon approval by the Sec unilaterally by the ER.
of DOLE, provided however, that such
recommendation shall be given only for the  Food/Meal Allowance
purpose of making the cooperative viable and  Cebu Autobus Co v United Cebu Autobus EEs
upon finding and certification of said Bureau Assoc: the company used to pay its drivers
supported by adequate proof, that the and conductors, aside from their regular
cooperative cannot resort to other remedial salary, a certain percentage of their daily
measures w/o serious loss or prejudice to its wage, as allowance for food. Discontinued by
operation except through its exemption from ER upon effectivity of Minimum Wage Law.
the requirements of the Rules. The exemption CIR:
shall be subj to such terms & conditions and for  company practice
such period of time as the Sec of Labor may  Nonconributory Retirement Plan
prescribe. Nestle PH Inc. v NLRC: The fact that the
5. Barangay Micro Business Enterprises (BMBE) retirement plan is noncontributory, does not
(under RA 9178/BMBE Law), provided that all make it a nonissue in the CBA negotiations.
EEs covered under this Act shall be entitled to The EEs have a vested right over the existing
the same benefits given to any regular EE such benefits voluntarily granted to them by their
as social security and health care benefits. ER. The latter may not unilaterally withdraw,
BMBEs are also exempt from income tax. eliminate or diminish such benefits.
 Monthly Emergency Allowance
BMBE – any business entity or enterprise  R. Tiangco & V. Tiangco v Hon. Leogardo: ERs,
engaged in the production, processing or fishing operator and fishbroker, discontinued
manufacturing of products or commodities, paying the batillos (who work by unloading
including agro-processing, trading and the fish from the vessels  dependent on
services, whose total assets including those arrival of the vessels, hence they work only a
arising from loans but exclusive of the land few days a month averaging 4 hrs a day) a
on w/c the particular business entity’s office, fixed monthly emergency allowance (which
plant and equipment are situated, shall not they had been paid as a matter of
be more than P3M. (comprises no less than practice/verbal agreement)  illegal.
90% of Ph ERs)

th
Full 13 month pay
6. Retail Service Establishments (by virtue of RA
Arco Metal Products v Samahan ng
6727/Wage Rationalization Act)
Manggagawa: ER cannot shrink away from its
a. regularly employing not more than 10
responsibility by merely claiming that its acts
workers; and th
of giving full 13 month pay to EEs who have
b. upon application w/ and as
not worked for the full year is a mistake. It has
determined by the Regional Board in
become practice.
accordance w/ the RRs of the
Commission.
Exceptions to the Non-Diminution Rule
If not granted, EEs shall receive the approp
1. Correction of error;
compensation due them + 1% interest per
2. Negotiated benefits;
month retroactive to the effectivity of the
3. Wage order compliance;
Act.
4. Benefits on reimbursement basis;
Burden of proving such exemption rests on
5. Reclassification of position;
the ER.
6. Contingent benefits or conditional bonus; and
7. Other exemptions by provisions of Wage Orders
7. Productivity incentives.
by the Regional Tripartite Wage & Productivity
Board

 Not established practice; Mistake in App of Law

Art 100. PROHIBITION AGAINST ELIMINATION OR
DIMINUTION OF BENEFITS Globe Mackay v NLRC: ER had been computing
the COLA by multiplying P3/day by 30 days.
Upon effectivity of Wage Order #6, and in
virtue thereof, it used 22 days or actual days

33
 of work. Union disagreed and claimed 30 days also shown that they received upward adjustments
basis as company practice. SC: Not voluntary in basic pay & allowances. SC: This reclassification is
company practice. To be considered as such, it in essence a promotion w/c is one of the
should have been practiced over a long pd of jurisprudentially recognized exclusive prerogatives of
time, and must be shown to have been mgt, provided in is done in GF. Union failed to prove
consistent & deliberate and not merely an BF on the part of the ER.
erroneous application of the law.
Samahang Manggagawa sa Top Form v NLRC: Promotion – the advancement from one position to
Granted that the ER had granted an across- another with an increase in duties & responsibilities
the-board wage increase pursuant to RA 6727, as authorized by law and usually accompanied by an
that single instance may not be considered an increase in salary
established company practice.
 Negotiated benefits – benefits initiated through  Contingent/Conditional Benefits; Bonus
negotiation bet ER & EEs, such as CBAs, are not - Art 100 is n/a to a benefit whose grant depends
w/in the prohibition of Art 100 because, as on the existence of certain conditions, so that
products of bilateral contract, they can only be the benefit is no demandable if those
eliminated or diminished bilaterally. What the preconditions are absent.
law forbids is elimination/modification done Bonus – an amt granted & paid to an EE for his
unilaterally by the ER. industry & loyalty w/c contributed to the success of
 Wage Order Compliance – the giving of across- the ER’s business and made possible the realization
the-board salary increases so as to rectify a salary of profits. It is an act of generosity.
distortion caused by compliance w/ a wage order - it is not a demandable and enforceable oblig.
cannot be said to have ripened into a company BUT! It is so when it is made a part of the
practice. wage/salary. In such a case, the latter would be a
fixed amt and the former would be a contingent one
Pag-asa Steel Works v CA: To ripen into a dependent upon the realization of profit
company practice that is demandable as a matter
of right, the giving of the increase should not only WON bonus forms part of wages: depends on the
be by reason of a strict legal (as Wage Order) or circs and conditions for its payment.
contractual oblig (CBA), but by reason of an act of a. If it is an addt’l compensation w/c the ER
liberality on the part of the ER. promised and agreed to give w/o any
 Benefit on Reimbursement Basis – conditions imposed for its payment, such as
o Per diem allowance – a daily allowance success of business or greater production or
given for each day when an EE is away output, then it is part of the wage.
from his home base; intended to cover b. If it is paid only if profits are realized on a
their cost of lodging & subsistence certain amt of productivity achieved, it
when on duty outside of their cannot be considered part of the wages.
permanent stationif the EE did not c. Where it is not payable to all but only to
leave his permanent station and spent laborers and only when the laborer
nothing for meals & lodging outside becomes more efficient or more productive,
thereof, then he is not entitled to per it is only an inducement for efficiency, a
diem as there is nothing to be prize therefor, not a part of the wage.
reimbursed Luzon Stevedoring Corp case: An ER cannot be
o Monthly ration of gas given to certain forced to distribute bonuses w/c it can no
managerial EEs is not part of their longer afford to pay. To hold otherwise
basic salary.  its temporary would be to penalize the ER for his past
revocation does not constitute a generosity.
diminution of the EE’s fringe benefits. American Wire & Cable Daily Rated EEs Union
o The elimination of an existing benefit v AWC Co Inc & the CA: For a bonus to be
in exchange for an equal or better one enforceable, it must have been promised by the ER
does not violate Art 100. and expressly agreed by the parties, or it must have
 Reclassification of Position; Promotion had a fixed amt and had been a long and regular
o from rank-and-file to supervisory - the practice on the part of the ER.
position holders lose OT pay and other
benefits but Art 100 is not violated.  Equity or Long Practice as Basis of Bonus
But, promotion & position reclassification - Ph Education Co. Inc v CIR: even if a bonus is
must be done in GF. not demandable for not being part of the salary
of the EE, the bonus may nevertheless be
 National Sugar Refineries Corp v NLRS & granted on equitable consideration.
NBSR Union: ER implemented a Job Evaluation - Marcos v NLRC:if one enters into a contract of
program affecting all EEs. Respondents were ENT under an agreemt that he shall be paid a
reclassified from rank-and-file to certain salary by the week or some other stated
supervisory/managerial positions. Because of that, period and, in addition, a bonus, in case he
they lost their OT, rest day & holiday pay but it was serves for a specified length of time, there is not

34
 reason for refusing to enforce the promise to basic salary, the ER shall pay the difference. - Dole
pay the bonus, if the EE has served during the PH Inc v Leogardo
stipulated time, on the ground that it was a  shall not include cash & stock dividends, COLAs, &
promise of mere gratuity. all other allowances regularly enjoyed by the EEs, as
 Services Rendered as Basis of Bonus well as nonmonetary benefits (food, free electricity,
- EEs whose ENT has been terminated may still etc)
demand paymt of service under company policy Framanlis Farms Inc. v Minister of Labor: Such
and of the bonuses. The R is not defeated by a benefits in the form of food or free electricity are not
“release & quitclaim” the proper substitute for the 13thMP required by law.
-  LG Marcos v NLRC & Insular Life: The fact that Neither may year-end rewards for loyalty & service
an EE has signed a satisfaction receipt for his be considered in lieu of 13thMP
claims does not necessarily result in the waiver
thereof. The law does not consider as valid any  If the bonus was included in or considered as the
th
agreement whereby a worker agrees to receive equivalent of the 13 MP, there would be no need for
less compensation than what he is entitled to a specific provision of such bonus in the CBA. But if
recover. A deed of release or quitclaim cannot the CBA did provide for a bonus in graduated amts
bar an EE from demanding benefits to w/c he is depending on the length of service, for example, the
legally entitled. intention is clear that the bonus provided in the CBA
 No Profit, No Bonus was meant to be in addition to the legal requirement
- Traders Royal Bank v NLRC: The matter of th
of 13 MP.
giving the EEs bonuses over & above their lawful
th
salaries & allowances is entirely dependent on 13 MP – deemed incorporated in the CBA, employment
the profits, if any, realized by the bank from its contract.  The absence of an express provision
th
operations during the past year. Since the fiscal obligating the ER to pay 13 MP to the EEs is
condition having declined, the bank may not be immaterial
forced to distribute bonuses w/c it can no longer
14 MP – basically a bonus, and  gratuitous;
th
afford to pay and, in effect, be penalized for its
past generosity to its EEs. - mgt prerogative & cannot be forced upon the
 Productivity Incentives - bonus that comes from ER; not legally demandable
productivity gain, or improved output without
th
increasing input Exclusions in the Computation of 13 MP
- RA 6971: EE’s share is in the nature of salary th
13 MP = 1/12 of the basic salary of the EE w/in a
bonus proportionate to increases in current calendar year
productivity over the average for the preceding Q: What does “basic salary” include?
3 consecutive yrs A: Basic salary shall include all renumerations or
- Not gratuitous; it is a benefit claimable only on earnings paid by an ER to an EE for services rendered
the basis of predefined output level  Not included (fringe benefits)
- Contingent/conditional; if they are not given  COLAs granted pursuant to PD 525/LOI 174,
because the preconditions are absent, Art 100 is  profit-sharing payments and all allowances and
not violated except perhaps if there is  monetary benefits w/c are not considered or
contractual commitment to the contrary. integrated as part of the regular or basic salary
of the EE
TH
 OT Pay
PD 851: 13 MONTH PAY Fringe benefits – all allowances & monetary
- adds 1-month pay to the usual 12-month benefits w/c are not considered/integrated as
earnings. BUT, does not change the EE’s basic part of the basic salary
wage. Hence, OT pay, restday pay, SSS  The items excluded by the decree may be included
contributions & other roll-up or add-on payroll through established practice or agreement binding
costs do not increase. on the ER
- Requires at least 1 month service during the
calendar yr Q: Are commissions included in the computation?
- SCOPE: all rank-and-file EEs, regardless or salary A: It depends.
rate.  managerial & supervisory EEs 1. If the commissions may properly be
- EXCEPTION: ERs who are already paying their considered part of the basic salary, they
th
EEs a 13 MP “or its equivalent” are not covered TH
should be included in computing the 13 MP
by the decree. (the intent of the law was to
grant addt’l income to EEs not already rcving the Ph Duplicators Inc v NLRC: the sales
samenot to all EEs but only to the unfortunate commission earned by the sales men
th
ones who are not paid a 13 month salary or constitute part of their compensation,
what amounts to it, by whatever name called) considering that the ER pays them a small
“its Equivalent” – shall include Xmas bonus, mid-year fixed/guaranteed wage; the greater part
bonus, profit-sharing payments and other cash being composed of the sales/incentive
bonuses amounting to not less than 1/12 of the basic commissions earned on actual sales closed
salary. When an ER pays less than 1/12 of the EE’s by them

35
 Overload – the load in excess of the normal load of
Sales commissions – are intimately related or private school teachers as prescribed by the DECS or the
directly proportional to the extent or energy of policies, rules & standard of particular private schools.
an EE’s endeavors; paid upon the specific results Normal load- 8hrs per working day
achieved by a salesman-EE; it is a percentage of Overload work ≠ Overtime work
the sales closed by a salesman & operates as an Overtime work Overload work
integral part of such salesman’s bsic pay. Work rendered in excess May be performed either
of the normal working w/in or outside 8 hrs in a
hrs of 8 in a day day

2. If they are NOT integral part of the basic Proportionate 13thMP

salary, then they shld be excluded. - an EE who has resigned or was dismissed at any
time before the time for payment of the 13thMP
Boie-Takeda Case: the commissions paid is entitled to this monetary benefit in proportion
to medreps were excluded from the term to the length of time he worked during the year.
“basic salary” because these were paid to unless otherwise stipulated in the CBA
them as “productivity bonuses”. They are
Distressed Employer – exempted from paying 13 MP
generally tied to the productivity or capacity th

for revenue production of a corp; such upon prior authorization from the Sec of DOLE
bonuses closely resemble profit-sharing
payments and have no clear direct or th
Difference of opinion in the computation of 13 MP is a
necessary relation to the amt of work nonstrikeable issue.  a strike held on this ground is
actually done by each indiv EE. illegal.
The commissions pd by Boie to its
medreps could not have been sales  Govt Employees – not covered by 13 MP
th

commissions. Medreps are not salesmen;  Seafarers – not covered by 13 MP; because they are
th

they do not effect any sale of any article at contractual, not regular EEs. Their ENT is governed
all. They are EEs engaged in the promotion by their Contract of Enlistment w/c was approved by
of pharmaceutical products or med devices th
the POEA. It does not provide for 13 MP.
manufactured by their ER. They promote
such products by visiting identified
physicians & inform such physicians
orally/w/ the aid of brochures, of the Art 101. PAYMENT BY RESULTS (Piecework)
existence & chem composition of the The Sec of Labor shall regulate the payment of
pharma product. The addt’s payments given wages by results, including pakyao, piecework and
to them were not in fact commissions but other noontime work, in order to ensure the
rather in the nature of profit-sharing payment of fair & reasonable wage rates,
bonuses. preferably through time & motion studies or in
consultation w/ reps of workers & ER’s orgs.

Workers paid by results – workers whose pay is

calculated not on the basis of time spent on the job
Guaranteed wage/commission – EEs whose income is but of the quantity & quality or the kind of work they
guaranteed by way of wages and/or commissions are turn out. (nontime work).
entitled to a 13thMP based on their earnings that - stress is placed on the unit of work produced or
include commissions. the quantity thereof
- a uniform amount is paid per unit accomplished
 Ph Agricultural Commercial & Industrial Workers
Union v NLRC: the bus drivers & conductors of Categories of Piece-rate workers
respondent transic co. (allegedly paid on purely A. As to presence of control
commission basis) are entitled to 13thMP on both 1. those whose time & performance is supervised
their fixed & guaranteed wage and commission by the ER;
 in the case of a bus conductor paid on commission  piece-rate workers, esp when they work in
only as supported by his pay slips w/c indicated the company premises (shoes, handicraft,
varying amount of commissions he received each trip garment)
not included in 13 MP
TH
2. those whose time & performance is
unsupervised by the ER.
Q: Is Teachers’ Overload Pay Included?  Pakyaw & takay basis – commonly
A: Yes. It is considered part of their basic pay for the practiced in the agricultural industry
th
purposes of computing 13 MP (planting, harvesting per hectare of land)
GR: Payments for overload work w/in 8 hrs form part of Pakyaw Piece-rate
the basic wage, & therefore are to be included in the More aptly used when Common where the
computation of 13thMP. the job/work to be output may easily be
performed is in counted or measured

36
 bulk/volumes w/c are GR: the amt earned during the year may exclude
difficult to quantify COLA, OT pay, and premium pay, holiday pay, NSD
and company fringe benefits  there is agreement to
*Payment by result is not determinative of EE-ER Relship. the contrary
It is merely a method of compensation and does not Illustration of the computation
define the essence of the relation. Total wages earned for 1 yr ÷ 12 = ave monthly
earning
Basis of Output Rate; Process to set the Standard AME ÷ 30*** = Daily Earnings
1. On petition of any interested party, or upon its DE x 5 = five-day incentive pay
initiative, the DOLE shall use all available reps of *** should be the actual days of work in a month
ERs & workers’ orgs, to determine whether the
EEs in any industry/enterprise are being Entitlement to Holiday Pay
compensated in accordance w/ the min wage - shall not be less than his average daily earnings
reqmts for the last 7 actual working days immediately
2. The basis for the establishment of rates per pc, preceding the regular holiday. Provided however,
output or contract work shall be the that in no case shall the holiday pay be less than
performance of an ordinary worker of min the applicable statutory min wage rate
skill/ability.
th
3. An ordinary worker of min skill/ability is the Entitlement to 13 MP
th
average worker of the lowest producing group GR: PD 851 exempts from payment of 13 MP ERs of
representing 50% of the total # of EEs engaged those who are paid a fixed amt for performing
in similar ENT in a particular establishment, specific work, irrespective of time consumed in the
excluding learners, apprentices & perf thereof,
handicapped workers employed therein. except where the workers are paid on piece-work basis
4. Where the output rates established by the ER (those who are paid a standard amt for every pc/unit
do not conform w/ the standards prescribed of work produced that is more/less regularly
herein, or w/ the rates prescribed by the DOLE replicated, w/o regard to the time spent in producing
th
in an approp order, the EEs shall be entitled to the same) in w/c case the ER shall grant the 13 MP
the diff bet the amt to w/c they are entitled to to such EEs.
receive under such prescribed standards/rates  The piece-rate worker should have rendered at least 1
and that actually paid them by the ER. month work/service during the calendar yr.
th
Not Entitled to HP,ND, SIL, 13 MP
B. As to Rate of Payment 1. Field personnel
1. Those who are paid piece rates w/c are 2. Unsupervised employees
prescribed in Piece Rate Orders issued by DOLE 3. Engaged on task/contract basis
# of pieces x rate per pc 4. Purely commission basis
- these workers are not covered by the Rule on 5. Paid a fixed amt for performing work
Hours of Work (no premium & OT pay) irrespective of the time consumed
Not Entitled to OT Pay
2. Those who are paid output rates w/c are 1. Paid on piece-work
prescribed by the ER and are not yet approved 2. Paid on takay
by the DOLE. 3. Paid on pakyaw
4. Paid on task basis if their output rates are in
# of pcs x rate per pc as determined by the ER. accordance w/ the standards under Sec 8 Rule 7
Book 3, or where such rates have been fixed by
a.) If the resulting amt is  than the the Sec of Labor
statutory min daily rate in rel to the #
of hrs worked, the worker will rcv such Benefits Payable to Piece-Rate Workers
amt. 1. Statutory minimum wage (MW)
b.) BUT, if the amt is less than the 2. Yearly service incentive leave of 5 days w/ pay
applicable legal rate, it is possible that (SIL)
the rates per pc are not in accordance 3. Night shift differential (ND)
w/ the standards. In that case, the ER 4. Holiday pay (HP)
is required by law to pay the difference. 5. Meal & rest periods (Meal/rest)
6. Overtime pay (conditional) (OT)
Entitlement of Piece-Rate Workers to NSD and SIL 7. Premium pay (conditional) (PP)
th th
a. Unsupervised – no OT/SIL 8. 13 Month pay (13 )
b. Supervised – entitled to OT/SIL 9. other benefits granted by law, by indiv/CBA or
- The yearly commutation/cash conversion of the SIL company policy/practice (CBA)
should be based on their average daily earnings
earned during the yr by the actual number of BWC Guidelines Summary
working days or the statutory min rate, whichever is  The rate-per-pc to be paid to a worker should
higher. be submitted to DOLE for approval.

37
  DOLE decides whether the outpu-and-pay there is no CBA authorizing the
proposal of the ER fairly & reasonably meets payment of wages by bank checks.
the legal MW, based on the output of ave.
workers doing same products under Art 103. TIME OF PAYMENT
comparable conditions.
 If DOLE approves the proposal it becomes the GR:
standard (quota). Because the DOLE-approved 1. At least once every 2 weeks; or
standard is presumed fair & reasonable, a 2. Twice a month at intervals not exceeding 16
piece-rater who does not reach the quota will days.
earn less than the legal MW and not w/ the pay :
formula. In such case the ER need not make up 1. In case of force majeure or other circs beyond
the diff bet the legal MW and the wage actually the ER’s control, payment must be made
earned. immediately after such occurrence has ceased.
 On the other hand, if the outpu-and-pay 2. If engaged to perform a task w/c cannot be
scheme has not been approved by DOLE, or completed in 2 weeks and in the absence of
does not conform w/ DOLE-issued orders, then CBA or arbitration award:
the ER may be required to pay the shortfall bet a. Payment shall be made at intervals not
the actual earning and the prescribed MW. exceeding 16 days, in proportion to
 The piece-rate pay formula needs DOLE’s the amt of work completed;
approval so ast to protect the worker’s right to b. That final settlement is made upon
be paid or to earn at least the MW, and at the completion of work.
same time, to help the ER obtain the Art 104. PLACE OF PAYMENT
corresponding work ouput. GR: At or near the place of undertaking
Ch 3 PAYMENT OF WAGES :
Art 102. FORMS OF PAYMENT 1. When payment cannot be effected at or near
the place of work by reason of deterioration of
Proof of Wage payment – ER has burden of proof peace & order conditions, or by reason of
The IRs require every ER to keep a payroll. Among other actual or impending emergencies caused by fire,
things, it must show the length of time to be paid, flood or other calamity rendering paymt
the pay rate, the amt actually paid, and so on. AND thereat impossible;
the EE should sign the payroll. 2. When the ER provides for free transpo to the
ER cannot pay his workers by means of: EEs back and forth; and
1. Promissory notes 3. Under any other analogous circs.
2. Vouchers Prohibition: No ER shall pay his EEs in a bar, night or day
3. Coupons club, drinking establishment, massage clinic, dance
4. Tokens hall or other similar places or in places where games
5. Tickets are played w/ stakes of money or thins representing
6. Chits money except in the case of persons employed in
7. Any obj other than legal tender such places.
Even when expressly requested by the EE.
Requisites for Payment thru Banks (Wage
GR: Payment by legal tender Rationalization Act)
: Payment by check or money order may be allowed if 1. There must be written permission of the
the same is: majority of the EEs concerned in an
1. Customary on the date of effectivity of the LC; establishment;
2. Necessary because of special circs as 2. The establishment must have 25/more EEs; and
determined by the Sec of Labor; 3. The establishment must be located w/in 1 km
3. Stipulated in the CB; or radius to the bank
4. Where the ff conditions are met
a. There is a bank or other facility for Requisites of Payment thru ATM
encashment w/in 1km radius; 1. The ATM sys of paymt is w/ the written consent
b. The ER, or any of his agents or reps, of the EE concerned;
does not rcv any pecuniary benefit 2. The EEs are given reasonable time to withdraw
directly/indirectly from the their wages from the bank facility w/c, if done
arrangement; during working hrs, shall be considered as
c. The EEs are given reasonable time compensable hrs worked;
during banking hrs to withdraw their 3. The sys shall allow the EE to rcv their wage w/in
wages from the bank w/c time shall be the period & the amt prescribed under the LC;
considered as compensable hours 4. There is a bank/ATM facility w/in 1km radius
worked if done during working hrs; from the workplace;
and 5. Upon the request of the concerned EE, the ER
d. The payment by check is w/ the shall issue a record evidencing paymt of wages,
written consent of the EEs concerned if benefits & deductions for a particular pd;

38
 6. The ATM sys of paymt shall neither result in coupons, tokens, tickets, chits, or any
diminution of benefits & privileges of the EE nor other obj other than legal tender
shall the latter incur addt’l expenses in the When Once every 2 weeks, or
process; and Twice a month at intervals of at least
7. The ER shall assume full responsibility in case 16 days
the wage protection provisions of law & Where At or near the place of undertaking
regulations are not complied w/ under the How Directly to the EE
arrangemt

Art 105. DIRECT PAYMENT OF WAGES Art 106. CONTRACTOR OR SUBCONTRACTOR

GR: Wages shall be paid directly to the workers to whom
they are due. Types of Contractors under the Law
: Exceptions 1. Job Contracting or Subcontracting – an arrangement
1. Payment through another person whereby a principal agrees to put out or farm out
a. In case of force majeure rendering with a contractor or subcontractor the performance
such payment impossible provided or completion of a specific job, work or service w/in a
said person is under written authority definite or predetermined period, regardless or
given by the worker for the purpose; whether such job, work, or service is t be performed
b. When authorized under existing law, or completed w/in or outside the premises of the
including payments for insurance principal
premiums of the EE and union dues
where the R to check-off has been Existence of Trilateral Relationship
recognized by the ER in accordance w/ -under this legitimate contracting the ff CONTRACTS
a CBA or authorized in writing by the exist:
indiv EEs concerned. a. Contract for specific job, work or service bet the
principal & the contractor/subcontractor; and
2. Payment through the heirs of the worker b. Contract of ENT bet the
- in case the worker has died, ER may pay wages contractor/subcontractor and its workers.
of the deceased worker to the heirs of the latter Hence, the PARTIES involved are:
w/o the necessity of intestate proceedings. 1. Principal;
2. Contractor/subcontractor; and
Procedure 3. Contractual workers
1) Claimants shall execute an affidavit Laws applicable between:
attesting their relshp to the deceased 1. Principal & Contractor  Civil Code &
and the fact that they are his heirs, to pertinent commercial laws
the exclusion of all others (Affidavit of 2. Contractor & his EEs  Labor Code &
Next of Kin); special labor laws
2) In case of a minor heir, affidavit shall 3. Principal & contractor’s EEs  no EE-ER
be executed on his behalf by his Relationship
natural guardian or next of kin; BUT ER-EE Relship will exist bet the Principal &
3) Affidavit shall be presented to the ER the Workers where the contracting
who shall make paymt through the Sec arrangement is not legitimate, as in labor-
of Labor or his rep; only contracting
4) The rep shall act as referee in dividing
the amt paid among the heirs; and Elements of Independent Contractor Job Contracting
5) Payment of wages under this Art shall 1. The sub/contractor carries on a distinct and
absolve the ER of any further liability independent business and undertakes to
w/ respect to the amt paid. perform the job on his own account and under
3. Payment through a family member of the his own responsibility, according to its own
workers family manner and method and free from the control
- where the ER is authorized in writing by the EE to & direction of the principal in all matters
pay his wages to a member of his family connected w/ the performance of the work
except to the results thereof;
Summary of Legal Prohibitions on Wages 2. The sub/contractor has substantial capital or
1) Payment of wages in non-cash form; investment in tool, equipment and machineries,
2) Payment of wages in night and day clubs, bars work premises and other materials necessary in
& other similar places; the conduct of his business;
3) Non-diminution of wages; and 3. The agreement bet the principal and
4) Non-interference by the ERs in the EE’s sub/contractor assures the contractual EEs
disposition of their wages. entitlement to all labor & health standards, free
exercise of the R to self-org, security of tenure
Summary of Rules on Payment of Wages and social & welfare benefits;
What must ✓Legal Tender. 4. Must be properly registered as such in
be paid ✗ promissory notes, vouchers, accordance w/ DO #18-02. (The absence of

39
 registration only gives rise to the presumption a bargaining unit, if such contracting out is not
that the contractor is engaged in labor-only done in GF & not justified by business
contracting a presumption that can be refuted.) exigencies;
3. Contracting w/ a Cabo – person/s or labor
2. Labor-only Contracting – an arrangement where the group w/c, in the guise of a labor org, supplies
sub/contractor merely recruits, supplies or places workers to an ER w/ or w/o any monetary or
workers to perform a job, work or service for a other consideration whether in the capacity of
principal, and ANY of the ff ELEMENTS is present: an agent of the ER or as an ostensible
a. Lack of substantial capital/investment AND independent contractor;
performance of activities directly related to the 4. Contracting w/ in-house agency;
principal’s business (confirming element); or 5. Contracting because of a strike/lockout;
b. The contractor does not exercise the right of 6. Contracting that constitutes ULP under Art 248.
control over the performance of the contractual
EE (confirming element); JOB CONTRACTING LABOR-ONLY
c. The arrangement is merely to recruit, supply or CONTRACTING
place workers to perform a job, work, or service The ER/principal is The ER/principal is
for a principal (Essential Element) merely an indirect ER, by treated as direct ER of
 LOC = Essential Element + either or both operation of law, of his the contractor’s EEs in all
confirming element/s contractor’s EEs instances (contractor is
deemed agen of the ER)
The law creates an ER-EE The statute creates an
Labor-only contracting is wrong & prohibited bcoz it is relshp for a limited ER-EE relshp for a
an attempt to evade the obligs of an EEr: purpose, i.e. to ensure comprehensive purpose,
a) To respect EE’s R to unionize; that the EEs are paid i.e. to prevent a
b) R to ENT standards; their wages circumvention of labor
c) R to security of tenure laws
The principal becomes The principal becomes
solidarily liable w/ the solidarily liable w/ the
Substantial capital – capital stocks and subscribed contractor in the even contractor not only for
capitalization in the case of corps, tools, equipment, the latter fails to pay the unpaid wages but also
implements, machineries and work premises, EEs wages and for for all the rightful claims
actually & directly used by the sub/contractor in the violation of laborof the EEs under the LC
performance or completion of the job, work or standard laws. TheAND ANCILLARY LAWS
service contracted out. liability, however does
- the law does not require both substantial capital not extend to the paymt
and investment in the form of tools, equipment, of backwages or
machineries, etc. separation pay of EEs
who are illegally
Right to control – refers to the right reserved to the dismissed
person for whom the service of the contractual Permissible Prohibited by law
workers are performed, to determine not only the Presence of substantial None
end to be achieved, but also the manner & means to capital or investment
be used in reaching that end Note: The principal shall be SOLIDARILY liable w/ the
contractor in the event of any violation of any
Insular life v NLRC: “exclusive servicing” esp provision of the LC, including failure to pay wages.
springing from a regulation issued by the Insurance This will not prevent the principal from claiming
Commission, and not from an intention by the reimbursement from the contractor.
alleged ER, does not necessarily mean being under
the control or ENT of the entity being served. The Note: The principal shall be deemed the ER of the
relship may still be classified as independent contractual EE in any of the ff cases as declared by
contractorship because the element of control is competent authority:
absent. 1. Labor-only contracting; and
2. Contracting arrangement falling w/in the
- EEs may resign from their jobs to prohibitions
become contractors to their former ER, but the latter
should cease controlling the means & method of
doing the work allegedly contracted, otherwise, the Art 107. INDIRECT ER – any person, partnership, assoc
result is LOC. or corp w/c not being n ER, contracts w/ an
independent contractor for the perf of any work,
task, job or proj.
Summary of Prohibited Labor Contracting
1. Labor-only contracting; 4 Features of Legitimate Contracting
2. Contracting that terminates the ENT of regular 1. Parties – a principal (contractee) enters into a
EEs, or reduces their work hrs, or reduces/splits contract w/ a contractor, or if the principal is

40
 himself a contractor, he enters into contact w/ The provision of existing laws to the contrary
a sub-contractor. A contracted job may be notwithstanding, every ER or indirect ER shall be held
subcontracted, partly or wholly, unless responsible w/ his sub/contractor for any violation of
prohibited in the contract. any provision of the LC. For purposes of determining
2. Specific job – the contract calls for the the extent of their civil liability under this Ch, they
performance or completion of a specific job, shall be considered as direct ERs.
work or service;
3. Period – such job, work or service is to be The existence of ER-EE Relshp is a precondition to
performed or completed w/in a definite or entitlement to labor standards & labor relatios Rs.
predetermined period; and
4. Location – the contracted job, work or service Extent of Principal’s Liability in Legitimate Contracting
may be performed or completed inside or - solidarily liable in the event of any violation of
outside the premises of the principal any provisions of the LC
1. For wages and money claims – if the
An independent contractor is one who exercises: sub/contractor fails to pay the wages of his
1. Independent ENT; EEs in accdance w/ the LC, the ER shall be
2. Contracts to do a pc of work accdg to his own jointly & severally (solidarily) liable w/ his
methods; and contractor to such EEs to the extent of work
3. Is not subj to control of ER  result performed under the contract, in the same
manner & extent that he is liable to EEs
The labor contractor is legit if: directly employed by him.
1. He is a job contractor; and He cannot escape this liability even if
2. Is properly registered w/ DOLE as the same he has paid the workers’ wage rate in
accordance w/ the contract w/ the
Judicial Notice of Job Contracting contractor. The EEs are not privy to the
- The Court has already taken judicial notice of the contract. Also, the labor standard
general practice adopted in several gort & legislations are considered written in every
private institutions and industries of hiring contract. Similarly, legislated wage increases
independent contractors to perform special are deemed amendments to the contract.
services. These services range from janitorial, Thus, ERs cannot hide behind their contracts
security and even technical or other specific in order to evade their or their contractor’s
services. While these services may be considered liability for noncompliance w/ the statutory
directly related to the principal business of the min wage, w/o prejudice to his R to recover
ER, nevertheless, they are not necessary in the whatever amount he paid from the
conduct of the principal business of the ER. contractor.

 A manpower company may be a LOC in one case but an 2. a) Reimbursement – the joint & several
independent contractor in another. liability of the contractor & the principal
 Coca-cola Bottlers Ph v Hingpit: Lipercon was under Arts 106, 107 & 109 of the LC is
adjudged to be a LOC in a previous case (Guarin v mandated to assure compliance of the
Lipercon), for lacking the substantial capital. But not so provisions including the statutory min wage.
in the present case, where it has been able to establish The contractor is made liable by virtue of his
its characted as an independent contractor. Aside form status as the direct ER; and the principal is
hiring its own EEs and paying the workers their salaries, made the indirect ER of the contractor’s EEs
it also exercised supervision & control over them, w/c is for purposes of paying the EEs their wages
the most important aspect in determining ER-EE Relshp. should the contractor fail to do so.
- where no ER-EE Relshp
exists bet the parties, as to reimbursement
Art 108. POSTING OF BOND bet the principal & the contractor, the RTC
- An ER or indirect ER may require the has jurisdiction
sub/contractor to furnish a bond equal to the
cost of labor under contract, on condition that b) Payment before Reimbursement – but
the bond will answer for the wages due the EEs one may seek reimbursement only AFTER it
should the sub/contractor, as the case may be has paid the EEs.
fail to pay the same.
- Where the ER fails to require the contractor to c) For Other Violations – qualified or limited
post a bond, the ER must answer for whatever liability; if the liability is for failure to pay the
liabilities the contractor may have incurred to his min wage, or the SIL, or other benefits
EEs. This is w/o prejudice to its seeking derived from or provided for by law, the
reimbursement from the contractor for principal is equally liable w/ the contractor
whatever amt it will have to pay the EEs. as if the principal were the direct ER.
BUT, if the liability is invested w/
Art 109. SOLIDARY LIABILITY punitive character, such as an award for
backwages & separation pay because of an

41
 illegal dismissal of the contractor’s EE, the  But, if the contractor directly supervises the workers
liability should be solely that of the & imposes disciplinary action, he qualifies as a legit
contractor in absence of proof that the contractor despite nonregistration w/ DOLE.
principal conspired w/ the contractor in the
commission of the illegal dismissal. Art. 110. WORKER PREFERENCE IN CASE OF
BANKRUPTCY
Rights of Contractual EEs (EEs of a legitimate contractor) - Workers shall enjoy first preference as regards
1. Safe & healthful working conditions; their unpaid wages & other monetary claims,
2. Labor standards such as SIL, rest days, OT any provision of law to the contrary
th
Pay, holiday pay, 13 MP, & separation pay; notwithstanding.
3. SS & welfare benefits; - Unpaid wages earned by EEs before the
4. Self-orgs, CB and peaceful concerted action; declaration of bankruptcy or judicial liquidation
and of the ER’s business shall be given first
5. Security of tenure. preference & shall be paid in full before other
creditors may establish any claim to share in the
Certain conditions required expressly stipulated in the assets of the employer.
ENT Contract - Not only unpaid wages, but also other monetary
1. Specific description of the job, work or service claims to w/c even claims of the govt must be
to be performed by the contractual EE; deemed subordinate.
2. The place of work and terms & conditions of  n/a in case the ER-corp is under rehabilitation.
ENT, uncluding a statement of the wage rate
applicable to the indiv contractual EE; and Conditions:
3. The term/duration of ENT, w/c shall be 1. Formal declaration of insolvency or bankruptcy;
coextensive w/ the contract of the principal & 2. General judicial liquidation proceedings of the
contractor or w/ the specific phase for w/c the ER’s business; and
contractual EE is engaged, as the case may be. 3. Filing of claims by workers.
The sub/contractor shall inform the contractual EE Art 111. ATTORNEY’S FEES
of the foregoing terms & conditions on or before Rules:
st
the 1 day of his ENT. 1. In cases of unlawful withholding of wages, the
culpable party may be assessed atty’s fees
Security of Tenure: equivalent to 10% of the amt of wages
a. in cases of termination of ENT prior to the recovered.
expiration of the contract bet the principal & 2. It shall be unlawful for any person to demand
the sub/contractor, the R of the contractual EE or accept, in any judicial or admin proceedings
to separation pay or other related benefits shall for the recovery of the wages, atty’s fees w/c
be governed by applicable laws & jurisprudence exceed 10% of the amt of wages recovered.
on termination of ENT.
Concepts of Atty’s Fees
b. Where the termination results from expiration a. Ordinary – reasonable compensation paid to a
of contract bet the principal & the contractor, lawyer by his client for the legal services he has
or from completion of the phase of the job for rendered.
w/c the EE is engagednot entitled to b. Extraordinary – indemnity for damages ordered
separation pay.  however, this shall be w/o by the court to be paid by the losing party in a
prejudice to completion bonuses or other litigation, and is not to be paid to the lawyer
emoluments, incl retirement pay as may be but to the client, unless they have agreed that
provided by law/contract bet the principal & the award shall pertain to the lawyer as an
the contractor. addtl compensation or as a part there of.

Security of tenure requires procedural due

process for termination of ENT.
GR: Awarded atty’s fee may not exceed 10%,
No security of tenure for casual EEs.  but bet lawyer & client quantum meruit may apply.
Registration of Contractors
Requirements: Quantum meruit – as much as he deserves.
1. Submission of annual reports Basis:
a. Sworn undertaiking that the sss, Home 1. The time spent & the extent of services
Devt Mutual Fund, PhilHealth, EEs rendered or required;
Compensation Commission (ECC), and 2. The novelty & difficulty of the questions
BIR remittances involved;
2. They are subj to routine inspection by the DOLE 3. The importance of the subject matter;
4. The skill demanded;
Effect of Nonregistration: 5. The probability of losing other ENT as a result of
GR: The absence of registration gives rise to the acceptance of the proferred IBP chapter to w/c
presumption that the contractor is engaged in LOC, the lawyer belongs;

42
 6. The amt involved in the controversy and the
benefits resulting to the client from the
services;
7. The contingency of certainty of compensation;
8. The character of ENT, whether occasional or
established; and
9. The professional standing of the lawyer.

2 Kinds of Cases where Atty’s Fees may be Assessed:

1. Cases arising from unlawful withholding of
wages; and
2. Cases arising from CBAs.
3. Claims for death benefits (Heirs of Aniban) :
Art 111 does not limit the award of atty’s fees
to cases of unlawful withholding of wages only.
What it explicitly prohibits is the award of atty’s
fees w/c exceed 10% of the amt of wages
recovered.

Non-lawyers not entitled to Atty’s Fees

GR: Although the law allows non-lawyers to appear
before the NLRC or any Labor Arbiter, this does not
mean that they are entitled to atty’s fees.
Entitlement to atty’s fees presupposes the existence
of ER-EE Relshp, and this cannot exist unless the
client’s rep is a lawyer.
 Union Service Fee –non-lawyers may represent their
org or members. The said labor federations & local
unions have a valid claim to atty’s fees.

PAO lawyers are disqualified from being awarded atty’s

fees.

43