LABOR STANDARDS / Midterms

SOURCES: Azucena, various Disini reviewers scattered throughout the internet

Sec. 1 – Labor Law in General or their representatives. Labor

relations are dealt with in:
1.01. LABOR LAW DEFINED o Book V: Labor Relations (Arts.
211-277)
 Labor law is the field of law governing  Welfare laws: that which is designed
the relationship between employers to take care of the contingencies
and employees. which may affect the workers (e.g.
 Labor law is the law governing the where there is loss of income for
rights and duties of the employer and reasons beyond control like sickness,
employees: death or accident). Some Philippine
1. with respect to the terms and welfare laws are the following:
conditions of employment, and o Social Security Act of 1997 (RA
2. with respect to labor disputes 8282)
arising from collective bargaining o Philippine Government
respecting such terms and Service Insurance System Act
conditions. of 1997 (RA 8291)
o Employment Compensation
1.02. LAW CLASSIFICATION – LABOR and State Insurance Fund
STANDARDS, LABOR RELATIONS, AND o National Health Insurance Act
WELFARE LAWS of 1195 (RA 7875)

Philippine labor laws can be classified into Labor Standards

three (3) categories: labor standards, labor
relations, and welfare laws. Batong Buhay Goldmines, Inc. v. de la
Serna: Labor standards refers [sic] to the
 Labor standards: that which sets out minimum requirements prescribed by
the minimum terms, conditions and existing laws, rules and regulations relating to
benefits of employment that wages, hours of work, cost of living
employers must provide or comply allowance and other monetary and welfare
with and to which employers are benefits, including occupational, safety and
entitled to as a matter of legal right. health standards. Labor standards cases are
Labor standards are dealt with in the governed by Article 128(b) of the Labor Code.
following books of the Labor Code:
o Book I: Pre-employment (Arts. Peñaranda v. Baganga Plywood Corp.:
12-42) Labor standards provide the working
o Book II: Human Resources conditions of employees, including
Development Program (Arts. entitlement to overtime pay and premium pay
23-81) for working on rest days.
o Book III: Conditions of
Employment (Arts. 82-155) 1.03. BASIS FOR ENACTMENT –
o Book IV: Health, Safety, and CONSTITUTION (1987)
Social Welfare Benefits (Arts.
156-210) Art. II, Sec. 18. The State affirms labor as a
o Book VI: Post-employment primary social economic force. It shall protect
 Labor relations: that which defines the rights of workers and promote their
the status, rights and duties, and the welfare.
institutional mechanisms that govern
the individual and collective
interactions of employers, employees

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Art. XIII, Sec. 1. The Congress shall give Kasapian ng Malayang Manggagawa sa
highest priority to the enactment of measures Coca-Cola v. CA: The MOA, being a contract
that protect and enhance the right of all the freely entered into by the parties, now
people to human dignity, reduce social, constitutes as the law between them, and the
economic, and political inequalities, and interpretation of its contents purely involves
remove cultural inequities by equitably an evaluation of the law as applied to the
diffusing wealth and political power for the facts herein.
common good.
C. Collective Bargaining Agreement – Book
Police Power V, Rule I, Sec. 1(j), Omnibus Rules

Police power is the state authority to enact Rule I, Sec. 1(j). “Collective Bargaining
legislation that may interfere with personal Agreement” or “CBA” refers to the contract
liberty or property in order to promote the between a legitimate labor union and the
general welfare. employer concerning wages, hours of work,
and all other terms and conditions of
CMS Estate, Inc. v. Social Security System: employment in a bargaining unit.
It (compulsory coverage of employers and
employees under the SSS as required by RA DOLE Phils., v. Pawis ng Makabayang
1161) is actually a legal imposition on said Obrero: The CBA is the norm of conduct
employers and employees, designed to between the parties and compliance
provide social security to the working men. therewith is mandated by the express policy
Membership in the SSS is therefore in of the law.
compliance with the lawful exercise of the
police power of the State. D. Past Practices

1.04. SOURCES OF LAW To be a source of rights and obligations, the

following requisites must be present:
A. Labor Code and Related Special
Legislation (including IRR) 1. The practice must be freely,
voluntarily and continuously given
Mariveles Shipyard Corp. v. CA: Labor laws within a considerable length of time
are considered written in every contract. (Davao Fruits Corp. v. Associated
Stipulations in violation thereof are Labor Union)
considered null. Similarly, legislated wage 2. The practice must be not just a single
increases are deemed amendments to the instance; i.e. not granted only once
contract. (Samahang Manggagawa, etc. v.
NLRC)
B. Contract (Art. 1305 – 1306, NCC) 3. The practice should be done over a
long period of time and must be
Art. 1305. A contract is a meeting of minds shown to have been consistent and
between two persons whereby one binds deliberate (American Wire and Cable
himself with respect to the other, to give Daily Rated Employers Union v.
something or to render some service. American Wire and Cable Co., Inc.)
Art. 1306. The contracting parties may 4. The practice must not be by reason of
establish such stipulations, clauses, terms a strict legal or contractual obligation,
and conditions as they may deem but by reason of an act of liberality on
convenient, provided they are not contrary to the part of the employer (Pag-asa
law, morals, good customs, public order, or Steel Works, Inc. v. CA)
public policy.
E. Company Policies

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China Banking Corp. v. Borromeo: Company damages arising from employer-

policies are generally binding and valid on employee relations;
the parties and must be complied with until - Cases arising from any violation
finally revised or amended unilaterally o of Article 264 of this Code,
preferably through negotiation by competent including questions involving
authority, unless shown to be grossly legality of strikes and lockouts;
oppressive or contrary to law. and
- Except claims for Employees
1.05. LAW AND WORKER Compensation, Social Security,
Medicare and maternity benefits,
Amkor Technology v. Juangco: While the all other claims, arising from
Constitution is committed to the policy of employer-employee relations,
social justice and the protection of the including those of persons in
working class, it should not be expected that domestic or household service,
every labor dispute will be automatically involving an amount exceeding
decided in favor of labor. Management also five thousand pesos (P5,000.00)
has its own rights which, as such, are entitled regardless of whether
to respect and enforcement in the interest of accompanied with a claim for
simple fair play. reinstatement.

Without these two elements, there is no labor

Cebu Royal Plant v. Deputy Minister of case. (Lapanday Agricultural Development
Labor: We take this opportunity to reaffirm Corp. v. CA)
our concern for the lowly worker who, often
at the mercy of his employers, must look up 1.07. CASE DECISION
to the law for his protection. Fittingly, that law
regards him with tenderness and even favor
Anino v. NLRC: A decision should faithfully
and always with faith and hope in his
comply with Sec. 14, Art. VIII of the
capacity to help in shaping the nation's future
Constitution. (No decision shall be rendered
… If we cherish him as we should, we must
by any court [or quasi-judicial body] without
resolve to lighten "the weight of centuries" of
expressing therein clearly and distinctly the
exploitation and disdain that bends his back
facts of the case and the law on which it is
but does not bow his head.
based.) The factual and legal bases of public
respondent's conclusions were bereft of
1.06. LABOR CASE substantial evidence — the quantum of proof
in labor cases — its disposition is manifestly a
To determine whether or not there is a labor violation of the constitutional mandate and
case, two elements must concur: an exercise of grave abuse of discretion.
Such decision is a nullity.
1. the presence of an employer-
employee relationship; and
1.08. MANAGEMENT FUNCTION
2. a violation of the Labor Code – Art.
217 enumerates acts that fall under
Recognition
the jurisdiction of labor arbiters:
- Unfair labor practices;
- Termination disputes; Gustilo v. Wyeth: It is the employer’s
- If accompanied with a claim for prerogative to prescribe reasonable rules and
reinstatement, those cases that regulations necessary or proper for the
workers may file involving wages, conduct of its business or concern to provide
rates of pay, hours of work and certain disciplinary measures to implement
other terms and conditions of said rules and to assure that the same be
employment; complied with. At the same time, it is one of
- Claims for actual, moral the fundamental duties of the employee to
exemplary and other form of yield obedience to all reasonable rules,

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orders, and instructions of the employer, and

willful or intentional disobedience thereof, as Art. 2028. A compromise is a contract
a general rule, justifies rescission of the whereby the parties, by making reciprocal
contract of service and the preemptory concessions, avoid a litigation or put an end
dismissal of the employee. to one already commenced.

Limitations Art. 2036. A compromise comprises only

those objects which are definitely stated
Phil. Airlines v. Pascua: The exercise of therein, or which by necessary implication
management prerogative is not absolute. from its terms should be deemed to have
While the employer may be conceded that been included in the same.
management is in the best position to know A general renunciation of rights is understood
its operational needs, the exercise of to refer only to those that are connected with
management prerogative cannot be utilized the dispute which was the subject of the
to circumvent the law and public policy on compromise.
labor and social justice. It must always be
exercised with the principles of fair play at  Waivers and compromise are
heart and justice in mind. frowned upon by law because it is
subject to abuse (leading to instances
The limitations to the exercise of when labor may be exploited by
management prerogatives are as follows: capital)
 Even so, not all compromises and
1. Law and public policy on labor on waivers are void or contrary to law –
social justice labor law is not meant to suppress
2. Terms and conditions of the employers; just as it protects
collective bargaining agreement employees, it also protects
(CBA) negotiated between labor and employers. There’s a shared
capital responsibility: employee’s right to the
3. Principles of fair play and justice fruits of his labor, and employer’s right
4. That the exercise of management to the return of his investment.
prerogatives be in good faith to  There are three elements that must
advance its interest and not for the concur to determine the validity of a
purpose of defeating or compromise or waiver:
circumventing the rights of o The amount involved is
employees under the laws or valid reasonable and not
agreements (Valiao v. CA) unconscionable
o It is voluntarily entered into
1.09. COMPROMISE AND WAIVER – Art. 227, o There is proximate equality,
Labor Code; Arts. 2028, 2036, Civil Code no moral ascendancy over the
other
Art. 227. Compromise agreements – Any
compromise settlement, including those
involving labor standard laws, voluntarily Sec. 2 – Labor and the Constitution
agreed upon by the parties with the
assistance of the Bureau or the regional STATUTORY REFERENCE – 1935, 1973, and
office of the Department of Labor, shall be 1987 Constitutions
final and binding upon the parties. The
National Labor Relations Commission or any 2.01. HISTORICAL BACKGROUND AND
court shall not assume jurisdiction over RATIONALE
issues involved therein except in case of non-
compliance thereof or if there is prima facie
Antamoc Goldfields Mining Co., v. CIR: … our
evidence that the settlement was obtained
Constitution was adopted in the midst of
through fraud, misrepresentation, or coercion.

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surging unrest and dissatisfaction resulting Art. II, Sec. 18. The State affirms labor as a
from economic and social distress which primary social economic force. It shall protect
was threatening the stability of governments the rights of workers and promote their
the world over. Embodying the spirit of the welfare.
present epoch, general provisions were
inserted in the Constitution which are B. Protection of Labor – Guarantees – Art.
intended to bring about the needed social XIII, Sec. 3 (Compare: 1935 Constitution – Art.
and economic equilibrium between XIV, Sec. 3; 1973 Constitution – Art. II, Sec. 9;
component elements of society … to be and 1987 Constitution, Art. XIII, Secs. 1, 3; Art.
secured through the counterbalancing of II, Secs. 10, 18)
economic and social forces and
opportunities which should be regulated, if Art. XIII, Sec. 3. The State shall afford full
not controlled, by the State or placed, as it protection to labor, local and overseas,
were, in custodia societatis. 'The promotion organized and unorganized, and promote full
of social justice to in sure the well-being and employment and equality of employment
economic security of all the people' was thus opportunities for all.
inserted as vital principle in our Constitution. It shall guarantee the rights of all workers to
(Sec. 5, Art. II, Constitution.) And in order that self-organization, collective bargaining and
this declaration of principle may not just be negotiations, and peaceful concerted
an empty medley of words, the Constitution activities, including the right to strike in
in various sections thereof has provided the accordance with law. They shall be entitled to
means towards its realization … security of tenure, humane conditions of
work, and a living wage. They shall also
2.02. NATURE OF PROVISION participate in policy and decision-making
processes affecting their rights and benefits
Phil. Airlines, Inc. v. Santos: The sympathy of as may be provided by law.
the Court is on the side of the laboring The State shall promote the principle of
classes, not only because the Constitution shared responsibility between workers and
imposes such sympathy, but because of the employers and the preferential use of
one-sided relation between labor and capital. voluntary modes in settling disputes,
The constitutional mandate for the promotion including conciliation, and shall enforce their
of labor is as explicit as it is demanding. The mutual compliance therewith to foster
purpose is to place the workingman on an industrial peace.
equal plane with management — with all its The State shall regulate the relations
power and influence — in negotiating for the between workers and employers, recognizing
advancement of his interests and the defense the right of labor to its just share in the fruits
of his rights. Under the policy of social justice, of production and the right of enterprises to
the law bends over backward to reasonable returns to investments, and to
accommodate the interests of the working expansion and growth.
class on the humane justification that those
with less privileges in life should have more C. Social Justice – Art II, Sec. 10; 1973
privileges in law. Constitution; Art. II, Sec. 5, 1935 Constitution;
1987 Constitution, Art. XIII, Secs. 1-2
 To summarize, the interpretation of
labor laws should be made in favor of Art. II, Sec. 10. (1987) The State shall
the laborers. promote social justice in all phases of
national development.
2.03. 1987 CONSTITUTION
Art. II, Sec. 6. (1973) The State shall promote
A. Labor Sector – Characterized – Art. II, Sec. social justice to ensure the dignity, welfare,
18 and security of all the people. Towards this
end, the State shall regulate the acquisition,

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 LABOR STANDARDS / Midterms

ownership, use, enjoyment, and disposition of  EX: The Constitution does not protect
private property, and equitably diffuse the employee when the employee is
property ownership and profits. wrong and the employer is right.

Art. II, Sec. 5. (1935) The promotion of social Dayan v. BPI: Law, in protecting the rights of
justice to insure the well-being and economic labor, authorized neither oppression nor self-
security of all the people should be the destruction of an employer company which
concern of the State. itself is possessed of rights that must be
entitled to recognition and respect.
Art. XIII, Sec. 1. (1987) The Congress shall
give highest priority to the enactment of Equal Work Opportunities
measures that protect and enhance the right
of all the people to human dignity, reduce Star Paper Corp. v. Simbol: The absence of
social, economic, and political inequalities, a statute expressly prohibiting marital
and remove cultural inequities by equitably discrimination in our jurisdiction cannot
diffusing wealth and political power for the benefit the petitioners. The protection given to
common good. labor in our jurisdiction is vast and extensive
To this end, the State shall regulate the that we cannot prudently draw inferences
acquisition, ownership, use, and disposition from the legislature’s silence that married
of property and its increments. persons are not protected under our
Sec. 2. The promotion of social justice shall Constitution and declare valid a policy based
include the commitment to create economic on a prejudice or stereotype. Thus, for failure
opportunities based on freedom of initiative of petitioners to present undisputed proof of a
and self-reliance. reasonable business necessity, we rule that
the questioned policy is an invalid exercise of
Definition – Social Justice management prerogative.

Calalang v. Williams: Social justice is the Labor as Property

humanization of laws and the equalization of
social and economic forces by the State so Asuncion v. NLRC: A worker’s employment is
that justice in its rational and objective property in the constitutional sense. He
secular conception may at least be cannot be deprived of his work without due
approximated. process. In order for the dismissal to be valid,
not only must it be based on just cause
Limits of Use supported by clear and convincing evidence,
the employee must also be given an
opportunity to be heard and defend himself.
PLDT v. NLRC: Social justice is not intended
It is the employer who has the burden of
to countenance wrongdoing simply because
proving that the dismissal was with just or
it is committed by the underprivileged.
authorized cause. The failure of the employer
Compassion for the poor is an imperative of
to discharge this burden means that the
every humane society but only when the
dismissal is not justified and that the
recipient is not a rascal claiming an
employee is entitled to reinstatement and
underserved privilege.
backwages.
2.04. CONSTITUTIONAL RIGHTS AND
Due Process Requirements
LABOR LAW
Ang Tibay v. CIR: The procedural due
Management of the Constitution
process requirements are:
1. Right to a hearing; includes the right
 GR: The Constitution protects and
of a part to present his own case and
promotes the welfare of the
submit evidence in support thereof
employee.

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 LABOR STANDARDS / Midterms

2. The tribunal must consider the

evidence presented Philippine Airlines, Inc. v. NLRC: Industrial
3. Decision must be supported by peace cannot be achieved if the employees
evidence are denied their just participation in the
4. Evidence must be substantial; discussion of matters affecting their rights.
relevant evidence as a reasonable The attainment of a harmonious labor-
mind might accept as adequate to management relationship and the then
support a conclusion, even if other already existing state policy of enlightening
minds equally reasonable would workers concerning their rights as employees
opine otherwise demand no less than the observance of
5. Decision must be rendered on the transparency in managerial moves affecting
evidence presented at the hearing or employees’ rights.
at least contained in the record and Unlike management prerogative regarding
disclosed to the parties affected business operations, the exercise of
6. Independent consideration of judge; management prerogative regarding matters
must not simply accept views of which affect the rights of employees should
subordinate in arriving at a decision be made known to employees. They should
7. Decision rendered in such a manner be properly informed of the decision and the
as to let the parties know the various modes through which they were arrived at.
issues involved and the reasons for
the decision rendered.
Sec. 3 – Labor and the Civil Code
Air Manila, Inc. v. Balatbat & Agabon v.
NLRC:
8. A tribunal so constituted as to give STATUTORY REFERENCE – Civil Code of the
him reasonable assurance of honesty Philippines, R.A. No. 386 as amended
and impartiality, and one of
competent jurisdiction 3.01. ROLE OF LAW – Art. 1700
9. Specifically for termination case: twin
notice rule. Art. 1700. The relation between capital and
labor are not merely contractual. They are so
Liberty of Contract/Laissez-faire and State impressed with public interest that labor
Interference contracts must yield to the common good.
Therefore, such contracts are subject to the
Leyte Land Transportation Co. v. Leyte special laws on labor unions, collective
Farmers and Workers Union: The State still bargaining, strikes and lockouts, closed shop,
exercises control/power to interfere where wages, working conditions, hours of labor
the parties are not equal in standing. and similar subjects.

Welfare State Labor Contracts

3.02. EMPLOYER-EMPLOYEE STANDARD

Alalayan v. NPC: The welfare state concept is
OF CONDUCT – Art. 1701
not alien to the philosophy of our
Constitution. It is implicit in quite a few of its
provisions. There is the clause on the Art. 1701. Neither capital nor labor shall act
promotion of social justice to ensure the well- oppressively against the other, or impair the
being and economic security of all the interest of convenience of the public.
people, as well as the pledge of protection to
labor with the specific authority to regulate Fair Treatment
the relations between landowners and
tenants and between labor and capital. Uypitching v. Quiamco: The basic principle
of human relations, embodied in Article 19 of
Participation in Decision-Making Process the Civil Code, provides: [Art. 19. Every person

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 LABOR STANDARDS / Midterms

must in the exercise of his rights and in the suffer the consequences of his negligence if
performance of his duties, act with justice, not lack of due care in the performance of his
give every one his due, and observe honesty duties.
and good faith.] Article 19, also known as the
'principle of abuse of right, prescribes that a Public Policy
person should not use his right unjustly or
contrary to honesty and good faith, otherwise Avon Cosmetics, Inc. v. Luna: Public policy is
he opens himself to liability. It seeks to that principle of the law which holds that no
preclude the use of, or the tendency to use, a subject or citizen can lawfully do that which
legal right (or duty) as a means to unjust has a tendency to be injurious to the public or
ends. There is an abuse of right when it is against the public good. As applied to
exercised solely to prejudice or injure contracts, in the absence of express
another. The exercise of a right must be in legislation or constitutional prohibition, a
accordance with the purpose for which it was court, in order to declare a contract void as
established and must not be excessive or against public policy, must find that the
unduly harsh; there must be no intention to contract as to the consideration or thing to be
harm another. Otherwise, liability for done, has a tendency to injure the public, is
damages to the injured party will attach. against the public good, or contravenes
some established interests of society, or is
Law Compliance inconsistent with sound policy and good
morals, or tends clearly to undermine the
Sarmiento v. Tuico: It must be stressed that security of individual rights, whether of
while one purpose of the return-to-work order personal liability or of private property.
is to protect the workers who might otherwise
be locked out by the employer for threatening
or waging the strike, the more important
Sec. 4 – Labor and International Covenants
reason is to prevent impairment of the
(Labor Standards and Welfare Law)
national interest in case the operations of the
company are disrupted by a refusal of the
strikers to return to work as directed. More 4.01. UNIVERSAL DECLARATION OF
particularly, it is the national economy that HUMAN RIGHTS – Arts. 3, 7, 17, 22, 23, 24, 25
will suffer because of the resultant reduction
in our export earnings and our dollar Art. 3. Everyone has the right to life, liberty
reserves, not to mention possible and security of person.
cancellation of the contracts of the company
with foreign importers. Art. 7. All are equal before the law and are
entitled without any discrimination to equal
Employee Obedience and Compliance [to] protection of the law. All are entitled to equal
Employer Orders protection against any discrimination in
violation of this Declaration and against any
incitement to such discrimination.
PCIB v. Jacinto: Any employee who is
entrusted with responsibility by his employer
Art. 17. (1) Everyone has the right to own
should perform the task assigned to him with
property alone as well as in association with
care and dedication. The lack of a written or
others.
formal designation should not be an excuse
(2) No one shall be arbitrarily deprived of his
to disclaim any responsibility for any damage
property.
suffered by the employer due to his
negligence. The measure of the responsibility
Art. 22. Everyone, as a member of society,
of an employee is that if he performed his
has the right to social security and is entitled
assigned task efficiently and according to the
to realization, through national effort and
usual standards, then he may not be held
international co-operation and in accordance
personally liable for any damage arising
with the organization and resources of each
therefrom. Failing in this, the employee must

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 LABOR STANDARDS / Midterms

State, of the economic, social and cultural programmes, policies and techniques to
rights indispensable for his dignity and the achieve steady economic, social and cultural
free development of his personality. development and full and productive
employment under conditions safeguarding
Art. 23. (1) Everyone has the right to work, to fundamental political and economic
free choice of employment, to just and freedoms to the individual.
favorable conditions of work and to
protection against unemployment. Art. 7. The States Parties to the present
(2) Everyone, without any discrimination, has Covenant recognize the right of everyone to
the right to equal pay for equal work. the enjoyment of just and favorable
(3) Everyone who works has the right to just conditions of work which ensure, in
and favorable remuneration ensuring for particular:
himself and his family an existence worthy of (a) Remuneration which provides all workers,
human dignity, and supplemented, if as a minimum, with:
necessary, by other means of social (i) Fair wages and equal remuneration for
protection. work of equal value without distinction of any
(4) Everyone has the right to form and to join kind, in particular women being guaranteed
trade unions for the protection of his interests. conditions of work not inferior to those
enjoyed by men, with equal pay for equal
Art. 24. Everyone has the right to rest and work;
leisure, including reasonable limitation of (ii) A decent living for themselves and their
working hours and periodic holidays with families in accordance with the provisions of
pay. the present Covenant;
(b) Safe and healthy working conditions;
Art. 25. (1) Everyone has the right to a (c) Equal opportunity for everyone to be
standard of living adequate for the health and promoted in his employment to an
well-being of himself and of his family, appropriate higher level, subject to no
including food, clothing, housing and medical considerations other than those of seniority
care and necessary social services, and the and competence;
right to security in the event of (d) Rest, leisure and reasonable limitation of
unemployment, sickness, disability, working hours and periodic holidays with
widowhood, old age or other lack of pay, as well as remuneration for public
livelihood in circumstances beyond his holidays
control.
(2) Motherhood and childhood are entitled to Art. 9. The States Parties to the present
special care and assistance. All children, Covenant recognize the right of everyone to
whether born in or out of wedlock, shall enjoy social security, including social insurance.
the same social protection.
Art. 11. 1. The States Parties to the present
4.02. INTERNATIONAL COVENANT ON Covenant recognize the right of everyone to
ECONOMIC, SOCIAL AND CULTURAL an adequate standard of living for himself
RIGHTS – Part III, Arts. 6, 7, 9, 11 and his family, including adequate food,
clothing and housing, and to the continuous
Art. 6. 1. The States Parties to the present improvement of living conditions. The States
Covenant recognize the right to work, which Parties will take appropriate steps to ensure
includes the right of everyone to the the realization of this right, recognizing to this
opportunity to gain his living by work which effect the essential importance of
he freely chooses or accepts, and will take international co-operation based on free
appropriate steps to safeguard this right. consent.
2. The steps to be taken by a State Party to 2. The States Parties to the present Covenant,
the present Covenant to achieve the full recognizing the fundamental right of
realization of this right shall include technical everyone to be free from hunger, shall take,
and vocational guidance and training individually and through international co-

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 LABOR STANDARDS / Midterms

operation, the measures, including specific

programmes, which are needed: International Conventions
(a) To improve methods of production,
conservation and distribution of food by International School Alliance of Educators
making full use of technical and scientific v. Quisumbing: The Constitution, Labor Code
knowledge, by disseminating knowledge of and the International Covenant on Economic,
the principles of nutrition and by developing Social, and Cultural Rights impregnably
or reforming agrarian systems in such a way institutionalize in this jurisdiction the long
as to achieve the most efficient development honored legal truism of "equal pay for equal
and utilization of natural resources; work." Persons who work with substantially
(b) Taking into account the problems of both equal qualifications, skill, effort and
food-importing and food-exporting countries, responsibility, under similar conditions,
to ensure an equitable distribution of world should be paid similar salaries.
food supplies in relation to need.

4.03. INTERNATIONAL COVENANT ON CIVIL Sec. 5 – The Labor Code of the Philippines
AND POLITICAL RIGHTS – Part III, Art. 8
5.01. DECREE TITLE
Art. 8. 1. No one shall be held in slavery;
slavery and the slave-trade in all their forms
Art. 1. Name of decree – This Decree shall be
shall be prohibited.
known as the “Labor Code of the Philippines.”
2. No one shall be held in servitude.
(a) No one shall be required to perform
forced or compulsory labor; 5.02. EFFECTIVITY
(b) Paragraph 3 (a) shall not be held to
preclude, in countries where imprisonment Art. 2. Date of effectivity – This Code shall
with hard labor may be imposed as a take effect six (6) months after its
punishment for a crime, the performance of promulgation.
hard labor in pursuance of a sentence to
such punishment by a competent court;  The Labor Code was promulgated on
(c) For the purpose of this paragraph the term May 1, 1974 and hence took effect on
"forced or compulsory labor" shall not November 1, 1974; however, PD No.
include: 607 deferred the effectivity of portions
(i) Any work or service, not referred to in of Book IV to January 1, 1975.
subparagraph (b), normally required of a
person who is under detention in 5.03. POLICY DECLARATION – CF.
consequence of a lawful order of a court, or CONSTITUTION, ART. XIII, Sec. 3
of a person during conditional release from
such detention; Art. 3. Declaration of basic policy – The State
(ii) Any service of a military character and, in shall afford protection to labor, promote full
countries where conscientious objection is employment, ensure equal work
recognized, any national service required by opportunities regardless of sex, race or creed,
law of conscientious objectors; and regulate the relations between worker
(iii) Any service exacted in cases of and employers. The State shall assure the
emergency or calamity threatening the life or rights of workers to self-organization,
well-being of the community; collective bargaining, security of tenure, and
(iv) Any work or service which forms part of humane conditions of work.
normal civil obligations.
5.04. RATIONALE, SPIRIT, INTENT
4.04. CONVENTIONS AND
RECOMMENDATIONS OF THE Magallanes v. Sun Yat Sen Elem. School:
INTERNATIONAL LABOR ORGANIZATION The Labor Code was promulgated to
(ILO) promote the welfare and well-being of the

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 LABOR STANDARDS / Midterms

working man. Its spirit and intent mandate

the speedy administration of justice, with Light Railway Transit Authority v. Venus:
least attention to technicalities but without Labor law claims against government-owned
sacrificing the fundamental requisites of due and controlled corporations without original
process. charter fall within the jurisdiction of the
Department of Labor and Employment and
5.05. APPLICABILITY – 276, Art. IX, B, Sec. not the Civil Service Commission.
2(1), CONSTITUTION
The manner by which how a GOCC was
Art. 6. Applicability – All rights and benefits created is important in determining which
granted to workers under this Code shall, law applies to it:
except as may otherwise be provided herein,
apply alike to all workers, whether  If with original charter: the Civil
agricultural, or non-agricultural. Service Law applies (Art. 276, LC; Art.
IX-B, Sec. 2 (1), Consti.)
Art. 276. Government employees – The terms  If incorporated under the Corporation
and conditions of employment of all Code (no original charter): the Labor
government employees, including employees Code applies
of government-owned and controlled
corporations, shall be governed by the Civil However, in terms of wages, the Labor Code
Service Law, rules and regulations. Their does not distinguish as to the nature of the
salaries shall be standardized by the National GOCC – its provisions on wages apply on
Assembly as provided for in the New both.
Constitution. However, there shall be no
reduction of existing wages, benefits and International Agencies/Organizations
other terms and conditions of employment
being enjoyed by them at the time of the Ebro III v. NLRC: The grant of immunity from
adoption of the Code. local jurisdiction to [an international
organization] is clearly necessitated by their
international character and respective
Sec. 2. (1) The civil service embraces all
purposes. The objective is to avoid the
branches, subdivisions, instrumentalities, and
danger of partiality and interference by the
agencies of the Government, including
host country in their internal workings. The
government-owned or controlled
exercise of jurisdiction by the Department of
corporations with original charters.
Labor in these instances would defeat the
very purpose of immunity, which is to shield
 GR: The Labor Code applies to all the affairs of international organizations, in
workers, whether agricultural or non- accordance with international practice, from
agricultural (also see Requisite political pressure or control by the host
Relationship below). country to the prejudice of the member State
 EX: The Labor Code does not apply to of the organization, and to ensure the
those specified as such therein, such unhampered performance of their functions.
as government employees and
employees of GOCCs with original
School Teachers
charters.

Requisite Relationship Chiang Kai Shek College v. CA: Under the

Manual of Regulations for Private Schools, for
a private school teacher to acquire a
Uy v. Bueno: The requirement of employer-
permanent status of employment and,
employee relationship is jurisdictional for the
therefore, be entitled to a security of tenure,
provisions of the Labor Code to apply.
the following requisites must concur: (a) the
teacher is a full-time teacher; (b) the teacher
Test – GOCC must have rendered three consecutive years

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 LABOR STANDARDS / Midterms

of service; and (c) such service must have necessarily required the use of discretion and
been satisfactory. independent judgment to ensure the proper
functioning of the steam plant boiler. As
National Mines and Allied Workers Union v. supervisor, petitioner is deemed a member of
San Ildefonso College: On the issue of the managerial staff.
whether the individual petitioners were
permanent employees, it is the Manual of 5.06. RULE-MAKING POWER – 5
Regulations for Private Schools, and not the
Labor Code, which is applicable. This was Limitation – Rule-Making Power – Policy
settled in University of Sto. Tomas v. NLRC, Instructions
where we explicitly ruled that for a private
school teacher to acquire permanent status Sonza v. ABS-CBN: Sonza argues Policy
in employment and, therefore, be entitled to Instruction No. 40 by Minister of Labor said
security of tenure, the following requisites the types of employees in broadcast are the
must concur: (1) the teacher is a full-time station and program employees. Court said
teacher; (2) the teacher must have rendered this instruction is a mere executive issuance
three (3) consecutive years of service; and (3) which does not have the force and effect of
such service must have been satisfactory. law and not binding on the Court.

 However, the Labor Code is CBTC Employees Union v. Clave: A labor

suppletory to the Manual. regulation which in effect amends the Labor
Code is null and void. An administrative
Religious Corporations interpretation which diminishes the benefits
of labor to less than what the statute delimits
Austria v. NLRC: An ecclesiastical affair or withholds is obviously ultra vires.
involves the relationship between the church
and its members and relate to matters of 5.07. LAW INTERPRETATION – 4; Art. 1702,
faith, religious doctrines, worship and NCC
governance of the congregation. Examples of
this so-called ecclesiastical affairs to which Art. 4. Construction in favor of labor – All
the State cannot meddle are proceedings for doubts in the implementation and
excommunication, ordinations of religious interpretation of the provisions of this Code,
ministers, administration of sacraments and including its implementing rules and
other activities which attached religious regulations, shall be resolved in favor of labor.
significance.
Art. 1702. In case of doubt, all labor
 If ecclesiastical affairs: Labor Code legislation and all labor contracts shall be
does not apply construed in favor of the safety and decent
 If not ecclesiastical affairs: Labor living for the laborer.
Code applies
Liberal Construction
Managerial Employees
Salinas v. NLRC: In carrying out and
Peñaranda v. Baganga Plywood Corp.:
interpreting the provisions of the Labor Code
Petitioner’s duties and responsibilities
and its implementing regulations, the
conform to the definition of a member of a
workingman’s welfare should be the
managerial staff under the Implementing
primordial and paramount consideration.
Rules. Petitioner supervised the engineering
section of the steam plant boiler. His work
involved overseeing the operation of the Duncan Association v. Glaxo-Wellcome:
machines and the performance of the Glaxo’s policy prohibiting an employee from
workers in the engineering section. This work having a relationship with an employee of a
competitor company is a valid exercise of

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 LABOR STANDARDS / Midterms

management prerogative. Glaxo has a right Clemente v. GSIS: Doubts should be

to guard its trade secrets, etc. resolved in favor of the claimant-employee.
The commands of the equal protection
clause are addressed only to the state or No Doubt
those acting under the color of authority, and
erect no shield against merely private Bonifacio v. GSIS: While the court does not
conduct, however discriminatory or wrongful. dispute petitioner's contention that under the
law, in case of doubt in the implementation
 EX: when the state in any of its and interpretation of the provisions of the
manifestations or actions has been Labor Code, including its implementing rules
found to have become entwined or and regulations, the doubt shall be resolved
involved in the wrongful private in favor of the laborer, the court finds that the
conduct same has no application in this case since
the pertinent provisions of the Labor Code
“In favor of labor” – Rationale” leave no room for doubt either in their
interpretation or application.
Abella v. NLRC: In any event, it is well-settled
that in the implementation and interpretation Sweeping Interpretation
of the provisions of the Labor Code and its
implementing regulations, the workingman's Bravo v. Employees Compensation
welfare should be the primordial and Commission: “We are aware of the mandate
paramount consideration. that social legislation should be applied in
The policy is to extend the applicability of the consonance with the principles of social
decree to a greater number of employees justice and protection to labor. However, we
who can avail of the benefits under the law, cannot adopt a sweeping interpretation of the
which is in consonance with the avowed law in favor of labor lest we engage in judicial
policy of the State to give maximum aid and legislation.”
protection to labor.
It is the kind of interpretation which gives Factual Considerations and Rationality
meaning and substance to the liberal and
compassionate spirit of the law as provided
Phil. Airlines, Inc. v. NLRC: [First, while the
for in Article 4 of the New Labor Code which
issue of labor-only contracting may involve
states that “all doubts in the implementation
some factual considerations] the existence of
and interpretation of the provisions of this
an employer-employee relation is
Code including its implementing rules and
nonetheless a question of law. Thus, it falls
regulations shall be resolved in favor of
squarely within the ambit of this Court’s
labor."
judicial review.

Acuña v. CA: It is a time-honored rule that in Equity and Moral Consideration

controversies between a worker and his
employer, doubts reasonably arising from the
Manning International Corp. V. NLRC:
evidence or in the interpretation of
Considerations of "equity and social justice”
agreements and writing should be resolved
cannot prevail over against the expressed
in the worker's favor. The policy is to extend
provision of the labor laws allowing dismissal
the applicability of the decree to a greater
of employees for cause and without any
number of employees who can avail of the
provision for separation pay.
benefits under the law, which is in
consonance with the avowed policy of the
State to give maximum aid and protection to Fairness
labor.
Reliance Surety and Insurance Co., Inc. v.
Doubt NLRC: The sympathy of the Court is on the
side of the laboring classes, not only because

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 LABOR STANDARDS / Midterms

the Constitution imposes sympathy but (c) “Employee” includes any individual
because of the one-sided relation between employed by an employer.
labor and capital. The Court must take care,
however, that in the contest between labor Definition in relation to the Employees
and capital, the results achieved are fair and Compensation and State Insurance Fund
in conformity with the rules. (now superseded/modified by the GSIS Act of
1997 and the SSS Act of 1996):
Balancing Conflicting Claims
Art. 67. … (f) “Employer” means any person,
Phil. Airlines, Inc. v. NLRC: That there should natural or juridical, employing the services of
be care and solicitude in the protection and the employee.
vindication of the rights of workingmen (g) “Employee” means any person
cannot be gainsaid; but that care and compulsorily covered by the GSIS under
solicitude cannot justify disregard of relevant Commonwealth Act Numbered One hundred
facts or eschewal of rationality in the eighty-six, as amended, including the
construction of the text of applicable rules in members of the Armed Forces of the
order to arrive at a disposition in favor of an Philippines, and any person employed as
employee who is perceived as otherwise casual, emergency, temporary, substitute or
deserving of sympathy and commisseration. contractual, or any person compulsorily
covered by the SSS under Republic Act 1161,
Duncan Association v. Glaxo-Wellcome: as amended.
Indeed, while our laws endeavor to give life to
the constitutional policy on social justice and Definition as regards labor relations:
the protection of labor, it does not mean that
eveyr labor dispute will be decided in favor of Art. 212. … (e) “Employer” includes any person
the workers. The law also recognizes that acting in the interest of an employer, directly
managements has rights which are also or indirectly. The term shall not include any
entitled to respect and enforcement in the labor organization or any of its officers except
interest of fair play. when acting as employer.
(f) “Employee” includes any person in the
employ of an employer. The term shall not be
limited to the employees of a particular
Sec. 6 – Work Relationship
employer, unless this Code so explicitly
states. It shall include any individual whose
6.01. WORK RELATIONSHIP work has ceased as a result of or in
connection with any current labor dispute or
A. Definitions: Employer and Employee because of any unfair labor practice if he has
not obtained any labor substantially
Definition in relation to wages: equivalent and regular employment.

Art. 97. As used in this title: (a) “Person” Employee

means an individual, partnership, association,
corporation, business trust, legal B. Employer-Employee Relationship
representative, or any organized group of
persons. Factual Test
(b) “Employer” includes any person acting
directly or indirectly in the interest of an  The existence of an EE-ER
employer in relation to an employee and shall relationship is a question of fact.
include the government and all its branches,  The elements of an EE-ER
subdivision and instrumentalities, all relationship are:
government-owned or controlled o Selection and engagement of
corporations and institutions, as well as non- employee
profit private institutions, or organizations. o Payment of wages
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 LABOR STANDARDS / Midterms

o Power of dismissal
o Employer’s power to control Lazaro v. SSS: Insurance agents are EE’s of
the employee as regards the their insurance company, even though the
means and methods by which agents’ compensation is not paid by the
work is accomplished, i.e. the company but by the investor/person insured.
control test The relevant factor remains that determined
by the control test.
Established
Hours of Work
Miguel v. JCT Group: The test for
determining an employer-employee Lazaro v. SSS: It doesn’t follow that a person
relationship hinges on resolving who has the who does not observe normal hours of work
power to select employees, who pays for cannot be deemed an employee. A sales
their wages, who has the power to dismiss supervisor, although compensated on
them, and who exercises control ... [t]he last commission basis, [is] exempt from the
factor, the “control test”, is the most important. observance of normal hours of work for his
compensation in measured by the number of
Factors sales he makes.

 see Factual Test Proof

Control Test
Domasig v. NLRC: In administrative and
R. Transport v. Ejandra: According to the quasi-judicial proceedings, substantial
control test, the power to dismiss an evidence is sufficient as basis for judgment
employee is one of the indications of an on the existence of an EE-ER relationship. No
employment relationship. particular form of evidence is required; any
competent and relevant evidence may be
Economic Test admitted. (Substantial evidence = such
relevant evidence as a reasonable mind
In general, the “right of control” test has been might accept as adequate to support a
used to determine the existence of an EE-ER conclusion.)
relation: whether the person for whom the
services are performed reserves a right to Absence of Relationship
control not only the end to be achieved, but
also the means to be used in reaching such Abante v. Lamadrid: There can be no EE-ER
end. Also considered are the economic relationship where thereis no element of
conditions prevailing between the parties, control.
e.g. the inclusion of the EE in the payrolls.
Denial – Negative Pregnant Rule
Agreement
6.02. INDEPENDENT CONTRACTOR AND
Lopez v. MWSS: The existence of an EE-ER LABOR CONTRACTOR ONLY – 106-107; 109;
relationship cannot be negated by expressly DOLE ORDER No. 18-02, series of 2002 –
repudiating it in the agreement and providing Azucena, Essentials of Labor Law, pp. 634-
therein that the EE is “not an employee” when 645
the terms and conditions show otherwise.
The employment status of a person is defined
Art. 106. Contractor or subcontractor –
and prescribed by law and not by what the
Whenever an employer enters into a contract
parties say it should be.
with another person for the performance of
the former’s work, the employees of the
Broadcast – Talents – Performers contractor and of the latter’s subcontractor, if
Method of Wage Payment

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 LABOR STANDARDS / Midterms

any, shall be paid in accordance with the determining the extent of their civil liability
provisions of this Code. under this Chapter, they shall be considered
In the event that the contractor or sub- as direct employers.
contractor fails to pay the wages of his
employees in accordance with this Code, the A. Independent Contractor
employer shall be jointly and severally liable
with his contractor or subcontractor to such Recognition
employees to the extent of the work
performed under the contract, in the work Management Function – Determination Need
performed under the contract, in the same
manner and extent that he is liable to MERALCO v. Quisumbing: The company can
employees directly employed by him. determine in its best business judgment
The Secretary of Labor may, by appropriate whether it should contract out the
regulations, restrict or prohibit the contracting performance of some of its work for as long
out of Labor to protect the rights of workers as the employer is motivated by good faith,
established under this Code. In so prohibiting and the contracting out must not have been
or restricting, he may make appropriate resorted to circumvent the law or must not
distinctions between labor-only contracting have been the result of malicious or arbitrary
and job contracting as well as differentiations action.
within these types of contracting and
determine who among the parties involved Trilateral Relationship
shall be considerd the employer for purposes
of this Code, to prevent any violation or Requirements – Independent Contractor
circumvention of any provision of this Code.
There is “labor-only contracting” where the
Manila Water Co. V. Peña: These are what
person supplying workers to an employer
distinguishes an independent (job)
does not have substantial capital or
contractor: a) carries on an indepentend
investment in the form of tools, equipment,
business and undertakes the contract work
machineries, work premises, among others,
on his own account under his own
and the workers recruited and placed by
responsibility according to his own manner
such person are performing acivities which
and method, free from control and direction
are directly related to the principal busines of
of his employer or principal in all matters
such employer. In such cases, the person or
connected with the performance of work
intermediary shall be considered merely as
except as to the results thereof; b) has
an agent of the employer who shall be
substantial capital or investment in the form
responsible to the workers in the same
of tools, equipments, machineries, work
manner and extent as if the latter were
premises and other material swhich are
directly employed by him.
necessary in the conduct of business.

Art. 107. Indirect employer – The privisions of Desirable – Unnecessary

the immediately preceding Article shall
likewise apply to any person, partnership,
Coca-Cola Bottlers Phils. V. NLRC: Although
association or corporation which, not being
janitorial services may be considered directly
an employer, contracts with an independent
related to the principal business of an
contractor for the performance of any work,
employer, the Court deemed them
task, job or project.
unnecessary in the conduct of the employer’s
principal business.
Art. 109. Solidary liability – The provisions of
existing laws to the contrary notwithstanding, Proof
every employer or indirect employer shall be
held responsible with his contractor or Employer-Employee Relationship
subcontractor for any violation of any
provision of this Code. For purposes of

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 LABOR STANDARDS / Midterms

Philippine Airlines v. NLRC: The private

respondents were doing work which are  Labor-only contractors: where the
directly related to its nature of business. contractor/sub-contractor merely
Hence, they are deemed regular employees recruits, supplies or places workers to
pursuant to Art. 280 of the Labor Code. They peform jobs, works, or services for a
had been employed for a period ranging from principal.
1 – 4 months to 11 years & 10 months. The o Does not have substantial
continuous employment indicates that their capital or investment which
jobs are directly necessary to the daily relates to the job, work or
operation of petitioner’s business. The private service to be performed
respondents were supervised, directed and o Does not exercise the right to
controlled by PAL’s regular employees. Thus, control over the performance
G.C. is a labor-only contractor who acted as o f the work of the contractual
mere supplier of manpower. employees

Liability C. Effect of Finding

Mariveles Shipyard v. CA: (see Arts. 106, 108 San Miguel Corp. v. Bernardo: SMC played a
and 109 on preceding page, focus on 109) large and indispendable part in the hiring of
The solidary liability of petitioner with that of MAERC’s workers. Majority of the
Longest Force does not preclude the complainants have also been working for
application of the CC provision on the right of SMC long before the service contract
reimbursement from his co-debtor by the one between SMC and MAERC was entered into.
who paid. SMC also maintained a constant presence in
the workplace thru its own checkers who are
B. Labor Contractor Only tasked to report on the identity of workers
whose performance was not according to the
Requisites and Prohibition rules and standards set by SMC. [An EE-ER
relationship thuse found between SMC and
 Labor-only contracting, a prohibited the compalinants, the former was found
act, is an arrangement where the guilty of illegal dismissal.]
contractor merely recruits, supplies or
places workers to perform a job for a
principal. Sec. 7 – Employee Classification

 Permissible job contracting, on the STATUTORY REFERENCE: Art. 280; Book VI,
other hand, is an agreement where a Rule I, Sec. 5, Omnibus Rules
principal agrees to farm out with a
contractor the performance of a Art. 280. Regular and casual employment –
specific job within a definite or The provisions of written agreement to the
predetermined period. contrary notwithstanding and regardless of
the oral agreement of the parties, an
Maraguinot v. NLRC: It is settled that the employment shall be deemed to be regular
contracting out of labor is allowed only in where the employee has been engaged to
case of job contracting. perform activities which are usually
As labor-only contracting is prohibited, the necessary or desirable in the usual business
law considers the person or entity engaged in or trade of the employer, except where the
the same a mere agent or intermediary of the employment has been fixed for a specific
direct employer. But even by the preceding project or undertaking the completion or
standards, the associate producers of VIVA termination of which has been determined at
cannot be considered labor-only contractors the time of the engagement of the employee
as they did not supply, recruit nor hire the or where the work or services to be
workers.

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 LABOR STANDARDS / Midterms

performed is seasonal in nature and the Art. 278. Coverage – The provisions of this
employment is for the duration of the season. title shall apply to all establishments or
An employment shall be deemed casual if it undertakings, whether for profit or not.
is not covered by the preceding paragraph:
provided, that any employee who has 7.02. EMPLOYEE CLASSIFICATION – 280-281
rendered at least one year of service, whether
such service is continuous or broken, shall be Recognition and Types
considered a regular employee with respect
to the activity in which he is employed and Pangilinan v. General Mining Corp.: Article
his employment shall continue while such 280 of the Labor Code comprehends three
activity exists. kinds of employees: (a) regular employees or
those whose work is necessary or desirable
Rule I, Sec. 5. (a) Regular employment – The to the usual business of the employer; (b)
provisions of written agreements to the project employees or those whose
contrary notwithstanding and regardless of employment has been fixed for a specific
the oral agreements of the parties, project or undertaking the completion or
employment shall be deemed regular for termination of which has been determined at
purposes of Book VI of the Labor Code where the time of the engagement of the employee
the employee has been engaged to perform or where the work or services to be
activities which are usually necessary or performed is seasonal in nature and the
desirable in the usual business or trade of the employment is for the duration of the season;
employer, except where the employment has and, (c) casual employees or those who are
been fixed for a specific project or neither regular nor project employees.
undertaking the completion or termination of A regular employee is one who is engaged to
which has been determined at the time of the perform activities which are necessary and
engagement of the employee or where the desirable in the usual business or trade of the
job, work or service to be performed is employer as against those which are
seasonal in nature and the employment is for undertaken for a specific project or are
the duration of the season. seasonal.
(b) Causal employment – There is casual There are two separate instances whereby it
employment where an employee is engaged can be determined that an employment is
to perform a job, work or service which is regular: (1) if the particular activity performed
merely incidental to the business of the by the employee is necessary or desirable in
employer, and such job, work or service is for the usual business or trade of the employer;
a definite period made known to the and, (2) if the employee has been performing
employee at the time of engagement: the job for at least a year.
provide, that any employee who has
rendered at least one year of service, whether Nature of Issue
such service is continuous or not, shall be
considered a regular employee with respect Universal Robina, etc. v. Caballeda: Whether
to the activity in which he is employed and or not an employee was a seasonal/project
his employment shall continue while such employee or a regular employee is a
activity exists. question of fact. As such, the Supreme Court
Notwithstanding the foregoing distinctions, is not at liberty to review the said factual issue
every employee shall be entitled to the rights because our jurisdiction is generally limited to
and privileges, and shall be subject to the reviewing errors of law that the CA may have
duties and obligations, as may be granted by committed. When the findings of the LA, the
law to regular employees during the period of NLRC and the CA are in absolute agreement,
their actual employment. the same are accorded not only respect but
even finality as long as they are amply
7.01. COVERAGE – 278 supported by substantial evidence.

Employer Determination – Effect

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 LABOR STANDARDS / Midterms

continuously for one whole year but only for

San Miguel Corp. v. NLRC: Thus, under the duration of the season does not detract
Article 280 of the Labor Code, an employment from considering them in regular
is deemed regular when the activities employment since in a litany of cases the
performed by the employee are usually Supreme Court has already settled that
necessary or desirable in the usual business seasonal workers who are called to work
or trade of the employer even if the parties from time to time and are temporarily laid off
enter into an agreement stating otherwise. during off-season are not separated from
But considered not regular under said Article service in said period, but merely considered
(1) the so-called "project employment" the on leave until re-employed.
termination of which is more or less
determinable at the time of employment, Hiring Extend Period
such as those connected, which by its nature
is only for one season of the year and the Lopez v. MWSS: Where the employment of
employment is limited for the duration of that project employees is extended long after the
season, such as the Christmas holiday supposed project has been finished, the
season. Nevertheless, an exception to this employees are removed from the scope of
exception is made: any employee who has project employees and considered regular
rendered at least 1 year of service, whether employees.
continuous or intermittent, with respect to the
activity he performed and while such activity Contract to Contract
actually exists, must be deemed regular.
Beta Electric v. NLRC: The fact that
7.03. REGULAR EMPLOYEES – 280, 1st par.; employee’s employment has been a
280, 2nd par.; 281, last sentence and 75(d) contract-to-contract basis cannot alter the
character of employment, because contracts
Types – Regular Employees cannot override the mandate of law.

Philips Semiconductors, etc. v. Fadriquela: Length of Time

According to Article 280 of the Labor Code,
there are 2 kinds of regular employees: (1)
Maraguinot v. NLRC: Length of time is not a
those engaged to perform activities which
controlling factor as to whether the EE is
are necessary or desirable in the usual
project-based or regular. Length of time is
business or trade of the employer; and (2)
merely a badge of employment.
those casual employees who have rendered
at least one year of service, whether
continuous or broken, with respect to the Seafarers
activities in which they are employed.
Dela Cruz v. Maersk: Seafarers are not
Nature of Work covered by the term "regular employment",
as defined under Article 280 of the Labor
Code. Instead, they are considered
Magsalin v. National Organization, etc.: In
contractual employees whose rights and
determining whether an employment should
obligations are governed primarily by the
be considered regular or non-regular, the
POEA Standard Employment Contract for
applicable test is the reasonable connection
Filipino Seamen (POEA Standard
between the particular activity performed by
Employment Contract), the Rules and
the employee in relation to the usual
Regulations Governing Overseas
business or trade of the employer.
Employment, and, more importantly, by
Republic Act No. 8042, otherwise known as
Hacienda Fatima v. National Federation of The Migrant Workers and Overseas Filipinos
Sugarcane Workers Food and General Act of 1995.
Trade: The fact that respondents do not work

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7.04. PROJECT EMPLOYEES – 280, 1st par. Sandoval Shipyards v. NLRC: The
completion of their work or project
Art. 280. … except where the employment automatically terminates their employment.
has been fixed for a specific project or
undertaking the completion or termination of Rationale [re: ruling in Cartagenas case, that
which has been determined at the time of the contract workers are not considered regular
engagement of the employee… employees]

Defined De Ocampo v. NLRC: 'The rationale of this

rule is that if a project has already been
ALU-TUCP v. NLRC: As evident in Article 280 completed, it would be unjust to require the
of the Labor Code, the principal test for employer to maintain them in the payroll
determining whether particular employees while they are doing absolutely nothing
are properly characterized as “project except waiting until another project is begun,
employees” as distinguished from “regular if at all. In effect, these stand-by workers
employees” is whether or not the “project would be enjoying the status of privileged
employees” were assigned to carry out a retainers, collecting payment for work not
“specific project or undertaking, the duration done, to be disbursed by the employer from
(and scope) of which were specified at the profits not earned. This is not fair by any
time the employees were engaged for that standard and can only lead to a coddling of
project. labor at the expense of management.'
In business and industry, “project” could refer
to one or the other of at least two Employer Obligation
distinguishable types of activities. Firstly, a
project could refer to a particular job or A, M. Oreta and Co. Inc. v. NLRC: If
undertaking that is within the regular or usual dismissal was unjustified and done before
business of the employer company, but expiration of the term, the project employee
which is distinct and separate, and should be paid his salary for the unexpired
identifiable as such, from the other portion of his contract.
undertakings of the company. Such job or
undertaking begins and ends at determined Specific Period
or determinable times. Secondly, the term
“project” could also refer to a particular job or
Purefoods Corp. v. NLRC: Under Art. 280,
undertaking that is not within the regular
“specific period or undertaking” contemplates
business of the corporation. Such job or
an activity which is not commonly or
undertaking must also be identifiably
habitually performed, or such type of work
separate and distinct from the ordinary or
which is not done on a daily basis, but only
regular business operations of the employer.
for a specific duration of time or until
The job or undertaking also begins and ends
completion. In Brent School v. Zamora, the
at determined or determinable times.
criteria by which term employment cannot be
Whichever type of project employment is
said to be a circumvention of the law on
found in a particular case, a common basic
security of tenure are:
requisite is that the designation of named
(1) a fixed period of employment knowingly
employees as “project employees” and their
and voluntarily agreed upon without any
assignment to a specific project, are effected
force, duress, or improper pressure being
and implemented in good faith, and not
brought to bear upon the employee, absent
merely as a means of evading otherwise
any other circumstance vitiating his consent;
applicable requirements of labor laws.
and
(2) satisfactory appearance that the ER and
Project Employees EE dealth with each other on more or less
equal terms, with no moral domonance
exercised by the ER over the EE,

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 LABOR STANDARDS / Midterms

San Miguel Corp. v. Abella: On janitorial and

Continuous Rehiring messengerial services: may be considered
directly related to business, but are deemed
Chua v. NLRC: A (project) employment necessary.
ceases to be co-terminous with specific
projects when the employee is continuously One Year Service
rehired and re-engaged for many more
projects without interruption. Kimberly v. Drilon: If the casual employee
exceeds one year in service, the status of
Workpool Employees regular employment attaches to him on the
day immediately after the end of his first year
Maraguinot v. NLRC: Once (1) a project/pool of service.
employee has been continually, as opposed
to intermittently, re-hired by the same 7.06. CONTRACT – FIXED PERIOD
employer for the same tasks, and (2) those
tasks are vital, necessary, and indispensable, Tests [for] Validity
then the employee must be deemed a
regular employee.  Fixed-term employment is valid; (even
as Art. 280 in its strictest interpretation
Aguilar Corp. v. NLRC: Members of a work appears to restrict without reasonable
pool from which a construction company distinctions the right of an employee
draws its project employees, if considered to freely stipulate with his employer
employees of the construction company the duration of his engagement,)
while in the workpool, are non-project nothing in the law really prohibits
employees or employees for an indefinite fixed-term employment, provided that
period. If they are employed in the particular it does not intend to circumvent the
project, its completion or that of any phase law on tenurial security.
thereof will not mean severance of the ER-EE  There are two requisites for validity of
relationship. fixed-term employment:
o It should be entered
Length of Service knowingly and voluntarily by
the parties without any force,
Filipinas Pre-Fabricated Building Systems duress or improper pressure
Inc. v. Puente: The length of service of a o That ER and EE dealt with
project employee is not the controlling test of each other on more or less
employment tenure but WON “the equal terms; no moral
employment has been fixed for a specific dominance over the other.
project or undertaking the completion or
termination of which has been determined at Seasonal Employees
the time of the engagement of the employee”.
Manila Hotel v. CIR: The general rule is that
7.05. CASUAL EMPLOYEES – 280, 2nd par. where the work or service to be performed is
seasonal in character, the employment is
Nature of Work deemed to last only for the duration of the
season, unless when the employee involved
is constantly rehired after every season,
A.M. Oreta & co. V. NLRC: Test: not the
which will garner him the consideration that
employment contract, but the nature of the
he’s merely on LOA with pay, and that the
job (if usually necessary or desirable to the
employment relationship is never severed,
main business of the ER, EE = regular
only suspended.
employee).

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Sec. 8 – Probationary Employee Definition

STATUTORY REFERENCE – Probationary International Catholic Migration

Employees – 281; 61, 2nd sentence, Book VI, Commission v. NLRC: A probationary
Rule I, Sec. 6, Omnibus Rules employee is made to afford the employer an
opportunity to observe the fitness of a
8.01. PROBATIONARY EMPLOYEES – 281; probationer while at work, and to ascertain
61, 2nd sentence, Book VI, Rule I, Sec. 6, whether the prospective employee is
Omnibus Rules qualified for permanent employment.
Duration is immaterial; the nature of the
Art. 281. Probationary employment – probationary period lies in the objective
Probationary employment shall not exceed sought to be attained by both the employer
six (6) months from the date the employee and employee during the said period. Failure
started working, unless it is covered by an to qualify as a regular employee in
apprenticeship agreement stipulating a accordance of to reasonable standards of the
longer period. The services of an employee employer is reasonable cause for terminating
who has been engaged on a probationary employment under Art. 281, LC.
basis may be terminated for a just cause or
when he fails to qualify as a regular Purpose
employee in acordance with reasonable
standards made known by the employer to Dela Cruz v. NLRC: A probationary
the employee at the time of his engagement. employment is made to afford the employer
An employee who is allowed to work after a an opportunity to bserve the fitness, skill,
probationary period shall be considerd a competence and attitude of a probationer
regular employee. while at work, and to ascertain whether he
will become a proper and efficient employee.
Rule I, Sec. 6. Probationary employment – (a)
Where the work for which an employee has Employer’s Right [to] Set Period/Obligation
been engaged is learnable or apprenticeable
in accordance with the standards prescribed Grand Motors Corp. v. MOLE: The employer
by the Department of Labor, the probationary has the right to choose as to who will be
employment period of the employee shall be hired and who will be declined. It is within the
limited to the authorized learnership or exercise of his righ tot select his employees
apprenticeship period, whichever is that the employer may set or fix a
applicable. probationary period within which the latter
(b) Where the work is neither learnable nor may test and observe the conduct of the
apprenticeable, the probationary former before hirihg him permanently.
employment period shall not exceed six (6)
months reckoned from the date the Duration/Exception
employee actually started working.
(c) The services of an employee who has Buiser v. Leogardo, Mariwasa v. Leogardo,
been engaged on probationary basis may be ICMC v. NLRC: see subsequent general rule
terminated only for a just cause or when and exceptions
authorized by existin glaws, or when he fails
to qualify as a regular employee in GR: shall not exceed 6 months from date the
accordance with reasonable standards employee started working
prescribed by the employer. EX: period may be extended if (1) the parties
(d) In all cases involving employees engaged agree so or (2) a longer period is necessary
on probationary basis, the employer shall to learn the nature of the work to be
make known to the employee the standards performed, provided that:
under which he will qualify as a regular  There is no indication that the
employee at the time of his engagement. extension s a mere strategem of ER to

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 LABOR STANDARDS / Midterms

avoid legal consequences of probe absorbed to another company, EE remains

period satisfactorily completed regular and cannot be subjected to another
 There is written consent of the EE probationary employment.
 EE wanted the extension him/herself
to improve performance and qualify Termination and Salary
for regular employment
A probationary’s services may be terminated:
Criteria Regularization 1. For just cause
2. When EE fails to qualify as regular EE
Mitsubishi v. Chrysler Labor Union: ER has in accordance with reasonable
obligation to inform EE of the reasonable standards made known by ER to EE
standards to qualify as regular EE. at the time of engagement

Alcira v. NLRC: Not being able to pass the Dela Cruz v. NLRC: As long as the
standards (e.g. by means of absences, temrination was made before the expiration
tardiness, failing to wear proper uniform and of the 6-month probationary period, the ER
showing inferior skills) justifies ER to end may decide to sever the relationship [for just
employment relationship with EE. cause].

Extension of Contract  Valid termination = EE not entltled to

salary for unexpired portion of
Mariwasa Manufacturing v. Leogardo: probationary period.
Agreements stipulating longer probationary
periods are considered lawful exceptions to Rule [on] Private School Teachers
the statutory prescription limiting such period
to 6 months ... [in this case, the extension  Requisites before a private teacher
made was] an act of liberality on the part of may be deemed to have acquired
his employer affording him a second chance permanent employment:
to make good after having initially failed to o Teacher is a full-time teacher
prove his worth as an employee. By o Teacher must have rendered
voluntarily agreeing to an extension of the 3 consecutive years of service
probationary period, EE in effect waived any o Teacher’s service must have
benefit attaching to the completion of said been satisfactory
period.  In determining the employment status
of private school teachers, the
Absorbed Employees Manual of Regulations for Private
Schools, not the Labor Code, applies.
 Absorption: merger of companies; (see page 11)
Ees of the absorbed company are
absorbed into the new company.
Good luck and God bless you! 
Cebu Stevedoring v. Regional Director: In
this case, the EE’s cannot be considered as
probationaries because they were already
well-trained in their functions. They were
absorbed as regular employees.

Double Probation

A Prime Security Services v. NLRC: There

can be no double probation: if EE is
probationary then became regular, then was

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