Up Labor Law Reviewer 2017pdf

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Dean Danilo L. Concepcion
Dean
Prof. Concepcion L. Jardeleza

Associate Dean
Prof. Ma. Gisella N. Dizon-Reyes

College Secretary
Christine Joy F. Angat

Bar Operations Commissioner
Andrea Alcancia
Gian Chua
Carlo Mercado
Marianne Vitug
Dwight Tan
Artkario Bian Villanueva
Academics Committee Heads
Elaine Marcilla
Revrev Sumagaysay
Layout Committee Heads
Prof. Evelyn (Leo) D.

Battad Faculty Adviser
Baba Foronda
Chris Alquizalas
Subject Heads
BAR OPERATIONS Alcancia Gian
COMMISSION Andre Chua
2017 a Carlo
Mercado LABOR LAW TEAM EXECUTIVE BOARD
Marianne Vitug
Dwight Tan
Artkario Bian Villanueva Prof Evelyn (Leo} Battad Christine Joy F. Angat
Heads, Academies Committee Faculty Adviser Commissioner
Elaine Marcilla LABOR LAW i Jolinna Ysabelle Mari A. Chan

Revrev Sumagaysay Baba Foronda Johanna Celine Mari A. Chan
Heads, Layout Committee Subject Head Deputy Commissioners
Riabelle Aurellano LABOR LAW z Raissa N. Matunog
Princess Trisha Joy Chris Alquizalas Secretary
Heads, Academics Support
Subject Head
Anna Mickaella M. Lingat Emir Mendoza Carlo Magno C. Caballa
Victor Enrique G. Bolinao Yrra Espino Treasurer
Heads, Secretariat and Maureen Erni
Welfare Student Contributors Ihna Alyssa Marie O. Santos
Auditor
Beatrix Raine L. Bayudan
Patricia Mar G. Peralta Micah Cacdac
Heads, Events Micah Taguibao
Andrea Adorna
Juan Paolo S. Artiaga
Denise Blesila Neri Maan Pablico
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Marielle Cabais
Andrea V. Alegre Layout Volunteers
Clyde E. Tan
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Daniel Al B. Delfin
Josemaria Carlo F. Magsino
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Hannah F. Plopinio
Ma. Julienne Te
Heads, Public Relations
Christopher Edward L.
Nuevo Nadaine P. Tongco
Heads, Food Operations
Krizia Camille P. Nicolas

Ranell John V. Nunez
Heads, Hotel Operations
Ellen Charmane S. Cala

JuanCarlos Miguel B. Tan
Heads, Day Operations
Victor John Dominguez

Reynaldo P. Nicolas Jr.
Heads, Logistics
B A R O P E R A T I O N S C O M M I SSIO N
ALA B
Copyright and all other relevant rights over this material are
owned by the University of the Philippines College of Law and
the Student Editorial Team.
The ownership of the work belongs to the University of the

Philippines College of Law. No part of this book shall be
reproduced or distributed without the consent of the
University of the Philippines College of Law.
All rights reserved.

C.3.PATERNITY LEAVE [RA 8187 (PATERNITY LEAVE
TABLE OF CONTENTS
ACT OF 1996)]..................................................69
LABOR STANDARDS C.4.
I. FUNDAMENTAL PRINCIPLE AND

POLICIES
2
A. LEGAL BASIS..............................................2
A.1 1987 CONSTITUTION....................................2
A.2 CIVIL CODE...............................................5
B. CONSTRUCTION IN FAVOR OF LABOR......5
C.SOCIAL JUSTICE...........................................7
II. RECRUITMENT AND PLACEMENT.......8
A. ILLEGAL RECRUITMENT..............................9
A.1 ESSENTIAL ELEMENTS OF ILLEGAL
RECRUITMENT.....................................................10
A.2. PROHIBITED ACTIVITIES............................10
A.3. TYPES OF ILLEGAL RECRUITMENT...........12
A.4 ILLEGAL RECRUITMENT VS. ESTAFA.........19
A.5. LIABILITYOF LOCAL RECRUITMENT
AGENCY AND FOREIGN EMPLOYER....................20
A.6. TERMINATION OF CONTRACT OF MIGRANT
WORKER WITHOUT JUST CAUSE........................22
A.7.DIRECT HIRING........................................22
B. REGULATIONS OF RECRUITMENT AND
PLACEMENT ACTIVITIES...................................23
B.1.................................................................S
USPENSION OR CANCELLATION OF
LICENSE OR AUTHORITY.....................................24
B.2. REGULATORY AND VISITORIAL POWERS
OF THE DOLE SECRETARY................................24
B.3.REMITTANCE OF FOREIGN EXCHANGE
EARNINGS........................................................25
C. EMPLOYMENT OF NON-RESIDENT
ALIENS...........................................................25
C.1. COVERAGE.................................................26
C.2CONDITIONS FOR GRANT OF PERMIT......26
C.3 VALIDITY OF AEP..............................27
C.4 DENIAL OF APPLICATION.................27
D. TRAINING AND EMPLOYMENT OF SPECIAL
WORKERS......................................................18
D.1 APPRENTICES AND LEARNERS RA
7796 (TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT ACT OF 1994 OR TESDA ACT
OF 1994) 18
D.2. HANDICAPPED WORKERS – DIFFERENTLY-
ABLED WORKERS................................................52
III. LABOR STANDARDS..........................57

A. CONDITIONS OF EMPLOYMENT...............58
A.1 SCOPE [ART. 82, LABOR CODE].............58
B. WAGES......................................................59
C.LEAVES.....................................................67
C.1.................................................................SE
RVICE INCENTIVE LEAVE PAY...................67
C.2.MATERNITY LEAVE.....................................68
iv
PARENTAL LEAVE FOR SOLO PARENTS [RA G.POST-EMPLOYMENT BAN........................134
8972 (SOLO PARENTS’ WELFARE ACT OF
2000)] VI. SOCIAL WELFARE LEGISLATION......135
........................................................................... A. SSS LAW [RA 8282].............................135
.. 70 A.1................................................................COVERAGE
C.5.SPECIAL LEAVE FOR WOMEN & EXCLUSIONS...........................................135
WORKERS [RA 9710 (THE MAGNA A.2. DEPENDENTS, BENEFICIARIES...............136
CARTA OF WOMEN), DOLE DO NO. A.3. BENEFITS................................................136
112, SERIES OF 2011 AS AMENDED BY B. GSIS [RA 8291]...................................139
DO NO. 112-A SERIES OF 2012]........................71 B.1................................................................COVERAGE
D. SPECIAL GROUPS OF EMPLOYEES.........73 & EXCLUSIONS...........................................139
D.1.................................................................W B.2. DEPENDENTS, BENEFICIARIES...............139
OMEN......................................................73 B.3.BENEFITS................................................140
D.2. MINORS..................................................77 C.LIMITED PORTABILITY LAW [RA 7699].146
D.3. KASAMBAHAY..........................................79
C.1................................................................
A.2. COMMINGLIN
D.4. HOMEWORKERS........................................82 E [SEC. 3] G/MIXTURE
D.5. NIGHT WORKERS.......................................83 146 OF
C.2. PROCESS MEMBERSHI
IV. POST-EMPLOYMENT..........................86 ...........................................................................P
A. EMPLOYER-EMPLOYEE RELATIONSHIP..86 D. EMPLOYEE’S ..............................
A.1.................................................................TESTS TO DETERMINECOMPENSAT
EMPLOYER- ..............................
EMPLOYEE (ER-EE) RELATIONSHIP...................86 ............... 154
ION –
A.2. KINDS OF EMPLOYMENT.......................88 A.3. RIGHTS
COVERAGE
A.3. SUB-CONTRACTING VS AND
AND WHEN
LABOR-ONLY CONTRACTING..........................95 CONDITIONS
COMPENSABLE
B. TERMINATION FROM EMPLOYMENT......100 OF
.........................................................................
B.1................................................................TERMINATION OF EMPLOYMENT BY MEMBERSHIP...................
D.1................................................................
EMPLOYEE........................................................102 E [SEC. 2, B. BARGAINING
B.2. TERMINATION BY EMPLOYER.................104 UNIT..............................
RULE I]......................................................
B.3 RELIEFS FOR ILLEGAL DISMISSAL...........120 D.2. EFFECTIV C.BARGAINING
B.4. PREVENTIVE SUSPENSION......................126 ITY [SEC. REPRESENTATI
C.RETIREMENT..............................................127 6, RULE I] VE....................................
C.1................................................................ELI 147 C.1...................................
GIBILITY.......................................................127 D.3. WHEN TION OF
C.2.AMOUNT OF RETIREMENT PAY...........128 COMPENS REPRESENTATI
ABLE...........................................................
ON STATUS........................
C.3.RETIREMENT BENEFITS OF
WORKERS WHO ARE PAID BY C.2.UNION
RESULTS........................................................129 SECURITY
196
C.4.RETIREMENT BENEFIT OF
PART-TIME WORKERS.................................129
LABOR D.UNFAIR LABOR
C.5.TAXABILITY.............................................129 RELATIO PRACTICE (ULP)
.............................................
V. MANAGEMENT PREROGATIVE NS D.1...................................
131 ASPECTS....................
A. DISCIPLINE..............................................133 VII. LABOR D.2. ULP BY
B. TRANSFER OF EMPLOYEES....................133
RELATIONS EMPLOYERS
149 202
C.PRODUCTIVITY STANDARD D.3. ULP OF
..................................................................... A. RIGHT TO
LABOR
SELF-
134 ORGANIZAT
ORGANIZATI IONS.........................
D. GRANT OF BONUS
ON...............................................................
134 E. RIGHT TO
A.1................................................................
E.CHANGE OF WORKING HOURS PEACEFUL
UNIONIZE
134 FOR CONCERTED
F. RULES ON MARRIAGE PURPOSES ACTIVITIES..........................
BETWEEN EMPLOYEES OF OF 1. BY LABOR
COMPETITOR-EMPLOYERS COLLECTIVE ORGANIZATI
BARGAINING? ON..............................
.......................................................................
150 E.2WHO MAY
.134
DECLARE A
v
STRIKE A.1...............................................................
E.1. ED BY
OR TION............................................................
RECOVERY/ADJU THE
LOCKOUT B. NATIONAL DICATORY LABOR
? 207 LABOR POWER.............................................................CODE
E.3REQUI RELATIONS F. DOLE AND IRR
SITES SECRETARY
COMMISSION ISSUED
FOR A 226
(NLRC)............................................................. PURSUA
VALID
F.1 VISITO NT
STRIK B.1................................................................
RIAL AND THERET
E 207 TION.............................................................
ENFORCEM O
E.4 REQUI C.BUREAU ENT
SITES OF LABOR ................................
POWERS
FOR A RELATION ................................
........................... ............231
VALID S (BLR)....................................................
...........................
LOCK J.5.ILLEGAL
C.1. .....................
OUT RECRUITMENT
JURISDICTIO 226
211 231
N........................................................................
F.2 PO
E.5REQUI
SITES D. NATIONA WER
FOR L TO
LAWF CONCILIATI SUSPE
UL ON AND ND/EFF
PICKE ECTS
TING
MEDIATION
OF
212 BOARD.........................................................
TERMIN
E.6.ASSU D.1...............................................................
ATION.............................................................
MPTION ATION
VS. G.VOLUNTARY
OF ARBITRATOR
MEDIATI
JURISDIC 227
ON..............................................................
TION BY G.1...............................................................
D.2. PREVEN
THE TIVE N..................................................................
DOLE MEDIATI G.2.REMEDIES
SECRETA ON..............................................................
228
RY 213 E.DOLE H. COURT OF
E.7. ILLE REGIONAL APPEALS................................................
GAL DIRECTORS H.1 APPEA
STRIK
225 L VIA RULE
E 215
65, RULES
E.8. INJUN OF COURT.
CTION 228
S 218
I. SUPREME
F. COURT.........................................................
REQUISITE
I.1.................................................................
S FOR RULES OF
LABOR COURT......................................................
INJUNCTIO J.PRESCRIPTION
NS 218 OF ACTIONS...............................................
H. J.1................................................................
“INNOCENT CLAIMS.....................................................
BYSTANDE J.2.ILLEGAL
R RULE”........................................................ DISMISSAL
230
VIII. JURISDI J.3.UNFAIR
CTION LABOR
AND PRACTICE
REMEDI 230
J.4.O
ES
FFEN
220 SES
A. LABOR PEN
ARBITER ALIZ
220
vi
UP LAW LABOR LABOR LAW
BOC STANDARDS
LABOR LAW
LABOR STANDARDS
PAGE 1 OF 235
I. Fundamental patriotism and nationalism, and encourage
their involvement in public and civic
Principle and Policies affairs.
Section 14. The State recognizes the role
of women in nation-building, and shall
A. LEGAL BASIS ensure the fundamental equality before
A.1 1987 CONSTITUTION the law of women and men.
Article II. Secs 9,10,11,13,14,18,20 Section 18. The State affirms labor as a
primary social economic force. It shall
Section 9.The State shall promote a just protect the rights of workers and
and dynamic social order that will ensure promote their welfare.
the prosperity and independence of the
nation and free the people from poverty Section 20. The State recognizes the
through policies that provide adequate indispensable role of the private sector,
social services, promote full encourages private enterprise, and
employment, a rising standard of living, provides incentives to needed
and an improved quality of life for all.
Limits of Social Justice
Section 10. The State shall promote
social justice in all phases of national Social justice should be used only to
development. correct an injustice. It must be founded on
the recognition of the necessity of
interdependence among diverse units of a
General Definition of Social Justice society, and of the protection that should
be equally and evenly extended to all
Social justice is neither communism, nor groups as a combined force in our social and
despotism, nor atomism, nor anarchy, but economic life. As partners in nation-building,
the humanization of laws and the labor and management need each other to
equalization of social and economic forces foster productivity and economic growth;
by the State so that justice in its rational hence, the need to weigh and balance the
and objectively secular conception may at rights and welfare of both the employee
least be approximated. [Calalang vs. and employer. [Agabon vs. NLRC, G.R.
Williams, G.R. No. 47800 (1940)] No. 158693 (2004)]
The policy of social justice is not intended
Welfare State to countenance wrongdoing simply because
it is committed by the underprivileged. At
The welfare state concept is found in the best it may mitigate the penalty but it
constitutional clause on the promotion of certainly will not condone the offense.
social justice to ensure the well-being and Compassion for the poor is an imperative
economic security of all the people, and in of every humane society but only when the
the pledge of protection to labor with recipient is not a rascal claiming an
specific authority to regulate the relations undeserved privilege. Social justice cannot
between landowners and tenants and be permitted to be a refuge of scoundrels
between labor and capital. [Alalayan vs. any more than can equity be an
National Power Corporation, G.R. No. L- impediment to the punishment of the guilty.
24396 (1968)] Those who invoke social justice may do so
only if their hands are clean and their
Section 11. The State values the dignity motives blameless and not simply because
of every human person and guarantees they happen to be poor. This great policy
full respect for human rights. of our Constitution is not meant for the
Section 13. The State recognizes the protection of those who have proved they
vital role of the youth in nation-building are not worthy of it, like the workers who
and shall promote and protect their have tainted the cause of labor with the
physical, moral, spiritual, intellectual, blemishes of their own character.
and social well-being. It shall inculcate
in the youth
[Tirazona vs. Philippine EDS
Techno-Service Inc., G.R. No.
169712 (2009)]
Laissez Faire Due Process
The Constitution is primarily a document of Under the Labor Code, as amended, the
social justice, and although it has requirements for the lawful dismissal of an
recognized the importance of the private employee by his employer are two-fold: the
sector, it has not embraced fully the substantive and the procedural. Not only
concept of laissez-faire or relied on pure must the dismissal be for a valid or
market forces to govern the economy. authorized cause as provided by law, but
[Employees Confederation of the the rudimentary requirements of due
Philippines vs. NWPC, G.R. No. 96169 process, basic to which are that an
(1991)] opportunity to be heard and to defend
oneself must be observed before an
employee may be dismissed [Metro Eye
Balancing of Interests Security v. Salsona, G.R. No. 167367 (2007)]
It is high time that employer and employee To constitute valid dismissal from
cease to view each other as adversaries employment, two requisites must concur:
and instead recognize that theirs is a (1) the dismissal must be for a just or
symbiotic relationship, wherein they must authorized cause; and (2) the employee
rely on each other to ensure the success must be afforded an opportunity to be
of the business. When they consider only heard and to defend himself. [Jeffrey
their own self- interests, and when they act Nacague vs. Sulpicio Lines, Inc., G.R. No.
only with their own benefit in mind, both 172589 (2010)]
parties suffer from short-sightedness,
failing to realize that they both have a
stake in the business. The employer wants Labor as Property Right
the business to succeed, considering the
One’s employment is a property right, and
investment that has been made. The
the wrongful interference therewith is an
employee in turn, also wants the business
actionable wrong. The right is considered
to succeed, as continued employment
to be property within the protection of the
means a living, and the chance to better
constitutional guarantee of due process of
one’s lot in life. It is clear then that they
law. [Texon Manufacturing v. Millena, G.R.
both have the same goal, even if the
No. 141380 (2004)]
benefit that results may be greater for one
party than the other. If this becomes a
source of conflict, there are various, more
The Right to Assemble
amicable means of settling disputes and of
balancing interests that do not add fuel to Section 4. No law shall be passed
the fire, and instead open avenues for abridging the freedom of speech, of
understanding and cooperation between expression, or of the press, or the right
the employer and the employee. [Toyota of the people peaceably to assemble
Motor Phils. Corp Workers Association and petition the government for redress
(TMPCWA) v. NLRC, G.R. No. 158786 of grievances.
(2007)]
The right of peaceable assembly is a right
While labor laws should be construed
cognate to those of free speech and free
liberally in favor of labor, we must be able press and is equally fundamental. [de
to balance this with the equally important Jonge vs. Oregon (1937)]
right of the [employer] to due process
[Gagui v. Dejero, G.R. No. 196036 (2013)
Wearing armbands and putting up
placards to express one’s views without
Article III. Sections 1, 4, 7, 8, 10, 16, 18(2) violating the rights of third parties, are legal
Section 1. No person shall be deprived per se and even constitutionally protected.
of life, liberty, or property without due
process of law, nor shall any person be
denied the equal protection of the laws.
[Bascon v CA, G.R. No. 144899
(2004)]
Transportation Co. vs. Leyte Farmers &
Workers Union, G.R. No. L-1377 (1948)]
Section 7. The right of the people to
information on matters of public concern
shall be recognized. Access to official
Section 16. All persons shall have the
records, and to documents and papers
right to a speedy disposition of their cases
pertaining to official acts, transactions,
before all judicial, quasi-judicial, or
or decisions, as well as to government
administrative bodies.
research data used as basis for policy
development, shall be afforded the Section 18 (2). No involuntary servitude
citizen, subject to such limitations as in any form shall exist except as a
may be provided by law. punishment for a crime whereof the
party shall have been duly convicted.
Section 8. The right of the people,
including those employed in the public
and private sectors, to form unions, Article XIII. Sections 1, 2, 3, 13, 14
associations, or societies for purposes
not contrary to law shall not be Section 1. The Congress shall give
abridged. highest priority to the enactment of
measures that protect and enhance the
The Right to Form Associations right of all the people to human dignity,
The right to form associations shall not be reduce social, economic, and political
inequalities, and remove cultural
impaired except through a valid exercise of
inequities by equitably diffusing wealth
police power. [Bernas, The 1987
and political power for the common
Philippine Constitution: a Comprehensive
good.
Reviewer]
To this end, the State shall regulate the
acquisition, ownership, use, and
Non-impairment of Contracts disposition of property and its
increments.
Section 10. No law impairing the
obligation of contracts shall be passed. Section 2. The promotion of social
justice shall include the commitment to
create economic opportunities based on
A law which changes the terms of a legal freedom of initiative and self-reliance.
contract between parties, either in the time
or mode or performance, or imposes new Section 3. The State shall afford full
conditions, or dispenses with those protection to labor, local and overseas,
expressed, or authorizes for its satisfaction organized and unorganized, and
something different from that provided in promote full employment and equality of
its terms, is a law which impairs the employment opportunities for all.
obligation of a contract and is null and It shall guarantee the rights of all
void. [Clemens vs. Nolting (1922)] workers to self-organization, collective
bargaining and negotiations, and
peaceful concerted activities, including
Vis-à-vis the freedom of contract the right to strike in accordance with
The prohibition to impair the obligation of law. They shall be entitled to security of
contracts is not absolute and unqualified. tenure, humane conditions of work, and
In spite of the constitutional prohibition and a living wage. They shall also participate
the fact that both parties are of full age and in policy and decision-making processes
competent to contract, it does not affecting their rights and benefits as may
necessarily deprive the State of the power be provided by law.
to interfere where the parties do not stand The State shall promote the principle of
upon an equality, or where the public shared responsibility between workers and
health demands that one party to the employers and the preferential use of
contract shall be protected against himself.
[Leyte Land
their mutual compliance therewith to
foster industrial peace. Article 1702
The State shall regulate the relations
Article 1702. In case of doubt, all labor
between workers and employers,
legislation and all labor contracts shall
recognizing the right of labor to its just
be construed in favor of the safety and
share in the fruits of production and the
decent living for the laborer.
right of enterprises to reasonable
returns to investments, and to
expansion and growth. Contracts
Participation in Decision-Making Process Under the Civil Code, contracts of labor
are explicitly subject to the police power of
Verily, a line must be drawn between
the state because they are not ordinary
management prerogatives regarding
contracts but are impressed with public
business operations per se and those
interest. Inasmuch as in this particular
which affect the rights of the employees. In
instance the contract in question would have
treating the latter, management should see
been deemed in violation of pertinent labor
to it that its employees are at least properly
laws, the provisions of said laws would
informed of its decisions or modes action.
prevail over the terms of the contract, and
Indeed, industrial peace cannot be achieved
private respondent would still be entitled to
if the employees are denied their just
overtime pay. [PAL Employees Savings
participation in the discussion of matters
and Loan Assn., Inc. vs. NLRC, G.R. No.
affecting their rights. [Phil. Airlines Inc. vs.
105963 (1996)]
NLRC, G.R. No. 85985 (1993)]
Indeed, a contract of employment is
impressed with public interest. For this
Section 13. The State recognizes the reason, provisions of applicable statutes
vital role of the youth in nation-building are deemed written into the contract.
and shall promote and protect their Hence, the parties are not at liberty to
physical, moral, spiritual, intellectual, insulate themselves and their relationships
and social well-being. It shall inculcate from the impact of labor laws and
in the youth patriotism and nationalism, regulations by simply contracting with each
and encourage their involvement in other. Moreover, in case of doubt, the
public and civic affairs. terms of a contract should be construed in
favor of labor. [Innodata Philippines, Inc.
Section 14. The State shall protect
vs. Quejada-Lopez, G.R. No. 162839
working women by providing safe and
(2006)]
healthful working conditions, taking into
account their maternal functions, and A contract is the law between the parties,
such facilities and opportunities that will and courts have no choice but to enforce
enhance their welfare and enable them such contract so long as it is not contrary
to realize their full potential in the to law, morals, good customs or public
policy. Otherwise, courts would be
A.2 CIVIL CODE interfering with the freedom of contract of
the parties. Simply put, courts cannot
Article 1700
stipulate for the parties or amend the
Article 1700. The relations between latter’s agreement, for to do so would be to
capital and labor are not merely alter the real intention of the contracting
contractual. They are so impressed with parties when the contrary function of courts
public interest that labor contracts must is to give force and effect to the intention
yield to the common good. Therefore, of the parties. [Maynilad Water Supervisors
such contracts are subject to the special Association vs. Maynilad Water Services,
laws on labor unions, collective Inc., G.R. No. 198935 (2013)]
bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours
of labor and similar subjects.
B. CONSTRUCTION IN
FAVOR OF
LABOR
Article 4, Labor Code (LC)
Construction in favor of labor. All doubts in consideration to the context in which it is
the implementation and interpretation of negotiated and purpose which it is
the provisions of this Code, including its intended to serve. [Cirtek Employees Labor
implementing rules and regulations, shall Union-FFW v Cirtek Electronics, G.R. No.
be resolved in favor of labor. 190515 (2010)]
such, it must be construed liberally rather than

narrowly and technically, and the courts must
Article 1702, Civil Code (CC) place a practical and realistic construction upon it,
giving due
See Art 1702, Civil Code, Supra at p.
Liberal Construction
Of the laws
Article 4 of the Labor Code mandates that
all doubts in the implementation and
interpretation of the provisions thereof
shall be resolved in favor of labor.
Consistent with the State’s avowed policy
to afford protection to labor, as Article 3 of
the Labor Code and Section 3, Article XIII
of the 1987 Constitution have enunciated,
particularly in relation to the worker’s
security of tenure, the Court held that “[t]o
be lawful, the cause for termination must
be a serious and grave malfeasance to
justify the deprivation of a means of
livelihood. This is merely in keeping with
the spirit of our Constitution and laws
which lean over backwards in favor of the
working class, and mandate that every
doubt must be resolved in their favor.”
Moreover, the penalty imposed on the erring
employee ought to be proportionate to the
offense, taking into account its nature and
surrounding circumstances. [Hocheng
Philippines Corporation v. Farrales, G.R. No.
211497 (2015)]
Of labor contracts
While the terms and conditions of a CBA
constitute the law between the parties, it is
not however, an ordinary contract to which
is applied the principles of law governing
ordinary contracts. A CBA, as a labor
contract within the contemplation of Article
1700 of the Civil Code of the Philippines
which governs the relations between labor
and capital, is not merely contractual in
nature but impressed with public interest,
thus, it must yield to the common good. As
responsibility for any damage suffered by
In general the employer due to his negligence. The
measure of the responsibility of an
When there is doubt between the
employee is that if
evidence submitted by the employer
and that submitted by the
employee, the scales of justice
must be tilted in favor of the
employee. This is consistent with
the rule that an employer’s cause
could only succeed on the strength
of its own evidence and not on the
weakness of the employee’s
evidence. [Misamis Oriental II Electric
Service Cooperative vs. Virgilio
Cagalawan, G.R. No. 175170 (2012)]
Fair treatment
The right of an employer to dismiss
an employee differs from and
should not be confused with the
manner in which such right is
exercised. It must not be oppressive
and abusive since it affects one's
person and property. [FASAP v.
PAL, G.R. No. 178083 (2008)]
Mutual obligation
The employer's obligation to give
his workers just compensation and
treatment carries with it the
corollary right to expect from the
workers adequate work, diligence
and good conduct. [Judy Philippines,
Inc. v NLRC, G.R. No. 111934,
(1998)]
Compliance with law

It is also important to emphasize
that the return-to-work order not so
much confers a right as it imposes a
duty; and while as a right it may be
waived, it must be discharged as a
duty even against the worker's will.
[Sarmiento v. Tuico, G.R. No. 75271
(1988)]
Employee's compliance and
obedience to employer's orders
The lack of a written or formal
designation should not be an
excuse to disclaim any
he performed
n, and shall enforce his
their mutual assignedtherewith
compliance task efficiently
to foster industrial peace.
and
ate the relations according
between to the
workers andusual standards,
employers, then the right of labor to its just share in the fruits of production and the right o
recognizing
he may not be held personally liable for any
damage arising therefrom. Failing in this,
the employee must suffer the consequences
of his negligence if not lack of due care in
the performance of his duties. [PCIB v.
Jacinto, G.R. No. 92742 (1991)]
C.SOCIAL JUSTICE
Section 10, Article II, Constitution When to/not to tilt the scales of justice as a
measure of equity and compassionate
Section 10. The State shall promote social social justice
justice in all phases of national
development. Absent any other supporting evidence, the
error in a single ticket issued by petitioner
Sections 1-3, Article XIII, can hardly be used to justify the inference
Constitution that he has committed serious misconduct
economic, and political inequalities, and remove cultural inequities by equitably diffusing
or has acted wealth and political
in a manner power
that runs for of
afoul the common goo
his employer's trust. More so, petitioner
cannot be taken to have engaged in a
pportunities for all. series of acts evincing a pattern or a
design of
n accordance with law. They shall be entitled to security of tenure, humane conditions towork,
defraud hiswage.employer.
and a living They shall also participa
Terminating his employment on these
unfounded reasons is manifestly unjust
[Rivera vs. Genesis Transport Service, Inc.,
G.R. 215568 (2015)].
Separation pay shall be allowed as a
measure of social justice only in those
instances where the employee is validly
dismissed for causes other than serious
misconduct or those reflecting on his moral
character. Where the reason for the valid
dismissal is, for example, habitual
intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations
with a fellow worker, the employer may not
be required to give the dismissed
employee separation pay, or financial
assistance, or whatever other name it is
called, on the ground of social justice [PLDT
vs. NLRC, 247 Phil. 641 (1988)].
The policy of social justice is not intended
to countenance wrongdoing simply because
it is committed by the underprivileged. At
best it may mitigate the penalty but it
certainly will not condone the offense.
Compassion for the poor is an imperative
of every humane society but only when the
recipient is not a rascal claiming an
undeserved privilege. Social justice cannot
be permitted to be [a] refuge of scoundrels
any more than can equity
be an impediment to the
punishment of the guilty.
Those who invoke social
justice may do so only
if their hands are clean and their motives
blameless and not simply because they II. Recruitment and
happen to be poor. This great policy of our
Constitution is not meant for the protection Placement
of those who have proved they are not
“Recruitment and placement" refers to any
worthy of it, like the workers who have
act of:
tainted the cause of labor with the
blemishes of their own character. (a) Canvassing,
[Tirazona vs. Phil EDS Techno- Service,
(b) Enlisting,
Inc., G.R. 169712 (2009)].
(c) Contracting,
(d) Transporting,
(e) Utilizing, or
(f) Hiring procuring workers,
And also includes

(a) Referrals,
(b) Contract services,
(c) Promising, or
(d) Advertising for employment, locally
or abroad, whether for profit or not
Provided, That any person or entity which,

in any manner, offers or promises for a fee
employment to two or more persons shall
be deemed engaged in recruitment and
placement. [Art. 13 (b), LC]
Any of the acts mentioned above
constitutes recruitment and placement.
The proviso provides for a presumption
that a person or entity so described
engages in recruitment and placement
[People v. Panis, G.R. No. 58674 (1988)]
What constitutes recruitment?

The number of persons dealt with is not an
essential ingredient of the act of
recruitment and placement of workers. Any
of the acts mentioned in Article 13(b) will
constitute recruitment and placement even
if only one prospective worker is involved.
The proviso merely lays down a rule of
evidence that where a fee is collected in
consideration of a promise or offer of
employment to two or more prospective
workers, the individual or entity dealing
with them shall be presumed to be
engaged in the act of recruitment and person or association engaged in the recruitment
placement. [People v. Panis] and placement of workers, locally or overseas,
Acts of referral
The act of referral, which is included in
recruitment, is "the act of passing along or
forwarding of an applicant for employment
after an initial interview of a selected
applicant for employment to a selected
employer, placement officer or bureau."
[Rodolfo vs. People, G.R. No. 146964
(2006)]
Promising employment
Promising employment as factory workers
and receiving money allegedly for
processing papers without authorization or
license is engaging into unlawful
recruitment and placement activities. The
absence of the necessary license or
authority renders all of accused-appellant’s
recruitment activities criminal. [People vs.
Saulo, G.R. No. 125903 (2000)]
Worker – refers to any member of the

labor force, whether employed or
unemployed [Art.13 (a), LC]
Overseas Filipino Worker – is a person

who is to be engaged, is engaged or has
been engaged in a remunerated activity in
a state of which he or she is not a citizen
or on board a vessel navigating the foreign
seas other than a government ship used
for military or non- commercial purposes or
on an installation located offshore or on
the high seas; to be used interchangeably
with migrant worker.” [Sec. 2 (a), RA 8042,
as amended]
Private Employment Agency – means any

person or entity engaged in recruitment
and placement of workers for a fee which
is charged, directly or indirectly, from the
workers or employers or both [Sec 13 (c),
LC]
Private Recruitment Entity – means any

without charging, directly or
indirectly, any fee from the workers
or employees [Sec 13 (e), LC] A. ILLEGAL RECRUITMENT
Illegal Recruitment shall mean any act of
canvassing, enlisting, contracting,
Policy of Close Government Regulation
transporting, utilizing, hiring, or procuring
RA 9422 or the Act to Strengthen workers and includes referring, contract
the Regulatory Functions of the services, promising or advertising for
Philippine Overseas Employment employment abroad, whether for profit or
Administration of 2007 expressly not, when undertaken by non-licensee or
repealed Sections 29 and 30 of RA non- holder of authority contemplated
8042 which provided for the under
deregulation of recruitment
activities.
Recruitment of Local and

Migrant Workers Policy of
Selective Deployment
The State shall allow the
deployment of overseas Filipino
workers only in countries where the
rights of Filipino migrant workers
are protected. The government
recognizes any of the following as a
guarantee on the part of the
receiving country for the protection
of the rights of overseas Filipino
workers:
(a) It has existing labor and social
laws protecting the rights of
workers, including migrant
workers;
(b) It is a signatory to and/or a
ratifier of multilateral
conventions, declarations or
resolutions relating to the
protection of workers,
including migrant workers; and
(c) It has concluded a bilateral
agreement or arrangement
with the government on the
protection of the rights of
overseas Filipino Workers:
Provided, That the receiving
country is taking positive,
concrete measures to protect
the rights of migrant workers
in furtherance of any of the
guarantees under
subparagraphs (a), (b) and (c)
hereof. [Sec. 3, RA 8042, as
amended]
Article 13(f) of Presidential Decree No. 442, (e) To influence or to attempt to
as amended, otherwise known as the Labor influence any person or entity not to
Code of the Philippines: Provided, That employ any worker who has not
any such non-licensee or non-holder who, applied for employment through his
in any manner, offers or promises for a fee agency;
employment abroad to two or more
persons shall be deemed so engaged. [Sec. (f) To engage in the recruitment or
5, R.A. No. 10022] placement of workers in jobs harmful
to public health or morality or to the
dignity of the Republic of the
A.1 ESSENTIAL ELEMENTS OF Philippines;
ILLEGAL RECRUITMENT (g) To obstruct or attempt to obstruct
1. The offender is a licensee/non-licensee inspection by the Secretary of Labor
or holder/non-holder of authority or by his duly authorized
engaged in the recruitment and representatives;
placement of workers; and (h) To fail to file reports on the status of
2. The offender undertakes wither any employment, placement vacancies,
recruitment activities defined under remittance of foreign exchange
Article 13(b), or any prohibited earnings, separation from jobs,
practices enumerated under Article 34 departures and such other matters or
[People vs. Sadiosa, GR No. 107084 information as may be required by the
(1998); Sec. 10, RA 8042] Secretary of Labor.
(i) To substitute or alter employment
contracts approved and verified by
A.2. PROHIBITED ACTIVITIES the Department of Labor from the
Prohibited practices time of actual signing thereof by the
parties up to and including the
It shall be unlawful for any individual,
periods of expiration of the same
entity, licensee, or holder of authority: without the approval of the Secretary
(a) To charge or accept, directly or of Labor;
indirectly, any amount greater than (j) To become an officer or member of
that specified in the schedule of the Board of any corporation
allowable fees prescribed by the engaged in travel agency or to be
Secretary of Labor, or to make a engaged directly or indirectly in the
worker pay any amount greater than management of a travel agency; and
that actually received by him as a
loan or advance; (k) To withhold or deny travel documents
from applicant workers before
(b) To furnish or publish any false notice
departure for monetary or financial
or information or document in relation considerations other than those
to recruitment or employment; authorized under this Code and its
(c) To give any false notice, testimony, implementing rules and regulations.
information or document or commit (Art. 34, LC)
any act of misrepresentation for the
purpose of securing a license or
authority under this Code. Other prohibited acts
(d) To induce or attempt to induce a It shall likewise include the following acts,
worker already employed to quit his whether committed by any person,
employment in order to offer him to whether a non-licensee, non-holder,
another unless the transfer is licensee or holder of authority:
designed to liberate the worker from (a) To charge or accept directly or
oppressive terms and conditions of indirectly any amount greater than
employment;
that specified in the schedule
of allowable fees prescribed by
the Secretary of Labor and
Employment, or to make a
worker pay or acknowledge
any amount greater than
that actually received by him as a and including the period of the expiration of
loan or advance; the same
or information or document in relation
to recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit
authority under the Labor Code, or
for the purpose of documenting hired
workers with the POEA, which
include the act of reprocessing
workers through a job order that
pertains to nonexistent work, work
different from the actual overseas
work, or work with a different
employer whether registered or not
with the POEA;
(d) To include or attempt to induce a
worker already employed to quit his
employment in order to offer him
another unless the transfer is
designed to liberate a worker from
oppressive terms and conditions of
employment;
(e) To influence or attempt to influence
any person or entity not to employ
any worker who has not applied for
employment through his agency or
who has formed, joined or supported,
or has contacted or is supported by
any union or workers' organization;
(f) To engage in the recruitment or
placement of workers in jobs harmful
Philippines;
(g) To fail to submit reports on the status
of employment, placement vacancies,
remittance of foreign exchange
earnings, separation from jobs,
departures and such other matters or
information as may be required by the
Secretary of Labor and Employment;
(h) To substitute or alter to the prejudice
of the worker, employment contracts
approved and verified by the
Department of Labor and
Employment from the time of actual
signing thereof by the parties up to
without the approval of the exceeding eight percent (8%) per
Department of Labor and annum, which will be used for
Employment; payment of legal and allowable
placement fees and make the
(i) For an officer or agent of a
migrant worker issue, either
recruitment or placement
personally or through a guarantor or
agency to become an officer
accommodation party, postdated
or member of the Board of
checks in relation to the said loan;
any corporation engaged in
travel agency or to be (2) Impose a compulsory and exclusive
engaged directly or indirectly arrangement whereby an overseas
in the management of travel Filipino worker is required to avail of
agency; a loan only from specifically
designated institutions, entities or
(j) To withhold or deny travel
persons;
documents from applicant
workers before departure for
monetary or financial
considerations, or for any
other reasons, other than
those authorized under the
Labor Code and its
implementing rules and
regulations;
(k) Failure to actually deploy a
contracted worker without
valid reason as determined
by the Department of Labor
and Employment;
(l) Failure to reimburse expenses
incurred by the worker in
connection with his
documentation and
processing for purposes of
deployment, in cases where
the deployment does not
actually take place without
the worker's fault. Illegal
recruitment when committed
by a syndicate or in large
scale shall be considered an
offense involving economic
sabotage; and
(m) To allow a non-Filipino
citizen to head or manage a
licensed recruitment/manning
agency [Sec 5]
In addition to the acts enumerated

above, it shall also be unlawful for
any person or entity to commit the
following prohibited acts:
(1) Grant a loan to an overseas
Filipino worker with interest
(3) Refuse to condone or renegotiate a A.3. TYPES OF ILLEGAL RECRUITMENT
loan incurred by an overseas Filipino
Simple Illegal Recruitment
worker after the latter's employment
contract has been prematurely
terminated through no fault of his or
her own;
(4) Impose a compulsory and exclusive
arrangement whereby an overseas
Filipino worker is required to undergo
health examinations only from
specifically designated medical
clinics, institutions, entities or
persons, except in the case of a
seafarer whose medical examination
cost is shouldered by the
principal/shipowner;
(5) Impose a compulsory and exclusive
arrangement whereby an overseas
training, seminar, instruction or
schooling of any kind only from
specifically designated institutions,
entities or persons, except for
recommendatory trainings mandated
by principals/shipowners where the
latter shoulder the cost of such
trainings;
(6) For a suspended
recruitment/manning agency to
engage in any kind of recruitment
activity including the processing of
pending workers' applications; and
(7) For a recruitment/manning agency or
a foreign principal/employer to pass
on the overseas Filipino worker or
deduct from his or her salary the
payment of the cost of insurance fees,
premium or other insurance related
charges, as provided under the
compulsory worker's insurance
coverage. (Sec. 6, RA 8042 as
amended)
Illegal recruitment for Local Workers Labor, or to make a worker pay any
[Governed by the Labor Code] amount greater than that actually
received by him as a loan or advance;
Simple Illegal
Recruitment (local) to recruitment or employment;
Elements: (c) To give any false notice, testimony,
(1) The person charged with the information or document or commit
any
crime must have undertaken
recruitment activities defined
under Art. 13 (b) or prohibited
activities defined under Art.
34; and
(2) The said person does not
have a license or authority to
do so. [Art. 38, LC]
Profit or lack thereof is immaterial

The act of recruitment may be "for
profit or not." Notably, it is the lack
of the necessary license or
authority, not the fact of payment
that renders the recruitment activity
of LCL unlawful. [C.F. Sharp vs.
Espanol, G.R. No. 155903 (2007)]
Accused must give the impression

of ability to send complainant
abroad
It is well-settled that to prove illegal
recruitment, it must be shown that
[the accused] gave complainants
the distinct impression that she had
the power or ability to send
complainants abroad for work such
that the latter were convinced to
part with their money in order to be
employed. [People v. Ochoa, G.R.
No. 173792 (2011)]
Prohibited practices
It shall be unlawful for any
individual, entity, licensee, or holder
of authority:
(a) To charge or accept, directly or
indirectly, any amount greater
than that specified in the
schedule of allowable fees
prescribed by the Secretary of
act of misrepresentation for the Manpower Exponent Co. v. Vinuya, G.R. No.
purpose of securing a license or 197528 (2012)]
authority under this Code.
(d) To induce or attempt to induce a
employment in order to offer him to
designed to liberate the worker from
employment;
(e) To influence or to attempt to
influence any person or entity not to
employ any worker who has not
applied for employment through his
agency;
Philippines;
(g) To obstruct or attempt to obstruct
inspection by the Secretary of Labor
or by his duly authorized
representatives;
(h) To fail to file reports on the status of
employment, placement vacancies,
remittance of foreign exchange
earnings, separation from jobs,
departures and such other matters or
information as may be required by the
Secretary of Labor.
(i) To substitute or alter employment
contracts approved and verified by
the Department of Labor from the
time of actual signing thereof by the
parties up to and including the
periods of expiration of the same
without the approval of the Secretary
of Labor;
(j) To become an officer or member of
the Board of any corporation
engaged in travel agency or to be
engaged directly or indirectly in the
management of a travel agency; and
(k) To withhold or deny travel
documents from applicant workers
before departure for monetary or
financial considerations other than
those authorized under this Code
and its implementing rules and
regulations. [Art. 34, LC, PERT/CPM
Contract Substitution amounts to No. 442, as amended, otherwise known as
Illegal Recruitment the Labor Code of the Philippines;
Provided, That any such non-licensee or
The reduced salaries and
non-holder who, in any manner, offers or
employment period in the new
promises for a fee employment abroad to
employment contract contradicted
two or more persons shall be deemed so
the POEA-approved employment
engaged. [Sec. 6, RA 8042 as amended]
contract. By this act of contract
substitution, respondents
committed a prohibited practice
Other prohibited acts
and engaged in illegal recruitment
as defined in Art. 34(i), LC.
[PERT/CPM Manpower Exponent
Co. v. Vinuya, G.R. No. 197528
(2012)]
Illegal recruitment for Migrant

Workers [Governed by R.A. 8042,
as amended by, R.A. 10022]
Simple Illegal
Recruitment
First type:
(1) Person charged
undertakes any
recruitment activity as
defined in Art.13
(b) of the Labor Code; and
(2) Said person does not have a
license or authority to do so.
Second type:
(1) Person charged commits any
of the enumerated acts
under Sec. 6 of R.A. 8042,
as amended by, R.A. 10022.
(2) It is immaterial whether he is
a holder or not of any license
or authority
Illegal recruitment shall mean any

act of canvassing, enlisting,
contracting, transporting, utilizing,
hiring, or procuring workers and
includes referring, contract
services, promising or advertising
for employment abroad, whether
for profit or not, when undertaken
by non-licensee or non- holder of
authority contemplated under
Article 13(f) of Presidential Decree
It shall likewise include the following acts, remittance of foreign exchange earnings,
whether committed by any person, separation from jobs, departures and such
whether a non-licensee, non-holder, other matters or information as
licensee or holder of authority:
(a) To charge or accept directly or
indirectly any amount greater than
that specified in the schedule of
allowable fees prescribed by the
Secretary of Labor and Employment,
or to make a worker pay or
acknowledge any amount greater
than that actually received by him as
a loan or advance;
to recruitment or employment;
(c) To give any false notice, testimony,
information or document or commit
authority under the Labor Code, or
for the purpose of documenting hired
workers with the POEA, which
include the act of reprocessing
workers through a job order that
pertains to nonexistent work, work
different from the actual overseas
work, or work with a different
employer whether registered or not
with the POEA;
(d) To induce or attempt to induce a
employment in order to offer him
designed to liberate a worker from
employment;
(e) To influence or attempt to influence
any person or entity not to employ
any worker who has not applied for
employment through his agency or
who has formed, joined or supported,
or has contacted or is supported by
any union or workers' organization;
Philippines;
(g) To fail to submit reports on the status
of employment, placement vacancies,
may be required by the recruitment/manning agency.
Secretary of Labor and
Employment;
In addition to the acts enumerated above,
(h) To substitute or alter to the
it shall also be unlawful for any person or
prejudice of the worker,
entity to commit the following prohibited
employment contracts
acts:
approved and verified by the
Department of Labor and (1) Grant a loan to an overseas Filipino
Employment from the time of worker with interest exceeding eight
actual signing thereof by the percent (8%) per annum, which will
parties up to and including the be used for payment of legal and
period of the expiration of the allowable placement fees and make
same without the approval of the migrant
the Department of Labor and
Employment;
(i) For an officer or agent of a
recruitment or placement
agency to become an officer or
member of the Board of any
corporation engaged in travel
agency or to be engaged
directly or indirectly in the
management of travel agency;
(j) To withhold or deny travel
documents from applicant
workers before departure for
monetary or financial
considerations, or for any other
reasons, other than those
authorized under the Labor
Code and its implementing
rules and regulations;
(k) Failure to actually deploy a
contracted worker without valid
reason as determined by the
Employment;
(l) Failure to reimburse expenses
incurred by the worker in
connection with his
documentation and processing
for purposes of deployment, in
cases where the deployment
does not actually take place
without the worker's fault.
Illegal recruitment when
committed by a syndicate or in
large scale shall be considered
an offense involving economic
sabotage; and
(m) To allow a non-Filipino citizen
to head or manage a
licensed
worker issue, either personally or recommendatory trainings mandated
through a guarantor or by principals/shipowners where the
accommodation party, postdated latter shoulder the cost of such
checks in relation to the said loan; trainings;
(2) Impose a compulsory and exclusive (6) For a suspended recruitment/manning
arrangement whereby an overseas agency to engage in any kind of
Filipino worker is required to avail of recruitment activity including the
a loan only from specifically processing of pending workers'
designated institutions, entities or applications; and
persons;
(7) For a recruitment/manning agency or a
(3) Refuse to condone or renegotiate a foreign principal/employer to pass on
loan incurred by an overseas Filipino the overseas Filipino worker or deduct
worker after the latter's employment from his or her salary the payment of
contract has been prematurely the cost of insurance fees, premium or
terminated through no fault of his or other insurance related charges, as
her own; provided under the compulsory worker's
(4) Impose a compulsory and exclusive insurance coverage. [Sec. 6, RA 8042
arrangement whereby an overseas as amended]
health examinations only from
specifically designated medical Migrant Workers’ Act (MWA) expands the
clinics, institutions, entities or definition of illegal recruitment
persons, except in the case of a The amendments to the Labor Code
seafarer whose medical examination introduced by Republic Act No. 8042,
cost is shouldered by the otherwise known as the Migrant Workers
principal/shipowner; and Overseas Filipinos Act of 1995,
(5) Impose a compulsory and exclusive broadened the concept of illegal
arrangement whereby an overseas recruitment and provided stiffer penalties,
Filipino worker is required to undergo especially for those that constitute
training, seminar, instruction or economic sabotage. [People v. Ocden,
schooling of any kind only from G.R. No. 173198 (2011)]
specifically designated institutions,
entities or persons, except for
Law Applicability Acts Punishable Who can be punished

Art. 13(b) Non-licensee
Labor Code Local Workers
Art. 34 Non-licensee
Art. 13(b) Labor Code Non-licensee
RA 8042 as
amended by RA Migrant Workers Enumerated prohibited Licensee/
10022 acts in Section 6 Non-licensee
activity within the meaning of "recruitment

Illegal recruitment in large and placement" defined under Article
13(b), or any of the
scale Illegal recruitment by a
syndicate
(1) The offender undertakes either any
prohibited practices enumerated
under Art. 34 of the Labor Code;
(2) He has no valid license or
authority required by law to
enable one to lawfully engage in
recruitment and placement of
workers; AND
BOC STANDARDS
(3) The illegal recruitment is committed Illegal recruitment is considered economic
by a group of three (3) or more sabotage when the commission thereof is
persons conspiring or confederating attended by the ff. qualifying
with one another. [People v. Gallo, circumstances:
G.R. No. 187730 (2010)]
(1) By a syndicate - if carried out by a
group of 3 or more persons
Illegal recruitment in large scale conspiring and confederating with
one another;
The acts committed by the accused
constituted illegal recruitment in large (2) In large scale - if committed against 3
scale, whose essential elements are the or more persons individually or as a
following: group. [Art. 38(b), LC]
(1) The accused engages in acts of
recruitment and placement of See iv. Illegal recruitment in large scale for
workers defined under Article 13(b)
requisites and discussion
of the Labor Code or in any
prohibited activities under Article 43
of the Labor Code; A.4 ILLEGAL RECRUITMENT VS. ESTAFA
(2) The accused has not complied with
Illegal Recruitment Estafa
the guidelines issued by the
Secretary of Labor and Employment, Malum prohibitum Malum in se
particularly with respect to the
Conviction for
securing of license or an authority to Conviction for
offenses under the
recruit and deploy workers, either estafa does not
Labor Code does
locally or overseas; and bar a conviction
not bar conviction
for illegal
(3) The accused commits the unlawful for offenses
recruitment under
acts against three or more persons punishable by other
the Labor Code.
individually or as a group. laws.
Three or more complainants must be in a One convicted for illegal recruitment may
single case still be convicted of estafa
When the Labor Code speaks of illegal In People v. Cortez the Court explained that:
recruitment "committed against three (3) or “In this jurisdiction, it is settled that a
more persons individually or as a group," it person who commits illegal recruitment
must be understood as referring to the may be charged and convicted separately of
number of complainants in each case who illegal recruitment under the Labor Code
are complainants therein, otherwise, and estafa under par. 2(a) of Art. 315 of the
prosecutions for single crimes of illegal Revised Penal Code. The offense of illegal
recruitment can be cumulated to make out recruitment is malum prohibitum where the
a case of large scale illegal recruitment. criminal intent of the accused is not
In other words, a conviction for large scale necessary for conviction, while estafa is
illegal recruitment must be based on a malum in se where the criminal intent of
the accused is crucial for conviction.
finding in each case of illegal recruitment
of three or more persons whether Conviction for offenses under the Labor
Code does not bar conviction for offenses
individually or as a group. [People vs.
Reyes, G.R. No. 105204 (1995)] punishable by other laws. Conversely,
conviction for estafa under par. 2(a) of Art.
315 of the Revised Penal Code does not
Illegal recruitment as economic sabotage bar a conviction for illegal recruitment
under the Labor Code. It follows that one's
Offense involving Economic Sabotage acquittal of the crime of estafa will not
(Large- Scale or by a Syndicate)
PAGE 19 OF
235
necessarily
BOC result in his acquittal of STANDARDS
the crime of illegal recruitment in
large scale, and vice versa.” [People
v. Ochoa (2011); People v. Ocden
(2011)]
PAGE 20 OF
235
Act Penalty
A.5. LIABILITYOF LOCAL RECRUITMENT Imprisonment: 6 yrs. and 1
AGENCY AND FOREIGN EMPLOYER day – 12 yrs.
Prohibited
LOCAL RECRUITMENT AGENCY Act/s AND
Illegal recruitment involving local workers [Art. Fine: P500k – P1M
39, LC]
Imprisonment: 12 yrs. and
Act Penalty 1 day – 20 yrs.
Illegal
Imprisonment: 2 - 5 recruitment AND
Licensee or holder yrs.
Fine: P1M – P2M
of authority
OR
violating or Life imprisonment
causing another Fine: P10k – P50k
AND
to violate Title I,
OR
Book I, LC Fine: P2M – P5M
Both Illegal
Imprisonment: 4 - 8 recruitment
constituting Maximum penalty if:
Violating or yrs. OR
economic 1. Illegally recruited
causing another Fine: P20k – P100k sabotage person below 18
to violate Title I,
Book I, LC OR years old
Both OR
Illegal recruitment Life imprisonment 2. Offense committed
constituting without
AND
economic RA 10022]
sabotage Fine: P100k
If the offender is a corporation,

partnership, association or entity, the
penalty shall be imposed upon the officer
or officers of the corporation, partnership,
association or entity responsible for
violation.
If such officer is an alien, he shall, in
addition to the penalties herein prescribed,
be deported without further proceedings.
In every case, conviction shall cause and
carry the automatic revocation of the
license or authority and all the permits and
privileges granted to such person or entity
under this Title, and the forfeiture of the
cash and surety bonds in favor of the
Overseas Employment Development
Board or the National Seamen Board, as
the case may be, both of which are
authorized to use the same exclusively to
promote their objectives.
Illegal recruitment involving migrant
workers [Sec. 7, RA 8042 as amended by
If the offender is an alien, he or she
shall, in addition to the penalties
herein prescribed, be deported
without further proceed-ings.
In every case, conviction shall cause
and carry the automatic revocation
of the license or registration of the
recruitment/ manning agency,
lending institutions, training school or
medical clinic.
Common Rules on Liability

(1) Employees of a company or
corporation engaged in illegal
recruitment may be held liable
as principal, together with his
employer, if it is shown that he
actively and consciously
participated in illegal
recruitment. [People vs.
Sagayaga, G.R. 143726
(2004)]
(2) Private employment agencies
are held jointly and severally
liable with the foreign-based
employer for any violation of the
recruitment agreement or
contract of employment. This
joint and solidary liability
imposed by law against
recruitment agencies and
foreign
employers is meant to assure the contract, including but not limited to payment of
aggrieved worker of immediate and wages, death and disability compensation and
sufficient payment of what is due him repatriation
[Becmen Service Exporter vs. Sps.
Cuaresma, G.R. 182978-79, (2009]
(3) If the recruitment/placement agency is
a juridical being, the corporate officers
and directors and partners as the
case may be, shall themselves be
jointly and solidarily liable with the
corporation or partnership for the
aforesaid claims and damages.
[Becmen Service Exporter vs. Sps.
Cuaresma, G.R. 182978-79, (2009]
(4) Foreign employer shall assume joint
and solidary liability with the employer
for all claims and liabilities which may
arise in connection with the
implementation of the contract,
including but not limited to payment
of wages, death and disability
compensation and repatriation
Common Rules on Illegal Recruitment

(Local or Overseas)
Venue
A criminal action arising from illegal
recruitment shall be filed with the RTC of
the province or city:
(1) where the offense was committed or
(2) where the offended party actually
resides at the time of the commission of
the offense. [Sec. 9, R.A. 8042 (this
part was not amended by R.A. 10022)].
Prescriptive Periods
(1) Simple Illegal Recruitment – 5 years
(2) Illegal Recruitment involving Economic
Sabotage – 20 years [Sec. 12, R.A.
8042 (this part was not amended by
R.A, 10022)].
FOREIGN EMPLOYER
Foreign employer shall assume joint and
solidary liability with the employer for all
claims and liabilities which may arise in
connection with the implementation of the
employees recruited and employed
pursuant to the said recruitment
A.5.a. SOLIDARY LIABILITY agreement. Otherwise, this will render
Solidary Liability of Agent and Principal nugatory the very purpose for which the law
governing the employment of workers for
The written application for a license foreign jobs abroad was enacted, that is, to
to operate a private employment or assure aggrieved workers of immediate
manning agency shall be submitted and sufficient payment of what is due
with, among others, a verified them. [OSM Shipping Phil, Inc. v. NLRC
undertaking stating that the (2003)]
applicant:
(1) Shall assume full and
complete responsibility for: A.5.b. THEORY OF IMPUTED KNOWLEDGE
 all claims and liabilities

which may arise in
connection with the use of
license;
 all acts of its officials,
employees and
representatives done in
connection with
recruitment and
placement;
(2) Shall assume joint and
solidary liability with the
employer for all claims and
liabilities which may arise in
connection with the
implementation of the
contract, including but not
limited to payment of wages,
death and disability
compensation and
repatriation;
(3) Shall guarantee compliance
with the existing labor and
social legislations of the
Philippines and of the country
of employment of recruited
workers [POEA Rules, Book II,
Rule II, Sec. 1 (f) (2-5)]
Purpose of Solidary Liability

The fact that the manning agency
and its principal have already
terminated their agency agreement
does not relieve the former of its
liability. The agency agreement with
the principal even if ended as
between them, still extends up to
and until the expiration of, the
employment contracts of the
This is a doctrine in agency which states salary rule applied
that the principal is chargeable with and
bound by the knowledge of or notice to his
agent received while the agent was acting
as such. Simply put, notice to the agent is
notice to the principal.
Since the local employment agency is
considered the agent of the foreign
employer, the principal, knowledge of the
former of existing labor and social
legislation in the Philippines is binding on
the latter. Consequently, notice to the
former of any violation thereof is notice to
the latter.
However, notice to the principal is not
notice to the agent. The SC held in Sunace
International Management Services, Inc.
vs. NLRC [G.R. 161757 (2006)] that “the
theory of imputed knowledge ascribes the
knowledge of the agent to the principal, not
the other way around. The knowledge of
the principal- foreign employer cannot,
therefore, be imputed to its agent.”
A.6. TERMINATION OF CONTRACT OF

MIGRANT WORKER WITHOUT JUST CAUSE
In case of termination of overseas
employment,
 without just, valid or authorized cause
as defined by law or contract, or
 any unauthorized deductions from the
migrant worker's salary
...shall entitle the worker to full

reimbursement of:
(1) his placement fee and the
deductions made with interest at
twelve percent (12%) per annum,
and;
(2) his salaries for the unexpired
portion of his employment
contract [or for three (3) months
for every year of the unexpired
term, whichever is less*] [Sec.
10, R.A. 8042, as amended by
R.A. 10022]
Rule before Serrano (1995-2009): 3-month

The employment contract involved in passage of RA 10022.
the instant case covers a two-year
period but the overseas contract
worker actually worked for only 26 A.7.DIRECT HIRING
days prior to his illegal dismissal. General Rule: No employer may hire a
Thus, the three months’ salary rule
Filipino worker for overseas employment
applies [Flourish Maritime Shipping
except through the Boards and entities
v. Almanzor, G.R. No. 177948
authorized by the Secretary of Labor. [Art.
(2008)]
18, LC]
Rule after Serrano: invalidated the 3-

Exceptions:
month salary cap clause
The SC there held that “said clause
is unconstitutional for being an
invalid classification, in violation of
the equal protection clause”.
[Serrano v. Gallant Maritime Services,
Inc., G.R. No. 167614 (2009)]
In the case of Yap vs. Thenamaris
Ship’s Management and Intermare
Maritime Agencies, Inc. [G.R. No.
179532 (May 30, 2011)], the SC
affirmed the Serrano ruling, but did
not apply the Operative Fact
doctrine: “As an exception to the
general rule, the doctrine applies
only as a matter of equity and fair
play.”
NB: In 2010, a year after Serrano, RA

10022, in amending RA 8042,
reincorporated the nullified 3-month
salary cap clause. However, the SC
did not allow this and again struck
the revived clause as
unconstitutional in the 2014 case of
Sameer Overseas Placement Agency
vs. Cabiles [G.R. No. 170139, (August
05, 2014)]. There, the SC said that:
“when a law or a provision of law is
null because it is inconsistent with
the Constitution, the nullity cannot
be cured by reincorporation or
reenactment of the same or a similar
law or provision. A law or provision
of law that was already declared
unconstitutional remains as such
unless circumstances have so
changed as to warrant a reverse
conclusion.”
Hence, the case of Serrano holds as
binding precedent, even after the
(1) Members of the diplomatic corps; Definition Any person Any person
or entity or
(2) International organizations; engaged in association
(3) Such other employees as may be recruitment engaged in
allowed by the Sec. of Labor; and the
placement recruitment
(4) Name hirees – those individuals who of workers and
are able to secure contracts for for a fee placement of
overseas employment on their own which is workers,
efforts and representation without the charged, locally or
assistance or participation of any directly or overseas,
agency. Their hiring, nonetheless, has indirectly, without
to be processed through the POEA. from the charging,
[Part III, Rule III of the POEA Rules workers or directly or
Governing Overseas Employment as employers indirectly,
amended in 2002] or both any fee
Requiremen License Authority
t
B. REGULATIONS OF RECRUITMENT
AND PLACEMENT ACTIVITIES
License and Authority
License – is a document issued by the Entities disqualified from being issued a license
Department of Labor and Employment (1) Travel agencies and sales agencies
(DOLE) authorizing a person or entity to
of airline companies. [Art. 26]
operate a private employment agency,
while an authority is a document issued by (2) Officers or members of the Board of
the DOLE authorizing a person or any corporation or members in
association to engage in recruitment and partnership engaged in the business
placement activities as a private recruitment of a travel agency.
agency. [Art. 13(d) and (f), LC] (3) Corporations and partnerships, when
any of its officers, members of the
board or partners, is also an officer,
License Authority member of the board of partner of a
Authorize an entity Authorize an corporation or partnership engaged
to operate as a entity to operate in the business of a travel agency.
private employment as a private (4) Persons, partnerships or
agency recruitment entity corporations which have derogatory
When a license is Does not entitle a records.
given, one is also private (5) Any official or employee of the
authorized to collect recruitment entity DOLE, POEA, OWWA, DFA and
fees to collect fees. other government agencies directly
involved in the implementation of
R.A. 8042 as amended and/or any of
Private employment agency (PEA) v.
his/her relatives within the 4th civil
Private recruitment entity (PRE)
degree of consanguinity and affinity.
Private Private [POEA Rules of 2002]
Employment Recruitmen
Agency t Entity
Non-transferability of license or authority
(1) No license or authority shall be used
directly or indirectly by any person
other than the one in whose
favor it was issued or at any
place other than that stated in
the license or authority,
(2) Nor may such license or authority be P2,000,000.
transferred, conveyed, or assigned to
any other person or entity.
Any transfer of business address,
appointment or designation of any agent or
representative including the establishment
of additional offices anywhere shall be
subject to the prior approval of the
Department of Labor. [Art. 29, LC]
See: POEA Rules Part II, Rule II, Sec. 7, 8, 9
Enforceability of the license

Licensed agencies are prohibited from
conducting any recruitment activities of
any form outside of the address stated in
the license, acknowledged branch or
extension office, without securing prior
authority from the POEA. [People vs. Buli-e,
G.R. No. 123146 (2003)]
Duration of Validity
4 years [POEA Rules of 2002]
Citizenship requirement
(1) Only Filipino citizens or
(2) Corporations, partnerships or entities
at least seventy-five percent (75%) of
the authorized and voting capital
stock of which is owned and
controlled by Filipino citizens shall be
permitted to participate in the
recruitment and placement of
workers, locally or overseas. [Art. 27,
LC]
See: POEA Rules, Part II, Rule I, Sec. 1(a)
Capitalization requirement
All applicants for authority to hire or
renewal of license to recruit are required to
have such substantial capitalization as
determined by the Secretary of Labor. [Art.
28, LC]
Based on POEA Rules the following are
the substantial capital requirements:
(1) Single proprietorships or partnerships
with minimum capitalization of
(2) Corporations with minimum of this Title and is hereby authorized to
paid-up capital of P2,000,000. issue orders and promulgate rules and
regulations to carry out the objectives and
implement the provisions of this Title.
B.1. SUSPENSION OR
CANCELLATION OF LICENSE OR
AUTHORITY Visitorial powers [Art. 37, LC]
The Secretary of Labor shall have the The Secretary of Labor or his duly
power to suspend or cancel any authorized representatives may, at any
license or authority to recruit time, inspect the premises, books of
employees for overseas accounts and records of
employment for:
 violation of rules and
regulations issued by the
Department of Labor, the
Overseas Employment
Development Board, and the
National Seamen Board
 violation of the provisions of
this and other applicable laws,
General Orders and Letters of
Instructions. [Art. 35, LC]
Acts prohibited under Article 34 are
grounds for suspension or
cancellation of license. Note that
these acts likewise constitute illegal
recruitment under R.A. 8042 as
amended by
R.A. 10022.
Who can suspend or cancel the license?

(1) DOLE Secretary
(2) POEA Administrator
The power to suspend or cancel
any license or authority to recruit
employees for overseas
employment is concurrently vested
with the POEA and the Secretary of
Labor. [People v. Diaz, G.R.
112175 (1996)]
B.2. REGULATORY AND

VISITORIAL POWERS OF THE
DOLE SECRETARY
Regulatory & rule-making powers [Art. 36,
LC]
The Secretary of Labor shall have the
power to restrict and regulate the
recruitment and placement activities
of all agencies within the coverage
any person or entity covered by this Title, remittance requirement:
require it to submit reports regularly on
prescribed forms, and act on violations of
any provisions of this Title.
Note: In the old case of Salazar vs.
Achacoso [G.R. No. 81510 (1990)], it was
declared that Art. 38 of the LC is
unconstitutional and that the Secretary of
Labor and Employment cannot issue a
warrant of arrest.
B.3. REMITTANCE OF FOREIGN EXCHANGE

EARNINGS
It shall be mandatory for all Filipino
workers abroad to remit a portion of their
foreign earnings to their families,
dependents, and/or beneficiaries in the
country. [Art. 22, LC]
Amount required to be remitted [Executive

Order No. 857]
The amount of one’s salary required to be
remitted depends on the type or nature of
work performed by the employee.
The following are the percentages of
foreign exchange remittance required from
various kinds of migrant workers:
(1) Seaman or mariner – 80% of basic
salary
(2) Workers for Filipino contractors and
construction companies – 70%
(3) Doctors, engineers, teachers, nurses
and other professional workers
whose contract provide for free board
and lodging – 70%
(4) All other professional workers whose
employment contracts do not provide
for free board and lodging facilities –
50%
(5) Domestic and other service workers –
50%
(6) All other workers not falling under the
aforementioned categories – 50%
(7) Performing artists – 50%
Individuals exempted from the mandatory

(1) The immediate family Art. 45 (formerly 42) National Manpower and Youth Council;
members, dependents or
beneficiaries of migrant
workers residing with the latter
abroad;
(2) Filipino servicemen working
within US military installations;
(3) Immigrants and Filipino
professionals working with the
United Nations and its
agencies or other specialized
bodies.
C. EMPLOYMENT OF NON-
RESIDENT ALIENS
Section 12, Art XII, Constitution
Art. 12 Statement of objectives – It is the
policy of the State:
(e) To regulate the employment of aliens,
including the establishment of a
registration and/or work permit system;
Article 43, Labor Code (LC)

Art. 43 (formerly 40) Statement of
objective – It is the objective of this Title to
develop human resources, establish
training institutions, and formulate such
plans and programs as will ensure efficient
allocation, development and utilization of
the nation’s manpower and thereby promote
employment and accelerate economic and
social growth.
Article 45, LC
conduct research studies in universities and
Government, the Secretary of Science and Technology, the
colleges as visiting, exchange or
Secretary of Trade and Industry and the Director-General of the Council. The Director General shall have no vote.
C.1. COVERAGE
DO 97-09, Sec. 1
Coverage – All foreign nationals who
intend to engage in gainful employment in
the Philippines shall apply for Alien
Employment Permit (AEP)
Covered: All aliens employed or seeking

employment in the Philippines, and their
present or prospective employers [Sec. 1,
Rule XIV, Book I, Omnibus Rules].
Exemptions:
1. All members of the diplomatic service
and foreign government officials
accredited by and with reciprocity
arrangement with the Philippine
government.
2. Officers and staff of international
organizations of which the Philippine
government is a member, and their
legitimate spouses desiring to work in
the Philippines.
3. Foreign nationals elected as
members of the Governing Board
who do not occupy any other
position, but have only voting rights
in the corporation:
4. All foreign nationals granted
exemption by law:
5. Owners and representatives of
foreign principals whose companies
are accredited by the Philippine
Overseas Employment
Administration (POEA), who come to
the Philippines for a limited period
and solely for the purpose of
interviewing Filipino applicants for
employment abroad:
6. Foreign national who come to the
Philippines to teach, present and/or
adjunct professors under employees in the section or
formal agreements between department for which the expatriates
the Philippine government and are being hired to ensure the actual
foreign government ; provided transfer of technology [Sec. 5, Rule
that the exemption is on a XIV, Book I, Omnibus Rules].
reciprocal basis; and
7. Permanent resident foreign
Issuances of Employment Permit
nationals, probationary or
temporary resident visa holders The Secretary of Labor and Employment
[Sec. 2, D.O. 97-09]. may issue an employment permit to the
C.2CONDITIONS FOR GRANT OF

PERMIT
Requirements for Employment
Permit Application
The application for an employment
permit shall be accompanied by the
following:
(a) Curriculum vitae duly signed
by the applicant indicating his
educational background, his
work experience and other
data showing that he
possesses high technical skills
in his trade or profession;
(b) Contract of employment
between the employer and the
principal which shall embody
the following, among others:
(1) That the non-resident alien
worker shall comply with
all applicable laws and
rules and regulations of
the Philippines;
(2) That the non-resident alien
worker and the employer
shall bind themselves to
train at least two (2)
Filipino understudies for a
period to be determined by
Employment; and
(3) That he shall not engage
in any gainful employment
other than that for which
he was issued a permit.
(c) A designation by the employer
of at least two (2) understudies
for every alien worker. Such
understudies must be the
most ranking regular
applicant based on: from the date of its issuance unless sooner
a) Compliance by the applicant and his revoked by the Secretary of Labor and
employer with the requirements of Employment for violation of any provisions
Section 2 hereof (submission of list of of the Code or of these Rules [Sec 7, Rule
foreign nationals by employer to the XIV, Book I, Omnibus Rules].
Bureau);
b) Report of the Bureau Director as to The AEP shall be valid for the position and
the availability or nonavailability of the company for which it was issued for a
any person in the Philippines who is period of one (1) year, unless the
competent, able, and willing to do the employment contract, consultancy services,
job for which the services of the or other modes of engagement provides
applicant are desired; otherwise, which in no case shall exceed
c) His assessment as to whether or not five (5) years [DO 97-09, Sec. 11].
the employment of the applicant will
redound to the national interest;
C.4 DENIAL OF APPLICATION
d) Admissibility of the alien as certified
by the Commission on Immigration Grounds:
and Deportation; 1. Misrepresentation of facts in the
e) The recommendation of the Board of application;
Investments or other appropriate 2. Submission of falsified documents
government agencies if the applicant
will be employed in preferred areas 3. The foreign national has a
of investments or in accordance with derogatory record; and,
imperatives of economic 4. Availability of a Filipino who is
developments; and competent, able and willing to do the
f) Payments of a P100.00 fee [Sec. 6, job intended for the foreign national
Rule XIV, Book I, Omnibus Rules]. [Sec. 10, D.O. 97-09]
C.3 VALIDITY OF AEP Officer who Denies AEP: Regional Director

Subject to renewal upon showing of good Denial of application for AEP shall cause
cause, the employment permit shall be the forfeiture of the fees paid by the
valid for a minimum period of one (1) year applicant.
starting
BOC STANDARDS
SUMMARY OF ALIEN EMPLOYMENT REGULATIONS
(lifted from B2017 Labor 1 Reviewer)
Coverage Aliens employed or seeking employment
Exceptions Officers and their spouses of int’l orgs where Phils. is a member
Members of governing board with voting rights
Those granted exemption
Owners of companies accredited with POEA with purpose of
interviewing Filipinos for employment abroad
Academic purposes (to teach and conduct research)
Resident foreign nationals
Temporary resident visa holders
Conditions for grant Requirements
of permit CV (educational background, work experience, and high technical
skills)
Contract of employment—must include:
1. Compliance with laws, rules and regulations
2. Undertaking of alien and employer (ER) to train at least 2
understudies > must be the most ranking regular employee
3. Purpose: Ensure the actual transfer of technology
4. Undertaking to not engage in other employment not in permit
Issuance of AEP
Compliance with the requirements
Documents from Bureau Director:
1. Report of the availability and non-availability of Filipinos
competent, able, and willing to do the job
2. Assessment that it will be for the national interest
Certification of admissibility from Commission on Immigration
Recommendation from Board of Investments that employment is in
preferred areas of investment
Payment of PhP100 fee
Validity of AEP Valid for 1 year
Subject to renewal upon showing of good cause
Cannot extend beyond 5 years
Revocation or Grounds
Cancellation
Non-compliance with the rules
Misrepresentation in application
Meritorious objection/information
Conviction of criminal offense
Termination of employment
PAGE 18 OF
235
D. TRAINING AND EMPLOYMENT OF
SPECIAL WORKERS
The act of filing the proposed apprenticeship
D.1 APPRENTICES AND LEARNERS program with the DOLE is a preliminary step
RA 7796 (TECHNICAL EDUCATION AND towards its final approval, and does not
SKILLS DEVELOPMENT ACT OF 1994 OR
TESDA ACT OF 1994)
D.1.A. Apprent
ices Policy
objectives
1. To help meet the demand of the
economy for trained manpower;
2. To establish a national
apprenticeship program through the
participation of employers, workers
and government and non-government
agencies; and
3. To establish apprenticeship
standards for the protection of
apprentices.
Definition
1. “Apprenticeship" - training within
employment with compulsory related
theoretical instruction involving a
contract between an apprentice and
an employer on an approved
apprenticeable occupation [Sec 4(j),
RA 7794]
2. "Apprentice" is a person undergoing
training for an approved
apprenticeable occupation during an
apprenticeship agreement [Sec 4(k)]
3. "Apprenticeship Agreement" is a
contract wherein a prospective
employer binds himself to train the
apprentice who in turn accepts the
terms of training for a recognized
apprenticeable occupation
emphasizing the rights, duties and
responsibilities of each party [Sec
4(l)]
4. "Apprenticeable Occupation" is an
occupation officially endorsed by a
tripartite body and approved for
apprenticeable by the Authority [Sec
4(m)]
instantaneously give rise to an (b) The employer institute measures
employer- apprentice relationship. It to prevent the child's exploitation
must be duly approved by the or discrimination taking into
Minister of Labor and Employment. account the system and level of
Hence, since the apprenticeship remuneration and the duration
agreement between petitioner and and arrangement of working time;
respondent has no force and effect, and
respondent's assertion that he was
(c) The employer shall formulate and
hired not as an apprentice but as a
delivery boy deserves credence. [Nitto
Enterprises vs. NLRC, G.R. No.
114337, (1995)]
Conditions under which children

below 15 may be employed
Children below fifteen (15) years of
age shall not be employed except:
(1) When a child works directly
under the sole responsibility of
his parents or legal guardian
and where only members of
the employer's family are
employed: Provided, however,
That his employment neither
endangers his life, safety,
health and morals, nor impairs
his normal development:
Provided, further, That the
parent or legal guardian shall
provide the said minor child
with the prescribed primary
and/or secondary education;
or
(2) Where a child's employment
or participation in public
entertainment or information
through cinema, theater, radio
or television is essential:
Provided, The employment
contract is concluded by the
child's parents or legal
guardian, with the express
agreement of the child
concerned, if possible, and
approval of the Department of
Labor and Employment: and
Provided, That the following
requirements in all instances
are strictly complied with:
(a) The employer shall ensure
the protection, health,
safety, morals and normal
development of the child;
BOC STANDARDS
implement, subject to the 1. Employer should be engaged in a business
approval and supervision of that is considered a highly technical industry
competent authorities, a (trade, business,
continuing program for training
and skills acquisition of the child.
In the above exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging child, a
work permit from the Department of Labor
and Employment which shall ensure
observance of the above requirements.
The Department of Labor and Employment
shall promulgate rules and regulations
necessary for the effective implementation
of this Section. [RA 7160, Sec. 12 as
amended by RA 7658, Sec. 1]
Qualifications of apprentice
(a) Be at least 14 years of age;
(b) Possess vocational aptitude and
capacity for appropriate tests; and
(c) Possess the ability to comprehend
and follow oral and written
instructions.
Trade and industry associations may
recommend to the Secretary of Labor
appropriate educational requirements for
different occupations. [Art. 59, LC]
Integrating both the abovementioned

provisions then the qualifications of an
apprentice are as follows:
(1) At least 15 years of age [as amended
by
R.A. 7610], provided that if he is below
18 years, he shall not be eligible for
hazardous occupation;
(2) Possess vocational aptitude and
capacity for appropriate tests;
(3) Possess the ability to comprehend
and follow oral and written
instructions. [Art. 59 of the LC, as
amended by R.A. 7610]
(4) Physically fit for occupation
Requisites for Employment of Apprentices:
PAGE 19 OF
235
BOC enterprise, which utilizes STANDARDS Employment may authorize the hiring of
application of advanced apprentices without compensation whose
technology) training on the job is required by the school
or training program curriculum or as
2. Job should be classified as an
requisite for graduation or board
apprenticeable occupation.
examination. [Art. 72, Labor Code]
The wages of apprentices and learners shall
Apprenticeable Age: 15 years-old and in no case be less than seventy-five
above percent (75%) of the applicable minimum
[RA 7658] wage rates.
Allowed employment
Apprenticeable Occupation – is an
occupation officially endorsed by a
tripartite body and approved to be
apprenticeable by the authority.
[Sec. 4, RA 7796]
Employment of
Apprentices When
applicable:
(1) Only employers in highly
technical industries may
employ apprentices; and
(2) Only in apprenticeable
occupations approved by the
Secretary of Labor. [Art. 60,
Labor Code]
Terms and conditions

Apprenticeship agreements,
including the wage rates of
apprentices, shall conform to the
rules issued by the Secretary of
Labor and Employment.
The period of apprenticeship shall
not exceed six months.
Apprenticeship agreements
providing for wage rates below the
legal minimum wage, which in no
case shall start below 75 percent of
the applicable minimum wage, may
be entered into only in accordance
with apprenticeship programs duly
approved by the Secretary of Labor
and Employment. [Art. 61, Labor
Code as amended by E.O. 111-1986]
The Secretary of Labor and
PAGE 20 OF
235
[Sec. 7, Wage Order No. NCR-19] a. Apprenticeship program must be duly
approved by the DOLE;
Enforcement
Investigation of violation of apprenticeship
agreement. - Upon complaint of any
interested person or upon its own initiative,
the appropriate agency of the Department
of Labor and Employment or its authorized
representative shall investigate any
violation of an apprenticeship agreement
pursuant to such rules and regulations as
may be prescribed by the Secretary of
Labor and Employment. [Art. 65, LC]
Appeal to the Secretary of Labor and
Employment. - The decision of the
authorized agency of the Department of
Labor and Employment may be appealed
by any aggrieved person to the Secretary
of Labor and Employment within five (5)
days from receipt of the decision. The
decision of the Secretary of Labor and
Employment shall be final and executory.
[Art.66, LC]
Exhaustion of administrative remedies. No
person shall institute any action for the
enforcement of any apprenticeship
agreement or damages for breach of any
such agreement, unless he has exhausted
all available administrative remedies. [Art.
67, LC]
Incentives for employers

An additional deduction from taxable
income of one-half (1/2) of the value of
labor training expenses incurred for
developing the productivity and efficiency of
apprentices shall be granted to the person
or enterprise organizing an apprenticeship
program: Provided, That such program is
duly recognized by the Department of
Labor and Employment: Provided, further,
That such deduction shall not exceed ten
(10%) percent of direct labor wage: and
Provided, finally, That the person or
enterprise who wishes to avail himself or
itself of this incentive should pay his
apprentices the minimum wage. [Art. 71,
LC]
Requisites of the deduction:

b. Deduction shall NOT exceed necessary to finish their chosen courses
10% of direct labor wage; under such agreement. [Sec. 14, Rule X,
IRR]
c. Employer must pay his
apprentices the minimum
wage.
D.1.B.Learners
Learners - persons hired as trainees in
Summary of Rules: semi- skilled and other industrial
occupations which are non-apprenticeable
(1)The apprentice must be paid
and which may be
not less than 75% of the
prescribed minimum salary
[Art. 61, LC];
HOWEVER, the employer MAY
NOT pay any wage if the
apprenticeship training is:
a. part of the school curriculum,
b. a requirement for graduation, or
c. a requirement for board
examination [Art. 72]
(2) The apprenticeship agreement
must be approved by the
DOLE Secretary (without such
one shall be deemed a regular
employee) [Nitto Enterprises
v. NLRC, Sept. 29, 1995];
(3) The employer is not
compelled to continue one’s
employment upon termination
of apprenticeship;
(4) One-half (1/2) of the value of
labor training expenses
incurred for developing the
productivity and efficiency of
apprentices of the training
cost is deducted from the
employer’s income tax but it
shall not exceed 10% of direct
labor wage [Art. 71]
Working scholars – there is no

employer- employee relationship
between students on one hand, and
schools, colleges or universities on
the other, where there is written
agreement between them under
which the former agree to work for
the latter in exchange for the
privilege to study free of charge,
provided, the students are given
real opportunities, including such
facilities as may be reasonable and
learned through practical training on the employees if training is terminated by
job in a relatively short period of time the employer before the end of the
which shall not exceed three (3) months stipulated period through no fault of
[Art 73, Labor Code, Sec 4(n), RA 7796] the learners.
The learnership agreement shall be subject
When may learners be hired to inspection by the Secretary of Labor and
Employment or his duly authorized
(1) No experienced workers are representative. [Art. 75, LC]
available;
Learners employed in piece or incentive-
(2) The employment of learners being rate jobs during the training period shall be
necessary to prevent the curtailment paid in full for the work done. [Art. 76, LC]
of employment opportunities; and
(3) The employment will neither create
unfair competition in terms of labor Summary of Rules
costs nor impair working standards. (1) The duration of learnership shall not
[Art. 74, Labor Code] exceed 3 months [Art. 73, LC];
(2) If the learnership of 3 months is
Terms and conditions of employment completed, the employer may be
compelled to continue with the
Any employer desiring to employ learners services of the learner as a regular
shall enter into a learnership agreement employee; There is a commitment
with them, which agreement shall include: from the employer to employ the
(1) The duration of the learnership learners if they so desire, as regular
period, which shall not exceed three employees upon completion of the
(3) months; learnership;
(2) The wages or salary rates of the (3) If the learner is dismissed from
learners which shall begin at not less service without just and valid cause
than seventy-five percent (75%) of and without due process after 2
the applicable minimum wage; and months of service, he will be deemed
as regular employee; [Art. 75(d)] and
(3) A commitment to employ the learners
if they so desire, as regular (4) The wages or salary rates of the
employees upon completion of the learners which shall begin at not less
learnership. All learners who have than 75% of the applicable minimum
been allowed or suffered to work wage. [Art. 75(c)]
during the first two (2) months shall
be deemed regular
BOC STANDARDS
Distinctions between Learnership and Apprenticeship
Apprenticeship Learnership
Highly technical industries Semi-skilled industrial occupations
Practical training whether or not such

Practical training supplemented by
practical training is supplemented by
related theoretical instruction
theoretical instructions
Apprenticeable occupations approved by the

Non-apprenticeable occupations
SOLE
Written apprentice agreement ratified by
Learnership agreement
the appropriate committees
More than 3 months, shall not exceed 6 Shall not exceed 3 months
months
1.The person is at least 15 years of age,
provided those who are at least 15 years of
age but less than 18 may be eligible for 1. When no experienced workers are available;
apprenticeship only in non-hazardous
2. The employment of learners is necessary
occupation;
to prevent curtailment of employment
2.The person is physically fit for the opportunities; and
occupation in which he desires to be
3. The employment does not create unfair
trained;
competition in terms of labor costs or
3.The person possesses vocational aptitude impair or lower working standards.
and capacity for the particular occupation
as established through appropriate tests;
and
4.The person is able to comprehend and
follow oral and written instructions.
Wage rate shall begin at not less than 75% of Wage rate shall begin at not less than
the minimum wage 75% of the minimum wage
No compensation if SOLE authorizes, as OJT Learners in piecework shall be paid in full for
is required by the school the work done
A commitment to employ the learners if they
so desire, as regular employees upon
completion of the learnership.
All learners who have been allowed or
suffered to work during the first 2 months
shall be deemed regular employees if
training is terminated by the employer
before the end of the stipulated period
through no fault of the learners.
Deductibility of ½ of training costs
incurred, provided:
 Program is duly recognized by DOLE
 Deduction shall not exceed 10% of direct
labor wage
 Payment of minimum wage to apprenticeship
PAGE 18 OF
235
BOC STANDARDS
D.2. HANDICAPPED WORKERS –
DIFFERENTLY-ABLED
overnment organizations. Disabled persons' WORKERS
rights must never be perceived as welfare services by the Government.
eaningful, productive and satisfying life. To reach
[RA 7277 - Magna Carta for Disabled out to a greater number of disabled persons, the rehabilitation services and benefits shal
n programs thatPersons,
address as
their needs and concerns.
amended by RA 9442]
abled persons. The State shall exert all efforts to remove all social, cultural, economic, environmental and attitudinal barriers that are preju
D.2.A. Definitions
1. Disabled persons are those suffering
from restriction or different abilities,
as a result of a mental, physical or
sensory impairment, to perform an
activity in the manner or within the
range considered normal for a
human being [Sec 4(a), RA 7277]
2. Impairment is any loss, diminution or
aberration of psychological,
physiological, or anatomical structure
or function [Sec 4(b)]
3. Disability shall mean (1) a physical or
mental impairment that substantially
limits one or more psychological,
physiological or anatomical function
of an individual or activities of such
individual; (2) a record of such an
impairment; (3) being regarded as
having such an impairment [Sec 4(c)]
4. Handicap refers to a disadvantage
for a given individual, resulting from
an impairment or a disability, that
limits or prevents the function or
activity, that is considered normal
given the age and sex of the
individual [Sec 4(d)]
D.2.B. Policy Declaration

RA 7277, Sec . 2 D.2.C. Covera
ge Sec 3, RA
7277
mainstream of society. Toward this end, the State shall adopt policies ensuring the rehabilitation, self- development and self-reliance of dis
Coverage — This Act shall cover all
disabled persons and, to the extent
herein provided, departments, offices
and agencies of the National Government
or nongovernment organizations
involved in the attainment of the
objectives of this Act.
Rights of disabled workers

(1) Equal opportunity for employment
PAGE 52 OF
235
BOC STANDARDS No disabled person shall be denied access
to opportunities for suitable employment. A
PAGE 53 OF
235
qualified disabled EE shall be subject to
the same terms and conditions of
employment and the same compensation, (4) Full minimum wage
privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-
bodied person. [Sec. 5 (par. 1), RA 7277]
(2) Reserved contractual positions

5% of all casual, emergency and
contractual positions in the DSWD; DOH,
DepEd; and other government agencies,
offices or corporations engaged in social
development shall be reserved for disabled
persons. [Sec 5 (par. 2), RA 7277]
(3) Sheltered employment

Sheltered Employment refers to the
provision of productive work for disabled
persons through workshop providing
special facilities, income producing
projects or homework schemes with a view
to given them the opportunity to earn a
living thus enabling them to acquire a
working capacity required in open industry.
[Sec 4(i), RA 7277]
If suitable employment for disabled
persons cannot be found through open
employment, the State shall endeavor to
provide it by means of sheltered
employment.
In the placement of disabled persons in
sheltered employment, it shall accord due
regard to the individual qualities,
vocational goals and inclinations to ensure
a good working atmosphere and efficient
production. [Sec 6, RA 7277]
Apprenticeship Opportunities. Disabled

persons shall be eligible as apprentices or
learners: Provided, that their handicap is
NOT as much as to effectively impede the
performance of job operations in the
particular occupation for which they are
hired; provided, further, That after the
lapse of the period of apprenticeship, if
found satisfactory in the job performance,
they shall be eligible for employment. [Art.
81 LC; Sec. 7, RA 7277] [Bernardo v
NLRC & FEBTC, 1999]
All qualified handicapped workers not limited to, x-rays, computerized
shall receive the full amount of the tomography scans and blood tests, in
minimum wage rate prescribed all government facilities, subject to
herein. [Sec 7, Wage Order No. NCR- guidelines to be issued by the DOH
19] in coordination with the
PHILHEALTH.
In this light, the Magna Carta for
Disabled Persons mandates that a (e) At least 20% discount on medical
qualified disabled EE should be and dental services including
given the same terms and diagnostic and laboratory fees and
conditions of employment as a professional fees of
qualified able- bodied person. Since
the Magna Carta accords them the
rights of qualified able-bodied
persons, they are thus covered by
Article 280 of the Labor Code. In
the present case, the handicap of
petitioners (deaf-mutes) is NOT a
hindrance to their work. The
eloquent proof of this statement is
the repeated renewal of their
employment contracts. [Bernardo v.
NLRC, G.R. No. 122917 (1999)]
Discounts and other privileges

Persons with disability shall be
entitled to the following:
(a) At least 20% discount from all
establishments relative to the
utilization of all services in
hotels and similar lodging
establishments; restaurants
and recreation centers for the
exclusive use or enjoyment of
persons with disability;
(b) A minimum of 20% discount
on admission fees charged by
theaters, cinema houses,
concert halls, circuses,
carnivals and other places of
culture, leisure and amusement
for the exclusive use or
enjoyment of persons with
disability;
(c) At least 20% discount for the
purchase of medicines in all
drugstores for the exclusive
use or enjoyment of persons
with disability;
(d) At least 20% discount on
medical and dental services
including diagnostic and
laboratory fees such as, but
attending doctors in all private (1) Persons with disability who are Filipino
hospitals and medical facilities, in citizens upon submission of any of the
accordance with the rules and following as proof of his/her entitlement
regulations to be issued by the DOH, thereto:
in coordination with PHILHEALTH;
(f) At least 20% discount on fare for
domestic air and sea travel for the
exclusive use or enjoyment of
persons with disability;
(g) At least 20% discount in public
railways, skyways, and bus fare for
the exclusive use and enjoyment of
persons with disability.
(h) Educational assistance to persons
with disability, for them to pursue
primary, secondary, tertiary, post
tertiary, as well as vocational or
technical education, in both public
and private schools, through the
provision of scholarships, grants,
financial aids, subsidies and other
incentives to qualified persons with
disability, including support for books,
learning materials and uniform
allowance to the extent feasible;
Provided, That persons with disability
shall meet minimum admission
requirements;
(i) To the extent practicable and
feasible, the continuance of the same
benefits and privileges given by the
GSIS, SSS, and PAG-IBIG, as the
case may be, as are enjoyed by
those in actual service;
(j) To the extent possible, the
government may grant special
discounts in special programs for
persons with disability on purchase of
basic commodities, subject to
guidelines to be issued for the
purpose by the DTI and the DA; and
(k) Provision of express lanes for
persons with disability in all
commercial and government
establishments; in the absence
thereof, priority shall be given to
them. [Sec 32, RA 7277, as
amended by RA 9442]
Conditions for entitlement

(a) An identification card disability in regard to job application
issued by the city or procedures, the hiring, promotion, or
municipal mayor or the discharge of employees, employee
barangay captain of the compensation, job training, and other
place where the persons terms, conditions, and privileges of
with disability reside; employment.
(b) The passport of the
persons with disability
Acts of Discrimination:
concerned; or
(c) Transportation discount
fare ID issued by the
National Council for the
Welfare of Disabled
Persons (NCWDP).
(2) The privileges may not be
claimed if the persons with
disability claim a higher
discount as may be granted
by the commercial
establishment and/or under
other existing laws or in
combination with other
discount program/s. [Sec 32,
RA 7277, as amended by RA
9442]
D.2.D.1. EQUAL
OPPORTUNITY Sec 5,
RA 7277
Equal Opportunity for Employment — No
disable person shall be denied access to
opportunities for suitable employment. A
qualified disabled employee shall be
subject to the same terms and conditions
of employment and the same
compensation, privileges, benefits, fringe
benefits, incentives or allowances as a
qualified able bodied person. Five percent
(5%) of all casual emergency and
contractual positions in
the Departments of Social Welfare and
Development; Health; Education, Culture
and Sports; and other government
agencies, offices or corporations engaged
in social development shall be reserved for
disabled persons.
D.2.D.2. DISCRIMINATION ON
EMPLOYMENT
No entity, whether public or private,
shall discriminate against a qualified
disabled person by reason of
(a) Limiting, segregating or classifying a tests which accurately reflect the skills,
disabled job applicant in such a aptitude or other factor of the disabled
manner that adversely affects his applicant or employee that such tests purports
work opportunities; to measure, rather than the
(b) Using qualification standards,
employment tests or other selection
criteria that screen out or tend to
screen out a disabled person unless
such standards, tests or other
selection criteria are shown to be job-
related for the position in question
and are consistent with business
necessity;
(c) Utilizing standards, criteria, or
methods of administration that:
(1)have the effect of discrimination
on the basis of disability; or
(2) perpetuate the discrimination of
others who are subject to
common administrative control.
(d) Providing less compensation, such
as salary, wage or other forms of
remuneration and fringe benefits, to
a qualified disabled employee, by
reason of his disability, than the
amount to which a non-disabled
person performing the same work is
entitled;
(e) Favoring a non-disabled employee
over a qualified disabled employee
with respect to promotion, training
opportunities, study and scholarship
grants, solely on account of the
latter's disability;
(f) Re-assigning or transferring a
disabled employee to a job or
position he cannot perform by reason
of his disability;
(g) Dismissing or terminating the services
of a disabled employee by reason of
his disability unless the employer can
prove that he impairs the satisfactory
performance of the work involved to
the prejudice of the business entity:
Provided, however, That the
employer first sought to provide
reasonable accommodations for
disabled persons;
(h) Failing to select or administer in the
most effective manner employment
impaired sensory, manual or
speaking skills of such
applicant or employee, if Other Provisions Against Discrimination
any; and
(1) Employment Entrance Examination
(i) Excluding disabled persons
Upon an offer of employment, a disabled
from membership in labor
applicant may be subjected to medical
unions or similar
examinations, on the following occasions:
organizations [Sec. 32, RA
7277] (a) all entering employees are subjected
to such an examination regardless of
disability;
Occasions when a Disabled
(b) Information obtained during the
Applicant may be Subjected to
medical condition or history of the
Medical Examination
applicant is collected and maintained
(a) All entering employees are
subjected to such an
examination regardless of
disability;
(b) Information obtained during
the medical condition or
history of the applicant is
collected and maintained on
separate forms and in
separate medical files and is
treated as a confidential
medical record; Provided,
however, That:
(1) Supervisors and
managers may be
informed regarding
necessary restrictions on
the work or duties of the
employees and
necessary
accommodations;
(2) First aid and safety
personnel may be
informed, when
appropriate, if the
disability may require
emergency treatment;
(3) Government officials
investigating compliance
with this Act shall be
provided relevant
information on request;
and
(4) The results of such
examination are used
only in accordance with
this Act [Sec 33, RA
7277].
on separate forms and in separate (1) The utterance of slanderous and
medical files and is treated as a abusive statements against a person
confidential medical record; with disability; and/or,
Provided, however, That:
(2) An activity in public which incites
(i) supervisors and managers may hatred towards, serious contempt for,
be informed regarding necessary or severe ridicule of persons with
restrictions on the work or duties disability. [Sec. 41, RA 7277, as
of the employees and necessary amended by RA 9442]
accommodations:
(ii) first aid and safety personnel may
be informed, when appropriate, if Tax Incentives for Employers/ Establishments
the disability might require (1) For employment of disabled persons
emergency treatment; - additional deduction, from their
(iii) government officials investigating gross income, equivalent to 25% of
compliance with this Act shall be the total amount paid as salaries and
provided relevant information on wages to disabled persons
request; and (a) Private entities
(iv) the results of such examination (b) Employ disabled persons either
are used only in accordance with as regular EEs, apprentice or
this Act. [Sec. 35, RA 7277 as learner
amended by RA 9442]
(c) Provided such entities present
proof as certified by the DOLE
(2) Prohibition on Verbal, Non-Verbal and the DOH [Sec. 8[b], RA
Ridicule and Vilification Against 7277]
Persons with Disability
(a) No individual, group or community (2) For construction of disabled-friendly
shall execute any of these acts of facilities - additional deduction from
ridicule against persons with their net taxable income, equivalent
disability in any time and place which to 50% of the direct costs of the
could intimidate or result in loss of improvements or modifications
self-esteem of the latter. [Sec. 40, RA
7277, as amended by RA 9442] (a) Private entities
(b) Any individual, group or community is (b) That improve or modify their
hereby prohibited from vilifying any physical facilities in order to
person with disability which could provide reasonable
result into loss of self-esteem of the accommodation for disabled
latter. [Sec. 42, RA 7277, as persons
amended by RA 9442] (c) Does NOT apply to improvements
or modifications or facilities
required under BP 344. [Sec. 8
Public Ridicule - The act of making fun of (c), RA 7277]
or contemptuous imitating or making
mockery of persons with disability whether
in writing, or in words, or in action due to (3) For establishments giving discounts –
their impairments. [Sec. 33, RA 7277, as may claim such discounts as tax
amended by RA 9442] deductions based on the net cost of
the goods sold or services rendered
Vilification includes: (a) The cost of the discount shall be
allowed as deduction from gross
income for the same taxable year
that the discount is
granted
(b) The total amount of the
claimed tax deduction net
of VAT if applicable, shall
be included in their gross
sales receipts for tax
purposes and shall
be subject to proper Penal Clause
documentation and to the
provisions of the National Internal
Revenue Code, as amended.
[Sec. 32, RA 7277, as amended
by RA 9442]
Enforcement
Enforcement by the Secretary of Justice
(a) Denial of Right
Duty to Investigate. The Secretary of
Justice shall investigate alleged
violations of this Act, and shall
undertake periodic reviews of
compliance of covered entities under
this Act.
(b) Potential Violations

The Secretary of Justice may
commence a legal action in any
appropriate court if the Secretary has
reasonable cause to believe that
(1) any person or group of persons is
engaged in a pattern of practice
of discrimination under this Act;
or
(2) any person or group of persons
has been discriminated against
under this Act and such
discrimination raises and issue of
general public importance. [Sec
44, RA 7277]
Authority of Court. The court may grant

any equitable relief that such court
considers to be appropriate, including, to
the extent required by this Act:
(a) granting temporary, preliminary or
permanent relief;
(b) providing an auxiliary aid or service,
modification of policy, practice or
procedure, or alternative method;
and
(c)making facilities readily accessible to
and usable by individuals with
disabilities. [Sec 45, RA 7277]
(a) Any person who violates any
provision of this Act shall suffer
the following penalties:
(i) for the first violation, a fine
of not less than Fifty
thousand pesos (P
50,000.00) but not
exceeding One hundred
thousand pesos
(P100,000.00) or
imprisonment of not less
than six (6) months but not
more than two (2) years, or
both at the discretion of the
court; and
(ii) for any subsequent violation,
a fine of not less than One
hundred thousand pesos
(P100,000.00) but not
exceeding Two hundred
thousand pesos (P
200,000.00) or
imprisonment for less than
two (2) years but not more
than six (6) years, or both at
the discretion of the court.
(b) Any person who abuses the
privileges granted herein shall
be punished with imprisonment
of not less than six (6) months
or a fine of not less than Five
thousand pesos (P 5,000.00)
but not more than Fifty
thousand pesos (P 50,000.00),
or both, at the discretion of the
court.
(c) If the violator is a corporation,
organization or any similar
entity, the officials thereof
directly involved shall be liable
therefor. (d). If the violator is an
alien or a foreigner, he shall be
deported immediately after
service of sentence without
further deportation proceedings.
[Sec 46, RA 7277]
the Civil Service Rules; only those created by
III.LABOR STANDARDS
Labor Standards refers to the minimum
requirements prescribed by existing laws,
rules and regulations relating to wages,
hours of work, cost-of-living allowance and
other monetary and welfare benefits,
including occupational, safety and health
standards.
A. CONDITIONS OF EMPLOYMENT
A.1 SCOPE [ART. 82, LABOR CODE]
General rule: Shall apply to employees in
all establishments and undertakings whether
for profit or not. [Art. 82, LC]
Exceptions (those NOT covered by Art. 82):

(1) Government employees [Art. 82; Art.
76] (EXCEPTION TO THE
EXCEPTION: Employees of GOCCs
created under the Corporation Code)
(2) Managerial Employees including
members of the managerial staff [Art.
82]
(3) Field Personnel [Art. 82]
(4) Members of the family of the
employer who are dependent on him
for support [Art. 82];
(5) Domestic workers or kasambahay
[Art. 141, RA 10361] (EXCEPTION TO
THE EXCEPTION: Assignment in a
Commercial, Industrial or Agricultural
Enterprise)
(6) Persons in the personal service of
another
(7) Workers who are paid by result as
determined by DOLE regulation [Art.
82]
A.1.A. Government Employees

The terms and conditions of employment
of all government employees, including
employees of GOCCs, are governed by the
Civil Service rules and regulations, not by
the Labor Code (Art. 291).
However, not all GOCCs are governed by
original charter are governed by the
Civil Service rules:
“Following Sec. 2(i) Art. IX-B of
1987 Phil. Constitution, the test in
determining whether a government
owned corporation is subject to the
Labor Code or the Civil Service law
is finding out what created it – if its
created by a special charter, then,
Civil Service Law applies, if it is
created by the General Corporation
Law, then the Labor Code applies.”
[PNOC Energy Development Corp.
v. NLRC (1991)]
A.1.b. Managerial Employees

Two definitions of “managerial employees”
in
the Labor Code:
[Art. 82, LC] Those whose primary duty
consists of the management of the
establishment in which they are
employed or of a department or
subdivision thereof and to other officers
or members of the managerial staff.
[Art. 212 (m), LC] One who is vested

The definition in Art. 82 covers with the powers or prerogatives to lay
more people than that in Article 212 down and execute management policies
(m) as Article 82 also includes and/or to hire, transfer, suspend, lay off,
managerial staff. In effect, recall, discharge, assign or discipline
managerial employees in Article 82 employees. Supervisory employees are
includes supervisors, but Article those who, in the interest of the
212(m) does not. employer, effectively recommend such
managerial actions if the exercise of
It follows that under Book V, such authority is not merely routinary or
supervisors are allowed to form, join clerical in nature but requires the use of
or assist a labor union. Supervisors independent judgment. All employees
are not, however, entitled to the not falling within any of the above
benefits under Book III Articles 83 definitions are considered rank and file
through 96, being part of the employees for purposes of this Book.
exemption of managerial employees
as defined in Article 82. [Azucena]
Characteristics of managerial employees of their hours worked in a work week to
activities which are not directly and closely
[Book 3, Rule 1, Sec. 2(b), IRR]
related to the performance of
Managerial employees are exempted from
the coverage of Book III Articles 83
through 96 if they meet all of the following
conditions:
(1) Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or sub-division thereof.
(2) They customarily and regularly direct
the work of two or more employees
therein.
(3) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations
as to hiring and firing and as to the
promotion or any other change of
status of other employees, are given
particular weight.
Managerial Staff also included as they are

considered managerial employees as well
[Book 3, Rule 1, Sec. 2(c), IRR]
Officers or members of a managerial staff
are also exempted if they perform the
following duties and responsibilities:
(1) Their primary duty consists of the
performance of work directly related
to management policies of their
employer;
(2) Customarily and regularly exercise
discretion and independent
judgment;
(3) (a) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
management of the establishment in
which he is employed or subdivision
thereof; OR
(b) Execute under general supervision
work along specialized or technical
lines requiring special training,
experience, or knowledge; OR
(c) Execute, under general supervision,
special assignments and tasks;
(4) Who do not devote more than 20%
the work described in are outside the coverage of this Title on
paragraphs (1), (2) and (3) working conditions and rest periods.
above.
A.1.e. Domestic Helpers

A.1.c. Field Personnel
Sec. 4(d), Art. 1, Kasambahay Law (RA 10361)
Non-agricultural employees:
(1) Who regularly perform their
duties away from the principal
or place of business or branch
office of the employer,
A
N
D
;
(2) Whose actual hours of work in
the field cannot be determined
with reasonable certainty. [Art.
82, LC]
Legal Test: Control & Supervision of

employer Although the fishermen
perform non-
agricultural work away from
petitioner’s business offices, the
fact remains that throughout the
duration of their work they are
under the effective control and
supervision of petitioner through the
vessel’s patron or master. Hence,
the fishermen are not “field
personnel”. [Mercidar Fishing
Corporation v. NLRC (1998)]
In order to determine whether an
employee is a field employee, it is
also necessary to ascertain if actual
hours of work in the field can be
determined with reasonable
certainty by the employer. In so
doing, an inquiry must be made as
to whether or not the employee’s
time and performance are
constantly supervised by the
employer. [Far East Agricultural
Supply v. Lebatique (2007)]
A.1.d. Dependent Family Members

Workers who are family members of
the employer, and who are
dependent on him for their support,
Workers who are paid by results,
Domestic worker or “Kasambahay” refers including those who are paid on piece
to any person engaged in domestic work work, “takay,” “pakiao” or task basis, and
within an employment relationship such other nontime work if their output rates
as but not limited to the following: are in accordance with the standards
general househelp, nursemaid or “yaya”, prescribed under Section 8, Rule VII,
cook, gardener or laundry person but Book Three of these regulations, or
shall exclude any person who performs where such rates have been fixed by the
domestic work only occasionally or Secretary of Labor and Employment in
sporadically and not on an occupational accordance with the aforesaid Section.
basis.
Exclusivity of function required Result Book 3, Rule 1, Sec. 2 (e),
Note that the definition contemplates a IRR
domestic helper who is employed in the
employer’s home to minister exclusively to
the personal comfort and enjoyment of the
employer’s family. [Azucena]
Thus, it has been held that the following
personnel are not domestic employees:
(1) House personnel hired by a ranking
company official but paid by the
company itself to maintain a staff
house provided for the official.
[Cadiz v. Philippine Sinter Corp,
NLRC Case No. 7- 1729, cited by
Azucena]
(2) A family cook, who is later assigned
to work as a watcher and cleaner of
the employer’s business
establishment, becomes an industrial
worker entitled to receive the wages
and benefits flowing from such
status. [Villa v. Zaragosa and
Associates, OP Decision No. 0183,
cited by Azucena]
A.1.f. Persons in Personal Service Of

Another
Book 3, Rule 1, Sec. 2 (d), IRR
Domestic servants and persons in the
personal service of another if they
perform such services in the employer’s
home which are usually necessary or
desirable for the maintenance and
enjoyment thereof or minister to the
personal comfort convenience or safety
of the employer as well as the members
of his employer’s household.
A.1.g. Workers Paid by

Workers under piece-rate
employment have no fixed salaries
and their compensation is computed
on the basis of accomplished tasks.
That their work output might have
been affected by the change in their
specific work assignments does not
necessarily imply that any resulting
reduction in pay is tantamount to
constructive dismissal. It is the
prerogative of the management to
change their assignments or to
transfer them. [Best Wear Garments
v. De Lemos and Ocubillo (2012)]
workers who are paid by results
including those who are paid on
piece-work, takay, pakiao, or task
basis, if their output rates are in
accordance with the standards
prescribed under Sec. 8, Rule VII,
Book III, of these regulations, or
where such rates have been fixed by
the Secretary of Labor in accordance
with the aforesaid section, are not
entitled to receive overtime pay.
A.2. HOURS OF WORK

A.2.a. PRINCIPLES IN DETERMINING
HOURS WORKED
Compensable Hours of Work
(Art. 84, LC) Hours worked
shall include:
(1) All time during which an
employee is required to be on
duty or to be at a prescribed
workplace; AND
(2) All time during which an
employee is suffered or
permitted to work.
General principles in determining if

time is considered as hours worked
[Book III, Rule 1, Sec. 4, IRR]
(1) All hours are hours worked
which the employee is required to
give his employer,
regardless of whether or not such (1) Cities and municipalities with a population of
hours are spent in productive labor or at least one million (1,000,000) OR
involve physical or mental exertion.
(2) An employee need not leave the
premises of the work place in order that
his rest period shall not be counted, it
being enough that he stops working,
may rest completely and may leave his
work place to go elsewhere, whether
within or outside the premises of his
work place.
(3) If the work performed was necessary,
or it benefited the employer, or the
employee could not abandon his work
at the end of his normal working hours
because he had no replacement, all
time spent for such work shall be
considered as hours worked, if the work
was with the knowledge of his
employer or immediate supervisor.
(4) The time during which an employee is
inactive by reason of interruptions in
his work beyond his control shall be
considered working time either:
(a) If the imminence of the
resumption of work requires the
employee’s presence at the place
of work, or
(b) If the interval is too brief to be
utilized effectively and gainfully in
the employee’s own interest.
A.2.b. NORMAL HOURS OF WORK

General Rule: 8-Hour Labor Law
The normal hours of work of any employee
shall not exceed eight (8) hours a day. [Art.
83, LC]
Note: Article 83 of the Labor Code only set

a maximum of number of hours as "normal
hours of work" but did not prohibit work of
less than eight hours [Legend Hotel v.
Realuyo, G.R. 153511 (2012)]
EXCEPTIONS to 8-Hour Law: Work Hours

of Health Personnel
Health personnel in:
(2) Hospitals and clinics with a On call
bed capacity of at least one
Compensable work time, if employee is:
hundred (100) shall hold
regular office hours for eight (1) Required to remain on call in the
(8) hours a day, for five (5) employer’s premises or so close thereto
days a week, exclusive of time
(2) That he cannot use the time
for meals, except where the
effectively and gainfully for his own
exigencies of the service
purpose shall be considered as
require that such personnel
working while on call.
work for six (6) days or forty-
eight (48) hours, in which
case, they shall be entitled to
an additional compensation of
at least thirty percent (30%) of
their regular wage for work on
the sixth day.
For purposes of this Article, "health
personnel" shall include resident
physicians, nurses, nutritionists,
dietitians, pharmacists, social
workers, laboratory technicians,
paramedical technicians,
psychologists, midwives, attendants
and all other hospital or clinic
personnel. [Art. 83, LC]
Medical secretaries are also
considered clinic personnel.
[Azucena]
Rest period – short duration or “coffee

break”
Rest periods of short duration
during working hours shall be
counted as hours worked. [Art. 84,
par. 2, LC]
Rest periods or coffee breaks running from
five
(5) to twenty (20) minutes shall be
considered as compensable
working time. [Book III, Rule 1, Sec.
7, par. 2, IRR]
Book III, Rule 1, Sec. 4 (b), IRR

An employee need not leave the premises
of the work place in order that his rest
period shall not be counted it being
enough that he stops working may rest
completely and may leave his work
place to go elsewhere whether within or
outside the premises of his work place.
(1) Attendance in lectures, meetings,
and training periods sanctioned or
Book III, Rule 1, Sec. 5(b), IRR
required by the employer are
An employee who is not required to considered hours worked.
leave word at his home or with company (2) Attendance in CBA negotiations or
officials where he may be reached is
grievance meeting is compensable
NOT working while on call. hours worked.
(3) Attendance in hearings in cases filed
Inactive due to work interruptions by the employee is NOT
The time during which an employee is compensable hours worked.
inactive by reason of interruptions in his (4) Participation in strikes is NOT
work beyond his control shall be compensable working time.
considered working time either:
(1) If the imminence of the resumption of
work requires the employee's presence Idle time
at the place of work OR The idle time that an employee may spend
(2) If the interval is too brief to be utilized for resting and dining which he may leave
effectively and gainfully in the the spot or place of work though not the
employee's own interest. [Book III, premises of his employer, is not counted
Rule 1, Sec. 4(d), IRR] as working time only where the work is
broken or is not continuous. [National
Development Co. v. CIR (1962)]
Necessary Work After Normal Hours A laborer need not leave the premises of
If the work performed was necessary, or it the factory, shop or boat in order that his
benefited the employer, or the employee period of rest shall not be counted, it being
could not abandon his work at the end of enough that he "cease to work", may rest
his normal working hours because he had no completely and leave or may leave at his
replacement, all the time spent for such will the spot where he actually stays while
work shall be considered as hours worked working, to go somewhere else, whether
if the work was with the knowledge of his within or outside the premises of said
employer or immediate supervisor. [Book factory, shop or boat. If these requisites are
III, Rule 1, Sec. 4(c), IRR] complied with, the period of such rest shall
not be counted. [Luzon Stevedoring Co. v.
Luzon Marine Department Union (1957)]
Lectures, meetings, trainings
Attendance at lectures, meetings, training Travel time [Department of Labor Manual]
programs, and other similar activities shall
not be counted as working time if ALL of (1) Travel from home to work – An
the following conditions are met: employee who travels from home
before his regular workday and
(1) Attendance is outside of the returns to his home at the end of the
employee’s workday is engaged in ordinary
regular working hours; home-to-work travel which is NOT
(2) Attendance is in fact voluntary; and considered hours worked, EXCEPT:
(3) The employee does not perform any (a) When called to travel during
productive work during such emergency;
attendance. [IRR, Book III, Rule 1, (b) When travel is done through a
Sec. 6] conveyance furnished by the
employer;
Note: (c) Travel is done under vexing and

dangerous circumstances;
(d) Travel is done under the when they are not actually working. The correct
supervision and control of the criterion in determining whether or not sailors are
employer. entitled to overtime pay is not,
(2) Travel that is all in the day’s work –
Time spent by an employee in travel
from jobsite to jobsite during the
workday, must be counted as hours
worked. Where an employee is
required to report at a meeting place
to receive instructions or to perform
other work there, the travel from the
designated place to the workplace is
part of the day’s work.
(3) Travel away from home - Travel that
keeps an employee away from home
overnight is travel away from home.
Travel away from home is worktime
when it cuts across the employee’s
workday. The time is hours worked
not only on regular working hours but
also during the corresponding hours
on non- working days.
Semestral Break of Private School Teachers

Regular full-time teachers are entitled to
salary during semestral breaks. These
semestral breaks are in the nature of work
interruptions beyond the employees’
control. As such, these breaks cannot be
considered as absences within the meaning
of the law for which deductions may be
made from monthly allowances.
[University of the Pangasinan Faculty
Union v. University of Pangasinan (1984)]
Work Hours of Seamen

Citing the 1957 ruling of Luzon Stevedoring
Co., Inc. vs Luzon Marine Department
Union, et al [G.R. 9265(1957)], the SC
reiterated in the more recent case of
Cagampan, et al. vs NLRC [G.R. 85122-24
(March 22, 1991)], that “seamen are required
to stay on board of their vessels by the very
nature of their duties, and it is for this
reason that, in addition to their regular
compensation, they are given free living
quarters to be on board. It could not have
been the purpose of the law to require their
employers to pay them overtime pay even
therefore, whether they are on board The normal workdays per week are
and cannot leave ship beyond the reduced but this arrangement should not
regular eight working number of last for more than 6 months.
hours, but whether they actually
rendered service in excess of said
number of hours.” Rotation of Workers
Proof of Hours worked

Entitlement to overtime pay must first
be established by proof that said
overtime work was actually
performed, before an employee may
avail of said benefit. [Lagatic v. NLRC,
G.R. 121004 (1998)]
Burden of Proof: When an employer

alleges that his employee works less
than the normal hours of
employment as provided for in the
law, he bears the burden of proving
his allegation with clear and
satisfactory evidence. [Prangan v.
NLRC, et. al., G.R. No. 126529,
(1998)]
FLEXIBLE WORK ARRANGEMENTS

[DOLE
Advisory No. 02, Series of 2004]
These are alternative arrangements
or schedules other than the standard
work hours, workdays, and
workweek. Their effectivity and
implementation shall be temporary
in nature.
Prior to implementation, the
employer shall notify the
Department through the Regional
Office which has jurisdiction over the
workplace, of the adoption of any of
the flexible work arrangements.
Under the following work
arrangements, the employers and
employees are encouraged to explore
alternative schemes under any
agreement and company policy or
practice to cushion and mitigate the
effect of the loss of income of the
employees.
Reduction of Workdays
The employees are rotated or alternately contaminants, human carcinogens or noise
provided work within the workweek prolonged exposure to which may pose
hazards to employees’ health and
Forced Leave
Employees are required to go on leave for
several days or weeks utilizing their leave
credits of there are any.
Broken-time Schedule
The works schedule is not continuous but
the work hours within the day or week
remain.
Flexi-holidays
The employees agree to avail the holidays
at some other days provided there is no
diminution of existing benefits as a result
of such arrangement.
A.2.b.i. COMPRESSED WORKWEEK

Compressed Work Week (CWW) [DOLE
Advisory No. 02, Series of 2004]
Under the CWW scheme, the normal
workday goes beyond eight hours without
the corresponding overtime premium.
The total hours of work, however, shall not
exceed 12 hours a day or 48 hours a week,
or the employer is obliged to pay the
worker the overtime premium in excess of
said work hours.
Conditions for CWW

(1) The CWW scheme is undertaken as
a result of an express and voluntary
agreement of majority of the covered
employees or their duly authorized
representatives. This agreement may
be expressed through collective
bargaining or other legitimate
workplace mechanisms of
participation such as labor
management councils, employee
assemblies or referenda.
(2) In firms using substances, chemicals
and processes or operating under
conditions where there are airborne
safety, there must be a Rationale
certification from an accredited
Although the right to overtime pay cannot
health and safety organization
be waived as per Cruz v. Yee Sing (1959),
or practitioner from the firm’s
D.O. No. 21 sanctions the waiver of
safety committee that work
overtime pay in consideration of the
beyond eight hours is within
benefits that the employees will derive
threshold limits or tolerable
from the adoption of a compressed
levels of exposure, as set in
workweek scheme, thus:
the OSHS.
The compressed workweek scheme was
(3) The employer shall notify
originally conceived for establishments
DOLE, through the Regional
Office having jurisdiction over
the workplace, of the adoption
of the CWW scheme. The
notice shall be in DOLE CWW
Report Form attached to this
Advisory. [DOLE Advisory No.
02-04]
Effects of CWW
(1) Unless there is a more favorable
practice existing in the firm,
work beyond eight hours will
not be compensable by
overtime premium provided the
total number of hours worked
per day shall not exceed twelve
(12) hours. In any case, any
work performed beyond 12
hours a day or 48 hours a week
shall be subject to overtime
premium.
(2) Consistent with Art. 85 of the
LC, employees under a CWW
scheme are entitled to meal
periods of not less than
60 minutes. There shall be no
impairment of the right of the
employees to rest days as well
as to holiday pay, rest day pay
or leaves in accordance with
law or applicable collective
bargaining agreement or
company practice.
(3) Adoption of the CWW scheme
shall in no case result in
diminution of existing benefits.
Reversion to the normal eight-
hour workday shall not
constitute a diminution of
benefits.
wishing to save on energy costs, promote May 22, 1978]
greater work efficiency and lower the rate
of employee absenteeism, among others.
Workers favor the scheme considering that
it would mean savings on the increasing
cost of transportation fares for at least one
(1) day a week; savings on meal and
snack expenses; longer weekends, or an
additional 52 off-days a year, that can be
devoted to rest, leisure, family
responsibilities, studies and other personal
matters, and that it will spare them for at
least another day in a week from certain
inconveniences that are the normal
incidents of employment, such as
commuting to and from the workplace,
travel time spent, exposure to dust and
motor vehicle fumes, dressing up for work,
etc. Thus, under this scheme, the generally
observed workweek of six (6) days is
shortened to five (5) days but prolonging
the working hours from Monday to Friday
without the employer being obliged for pay
overtime premium compensation for work
performed in excess of eight (8) hours on
weekdays, in exchange for the benefits
above cited that will accrue to the
employees. [Bisig Manggagawa sa Tryco v.
NLRC, et al. (2008)]
A.2.b.ii. POWER
INTERRUPTIONS/BROWNOUTS
Work interruption due to brownouts
Brownouts of short duration, but not
exceeding 20 minutes, shall be treated as
hours worked, whether used productively
by the employees or not.
If they last more than 20 minutes, the time
may not be treated as hours worked if:
a) the employees can leave their
workplace or go elsewhere whether
within or without the work premises;
OR
b) the employees can use the time
effectively for their own interest.
In this case, the employer may extend the
working hours beyond the regular schedule
on that day to compensate for the loss of
productive man-hours without being liable
for overtime pay. [Policy Instruction No. 36,
Note: The time during which an as they return to their posts on time.
employee is inactive by reason of Nowhere in the law may it be inferred that
work interruptions beyond his control employees must take their meals within
is considered working time, either if the company premises. [Philippine Airlines
the imminence of the resumption of v. NLRC (1999)]
work requires the employee’s
presence at the place of work or if
the interval is too brief to be utilized SYNTHESIS OF THE RULES
effectively and gainfully in the
employee’s own interest. [Book III,
Rule 1 Sec. 4 (d), IRR]
A.2.c.MEAL BREAK
General Rule: Subject to such
regulations as the Secretary of
Labor may prescribe, it shall be the
duty of every employer to give his
employees not less than sixty (60)
minutes time-off for their regular
meals (Art. 85, LC)
Exceptions:
Employees may be given a meal
period of not less than twenty (20)
minutes provided that such shorter
meal period is credited as
compensable hours worked of the
employee:
(1) Where the work is non-
manual work in nature or does
not involve strenuous physical
exertion;
(2) Where the establishment
regularly operates not less than
sixteen (16) hours a day;
(3) In case of actual or impending
emergencies or there is
urgent work to be performed
on machineries, equipment or
installations to avoid serious
loss which the employer
would otherwise suffer;
O
R
(4) Where the work is necessary
to prevent serious loss of
perishable goods [Book 3, Rule
1, Sec. 7 par 1, IRR]
Employees are not prohibited from
going out of the premises as long
General Rule: Meal periods are NOT existing before the effectivity of the
compensable. shortened meal period;
(3) The work of the employees does not involve
strenuous physical exertion and
Exception:
It becomes compensable:
(1) Where the lunch period or meal time
is predominantly spent for the
employer’s benefit. [Azucena citing 31
Am. Jur. 881; Duka, Labor Laws and
Social Legislation]
(2) Meal periods of 1 hour are deemed
compensable when the employee is
on continuous shift. [National
Development Co. v. CIR, G.R. No. L-
15422, (1962)]
(3) Shortened meal period of less than 1
hour (say, 30 minutes) must be
compensable. (Sec. 7, Rule I, Book
III, IRR)
Note: To shorten meal time to less than 20

minutes is not allowed. If the so-called
meal time is less than 20 minutes, it
becomes only a REST PERIOD and is
considered working time.
Exception to the Exception: Shortened

meal breaks upon the employees’ request
– NOT compensable.
The employees themselves may request
that the meal period be shortened so that
they can leave work earlier than the
previously established schedule. [Drilon:
Letter to Kodak Philippines, Nov. 27, 1989;
also Cilindro: BWC- WHSD Opinion No.
197, s. 1998]
Conditions for shortened meal breaks upon

employee’s request.
(1) The employees voluntarily agree in
writing to a shortened meal period of
30 minutes and are willing to waive
the overtime pay for such shortened
meal period;
(2) There will be no diminution
whatsoever in the salary and other
fringe benefits of the employees
they are provided with benefit or for the employee’s. [Azucena,
adequate “coffee breaks” in citing Armour v. Wantock]
the morning and afternoon.
(4) The value of the benefits
A.3.e. OVERTIME
derived by the employees
from the proposed work
arrangement is equal to or
commensurate with the
compensation due them for
the shortened meal period as
well as the overtime pay for 30
minutes as determined by the
employees concerned;
(5) The overtime pay of the
employees will become due
and demandable if ever they
are permitted or made beyond
4:30pm; and
(6) The effectivity of the proposed
working time arrangement
shall be of temporary duration
as determined by the Secretary
of Labor.
A.3.d. WAITING TIME

Book III, Rule I Sec. 5(a), IRR
Waiting time spent by an employee shall
be considered as working time if waiting
is an integral part of his work or the
employee is required or engaged by the
employer to wait.
Book 3, Rule 1, Sec. 5(b), IRR

An employee who is required to remain
on call in the employer’s premises or so
close thereto that he cannot use the
time effectively and gainfully for his own
purpose shall be considered as working
while on call.
Legal test: Whether waiting time

constitutes working time depends
upon the circumstances of each
particular case. The facts may show
that the employer was engaged or
was waiting to be engaged. The
controlling factor is whether waiting
time spent in idleness is so spent
predominantly for the employer’s
Overtime compensation is additional pay BUT when the overtime work was performed
for service or work rendered or performed on the employee’s rest day or on special days
in excess of eight hours a day by
employees or laborers covered by the Eight-
hour Labor Law. [National Shipyard and Steel
Corp. v. CIR (1961)]
Rationale
There can be no other reason than that he
is made to work longer than what is
commensurate with his agreed
compensation for the statutorily fixed or
voluntary agreed hours of labor he is
supposed to do. [PNB v. PEMA (1982)]
Overtime on ordinary working day

Art. 87, LC. Work may be performed
beyond eight (8) hours a day provided
that the employee is paid for the
overtime work, an additional
compensation equivalent to his regular
wage plus at least twenty five percent
(25%) thereof.
Overtime work on holiday or rest day

Art. 87, LC. Work performed beyond
eight hours on a holiday or rest day shall
be paid an additional compensation
equivalent to the rate of the first eight
hours on a holiday or rest day plus at
least thirty percent (30%) thereof.
Computation of additional compensation

Art. 90, LC. For purposes of computing
overtime and other additional
remuneration as required by this
Chapter the "regular wage" of an
employee shall include the cash wage
only without deduction on account of
facilities provided by the employer.
Base of Computation: Regular wage –

means regular base pay; it excludes money
received in different concepts such as
Christmas bonus and other fringe benefits.
[Bisig ng Manggagawa ng Philippine
Refining Co. v. Philippine Refining Co , G.R.
L-27761 (1981)]
or regular holidays (Art. 93 and 94), falls at nighttime [between 10:00pm and
the premium pay, must be included 6:00am], the receipt of overtime pay will
in the computation of the overtime not preclude the right to night differential
pay. pay. The latter is payment for work done
during the night while the other is payment
[See: p. 19 of Handbook on
for the excess of the regular eight-hour
Workers’ Statutory Monetary
work. [Naric v. Naric Workers Union
Benefits, issued by the Bureau of
(1959)]
Working Conditions, 2006]
SYNTHESIS OF RULES
Emergency overtime [Art. 89, LC]
Any employee may be required by
the employer to perform overtime
work in any of the following cases:
(1) When the country is at war or
when any other national or
local emergency has been
declared by the National
Assembly or the Chief
Executive;
(2) When it is necessary to
prevent loss of life or property
or in case of imminent danger
to public safety due to an
actual or impending
emergency in the locality
caused by serious accidents,
fire, flood, typhoon, earthquake,
epidemic, or other disaster or
calamity;
(3) When there is urgent work to
be performed on machines,
installations, or equipment, in
order to avoid serious loss or
damage to the employer or
some other cause of similar
nature;
(4) When the work is necessary to
prevent loss or damage to
perishable goods; and
(5) Where the completion or
continuation of the work
started before the eighth hour
is necessary to prevent
serious obstruction or
prejudice to the business or
operations of the employer.
Overtime pay does not preclude

night differential pay
When the tour of duty of a laborer
(1) An employer cannot compel an required in this Chapter. [Art. 88, LC]
employee to work overtime
Exception: Emergency overtime work
as provided for in Art. 89
(2) Additional compensation is
demandable only if the employer had
knowledge and consented to the
overtime work rendered by the
employee.
Exception: Express approval by a
superior NOT a requisite to make
overtime compensable:
(a) If the work performed is
necessary, or that it benefited the
company; or
(b) That the employee could not
abandon his work at the end of
his eight-hour work because
there was no substitute ready to
take his place. [Manila Railroad
Co. v. CIR, G.R. L- 4614 (1952)]
Note: However, the Court has also

ruled that a claim for overtime pay is
NOT justified in the absence of a
written authority to render overtime
after office hours during Sundays and
holidays. [Global Incorporated v.
Atienza, G.R. L- 51612-13 (1986)]
(3) Compensation for work rendered in

excess of the 8 normal working hours
in a day.
(a) For ordinary days, additional 25%
of the basic hourly rate.
(b) For rest day/special day/holiday,
additional 30% of the basic hourly
rate.
(4) A given day is considered an
ordinary day, unless it is a rest day.
(5) Undertime does NOT offset overtime.
Undertime work on any particular day
shall not be offset by overtime work
on any other day. Permission given
to the employee to go on leave on
some other day of the week shall
NOT exempt the employer from
paying the additional compensation
No Waiver of Overtime Pay differential [Art. 86, LC]
The right to overtime pay cannot The additional compensation of 10% of an
be waived. The Labor Code (Art. employee’s regular wage for each hour of
87) requires that an employee be work performed between 10pm and 6am.
paid all overtime compensation
Illustration: If an employee has a regular
notwithstanding any agreement to
wage of P100 for each hour of work
work for a lesser wage.
performed between 10PM and 6AM,
Consequently, such an agreement
he/she shall be paid P110 per hour worked
or "waiver" will not prevent an
during such time interval.
employee from recovering the
difference between the wages paid
the employee and the overtime
compensation he or she is entitled
to receive. [Cruz v. Yee Sing, G.R. L-
12046 (1959)]
Exception: When the waiver of

overtime pay is in consideration of
benefits and privileges which may
be more than what will accrue to
them in overtime pay, the waiver
MAY be permitted. [Meralco
Workers Union v. MERALCO, G.R.
L-11876 (1959)]
Composite or Package Pay NOT per se

illegal
Composite or “package pay” or “all-
inclusive salary” is an arrangement
where the employee’s salary
includes the overtime pay. In other
words, the overtime pay is “built-
in”.
Two conditions for validity of such
arrangement:
(1) There is a clear written
agreement knowingly and
freely entered by the
employee; and
(2) The mathematical result
shows that the agreed legal
wage rate and the overtime
pay, computed separately,
are equal to or higher than
the separate amounts legally
due. [Damasco v. NLRC,
G.R. 115755 (2000)]
A.2.f. NIGHT SHIFT

DIFFERENTIAL Night shift
Coverage [Book 3, Rule 2, Sec. 1, IRR] provide each of his employees a rest period of not
less than twenty-four (24) consecutive hours after
All employees, except:
every
(1) Those of the government and any of
its political subdivisions, including
government-owned and/or controlled
corporations;
(2) Those of retail and service
establishments regularly employing not
more than five (5) workers;
(3) Domestic helpers and persons in the
personal service of another;
(4) Managerial employees as defined in
Book Three of this Code;
(5) Field personnel and other employees
whose time and performance is
unsupervised by the employer
including those who are engaged on
task or contract basis, purely
commission basis, or those who are
paid a fixed amount for performing
work irrespective of the time
consumed in the performance
thereof.
Rest days (night-off)

Night shift employees are entitled to a
weekly night-off (usually Saturday evening)
or a weekly rest period of 24 hours
beginning at the start of the night shift.
Work on special days

Night shift employees are also entitled to
the premium pay on special days and
holidays. These days are reckoned as
calendar days which start at midnight and
end at the following midnight. The
premium pay for the night shift also starts
or ends at midnight. However, the
employment contract, company policy or
CBA may provide that in the case of night
shift workers, days—including special days
and regular holidays—shall begin on the
night before a calendar day.
A.2.g. REST PERIODS

It shall be the duty of every employer,
whether operating for profit or not, to
six (6) consecutive normal work Employment. [Art. 92, LC]
days. [Art. 91 (a)]
Synthesis of the Rules

Preference of the employee
(1) Rest day of not less than 24
The employer shall determine and consecutive hours after 6
schedule the weekly rest day of his consecutive days of work.
employees subject to collective
(2) No work, no pay principle applies
bargaining agreement and to such
rules and regulations as the Secretary
of Labor and Employment may
provide. However, the employer
shall respect the preference of
employees as to their weekly rest
day when such preference is based
on religious grounds. [Art. 94 (b)]
COMPULSORY WORK ON REST DAY

The employer may require his
employees to work on any day:
(1) In case of actual or impending
emergencies caused by
serious accident, fire, flood,
typhoon, earthquake,
epidemic or other disaster or
calamity to prevent loss of life
and property, or imminent
danger to public safety;
(2) In cases of urgent work to be
performed on the machinery,
equipment, or installation, to
avoid serious loss which the
employer would otherwise
suffer;
(3) In the event of abnormal
pressure of work due to
special circumstances, where
the employer cannot ordinarily
be expected to resort to other
measures;
(4) To prevent loss or damage to
perishable goods;
(5) Where the nature of the work
requires continuous operations
and the stoppage of work may
result in irreparable injury or
loss to the employer; and
(6) Under other circumstances
analogous or similar to the
foregoing as determined by
(3) If an employee works on his (5) Field personnel, if they regularly perform
designated rest day, he is entitled to their duties away from the principal or
a premium pay. branch office or place of
(4) Premium pay is additional 30% of the
basic pay.
(5) Employer selects the rest day of his
employees
(6) However, employer must consider
the religious reasons for the choice of
a rest day.
When the choice of the employee as to his

rest day based on religious grounds will
inevitably result in serious prejudice or
obstruction to the operations and the
employer cannot normally be expected to
resort to other measures, the employer
may so schedule the weekly rest day of his
choice for at least two days in a month
PREMIUM PAY
Premium pay refers to the additional
compensation for work performed within 8
hours on non-work days, such as rest days
and special days.
Coverage [Book 3, Rule 3, Sec. 7,

IRR] General Rule: All employees
Exceptions:
(1) Those of the government and any of
the political subdivision, including
government-owned and controlled
corporations;
(2) Managerial employees as defined in
Book III;
(3) Househelpers and persons in the
personal service of another;
(4) Workers who are paid by results,
including those who are paid on
piece rate, takay, pakyaw, or task
basis, and other noontime work, if
their output rates are in accordance
with the standards prescribed in the
regulations, or where such rates have
been fixed by the Secretary of Labor
and Employment;
business of the ER and whose
actual hours of work in the
filed cannot be determined
with reasonable certainty.
Premium pay rates [DOLE

Memorandum Circular 1, Series of
2004]
When Work Performed Premium Pay
On scheduled rest day 30% of regular

wage
On Sunday ONLY IF 30% of regular

this is the wage
ESTABLISHED rest day
On Sunday and 30% of regular

holidays, when no wage
regular work and rest
days
On any special 30% of regular
holiday/special day wage
On any special holiday 50% of regular

/special day falling on wage
scheduled rest day
On a regular holiday 230% of regular

falling on a rest day wage
Work on a Sunday or holiday which

is also a scheduled rest day
Sec. 2 Rule III, Book III, IRR
Business on Sundays/Holidays- All
establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees a
Sec. 7(a)(b), Rule III, Book III, IRR

Compensation on rest day/Sunday/holiday. –
(a) Except those employees referred to under Section 2, Rule I, Book III, an employee who is made or permitted to work on
on a Sunday only when it is his established rest day.
(b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be
Coverage
CBA on higher premium pay/ Rate

Adjustments
Where the collective bargaining agreement
or other applicable employment contract
stipulates the payment of a higher
premium pay than that prescribed under
this Article, the employer shall pay such
higher rate. [Art. 93 (d), LC.] The employer
and his employees or their representatives
are not prevented from entering into any
agreement with terms more favorable to
the employees. [Book III, Rule II, Sec. 9,
IRR.]
The laws and regulations should not be
used to diminish any benefit granted to the
employees under existing laws
agreements and voluntary employer
practices. [Ibid] Nothing in this rule shall
justify an employer in reducing the
compensation of his employees for the
unworked Sundays, holidays, or other rest
days which are considered paid off days or
holidays by agreement or practice
subsisting upon the effectivity of the Code.
[Book III, Rule III, Sec. 8, IRR].
A.2.h. HOLIDAY PAY, 13TH MONTH PAY

I. Holiday Pay
Holiday pay is a one-day pay given by law
to an employee even if he does not work
on a regular holiday. This gift of a day’s
pay is limited to each of the 12 regular
holidays.
Note: Art. 94 (c), LC was superseded by

E.O. 203, which was subsequently amended
by RA 9177, 9256, 9492, and Proclamation
No. 459. The current state of the law is
discussed below.
General Rule: All (1) New year’s Day – Jan. 1
employees (2) Araw ng Kagitingan – Apr. 9
Exceptions: (3) Maundy Thursday – Apr. 13
(1) Those of the government and (4) Good Friday – Apr. 14
any of the political subdivision,
(5) Labor Day – May 1
including government-owned
and controlled corporation; (6) Independence Day – June 12
(2) Those of retail and service
establishments regularly
employing less than 10
workers;
(3) Domestic helpers and persons
in the personal service of
another;
(4) Managerial employees and
officers or members of the
managerial staff as defined in
Book III
(5) Field personnel and other
employees whose time and
performance is unsupervised
by the employer including those
who are engaged on task or
contract basis, purely
commission basis, or those
who are paid a fixed amount
for performing work
irrespective of the time
thereof. [Sec. 1, Rule IV of the
IRR]
Retail Establishment is one

principally engaged in the sale of
goods to end-users for personal or
household use;
Service Establishment is one
principally engaged in the sale of
service to individuals for their own or
household use and is generally
recognized as such. [RA 6727/The
Wage Rationalization Act, IRR]
Regular holidays
Proclamation No. 50 signed by
President Duterte on August 16,
2016, provides for the observance of
the regular holidays and special (non-
working) days for the year 2017 on
the following dates:
(7) National Heroes Day – Aug. 28 twelfth (12th) lunar month of Dhu’l-Hijja.
(8) Bonifacio Day – Nov. 30
(9) Christmas Day – Dec. 25
(10) Rizal Day – Dec. 30
Special (Non-Working Days)

(1) Jan. 2 (based on Proclamation No. 117)
(2) Chinese New Year – Jan. 28
(3) EDSA Revolution Anniv – Feb. 25
(4) Black Saturday – Apr. 15
(5) Ninoy Aquino Day – Aug. 21
(6) All Saints Day – Nov. 1
(7) Dec. 31 (last day of the year)
The dates for Eid’l Fitr and Eid’l Adha

(special holidays) shall follow after
approximate dates of the Islamic holidays
have been determined.
P.D. 1083 (Code of Muslim Personal Laws)

SEE: Arts. 169-173
Specifically for the Muslim Areas, P.D. 1083,
in its Book V, Title, recognizes five (5)
Muslim Holidays, namely:
(1) Amun Jadid (New Year) which falls
on the first (1st) day of the lunar
month of Muharram;
(2) Mauli-un-Nabi (Birthday of the
Prophet Muhammad) which falls on
the twelfth (12th) day of the third
(3rd) lunar month of Rabi-ul-Awwal;
(3) Lailatul Isra Wal Mi Rai (Nocturnal
Journey and Ascencion of the
Prophet Muhammand) which falls on
the twenty- seventh (27th) day of the
seventh (7th) lunar month of Rajab;
(4) Id-ul-Fitr (Hari Raja Pausa) which
falls on the first (1st) day of the tenth
(10th) lunar month of Shawwal
commemorating the end of the
fasting season; and
(5) Id-ul-Adha (Hari Raha Haji) which
falls on the tenth (10th) day of the
Note: Id-ul-Fitr (Eid’l Fitr) and Id-ul-
Adha (Eid’l Adha) have been added
to the list of national legal holidays.
Note: There should be no distinction

between Muslims & non-Muslims as
regards to the payment of benefits
for Muslim holidays. Wages & other
emoluments granted bylaw to the
workingman are determined on the
basis of the criteria laid down by
laws & not on worker’s faith. Art.
3(3), PD 1083 states that nothing
herein shall be construed to operate
to the prejudice of a non-Muslim.
[San Miguel Corp vs. CA (2002)]
Holiday pay computation (Art. 94

Labor Code, Book III, Rule IV of
IRR, RA 9424 and DOLE
Memorandum Circular 1 Series of
2004)
General Rule: An employer may

require an employee to work on any
holiday but such employee shall be
paid a compensation equivalent to
twice his regular rate. [Art. 94(b)]
According to the LC, IRR and Memo:

Work on any regular
holiday, not exceeding Computation
8 hours
Work on any regular 200% of regular

holiday, if it exceeds daily wage (for
8 hours/overtime the 1st 8 hours)
+ 30% of
hourly rate on
said day
Work on any regular 200% of regular
holiday which falls on daily wage +
the scheduled rest day, 30% of such
not exceeding 8 hours amount
Work on any regular Regular holiday-

holiday which falls on on-rest day rate
scheduled rest day, if (200% of regular
it exceeds 8 daily wage plus
hours/overtime 30% of such
amount) + 30%
of hourly rate on
said day.
(2) He Work
worksononspecial
first holiday,
holidaywhich entitles
Regular him to pay on second holiday.
daily
not exceeding 8 hours wage + 30%
thereof preceding first holiday; or
Work on special Regular daily

holiday wage + 50%
thereof
According to DOLE Memo Circular 1-04, a

“special holiday”/”special day” includes the
National Special Days, and declared
special days such as Special Non-working
Holiday, Special Public Holiday and
Special National Holiday. Such days are
entitled to the rates prescribed above.
These days are not the same as a special
working holiday.
A special working holiday is considered an

ordinary working day, so there is no
premium pay.
Double holiday pay

According to “DOLE Explanatory Bulletin
on Worker’s Entitlement to Holiday Pay on
9 April 1993,” if two holidays fall on the
same day:
(1) If unworked, 200% of basic wage.
(2) If worked, 300% of basic wage.
[Azucena]
Double Holiday Rule for Monthly-paid

employees
For covered employees whose monthly
salaries are computed based on 365 days
and for those other employees who are
paid using factor 314, or 262, or any other
factor which already considers the
payment for the 11 regular holidays, NO
additional payment is due them. [BWC-
WHSD Opinion No. 053, s. 1998]
Successive holiday pay

According to IRR, Rule IV, Sec. 10, an
employee is entitled to holiday pay for both
days, IF:
(1) He is present on day immediately
of benefits under Sec. 100 of the labor
Divisors code, the “287” divisor should only be used
for computations which would be
The divisor assumes an important
advantageous to the employer (i.e.
role in determining whether or not
deduction for absences) and not for
holiday pay is already computed.
computations which would diminish the
(1) Monthly paid employees are existing benefits of the
not entitled to the holiday pay
if their total annual income is
divided by 365 days resulting
in a wage which is beyond the
minimum wage per day
because they are considered
paid everyday of the year
including holidays, rest days,
and other non-working days.
The 365 days are as follows:
(a) 296 days – ordinary days
(b) 52 days – rest days
(c) 10 days – regular holidays
(d) 7 days – special holidays
Note: For 2017, there are 10
regular holidays and 9 special
holidays. (See previous
enumeration of holidays )
(2) As a general rule, for a
company with a 6-day working
schedule, the divisor 313
already means that the legal
holidays are included in the
monthly pay of the employee.
The divisor is arrived at by
subtracting all Sundays from
the total number of calendar
days in a year.
(3) As a general rule for a
company with a 5-day working
schedule, the divisor 287
means that the holiday pay is
already included in the
monthly salary of the
employee.
Where the employer had a standing
practice of using 286 days as a
divisor and following the correct
computation and taking into account
that one of the holidays always falls
on a Sunday, therefore increasing
the divisor to “287”, but increase
would in some instances prejudice
the employees, in violation of the
proscription against non-diminution
employees (i.e., overtime pay, holiday pay
and leave conversions).[Trans Asia Phils. v.
NLRC (1999)] Right to holiday pay in case of absences
Sundays
(See “Work on a Sunday or holiday which is
also a scheduled rest day”) onp.
(1) When a holiday falls on a Sunday, the
following Monday will not be
considered a holiday unless a
proclamation says so.
(2) Furthermore as stated in the
Wellington case (see below), a legal
holiday falling on a Sunday does not
create a legal obligation to pay extra,
aside from the usual holiday pay, to
monthly-paid employees. [Azucena
citing Letter of Instruction No. 1087]
No provision of law requires any employer

to make adjustments in the monthly salary
rate set by him to take account of legal
holidays falling on Sundays in a given
year, otherwise to reckon a year at more
than 365 days. [Wellington Investment and
Manufacturing Corporation vs. Trajano
(1995)]
Non-working/scheduled rest day

Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of
the employee, he shall not be deemed to
be on leave of absence on that day, in
which case he shall be entitled to the
holiday pay if he worked on the day
immediately preceding the non-working
day or rest day. [Book III, Rule IV, Sec 6
(c), IRR]
Example:
If a holiday falls on Monday, and Sunday is
a non-working day in the establishment or
is the scheduled rest day of the employee,
the employee shall be entitled to holiday
pay if he worked on Saturday (which is the
day immediately preceding Sunday, the
non- working day or rest day).
All covered employees shall be (1) An annual inventory; or
entitled to the benefit provided herein
(2) Repair or cleaning of machineries
when they are on leave of absence
and equipment is undertaken.
with pay.
The employer may not pay his employees
Employees who are on leave of
for the regular holidays during the
absence without pay on the day
suspension of work if: the cessation of
immediately preceding a regular
operation is due to
holiday may not be paid the
required holiday pay if he has not
worked on such regular holiday.
[Book III, Rule IV, Sec 6(a), IRR]
Note:
(1) If an employee is on leave of
absence with pay on the day
immediately preceding a
regular holiday, he is entitled
to holiday pay.
(2) If an employee is on leave of
absence without pay on the
day immediately preceding a
regular holiday, he is not
entitled to holiday pay unless
he works on such regular
holiday.
In case of temporary cessation of work

(1) In cases of temporary or
periodic shutdown and
temporary cessation of work of
an establishment, as when a
yearly inventory or when the
repair or cleaning of
machineries and equipment is
undertaken, the regular
holidays falling within the
periods shall be compensated
in accordance with this Rule.
(2) The regular holiday during the
cessation of operation of an
enterprise due to business
reverses as authorized by the
Secretary of Labor may not be
paid by the employer. [Book
III, Rule IV, Sec 7, IRR]
An employee is entitled to holiday
pay for the regular holidays falling
within the period in cases of
temporary shutdowns or cessation of
work, when:
business reverses, and is authorized by only for work actually done. Since regular
the Secretary of Labor. holidays are known to both the school and
faculty members as “no class day”;
Teachers, Piece Workers, Seafarers, Seasonal

Workers, Etc.
(1) Private school teachers, including
faculty members of colleges and
universities, may not be paid for the
regular holidays during semestral
vacations. They shall, however, be paid
for the regular holidays during
Christmas vacation;
(2) Where a covered employee, is paid
by results or output, such as payment
on piece work, his holiday pay shall
not be less than his average daily
earnings for the last seven (7) actual
working days preceding the regular
holiday; Provided, However, that in no
case shall the holiday pay be less
than the applicable statutory
minimum wage rate.
(3) Seasonal workers may not be paid
the required holiday pay during off-
season when they are not at work
(4) Workers who have no regular
working days shall be entitled to the
benefits provided in this Rule. [Book
III, Rule IV, Sec. 8, IRR]
Holiday Pay of Hourly-Paid Faculty

Members Not Entitled: Regular Holiday
Pay
Entitled: Regular hourly rate on days
declared as special holidays or for some
reason classes are called off or shortened
for the hours they are supposed to have
taught, whether extensions of class days
be ordered or not; in case of extensions
said faculty members shall likewise be paid
their hourly rates should they teach during
said extensions.
(1) They are not entitled to payment of
holiday pay because they are paid
certainly the latter do not
expect payment for said
unworked holidays. Seasonal workers
(2) They are entitled to their Seasonal workers who do not work during
hourly rate on days declared as off- season are not entitled to pay for the
special holidays. When a regular holidays occurring during their off-
special public holiday is season. Workers assigned to “skeleton
declared, the faculty member crews” that work during the off-season
paid by the hour is deprived of have the right to be
expected income, and it does
not matter that the school
calendar is extended in view
of the days or hours lost, for
their income that could be
earned from other sources is
lost during the extended days.
(3) Similarly, when classes are
called off or shortened on
account of typhoons, floods,
rallies, and the like, these
faculty members must likewise
be paid, whether or not
extensions are ordered. [Jose
Rizal College v. NLRC,
(1987)]
Piece workers
Philosophy underlying the exclusion
of piece workers from the 8-hour
law is that said workers are paid
depending upon the work they do
irrespective of the amount of time
employed in doing said work. [Red
v. Coconut Products Ltd., v. CIR
(1966)]
Seafarers
Any hours of work or duty including
hours of watch-keeping performed
by the seafarer on designated rest
days and holidays shall be paid rest
day or holiday pay. (Section 11.C,
Standard Terms and Conditions
Governing the Employment of
Filipino Seafarers on Board Ocean-
Going Vessels)
paid on regular holidays falling in that
duration.
ILLUSTRATIONS
Minimum Wage (for 8 hours of Work) 
P800 Hourly Wage  P100
Hours of OT  4 hours
I. OT ON A REGULAR DAY (OTRD)

Work may be performed beyond eight (8) hours a day provided that the employee is paid for the
overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five
percent (25%) thereof [Art 87]
𝑂𝑇𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.25 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑅𝐷 = 100 × 1.25 × 4
𝑂𝑇𝑅𝐷 = 500
II. WORK ON SCHEDULED REST DAY (WRD)

Work performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof [Art 87]
𝑊𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.3

𝑊𝑅𝐷 = 800 × 1.3
𝑊𝑅𝐷 = 1,040
III. OT ON SCHEDULED REST DAY (OTSRD)

Art 93(a), LC: Where an employee is made or permitted to work on his scheduled rest day, he shall
be paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on Sunday only
when it is his established rest day.
𝑂𝑇𝑆𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.69 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑆𝑅𝐷 = 100 × 1.69 × 4
𝑂𝑇𝑆𝑅𝐷 = 676
Notes:
a. 1.69 was derived by adding 39% (which is 30% of 1.3 or 1.3x0.3) to 130%
b. The worker’s total take-home pay for the day is P1,716 (P676+P1,040)
IV. WORK ON SPECIAL HOLIDAY (WSH)

Work performed on any special holiday shall be paid an additional compensation of at least thirty
percent (30%) of the regular wage of the employee. [Art 93(c)]
BOC STANDARDS
𝑊𝑆𝐻 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.3

𝑊𝑆𝐻 = 800 × 1.3
𝑊𝑆𝐻 = 1,040
V. WORK ON SPECIAL HOLIDAY WHICH FALLS ON A REST DAY (WSHRD)

Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an additional
compensation of at least fifty per cent (50%) of his regular wage.
𝑊𝑆𝐻𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 1.5

𝑊𝑆𝐻𝑅𝐷 = 800 × 1.5
𝑊𝑆𝐻𝑅𝐷 = 1,200
VI. OT DURING WORK ON SPECIAL HOLIDAY WHICH FALLS ON A REST DAY (OTWSHRD)
𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 1.95 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 100 × 1.95 × 4
𝑂𝑇𝑊𝑆𝐻𝑅𝐷 = 780
Notes:
b. The worker’s total take-home pay for the day is P1,980 (P780+P1,200)
VII. WORK ON A REGULAR HOLIDAY (WRH)

The employer may require an employee to work on any holiday but such employee shall be paid a
compensation equivalent to twice his regular rate [Art 94(b)]
𝑊𝑅𝐻 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 2
𝑊𝑅𝐻 = 800 × 2
𝑊𝑅𝐻 = 1,600
VIII. OT ON A REGULAR HOLIDAY (OTRH)

Work performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof [Art 87]
𝑂𝑇𝑅𝐻 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑊𝑎𝑔𝑒 × 2.6 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑅𝐻 = 100 × 2.6 × 4
𝑂𝑇𝑅𝐻 = 1,040
PAGE 53 OF
235
Notes:
a. 2.6 was derived by adding 60% (which is 30% of 2 or 2x0.3) to 200%
b. The worker’s total take-home pay for the day is P2,640 (P1,600+P1,040)
IX. WORK ON REGULAR HOLIDAY WHICH FALLS ON A REST DAY (WRHRD)

If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an
additional premium pay of at least 30% of his regular wage holiday rate of 200% based on his
regular wage rate [2nd sentence, Sec. 4, Rule IV, Book III, IRR].
𝑊𝑅𝐻𝑅𝐷 = 𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑊𝑎𝑔𝑒 × 2.6

𝑊𝑅𝐻𝑅𝐷 = 800 × 2.6
𝑊𝑅𝐻𝐷 = 2,080
Notes:
a. 2.6 was derived by adding 60% (which is 30% of 2 or 2x0.3) to 200%
X. OT ON REGULAR HOLIDAY WHICH FALLS ON A REST DAY (OTWRHRD)

Where the regular holiday work exceeding 8 hours falls on the scheduled rest day of the employee,
he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-
rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee
shall consist of 200% of his regular daily wage rate + 30% thereof [par. 2, Sec. 5, Rule IV, Book III,
IRR].
𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 𝐻𝑜𝑢𝑟𝑙𝑦 𝑅𝑎𝑡𝑒 × 3.38 × 𝐻𝑜𝑢𝑟𝑠 𝑜𝑓 𝑂𝑇

𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 100 × 3.38 × 4
𝑂𝑇𝑊𝑅𝐻𝑅𝐷 = 1,352
Notes:
b. The worker’s total take-home pay for the day is P3,432 (P2,080+P1,352)
13th Month Pay
[PD 851 (The 13th-Month Pay Law) and
the Revised Guidelines on the Notes:
Implementation of the 13th Month Pay
Law]
Rationale
 To further protect the level of real
wages from the ravage of world-wide
inflation;
 There had been no increase in the
legal minimum wage rates since
1970;
 The Christmas season is an
opportune time for society to show its
concern for the plight of the working
masses so they may properly
celebrate Christmas and New Year.
Coverage
General Rule: ALL EMPLOYERS are hereby
required to pay all their rank and file
employees a 13th month pay not later than
Dec 24 of every year, Provided that they
have worked for at least one (1) month
during a calendar year.
Exempted Employers:
(1) Government, its political
subdivisions, including GOCCs except
those operating essentially as private
subsidiaries of the Government;
(2) Employers already paying their
employees a 13th month pay or more
in a calendar year or its equivalent at
the time of this issuance; and
(3) Employers of those who are paid on
purely commission, boundary or task
basis and those who are paid a fixed
amount for performing specific work,
irrespective of the time consumed in
the performance thereof (except
those workers who are paid on piece-
rate basis, in which case their
employer shall grant them 13th month
pay).
“Equivalent” includes: (f) Cost-of-living allowances.
(1) Christmas bonus, mid-year
bonus, cash bonuses
Exception: From 1975 to 1981, [the
(2) and other payments amounting employer] had freely, voluntarily and
to not less than 1/12 of the continuously included in the computation
basic salary of its employees' thirteenth month pay, the
payments for sick,
(3) but shall NOT INCLUDE cash
and stock dividends, cost of
living allowances and all other
allowances regularly enjoyed
by the employee as well a non-
monetary benefits.
Workers paid on a piece-rate basis -

paid a standard amount for every
piece or unit of work produced that
is more or less regularly replicated,
without regard to the time spent in
producing the same.
Minimum Amount
1/12 of the total basic salary earned
by an employee within a calendar
year
BASE AMOUNT,
General Rule: basic salary shall include:
(1) Cost of living allowances
(COLA) integrated into the
basic salary of a covered
employee pursuant to EO 178.
(2) All remunerations or earnings
paid by this employer for
services rendered.
(3) But not the allowances and
monetary benefits which are
not considered or integrated as
part of the regular or basic
salary, such as the cash
equivalent of:
(a) Unused vacation and sick
leave credits,
(b) Overtime,
(c) Premium,
(d) Night differential,
(e) Holiday pay and, and
vacation and maternity leaves, premiums time in a private enterprise, including private
for work done on rest days and special educational institutions, as well
holidays, and pay for regular holidays. The
considerable length of time the questioned
items had been included by [the employer]
indicates a unilateral and voluntary act on
its part, sufficient in itself to negate any
claim of mistake.
A company practice favorable to the
employees had indeed been established
and the payments made pursuant thereto,
ripened into benefits enjoyed by them. And
any benefit and supplement being enjoyed
by the employees cannot be reduced,
diminished, discontinued or eliminated by
the employer. [Davao Fruits Corp. v. ALU,
G.R. No. 85073 (1993)]
Time of payment
General Rule: paid not later than Dec 24 of
each year.
Exception: ER may give to his employees

half (½) of the required 13th Month Pay
before the opening of the regular school
year and the other half on or before the
24th of December every year.
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized
CBA of the employees.
13th Month Pay in Special Cases

(1) Paid by Results: Employees who are
paid on piece work basis are, by law,
entitled to the 13th Month Pay.
(Revised Guidelines on the
Implementation of the 13th Month Pay
Law)
(2) Fixed or Guaranteed Wage: Employees
who are paid a fixed or guaranteed
wage plus commission are entitled to
13th month pay (not purely
commission); the basis for
computation shall be both their fixed
or guaranteed wage and
commission. (Revised Guidelines)
(3) Those with Multiple Employers:
Government Employees working part
as Employees working in two
or more private firms, whether
on full or part time bases, are
entitled to the required 13th
Additional Rules:
Month Pay from all their
private Employers regardless (1) Commissions: If the commissions
of their total earnings from may be properly considered part of
each or all their employers. the basic salary, then they should be
(Revised Guidelines) INCLUDED. If they are not an integral
part of the basic salary, then they
(4) Private School Teachers:
should be
Private school teachers,
including faculty members of
universities and colleges, are
entitled to the required 13th
month pay, regardless of the
number of months they teach
or are paid within a year, if
they have rendered service for
at least one (1) month within a
year. (Revised Guidelines)
Overload pay is NOT included in

the computation for 13th month pay;
overload is not overtime as it is
additional work done within the
normal shift [Letran Calamba
Faculty vs NLRC, G.R. No. 156225
(2008)]
(5) Resigned or Separated

Employee: An Employee who
has resigned or whose
services were terminated at
any time before the time for
payment of the 13th month
pay is entitled to this monetary
benefit in proportion to the
length of time he worked
during the year, reckoned
from the time he started
working during the calendar
year up to the time of his
resignation or termination from
service. [Revised Guidelines]
(6) Terminated Employees: The
payment of the 13th month pay
may be demanded by the
employee upon the cessation
of employer-employee
relationship. [Archilles
Manufacturing Corp. vs NLRC,
1995]
EXCLUDED. [Phil. Duplicators Inc. employer cannot be compelled to pay a
vs NLRC, G.R. No. 110068 (1995)] productivity bonus to its employees, it should
follow that such productivity bonus, when
(2) Substitute Payment not allowed:
Benefits in the form of food or free
electricity, assuming they were given,
were not a proper substitute for the
13th month pay required by law.
Neither may year-end rewards for
loyalty and service be considered in
lieu of 13th month pay. [Framanlis
Farms, Inc. vs MOLE, G.R. No. 72616-
17 (1989)]
(3) Wage Difference: The difference
between the minimum wage and the
actual salary received by the
Employee cannot be deemed as his
13th month pay as such difference is
not equivalent to or of the same
import as the said benefit
contemplated by law. [JPL Marketing
Promotions vs CA, 2005]
(4) 14th Month Pay is not mandated:
Employers already paying their
employees a 13th month pay or its
equivalent are not covered by this
Decree.[Kamaya Point Hotel vs NLRC,
G.R. No. 75289 (1989)]
(5) Non-inclusion in regular wage: The
mandated 13th month pay need not
be credited as part of regular wage of
employees for purposes of
determining overtime and premium
pays, fringe benefits insurance fund,
Social Security, Medicare and private
retirement plans. [Revised Rules]
Commissions vis-à-vis 13th month pay

The Rule on Productivity Bonuses. The so-
called commissions “paid to or received by
medical representatives of Boie-Takada
Chemicals or by the rank-and-file
employees of Philippine Fuji Xerox Co.,
were excluded from the term “basic salary”
because these were paid to the medical
representatives and rank-and-file
employees as “productivity bonuses.”
These have no clear direct or necessary
relation to the amount of work actually
done by each individual employee. More
generally, a bonus is an amount granted
and paid ex gratia to an employee. If an
given, should not be deemed to fall Effect of Deficiency in 13th month pay
within the “basic salary” of
The intent of P.D. No. 851 is the granting
employees when the time comes to
of additional income in the form of 13th
compute their 13th month pay [Boie-
month pay to employees not as yet receiving
Takeda vs de la Serna, G.R. No.
the same and not that a double burden
92174 and G.R. No. L-102552,
should be imposed on the employer who is
(1993)]
already paying his employees a 13th
The decision in Boie-Takeda and month pay or its equivalent. [Iran v. NLRC,
the doctrine enunciated in this case G.R. No. 121927 (1998)]
in fact co-exist with the other. The
two cases present quite different
factual situations (although the
same word “commissions” was
used or invoked) the legal
characterizations of which must
accordingly differ.
In the instant case, there is no
question that the sales commission
earned by the salesmen who make
or close a sale of duplicating
machines constitute part of the
compensation or remuneration paid
to salesmen for serving as
salesmen, and hence as part of the
“wage” or salary of petitioner’s
salesmen. It appears that petitioner
pays its salesmen a small fixed or
guaranteed wage; the greater part
of the salesmen’s wages or salaries
being composed of the sales or
incentive commissions earned on
actual sales closed by them. The
sale commissions were an integral
part of the basic salary structure.
They are not overtime payments, or
profit sharing payments or any other
fringe benefit. [Phil. Duplicators vs
NLRC (1995)]
CBA vis-à-vis 13th month pay

The Presidential Decree is specific
and mandatory. However, if the
employers actually grant such for the
13th month pay in the monetary
benefits provided for in the CBA,
they could be exempted from the
operation of the decree. To be
exempted, there must be actual
payment. [Marcopper Mining Corp.
vs. Ople (1981)]
 Fifteen percent (15%) for the
An employer who pays less than 1/12th of disposition of management to answer
the employees basic salary as their 13th for losses and breakages and, at the
month pay is only required to pay the discretion of the management for
difference. [Revised Rules] distribution to managerial employees.
[Sec 3, Rule VI, Book 3, IRR]
The shares shall be distributed to
A.2.i. SERVICE CHARGE employees not less than once every 2
Coverage weeks or twice a month at intervals not
exceeding 16 days. [Sec 4, Rule VI, Book 3,
Employers [Sec 1, Rule VI, Book 3, IRR] IRR]
This rule shall apply only to establishments
which collect service charges such as:
Notes:
(1) Hotels, restaurants, lodging houses,
night clubs, cocktail lounge, massage  The P2,000.00 salary ceiling for
clinics, bars, casinos and gambling entitlement thereto is no longer
houses; applicable.
(2) Similar enterprises including those  [The employees’] right to their shares
entities operating primarily as private in the service charges collected by
subsidiaries of the Government [the employer] is distinct and
separate from their right to ECOLA;
gratification by the [employer] of one
Employees [Sec 2, Rule VI, Book 3, IRR] does not result in the satisfaction of
the other. [Philippine Hoteliers, Inc.,
Shall apply to ALL employees of covered Dusit Hotel-Nikko v. NUWHRAIN-
employers APL-IUF-Dusit Hotel Nikko Chapter,
(1) Regardless of their positions, G.R. No. 181972 (2009)]
designations, or employment status,
and
Integration
(2) Irrespective of the method by which
their wages are paid. In case service charge is abolished, the
shares of covered employees shall be
considered integrated in their wages. [Art
Exceptions 96, LC]
Managerial employees – one who is vested The basis of the amount to be integrated
with powers or prerogatives to lay down shall be the average monthly share of
and execute managerial policies and/or each employee for the past twelve (12)
hire, transfer, suspend, layoff, recall, months immediately preceding the
discharge, assign or discipline employees or abolition of withdrawal of the charges.
to effectively recommend such managerial [Sec. 5, Rule VI, Book 3, IRR]
actions. [Sec 2, Rule VI, Book 3, IRR]
In Relation to Collective Bargaining

Distribution Agreements and Employer-Employee
Agreements
Service charges are distributed in
accordance with the following percentage  Nothing in the Rules shall prevent the
of sharing: employer and employee from
entering into any agreement with
 Eighty-five percent (85%) for the terms more favorable to the
employees to be distributed equally employees than those granted
among them; therein, or be used to diminish any
benefit granted to the
employees under existing
laws, agreement AND
voluntary employer practice.
[Sec. 6, Rule VI, Book 3, IRR]
 The rule is without prejudice to furnished by the employer to the employee
existing, future collective bargaining
agreements. [Sec. 7, Rule VI, Book 3,
IRR]
Synthesis of the Rules

 Service charges must be pooled;
 Where a restaurant or similar
establishment does not collect
service charges but has a practice or
policy of monitoring and pooling tips
given voluntarily by its customers to
its employees, the pooled tips should
be monitored, accounted for and
distributed in the same manner as
the services charges. [DOLE
Handbook on Workers’ Statutory
Monetary Benefits, 2014ed.]
 The amount collected is divided
between the company (15%) and
employees (85%);
 It shall be given twice a month with
intervals of not more than 16 days;
 If discontinued, removed, or stopped,
the average share of the employees
of their service charge or tips shall be
integrated with their basic wage.
B. WAGES
Definition
(a) It is the remuneration or earnings,
however designated, capable of
being expressed in terms of money,
(b) Whether fixed or ascertained on a
time, task, piece, or commission
basis, or other method of calculating
the same,
(c) Which is payable by an employer to
an employee
(d) Under a written or unwritten contract
of employment for work done or to be
done, or for services rendered or to
be rendered and
(e) Includes the fair and reasonable
value, as determined by the Secretary
of Labor and Employment, of board,
lodging, or other facilities customarily
Fair and reasonable value - shall not (2) Household or domestic helpers,
include any profit to the employer, or including family drivers and other
to any person affiliated with the persons in the personal service of
employer. [Art. 97(f), LC] another;
(3) Homeworkers engaged in needlework;
“No work no pay” Principle
General Rule: the age old rule
governing the relation between labor
and capital or management and
employee is that a "fair day's wage
for a fair day's labor." [Sugue v.
Triumph International (2009)]
Exception: When the laborer was

able, willing and ready to work but
was illegally locked out, suspended
or dismissed, or otherwise illegally
prevented from working. [Sugue v
Triumph International, supra]
“Equal Work for Equal Pay” Principle

Employees working in the
Philippines, if they are performing
similar functions and responsibilities
under similar working conditions
should be paid equally. If an
employer accords employees the
same position and rank, the
presumption is that these
employees perform equal work.
[International School Alliance of
Educators v. Hon. Quisumbing
(2000)]
Coverage/Exclusions
Wage includes the fair and
reasonable value of facilities
furnished by the employer to the
employee [Art. 97(f)] while
allowances are excluded from the
basic salary or wage computation.
[Cebu Institute of Technology v Ople
(1987)]
Applicability
The Labor Code Title on wages
shall not apply to the following [Art.
98 and Book 3, Rule VII, Sec 3,
IRR]:
(1) Farm tenancy or leasehold;
(4) Workers in registered cottage industries 6. Any object other than legal tender,
who actually work at home; even when expressly requested by
(5) Workers in registered cooperatives the employee
when so recommended by the
Bureau of Cooperative Development
upon approval of the Secretary of Conditions for payment through check:
Labor; 1. Bank/Facility for encashment is within
1- km radius from the workplace
Note: Workers in registered barangay 2. ER did not receive any pecuniary
micro business enterprise are only benefit because of said arrangement
exempted from the Minimum Wage Law, 3. EEs are given reasonable time
not from the Title on Wages [RA 9178]. during banking hours to withdraw
their wages (compensable hours, if
during working hours)
B.1. WAGES VS SALARY
4. The payment by check is with the
Wages and salary are in essence written consent of the EEs
synonymous. [Songco v. NLRC (1990)] concerned, in the absence of a CBA
There are slight differences:
Wage Salary B.2.B.Time of Payment [Secs. 3, Rule VIII,
Book III, Omnibus Rules]
Paid for skilled or Paid to white
unskilled manual labor collar workers and TIME OF PAYMENT*
denote a higher At least once every
grade of Frequency 2 weeks or 2x per
employment month
Not subject to Not exempt from Must not be more
Intervals
execution, garnishment execution, than 16 days
or garnishment or
Valid excuse for
attachment except for attachment [Gaa
delayed payment
debts related to vs. CA, 1985]
necessities [Art. 1708] Force Majeure BUT ER must
B.2. PAYMENT OF WAGES pay immediately
after cessation
B.2.A. Form Of Payment [Secs. 1-2, Rule
VIII, Book III, IRR] Payments should be
made with intervals
General rule: Legal Tender Only
not more thanv16
Exception: Check/Money Order if Tasks which cannot days, in proportion
customary OR necessary because of be completed in 2 to work completed
special circumstances, as specified by the weeks Final settlement is
Secretary of Labor or the CBA
made upon
Not allowed: completion of the
work.
1. Promissory Notes
2. Vouchers
B.2.C. Place of Payment
3. Tokens
[Secs. 4, Rule VIII, Book III, Omnibus Rules]
4. Tickets
General Rule: Shall be made at or near the
5. Chits; or
place of undertaking (workplace)
Exceptions: III, Omnibus Rules]
1. Deterioration of peace and order
conditions, or by reason of actual or
impending emergencies (fire, flood,
epidemic)
2. Free transportation to the employees
back and forth
3. Under any other analogous
circumstances provided, that the time
spent by the employees in collecting
their wages shall be considered as
compensable hours worked.
NO PAYMENT in any bar, night or day
club, drinking establishment, massage clinic,
dance hall, or other similar places or in
places where games are played with
stakes of money or things representing
money except in the case of persons
employees in such places
Condition for ATM payment

[Labor Advisory on Payment of Salaries
thru ATM (1996)]:
1. ATM system of payment is with the
written consent of the EEs
2. EEs are given reasonable time to
withdraw their wages from the
banking facility (compensable hours,
if during work hours)
3. System shall allow workers to reeive
their wages within the
period/frequency provided by law
4. There is a bank/ATM facility within
1km radius from the place of work
5. Upon request of the concerned EEs,
the ER shall issue a record of
payment of wages, benefits and
deductions for a particular period
6. There shall be no additional
expenses and no diminution of
benefits and privileges
7. The ER shall assume responsibility in
case the wage protection provisions
of law and regulations are not
complied with under the arrangement
B.2.D. Person to Pay [Sec 5, Rule VIII, Book

General Rule: the conduct of the employer’s
business. This 2nd part is essentially
Directly to EE
defines what a supplement is.
Exceptions:
1. Member of EE’s family  if
Criterion: In determining whether a privilege
ER is authorized in writing by
is a facility, the criterion is not so much its
the EE
kind but it’s PURPOSE [Millares v NLRC &
2. A 3rd person  if authorized PICOP, 1999]
by law (e.g. insurance
Facilities are items of expense necessary for
companies for premiums,
the laborer’s and his family’s existence and
union dues where the right to
check-off has been
recognized by ER in
accordance with a CBA or
authorized in writing by EE
concerned)
3. Heirs  in case of death of
EE, without necessity of
intestate proceedings
 If heirs are of age  they
shall execute an affidavit
attesting to their
relationship to the
deceased and the fact that
they are his heirs to the
exclusion of others
 If any of the heirs is a
minor  such affidavit
shall be executed in his
behalf by his natural
guardian or next of kin.
B.3.FACILITIES vs SUPPLEMENTS
The distinction between facilities
and supplement is relevant because
the former is wage-deductible while
the latter is not. Simply put, a wage
includes facilities. [Art. 97, LC)
The IRR definition [IRR Book III Rule 7-A

Sec. 5]
has 2 components:
(1) Facilities are articles or
services for the benefit of the
employee or his family. This
1st part defines facilities.
(2) Facilities shall not include
tools of the trade or articles or
service primarily for the benefit
of the employer or necessary to
subsistence. [States Marine Corp. v. Cebu (2) The provision of deductible facilities
Seamen's Assoc., Inc., 1963] must be voluntarily accepted in
writing by the employee; and
Comparison between Facilities and (3) Facilities must be charged at
Supplements reasonable value.
Facilities Supplements [SLL International Cable Specialists v.

NLRC, 2011]
What it is Value of Facilties = Cost of Operation and
maintenance + Adequate depreciation +
Extra remuneration
Articles or reasonable allowance (not more than
or special benefits
services/items of 5.5% interest)
/ articles or
expense; EXCLUDES If the fair rental value is lower than the
services / tools of
tools of the trade or computed value, fair rental value will be
the trade given to
articles or service used.
or received by
primarily for the
laborers over and
benefit of ER
above their ordinary
earning or wages B.4. NON-DIMINUTION OF WAGES
Who Benefits General Rule: There is a prohibition
against elimination or diminution of
For the benefit of benefits [Art. 100]
the employee and For the benefit or
his family; for their convenience of No wage order issued by any regional
existence and the employer board shall provide for wage rates lower
subsistence than the statutory minimum wage rates
prescribed by Congress. [Art. 127, as
Part of Wage? amended by Republic Act No. 6727, June
9, 1989]
Yes No
Requisites
Deductible from Wage? If the following are met, then the employer
cannot remove or reduce benefits [Vergara
No - Independent
Yes - Part of wage Jr. v Coca-Cola Bottlers Phils]:
of the Wage so not
so it is (1) Ripened company policy: Benefit is
deductible
deductible founded on a policy which has
Examples ripened into a practice over a long
period
Meals, board
and lodging (2) Practice is consistent and deliberate and
(3) Not due to error in the construction or
application of a doubtful or difficult
Requirements for deducting value of question of law. [Globe Mackay Cable
facilities Mere availment is not sufficient to vs. NLRC, 1988]
allow (4) The diminution or discontinuance is

deductions from employees’ wages. done unilaterally by the employer.
Before the value of facilities can be
deducted from the employees’ wages, the
following requisites must all be attendant: When not applicable: At least one of the
requisites is absent.
(1) Proof must be shown that such
facilities are customarily furnished by (1) Mistake in the application of the law
the trade; [Globe Mackay Cable v. NLRC, June
29, 1988]
(2) Negotiated benefits [Azucena]
(3) Reclassification of Positions –
e.g. loss of some benefits by
promotion.
(4) Contingent or Conditional Benefits – 3. Other deductions authorized by
the rule does not apply to a benefit law/Secretary of Labor
whose grant depends on the
existence of certain conditions, so
that the benefit is not demandable if In case of Bankruptcy or Liquidation of an
those preconditions are absent. ER’s business [Art 110, LC]: Workers shall
Benefits initiated through negotiation enjoy first preference as regards their
between Employee and Employer, e.g. wages and other monetary claims, any
CBA, can only be eliminated or diminished provision of law to the contrary
bilaterally. nowithstanding. Such unpaid wages and
monetary claims shall be paid in full before
the claims of the Government and other
B.5. PROHIBITIONS REGARDING WAGES creditors may be paid [NOTE: Art 110, LC
amended Art 2244 of the Civil Code
1. Interference in disposal of wages [Art (ordinary preferred credits) by elevating #2
112, LC] of Art. 2244 to 1st priority]
2. Wage deduction [Art 113, LC]
3. Requirement to make deposits for B.5.C. Prohibition against Requirement To
loss or damage [Art 114-115, LC] Make Deposits For Loss Or Damage [Art.
4. Withholding of wages [Art 116, LC] 114, LC]
5. Deduction to ensure employment [Art General Rule: No ER shall require his worker
117, LC] to make deposits from which deductions
shall be made for the reimbursement of
6. Retaliatory measures [Art 118, LC] loss of or damage to tools, materials, or
7. False reporting [Art 119, LC] equipment supplied by the employer.
Exception: ER is engaged in such trades,
occupations or business where the practice
B.5.A. Prohibition against Interference In
of making deductions or requiring deposits
Disposal Of Wages
is a recognized one, or is necessary or
Art. 112 LC desirable as determined by the Secretary of
Labor and Employment in appropriate
Non-interference in disposal of wages. No rules and regulations.
employer shall limit or otherwise interfere
with the freedom of any employee to No deduction from the deposits of an EE
dispose of his wages. He shall not in any for the actual amount of the loss/damage
manner force, compel, or oblige his shall be made unless:
employees to purchase merchandise, 1. There is reasonable opportunity for
commodities or other property from any EE to show cause why deduction
other person, or otherwise make use of should not be made [Art 115, LC]
any store or services of such employer or
any other person. 2. EE’s responsibility has been clearly
shown [Art 115, LC]
B.5.B. Prohibition against Wage Deduction 3. Amount is fair and reasonable and
[Art 113, LC] shall not exceed the actual loss of
General Rule: ER cannot make any deduction damage; and
from the wages of his EE 4. Must not exceed 20% of weekly pay
Exceptions: Attorney’s fees in any judicial or
1. Insurance premiums administrative proceedings for the recovery
of wages shall not exceed 10% of the
2. Union dues amount awarded
B.5.D. Prohibition against
Withholding of Wages
Art. 116, LC of this Code knowing such statement, report or record to be false in any material re
Withholding of wages and kickbacks
prohibited. It shall be unlawful for any Covers all offenses under the Labor Code
person, directly or indirectly, to withhold
any amount from the wages of a worker or
induce him to give up any part of his B.6. WAGE ORDER, WAGE
wages by force, stealth, intimidation, threat DISTORTION WAGE ORDER
or by any other means whatsoever without
the worker’s consent. Wage Order (WO) – an order issued by the
Regional Tripartite Wages and Productivity
Exceptions: Boards (“Regional Boards”) whenever the
conditions in the region so warrant after
1. Deduction is for insurance premiums investigating and studying all pertinent
2. For union dues facts and based on the standards and
criteria prescribed by the Labor Code. The
3. Authorized by law/ DOLE Sec Regional Board proceeds to determine
4. Due & demandable debt to ER whether to issue the same or not [Art, 123,
LC, as amended by RA 6727].
WO establishes the minimum wage rates to
B.5.E. Prohibition Against Deduction To be paid by ERs in the region, which shall in
Ensure Employment no case be lower than the applicable
Art. 117, LC statutory minimum wage rates [NWPC
Rules of Procedure on Minimum Wage
Deduction to ensure employment. It shall Fixing].
be unlawful to make any deduction from
the wages of any employee for the benefit
of the employer or his representative or Section 2, Wage Rationalization Act (RA 6727)
intermediary as consideration of a promise
of employment or retention in employment. It is hereby declared the policy of the State
to rationalize the fixing of minimum wages
and to promote productivity-improvement
and gain-sharing measures to ensure a
B.5.F. Prohibition Against Retaliatory decent standard of living for the workers
Measures and their families; to guarantee the rights
of labor to its just share in the fruits of
Art. 118, LC production; to enhance employment
Retaliatory measures. It shall be unlawful generation in the countryside through
for an employer to refuse to pay or reduce industry dispersal; and to allow business
the wages and benefits, discharge or in and industry reasonable returns on
any manner discriminate against any investment, expansion and growth.
employee who has filed any complaint or
instituted any proceeding under this Title Art. 122, LC (as amended by RA 6727)
or has testified
reby created Regional Tripartiteor is about
Wages and to testify in such
Productivity Boards, hereinafter referred to as Regional Boards, in all regions, including auton
proceedings.
This covers offenses only under the titled of
Wages in the LC
B.5.G. Prohibition Against False

Reporting Art. 119, LC
False reporting. It shall be unlawful for any person to make any statement, report, or record filed or kept pursuant to the p
"The Regional Boards shall have the following powers and functions in their respective territorial jurisdiction: xxx (b) To de
gional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such order. It shall be mandat
e person appealing such order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for th
Standards/Criteria in Wage Fixing

1. The demand for living wages;
2. Wage adjustment vis-a-vis the
consumer price index;
3. The cost of living and changes or WO Effectivity: After 15 days from its
increases therein; complete publication in at least one
4. The needs of workers and their newspaper of general circulation
families; NOTE: Public hearing and publication are
5. The need to induce industries to mandatory[Cagayan Sugar Milling Co. vs.
invest in the countryside; Sec. of Labor, GR No. 128399 (1998)].
6. Improvements in standards of living;
7. The prevailing wage levels; Frequency: A WO issued by the Board may
not be disturbed for a period of 12 months
8. Fair return of the capital invested and from its effectivity and no petition for wage
capacity to pay of employers; increase shall be entertained during said
9. Effects on employment generation and period.
family income; and
10. The equitable distribution of income Exceptions:
and wealth along the imperatives of
economic and social development. 1. When Congress itself issues a law
[Art 124, as amended] increasing wages.
2. Supervening conditions (i.e.
extraordinary increases in prices of
Art. 123, LC (as amended by RA 6727) petroleum products and basic
goods/services.
rtinent facts; and based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order should be issu
ns, giving notices to employees' and employers' groups, provincial, city and municipal officials and other interested parties.
Appeal: Any party aggrieved by the Wage
Order issued by the Regional Board may
appeal such order to the Commission
within ten (10) calendar days from the
publication of such order. It shall be
mandatory for the Commission to decide
such appeal within sixty
(60) calendar days from the filing thereof.
Effect of Appeal: Does not operate to stay
the order
Exception: Party appealing such order

shall file with the Commission an
undertaking with a surety/sureties
(surety bond) satisfactory to
the Commission for payment to employees
affected by the order of the corresponding Salary Ceiling
Floor Wage
increase in the event such order is affirmed
[Sec 5, Rule V, IRR of RA 6727]. What it does
All wages under
Adds to a certain wage
Grounds for Appeals for Review of WO
previous increases to that
1. Non-conformity with prescribed minimum wage wage
guidelines and/or procedure
Example
2. Questions of law
All wages under
3. Grave abuse of discretion [Rule IV, P456+P100=P556 P556 must be
Revised Rules of Procedure on increased to P556
Minimum Wage Fixing]
Wage Distortion/Rectification
Double Indemnity Doctrine
A situation where an increase in
Double Indemnity is the payment to a prescribed wage rates results in the
concerned EE of the prescribed increase elimination or severe contraction of
or adjustments in the wage rate which was intentional quantitative differences in wage
not paid by an ER in an amount equivalent or salary rates between and among
to 2x the benefits owing to such employee. employee groups in an establishment as to
effectively obliterate the distinctions
embodied in such wage structure based on
Unpaid Benefits skills, length of service, or other logical
The prescribed wage rates which the ER bases of differentiation [Art. 124, LC]
failed to pay upon the effectivity of a WO,
exclusive of other wage-related benefits
4 Elements of wage distortion
Unpaid benefits serve as the principal basis
for computing the double indemnity [Sec. (a) Existing hierarchy of positions with
2, DO 10-98] corresponding salary rates;
Wages of apprentices, learners and (b) A significant change in the salary
handicapped workers shall in no case be rate of a lower pay class without a
less than 75% of the statutory minimum concomitant increase in the salary
wage rates [Sec. 10, IRR of RA 6727] rate of a higher one;
(c) The elimination of the distinction
between the two levels; and
METHODS OF FIXING
(d) The existence of the distortion in the
1. Floor Wage Method- fixing a same region of the country.
determinate amount to be added to [Prubankers Assn. v. Prudential Bank
the prevailing statutory minimum and Co. (1999)]
wage rates (e.g. setting P25 increase
for min. wage rates)
2. Salary-Ceiling Method- Wage How to Resolve [LC Art. 124]
adjustment to be applied to EEs Organized Establishment
receiving a certain denominated
salary or workers being paid more (1) Employer and the union shall
than existing min. wage (e.g. WO negotiate to correct the distortions.
granting P25 increase to those (2) Disputes shall be resolved through
earning up to P250) the grievance procedure.
(3) If still unresolved, voluntary
arbitration.
Grievance Procedure (under the CBA)  if one year of service shall be entitled to a yearly
unresolved, VOLUNTARY arbitration service incentive leave of five days with pay. [Art.
95(a), LC.]
Unorganized Establishment
(1) ERs and Employees shall endeavor
to correct such distortions.
(2) Disputes shall be settled through the
National Conciliation and Mediation
Board.
(3) If still unresolved after 10 calendar
days of conciliation, it shall be
referred to the appropriate branch of
the NLRC – compulsory arbitration
 Both the employer and employee
cannot use economic weapons.
(4) Employer cannot declare a lock-out;
Employee cannot declare a strike
because the law has provided for a
procedure for settling
(5) The salary or wage differential does
not need to be maintained. [National
Federation of Labor v. NLRC, 1994]
National Conciliation and Mediation Board
 if unresolved, COMPULSORY
arbitration by the NLRC
CBA vis-à-vis Wage Orders – CBA

creditability
In determining an employee’s regular
wage, the pertinent stipulations in the CBA
are controlling, provided the result is not
less than the statutory requirement
(Philippine National Bank vs. PEMA, 1982)
Note: The manner of resolving wage

distortion is largely based on the applicable
wage order. The current one for NCR, WO
20, refers to the procedure in Art. 124 of
the Labor Code
C.LEAVES
C.1. SERVICE INCENTIVE LEAVE
PAY
Coverage
Every employee who has rendered at least
or carried over to succeeding years. [R.A.
No. 10361, Sec. 5]
Service Incentive Leave DOES NOT
apply to the following employees:
(1) Those of the government and Meaning of “1 year of service”
any of its political subdivisions, "At least one year service" shall mean
including GOCCs; service for not less than 12 months,
(2) Domestic helpers and persons whether continuous or broken, reckoned
in the personal service of from the date the employee started
another; working, including authorized absences
and paid regular holidays unless the
(3) Managerial employees as working days in the establishment as a
defined in Book 3 of this matter of practice or policy,
Code;
(4) Field personnel and other
employees whose performance
is unsupervised by the
employer including those who
are engaged on task or
contract basis, purely
commission basis, or those
who are paid a fixed amount
for performing work
irrespective of the time
thereof;
(5) Those who are already
enjoying the benefit herein
provided;
(6) Those enjoying vacation leave
with pay of at least 5 days;
(7) Those employed in
establishments regularly
employing less than 10
employees. [Book 3, Rule 5,
Sec. 1, IRR]
Piece-rate employees are entitled to

service incentive leave pay. The
Court looked at several factors
which led them to conclude that
petitioners, although compensated
on a per piece basis, were regular
employees of. [Labor Congress of
the Phils., v. NLRC (1998)]
Teachers of private school on
contract basis are entitled to service
incentive leave. [Cebu Institute of
Technology v. Ople (1987)]
The law grants annual SIL of five
days to domestic workers but their
SIL shall not be converted to cash
or that provided in the employment Requisites
contract is less than 12 months, in which
case said period shall be considered as one
year. [Book III, Rule V, Sec. 3, IRR.]
Arbitration or Administrative Action

The grant of benefit IN EXCESS of that
provided herein shall not be made a
subject of arbitration or any court or
administrative action. [Art. 95 (c), LC]
The cause of action of an entitled
employee to claim his service incentive
leave pay accrues from the moment the
employer refuses to remunerate its
monetary equivalent if the employee did
not make use of said leave credits but
instead chose to avail of its commutation
(into money). Accordingly, if the employee
wishes to accumulate his leave credits and
opts for its commutation upon his
resignation or separation from
employment, his cause of action to claim
the whole amount of his accumulated
service incentive leave shall arise when
the employer fails to pay such amount at
the time of his resignation or separation
from employment. [Auto Bus Transport vs.
NLRC (2005)]
Commutable nature of benefit

The service incentive leave shall be
commutable to its money equivalent if not
used or exhausted at the end of the year.
[Book 3, Rule 5, Sec. 5]
C.2. MATERNITY LEAVE

[Sec. 14-A of RA 1161 (Social Security Law)
as amended by RA 7322 and RA 8282]
Coverage
Every pregnant woman in the private
sector, whether married or unmarried, is
entitled to the maternity leave benefits.
This is applicable to both childbirth and
miscarriage.
(1) Employment: A female (1) Employer shall advance the payment
employee employed at the subject to reimbursement by the SSS
time of delivery, miscarriage within 30 days from filing of leave
or abortion application.
(2) Contribution: who has paid at
least 3 monthly contributions
in the 12-month period
immediately preceding the
semester of her childbirth, or
miscarriage.
(3) Notice: employee notified
employer of her pregnancy
and the probable date of her
childbirth, which notice shall
be transmitted to the SSS in
accordance with the rules and
regulations it may provide.
Benefit received
A daily maternity benefit equivalent
to 100% of her average daily salary
credit for:
(1) 60 days for normal delivery
(2) 78 days for caesarean delivery
Note: This benefit shall NOT be

included in the computation of 13th
month pay as it is granted to an
employee in lieu of wages which is
the basis for computing 13th month.
Only 4 maternity leaves available

The maternity benefits provided
under the Social Security Law shall
be paid only for the first four (4)
deliveries or miscarriages
SSS pays for the maternity leave

The employer advances the benefit
to the employee but the SSS shall
immediately reimburse the
employer of one hundred percent
(100%) of the amount upon receipt
of satisfactory proof of such
payment and legality thereof
Other conditions
(2) Availment shall be a bar to the physically living together because of the
recovery of sickness benefits workstation or occupation, the male employee is
provided by this Act for the same still entitled to the paternity leave benefit.
period for which daily maternity
benefits have been received.
(3) Employee may only avail of benefit
for the first four (4) deliveries or
miscarriages.
(4) Sanction: That if an employee should
give birth or suffer miscarriage
(a) Without the required contributions
having been remitted for her by
her ER to the SSS, or
(b) Without the latter having been
previously notified by the ER of
time of the pregnancy, then the
employer shall pay to the SSS
damages equivalent to the
benefits which said employee
member would otherwise have
been entitled to.
C.3. PATERNITY LEAVE [RA 8187

(PATERNITY LEAVE ACT OF 1996)]
Coverage and Purpose
Paternity leave is granted to all married
male employees in the private and public
sectors, regardless of their employment
status (e.g. probationary, regular,
contractual, project basis). The purpose of
this benefit is to allow the husband to lend
support to his wife during her period of
recovery and/or in nursing her newborn
child. [Sec. 3, RA 8187]
Benefit
It shall be for 7 calendar days, with full
pay, consisting of basic salary and
mandatory allowances fixed by the Regional
Wage Board, if any, provided that his pay
shall not be less than the mandated
minimum wage. [Sec. 2, RA 8187]
It shall apply to the first 4 deliveries of the
employee’s lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together. [Sec. 1,
IRR, RA 8187] If the spouses are not
Crediting of existing benefits
Usage of the benefit (1) If the existing paternity leave benefit

under the CBA, contract, or company
Usage of the leave shall be after the policy is greater than 7 calendar days
delivery, without prejudice to an as provided for in RA 8187, the
employer’s policy of allowing the greater benefit shall prevail.
employee to avail of the benefit
before or during the delivery,
provided that the total number of
days shall not be more than 7 days
for each covered delivery. [Sec. 5,
IRR, RA 8187]
Conditions for entitlement [Sec. 3,

IRR, RA 8187]
(1) He is married;
(2) He is an employee at the time
of the delivery of his child;
(3) He is cohabiting with his
spouse at the time that she
gives birth or suffers a
miscarriage;
(4) He has applied for paternity
leave with his ER within a
reasonable period of time from
the expected date of delivery
by his pregnant spouse, or
within such period as may be
provided by company rules
and regulations, or by CBA;
and,
(5) His wife has given birth or
suffered a miscarriage.
Application for paternity leave

See number 4 under conditions for
entitlement.
In case of miscarriage, prior
application for paternity leave shall
not be required. [Sec. 4, IRR, RA
8187]
Non-conversion to cash
In the event that the paternity leave
is not availed of, it shall not be
convertible to cash and shall not be
cumulative. [Sec. 7, IRR, RA 8187]
(2) If the existing paternity leave benefit (1) year;
is less than that provided in RA 8187,
the ER shall adjust the existing
benefit to cover the difference. [Sec.
9, IRR, RA 8187]
Where a company policy, contract, or CBA
provides for an emergency or contingency
leave without specific provisions on
paternity leave, the ER shall grant to the
employee 7 calendar days of paternity
leave. [Sec. 9, IRR, RA 8187]
C.4. PARENTAL LEAVE FOR SOLO

PARENTS [RA 8972 (SOLO PARENTS’
WELFARE ACT OF 2000)]
Leave benefits granted to a solo parent to
enable him/her to perform parental duties
and responsibilities where physical presence
is required. [Sec. 3 (d), RA 8972]
Coverage
Any solo parent or individual who is left
alone with the responsibility of parenthood
due to:
(1) Giving birth as a result of rape or and
other crimes against chastity even
without a final conviction of the
offender: Provided, That the mother
keeps and raises the child;
(2) Death of spouse;
(3) Spouse is detained or is serving
sentence for a criminal conviction for
at least one (1) year;
(4) Physical and/or mental incapacity of
spouse as certified by a public
medical practitioner;
(5) Legal separation or de facto
separation from spouse for at least
one (1) year: Provided, that he/she is
entrusted with the custody of the
children;
(6) Declaration of nullity or annulment of
marriage as decreed by a court or by
a church: Provided, that he/she is
entrusted with the custody of the
children;
(7) Abandonment of spouse for at least
one
(8) Unmarried father/mother who RA 8972]
has preferred to keep and rear
his/her child/children, instead
of having others care for them Grant of Flexible Work Schedule
or give them up to a welfare The employer shall provide for a flexible
institution;
working schedule for solo parents:
(9) Any other person who solely Provided, That the same shall not affect
provides parental care and individual and company productivity:
support to a child or children: Provided, further, That
Provided, that he/she is duly
licensed as a foster parent by
the Department of Social
Welfare and Development
(DSWD) or duly appointed legal
guardian by the court; and
(10) Any family member who
assumes the responsibility of
head of family as a result of
the death, abandonment,
disappearance, or prolonged
absence of the parents or solo
parent for at least one (1)
year. [Sec. 3 (a), RA 8972]
Conditions for Entitlement

A solo parent employee shall be
entitled to the parental leave under
the following conditions:
(1) He/she has rendered at least
one (1) year of service,
whether continuous or broken;
(2) He/she has notified his/her
employer that he/she will avail
himself/herself of it, within a
reasonable period of time; and
(3) He/she has presented to
his/her employer a Solo
Parent Identification Card,
which may be obtained from
the DSWD office of the city or
municipality where he/she
resides. [Sec 19, Art. V, IRR,
RA 8972]
Availment
The parental leave is in addition to
leave privileges under existing laws
with full pay, consisting of basic
salary and mandatory allowances. It
shall not be more than seven (7)
working days every year. [Sec. 8,
any employer may request exemption from Gross Monthly Compensation
the above requirements from the DOLE on
certain meritorious grounds. [Sec. 6, RA
8972]
Protection against Work Discrimination

No employer shall discriminate against any
solo parent employee with respect to terms
and conditions of employment on account
of his/her status. [Sec. 7, RA 8972]
Termination of the Benefit

A change in the status or circumstance of
the parent claiming the benefit under the
law, such that he/she is no longer left
alone with the responsibility of parenthood,
shall terminate his/her eligibility for these
benefits. [Sec. 3 (a), RA 8972]
C.5. SPECIAL LEAVE FOR WOMEN

WORKERS [RA 9710 (THE MAGNA
CARTA OF WOMEN), DOLE DO NO. 112,
SERIES OF 2011 AS AMENDED BY DO NO.
112-A SERIES OF 2012]
Special Leave Benefit for Women

A female employee’s leave entitlement of
two
(2) months with full pay from her employer
based on her gross monthly compensation
following surgery caused by gynecological
disorders, provided that she has rendered
continuous aggregate employment service of
at least six (6) months for the last 12
months.
Gynecological Disorders
Disorders that would require surgical
procedures such as, but not limited to,
dilatation and curettage and those involving
female reproductive organs such as the
vagina, cervix, uterus, fallopian tubes,
ovaries, breast, adnexa and pelvic floor, as
certified by a competent physician. It shall
also include hysterectomy, ovariectomy, and
mastectomy.
The monthly basic pay plus surgery, or within such period as may be
mandatory allowances fixed by the provided by company rules and regulations
regional wage boards. [Sec. 7, Rule or by CBA.
II, IRR, RA 9710]
Basic Requirement
Application after surgery
The woman employee should have
been with the company for 12 months
prior to surgery. An aggregate
service of at least six (6) months
within the said 12-month period is
sufficient to entitle her to avail of the
special leave benefit.
Employment service includes
absences with pay such as use of
other mandated leaves, company-
granted leaves and maternity leaves
Competent Physician
A medical doctor preferably
specializing in gynecological
disorders or is in the position to
determine the period of recuperation
of the woman employee. [Sec. 1,
DO 112, as amended]
Conditions for Entitlement

Any female employee, regardless of
age and civil status, shall be entitled
to a special leave benefit, provided
she has complied with the following
conditions:
(1) She has rendered at least 6
months continuous aggregate
employment service for the
last 12 months prior to surgery;
(2) She has filed an application for
special leave
(3) She has undergone surgery
due to gynecological disorders
as certified by a competent
physician. [Sec. 2, DO 112]
Application for Special Leave

Application before surgery
The employee shall file her
application for leave with her
employer within a reasonable period
of time from the expected date of
Prior application for leave shall not be Statutory Leaves
necessary in cases requiring emergency
The SLB cannot be taken from existing statutory
surgical procedure, provided that the
leaves (i.e. 5-day SIL, leave for
employer shall be notified verbally or in
written form within a reasonable period of
time and provided further that after the
surgery or appropriate recuperating period,
the female employee shall immediately file
her application using the prescribed form.
[Sec. 3, DO 112]
Period of Entitlement
The 2 months special leave is the
maximum period of leave with pay that a
woman employee may avail of under RA
9710.
For purposes of determining the period of
leave with pay that will be allowed to a
female employee, the certification of a
competent physician as to the required
period of recuperation shall be controlling.
[Sec. 4, DO 112, as amended]
Availment
The special leave shall be granted to the
qualified employee after she has
undergone surgery. [Sec. 5, DO 112, as
amended]
A woman employee can avail of the SLB
for every instance of surgery due to
gynecological disorder for a maximum total
period of 2 months per year. [Sec. 6, DO
112, as amended]
Special Leave Benefit vis-à-vis SSS Sickness

Benefit
The SLB is different from the SSS
sickness benefit. The former is granted by
the employer in accordance with RA 9710.
It is granted to a woman employee who
has undergone surgery due to
gynecological disorder. The SSS sickness
benefit, on the other hand, is administered
and given by the SSS in accordance with RA
1161 as amended by RA 8282. [Sec. 7, DO
112, as amended]
Special Leave Benefit vis-à-vis Existing

victims of VAWC, Parental leave for Mode of Payment
solo parents). The grant of SLB
The SLB is a leave privilege. The woman
under the law is in recognition of the
employee shall not report for work for the
fact that patients with gynecological
duration of the leave but she will still
disorder needing surgery require a
receive her salary covering said period. The
longer period of recovery. The benefit
employer, in its discretion, may allow said
is considered an addition to the
employee to receive her pay for the period
leave benefits granted under
covered by the approved leave before or
existing laws and should be added
during the surgery. The computation of her
on top of said statutory leave
“pay” shall be based
entitlements.
If the SLB has already been
exhausted, the company leave and
other mandated leave benefits may
be availed of by the woman
employee. [Sec. 8, DO 112, as
amended]
Special Leave Benefit vis-à-vis

Maternity Leave Benefit
Where the woman employee had
undergone surgery due to
gynecological disorder during her
maternity leave, she is entitled only
to the difference between the SLB
and maternity leave benefit. [Sec. 9,
DO 112, as amended]
Crediting of Existing or Similar Benefits

If there are existing or similar
benefits under a company policy,
practice or CBA providing similar or
equal benefits to what is mandated
by law, the same shall be
considered as compliance, unless
the company policy, practice or
CBA provides otherwise.
In the event the company policy,
practice or CBA provides lesser
benefits, the company shall grant
the difference.
More liberal existing or similar
benefits cannot be withdrawn or
reduced by reason of this law. The
term “similar or equal benefits”
refers to leave benefits which are of
the same nature and purpose as
that of the SLB. [Sec. 10, DO 112,
as amended]
on her prevailing salary at the time of the remuneration and fringe benefits, to
surgery. [Sec. 11, DO 112, as amended] a female employees as against a
male employee, for work of equal
value; and
Non-Commutation of the Benefit
(2) Favoring a male employee over a
The SLB shall be non-cumulative and non- female employee with respect to
convertible to cash unless otherwise promotion, training opportunities,
provided by a CBA. [Sec. 12, DO 112, as study and scholarship grants solely
amended] on account of their sexes. [Art.133,
Labor Code]
D. SPECIAL GROUPS OF EMPLOYEES
D.1. WOMEN Par.
The 2, State
Sec. 2, Magna Carta of
condemns Women
discrimination
against women in all its forms and pursues
Sec. 14, Art. II, 1987 Constitution by all appropriate means and without delay
The State recognizes the role of women the policy of eliminating discrimination
in nation-building, and shall ensure the against women in keeping with the
fundamental equality before the law of Convention on the Elimination of All Forms
women and men. of Discrimination Against Women
(CEDAW) and other international
instruments consistent with Philippine law.
Sec. 14, Art XIII, 1987 Constitution The State shall accord women the rights,
protection, and opportunities available to
The State shall protect working women
every member of society.
by providing safe and healthful working
conditions, taking into account their
maternal functions, and such facilities Sec. 12, Magna Cart of Women
and opportunities that will enhance their Equal Treatment Before the Law. - The
welfare and enable them to realize their State shall take steps to review and, when
full potential in the service of the nation. necessary, amend and/or repeal existing
laws that are discriminatory to women
within three
Sec. 1, Rule XII, Book III, IRR (3) years from the effectivity of this Act.
General Statement on Coverage. – This including wage, salary or other form of
Rule shall apply to all employers,
whether operating for profit or not,
including educational, religious and
charitable institutions, except to the
Government and to government-owned
or controlled corporations and to
employers of household helpers and
persons in their personal service insofar
as such workers are concerned.
D.1.a. DISCRIMINATION
It shall be unlawful for any employer to
discriminate against any woman employee
with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
(1) Payment of a lesser compensation,
D.1.b. STIPULATION AGAINST
MARRIAGE It shall be unlawful
for an employer to:
(1) require as a condition of
employment or continuation of
employment that a woman
employee shall not get
married, or
(2) stipulate expressly or tacitly
that upon getting married a
woman employee shall be
deemed resigned or separated
or
(3) actually dismiss, discharge,
discriminate or otherwise
prejudice a woman employee
merely by reason of her
marriage. [Art. 134, Labor
Code] [Duncan Assoc of
Detailman – PTGWO v Glaxo
Wellcome, 2004]
With particular regard to women, Republic D.1.c.PROHIBITED ACTS [Art. 135 (previously
Act No. 9710 or the Magna Carta of Article 137)]
Women protects women against
discrimination in all matters relating to Note: Nightwork/ Exception (Art 130-131) –
marriage and family relations, including the No more nightwork prohibition under R.A.
right to choose freely a spouse and to 10151 (An Act Allowing the Employment of
enter into marriage only with their free and Night Workers, thereby Repealing Articles
full consent. Weighed against these 130 and 131 of PD 442, as amended,
safeguards, it becomes apparent that otherwise known as the Labor Code of the
Brent's (employer) condition is coercive, Philippines)
oppressive and discriminatory. There is no
rhyme or reason for it. It forces Cadiz to
marry for economic reasons and deprives Art. 154. RA 10151. Coverage. - This
her of the freedom to choose her status, chapter shall apply to all persons, who
which is a privilege that inheres in her as shall be employed or permitted or
an intangible and inalienable right. While a suffered to work at night, except those
marriage or no- marriage qualification may employed in agriculture, stock raising,
be justified as a "bona fide occupational fishing, maritime transport and inland
qualification," Brent must prove two factors navigation, during a period of not less
necessitating its imposition, viz: (1) that the than seven (7) consecutive hours,
employment qualification is reasonably including the interval from midnight to
related to the essential operation of the job five o'clock in the morning, to be
involved; and (2) that there is a factual determined by the Secretary of Labor
basis for believing that all or substantially and Employment, after consulting the
all persons meeting the qualification would workers' representatives/labor
be unable to properly perform the duties of organizations and employers.
the job. Brent has not shown the presence Night worker means any employed
of neither of these factors. Perforce, the person whose work requires
Court cannot uphold the validity of said performance of a substantial number of
condition [Capin-Cadiz vs. Brent Hospital hours of night work which exceeds a
and Colleges, Inc., G.R. No. 187417 (2016)]. specified limit. This limit shall be fixed by
the Secretary of Labor after consulting
the workers'
Bona fide occupational qualification exception representatives/labor organizations and
When the employer can prove that the
reasonable demands of the business require Women Night Workers. - Measures shall
a distinction based on marital status and be taken to ensure that an alternative to
there is no better available or acceptable night work is available to women
policy which would better accomplish the workers who would otherwise be called
business purpose, an ER may discriminate upon to perform such work:
against an EE based in the identity of the (a) Before and after childbirth, for a
EE’s spouse. [Star Paper Corp. vs. period of at least sixteen (16) weeks,
Simbol, 2006] which shall be divided between the time
The Court sustained the validity of before and after childbirth;
employer policy prohibiting an employee (b) For additional periods, in respect of
from having a personal or marital winch a medical certificate IS produced
relationship with an employee of a stating that said additional periods are
competitor. The prohibition was reasonable necessary for the health of the mother
under the circumstances because or child:
relationships of such nature might
compromise the interests of the company. (1) During pregnancy;
[Duncan Association of Detailmen vs. (2) During a specified time beyond the
Glaxo period, after childbirth is fixed pursuant
to subparagraph (a) above, the length
of
Wellcome,
2004]
which shall be determined by the DOLE preventing her from enjoying any of the
after consulting the labor organizations benefits provided under this Code. [Art. 135
and employers. (1)]
During the periods referred to in this
article: Discharge on account of pregnancy
(i) A woman worker shall not be To discharge such woman on account of
dismissed or given notice of dismissal, her pregnancy, while on leave or in
except for just or authorized causes confinement due to her pregnancy. [Art.
provided for in this Code that are not 135 (2)]
connected with pregnancy, childbirth
and childcare responsibilities. Discharge on account of testimony
(ii) A woman worker shall not lose the To discharge or refuse the admission of
benefits regarding her status, seniority, such woman upon returning to her work for
and access to promotion which may fear that she may again be pregnant. [Art.
attach to her regular night work position. 137 (3)]
Pregnant women and nursing mothers It shall be unlawful for any employer: …to
may be allowed to work at night only if a discharge any woman or child or any other
competent physician, other than the employee for having filed a complaint or
company physician, shall certify their having testified or being about to testify
fitness to render night work, and specify, under the Code [Book III, Rule XII, Sec
in the case of pregnant employees, the 13(d), IRR]
period of the pregnancy that they can
safely work. The measures referred to in
this article may include transfer to day Expulsion of Women faculty/ female
work where this is possible, the student due to pregnancy outside of
provision of social security benefits or an marriage
Expulsion and non-readmission of women
faculty due to pregnancy outside of
marriage shall be outlawed. No school
shall turn out or refuse admission to a
female student solely on the account of her
having contracted pregnancy outside of
The measures referred to in this article marriage during her term in school. [Sec.
may include transfer to day work where 13(c), RA 9710]
this is possible, the provision of social
security benefits or an extension of Discharge to prevent enjoyment of benefits
maternity leave.
To deny any woman employee the benefits
The provisions of this article shall not provided for in this Chapter or to discharge any
leave the effect of reducing the woman employed by him for the purpose of
protection and benefits connected with
maternity leave under existing laws.
Discrimination [Art 133, RA

9710] See D.1.a.
Stipulation against marriage [Art 134]

See D.1.b.
D.1.d. SEXUAL HARASSMENT
[RA 7877 - Anti-Sexual Harassment Act of
1995]
Forms of Sexual Harassment
(1) Employment or Work Related
(a)The sexual favor is made as a
condition
(i) in the hiring or in the
employment, re-
employment or
continued employment of
said individual or
(ii) in granting said
individual favorable
compensation, terms,
conditions, promotions,
or privileges, or
(iii) in the refusal to grant the
sexual favor results in
limiting, segregating or
classifying the EE which
in any way would
discriminate, deprive or
diminish employment
opportunities or
otherwise adversely affect said another to commit any act of sexual
employee; harassment as herein defined. OR
(b) The above acts would either: (3) Any person who cooperates in the
commission by another without which it
(i) impair the employee’s rights or
would NOT have been committed, shall
privileges under existing labor
laws; or
(ii) result in an intimidating, hostile,
or offensive environment for the
employee.
(2) Education or Training environment.

In an education or training
environment, sexual harassment is
committed:
(a) Against one who is under the care,
custody or supervision of the
offender
(b) Against one whose education,
training, apprenticeship or
tutorship is entrusted to the
offender;
(c) When the sexual favor is made a
condition to the giving of a
passing grade, or the granting of
honors and scholarships, or the
payment of a stipend, allowance or
other benefits, privileges, or
considerations; or
(d) When the sexual advances result in
an intimidating, hostile or offensive
environment for the result, trainee
or apprentice.
Persons who may be liable

(1) Any employer, employee, manager,
supervisor, agent of the employer,
teacher, instructor, professor, coach,
trainer or any other person, regardless
of whether the demand, request for
requirement for submission is accepted
by the object of said act having
authority, influence or moral
ascendancy over another in a work or
training or education environment,
who demands, requests or otherwise
requires any sexual favor from
another,
(2) Any person who directs or induces
also be held liable under this female, may rightfully cry "foul" provided
Act [Sec. 3, RA 7877] the claim is well substantiated. Strictly
speaking,
Role of the employer or Head of Office

Sec. 4, RA 7877. The Employer or Head of
Office shall have the duty:
(1) to prevent the commission of such
acts and
(2) to lay down the procedure for the
resolution, settlement or prosecution of
committed acts.
Sec. 5, RA 7877. He shall be solidarily
liable for damages:
(1) if he is informed of such acts by the
offended party and
(2) no immediate action is taken thereon.
Independent Action for Damages

Sec. 6, RA 7877. The victim of work,
education or training-related sexual
harassment can institute a separate and
independent action for damages and other
affirmative relief.
Sanctions
Criminal: imprisonment of 1 month
to mos. Or fine of P10k to P20k or
both
Prescription of such action is in 3 years.
Termination
As a managerial employee, petitioner
is bound by more exacting work
ethics. When such moral perversity
is perpetuated against his
subordinate, he provides a justifiable
ground for his dismissal for lack of
trust and confidence. It is the right,
nay the duty of every employer to
protect its employees from
oversexed superiors. [Sec. 7, RA
7877] [Libres vs NLRC, 1999]
The gravamen of the offense in
sexual harassment is not the
violation of the employee's sexuality
but the abuse of power by the
employer. Any employee, male or
there is no time period within which he or or legal guardian and where only members
she is expected to complain through the of
proper channels. The time to do so may
vary depending upon the needs,
circumstances, and more importantly, the
emotional threshold of the employee.
Not many women are made of the stuff
that can endure the agony and trauma of a
public, even corporate, scandal. If
petitioner- corporation had not issued the
third memorandum that terminated the
services of private respondent, we could
only speculate how much longer she would
keep her silence. Perhaps, to private
respondent's mind, for as long as she
could outwit her employer's ploys she
would continue on her job and consider
them as mere occupational hazards. [Phil.
Aelous Automotive United Corp. vs NLRC,
2000]
D.2. MINORS
Relevant Laws: RA 7610 (Special Protection
of Children Against Abuse, Exploitation
and Discrimination Act), RA 9231 (Special
Protection of Children Against Child
Abuse, Exploitation and Discrimination
Act), Art. 137(a)
Constitutional basis
The State recognizes the vital role of the
youth in nation-building and shall promote
and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their
involvement in public and civic affairs. [Art
II, Sec. 13 of the 1987 Constitution]
General Rule: Children below 15 shall NOT

be employed
Exception (Employment of Children )

Children below fifteen (15) years of age
shall not be employed except:
(1) When a child works directly under the
sole responsibility of his/her parents
his/her family are employed: employed, the employer shall first secure,
Provided, however, That before engaging such child, a work permit
his/her employment neither from the Department of Labor and
endangers his/her life, safety, Employment which shall ensure
health, and morals, nor observance of the above requirements.
impairs his/her normal
For purposes of this Article, the term
development: Provided, further,
"child" shall apply to all persons under
That the parent or legal
eighteen (18) years of age.[Sec 2, RA
guardian shall provide the said
9231]
child with the prescribed
primary and/or secondary
education; or Children - refers to any person under 18
(2) Where a child's employment years of age or those over but are unable
or participation in public to fully take
entertainment or information
through cinema, theater,
radio, television or other forms
of media is essential:
Provided, That the
employment contract is
concluded by the child's
parents or legal guardian, with
the express agreement of the
child concerned, if possible,
and the approval of the
Employment: Provided,
further, That the following
requirements in all instances
are strictly complied with:
(a) The employer shall ensure
the protection, health,
safety, morals and normal
development of the child;
(b) The employer shall
institute measures to
prevent the child's
exploitation or
discrimination taking into
account the system and
level of remuneration, and
the duration and
arrangement of working
time; and
(c) The employer shall
formulate and implement,
subject to the approval
and supervision of
competent authorities, a
continuing program for
training and skills
acquisition of the child.
In the above-exceptional cases
where any such child may be
care of themselves or protect themselves through cinema, theater, radio or television
from abuse, neglect, cruelty, exploitation or is essential, provided that [Sec. 12 of RA
discrimination because of a physical or 7610 as amended by RA 7658]:
mental disability or condition. [Sec. 2, RA
7610]
Child labor - refers to any work or economic

activity performed by a child that subjects
him/her to any form of exploitation or is
harmful to his/her health and safety or
physical, mental or psychosocial
development.
Working child - refers to any child engaged

as follows:
(1) when the child is below eighteen (18)
years of age, in work or economic
activity that is not child labor as
defined in the immediately preceding
subparagraph; and
(2) when the child is below fifteen (15)
years of age, in work where he/she is
directly under the responsibility of
his/her parents or legal guardian and
where only members of the child‘s
family are employed; or in public
entertainment or information. [Sec. 3,
DO 65-04]
Exceptions
(1) Child works directly under the sole
responsibility of his parents or legal
guardian and where only members of
the employer’s family are employed,
provided:
(a) his employment does NOT
endanger his life, safety, health
and morals,
(b) nor impairs his normal
development, and
(c) the parent or legal guardian shall
provide the said minor child with
the prescribed primary and/or
secondary education; [Sec. 12 of
RA 7610 as amended by RA
7658]
(2) child’s employment or participation in
public entertainment or information
(a) employment does NOT The following are HAZARDOUS workplaces:
involve ads or commercials
(1) Nature of the work exposes the
promoting alcohol, tobacco
workers to dangerous environmental
and its by-products or
elements, contaminants or working
violence [Sec. 14, RA
conditions;
7610]
(2) construction work, logging, fire-
(b) the employment contract is
fighting, mining, quarrying, blasting,
concluded by the child’s
stevedoring, dock work, deep sea
parents or guardian, and
fishing, and mechanized farming;
approved by DOLE
(c) The ER shall ensure the
protection, health, safety
and morals of the child
(d) The ER shall institute
measures to prevent the
child’s exploitation or
discrimination taking into
account the system and
level of remuneration, and
the duration and
arrangement of working
time
(e) The ER shall formulate and
implement, subject to the
approval and supervision
of competent authorities, a
continuing program for
training and skills
acquisition of the child.
[Sec. 12 of RA 7610 as
amended by RA 7658]
Employment of Children from 15 to 18

Employment is allowed even without
permit but restricted to non-
hazardous work.
Non-hazardous work shall mean any

work or activity in which the EE is
not exposed to any risk which
constitutes an imminent danger to
his safety and health. [Sec. 3, Rule
XII, Book III, IRR of LC]
The Secretary of Labor shall from
time to time publish a list of
hazardous work and activities in
which persons 18 years of age and
below cannot be employed [Sec. 3,
Rule XII, Book III, IRR of LC]
(3) manufacture or handling of (e) Exposes the child to physical danger such
explosives and other pyrotechnic as, but not limited to the dangerous
products; feats of balancing,
(4) exposure to or use of heavy power-
driven machinery or equipment;
(5) exposure to or use of power-driven
tools
Worst Forms of Child Labor

(1) All forms of slavery, as defined under
the "Anti-trafficking in Persons Act of
2003", or practices similar to slavery
such as sale and trafficking of
children, debt bondage and serfdom
and forced or compulsory labor,
including recruitment of children for
use in armed conflict; or
(2) The use, procuring, offering or
exposing of a child for prostitution, for
the production of pornography or for
pornographic performances; or
(3) The use, procuring or offering of a
child for illegal or illicit activities,
including the production and
trafficking of dangerous drugs and
volatile substances prohibited under
existing laws; or
(4) Work which, by its nature or the
circumstances in which it is carried
out, is hazardous or likely to be
harmful to the health, safety or
morals of children, such that it:
(a) Debases, degrades or demeans
the intrinsic worth and dignity of a
child as a human being; or
(b) Exposes the child to physical,
emotional or sexual abuse, or is
found to be highly stressful
psychologically or may prejudice
morals; or
(c) Is performed underground,
underwater or at dangerous
heights; or
(d) Involves the use of dangerous
machinery, equipment and tools
such as power-driven or
explosive power-actuated tools;
or
physical strength or Kasambahay
contortion, or which or Domestic Worker’s Act)
requires the manual
Note: RA 10361 has expressly repealed
transport of heavy loads; or
Chapter III, “Employment of
(f) Is performed in an Househelpers”, Title III of Book III of the
unhealthy environment Labor Code
exposing the child to
hazardous working
conditions, elements,
substances, co-agents or
processes involving
ionizing, radiation, fire,
flammable substances,
noxious components and
the like, or to extreme
temperatures, noise
levels, or vibrations; or
(g) Is performed under
particularly difficult
conditions; or
(h) Exposes the child to
biological agents such as
bacteria, fungi, viruses,
protozoans, nematodes and
other parasites; or
(i) Involves the manufacture
or handling of explosives
and other pyrotechnic
products.
Working Hours
of a Child
Quantity
Age Bracket Daily Max Weekly Max
Below 15 y 4 hrs 20 hrs
15 to below
8hrs. 40 hrs
18
Night work prohibition

Age Bracket Prohibited Hours
8 pm to 6 am
Below 15 y
(10 hrs.)
10 pm to 6 am
15 to below 18
(8 hrs.)
D.3. KASAMBAHAY
EMPLOYMENT OF HOUSEHELPERS
Relevant Law: RA 10361 (Batas
Domestic work - This refers to work Piñas, Pasig, Marikina,
performed in or for a household or Valenzuela, Taguig and Pateros in
households. [Sec 4(C). RA 10361] Metro Manila and in highly
urbanized cities;
(6) Six hundred fifty pesos (P650.00)
Domestic worker or “Kasambahay” - Refers
to any person engaged in domestic work a month for those in other
within an employment relationship such as, chartered cities and first class
but not limited to, the following: general municipalities; and
househelp, nursemaid or “yaya”, cook, (7) Five hundred fifty pesos (P550.00)
gardener, or laundry person. [Sec 4(D). a month for those in other
RA 10361] municipalities; Provided, that the
The term domestic worker or employees shall review the
“kasambahay” excludes any person who employment contracts of their
performs domestic work only occasionally househelpers every three (3) years
or sporadically and not on an occupational with the end in view of improving
basis. [Sec.4(D), RA 10361] the terms and conditions thereof.
Provided, further, that those
househelpers who are receiving at
Rights and Privileges least One thousand pesos
(P1,000.00) shall be covered by
(a) Minimum wage the Social Security System (SSS)
The minimum wage of domestic workers and be entitled to all the benefits
shall not be less than the following: provided thereunder."
i. P2,500 a month for those

employed in NCR
ii. P2,000 a month for those
employed in chartered cities and (b) Standard of Treatment
first class municipalities
The employer or any member of the
iii. P1,500 a month for those household shall not subject a domestic
employed in other municipalities worker or “kasambahay” to any kind of
Within one year from the effectivity of the abuse nor inflict any form of physical
Act, and periodically thereafter, the violence or harassment or any act tending
Regional Tripartite and Productivity Wage to degrade the dignity of a domestic
Boards shall review, and if proper, worker. [Sec. 5, RA 10361]
determine and adjust the minimum wage
rates of domestic workers. [Sec. 24, RA
10361] (c) Board, Lodging and Medical Attendance
The employer shall provide for the basic
SECTION 1. Subparagraphs (1), (2) and necessities of the domestic worker to
(3), Article 143 of Presidential Decree include at least three (3) adequate meals a
No. 442, as amended, otherwise known day and humane sleeping arrangements
as the "Labor Code of the Philippines" that ensure safety and shall provide
are hereby amended to read as follows: appropriate rest and assistance to the
ART. 143. Minimum wage. — (a) domestic worker in case of illnesses and
Househelpers shall be paid the following injuries sustained during service without loss
minimum wage rates; of benefits. [Sec. 6, RA 10361]
(1) Eight hundred pesos (P800.00) a

month for househelpers in Manila, (d) Privacy
Quezon, Pasay and Caloocan
cities and municipalities of Makati, Respect for the privacy of the domestic
San Juan, Mandaluyong,
Muntinlupa, Navotas, Malabon,
Parañaque, Las
worker shall be guaranteed at all
times and shall extend to all forms
of communication and personal
effects [Sec. 7, RA 10361]
if not available, any other document
showing the age of the domestic worker
(e) Access to Outside Communication
The employer shall grant the domestic
worker access to outside communication
during free time: Provided, That in case of
emergency, access to communication shall
be granted even during work time. [Sec. 8,
RA 10361]
(f) Education and Training

The employer shall afford the domestic
worker the opportunity to finish basic
education and may allow access to
alternative learning systems and, as far as
practicable, higher education or technical
and vocational training. [Sec. 9, RA 10361]
(g) Social and Other Benefits

A domestic worker who has rendered at
least one (1) month of service shall be
covered by the Social Security System
(SSS), the Philippine Health Insurance
Corporation (PhilHealth), and the Home
Development Mutual Fund or Pag-IBIG,
and shall be entitled to all the benefits in
accordance with the pertinent provisions
provided by law.
(h) Leave Benefits

least one (1) year of service shall be
entitled to an annual service incentive
leave of five (5) days with pay [Sec. 29, RA
10361]
Pre-Employment Requirement
Prior to the execution of the employment
contract, the employer may require the
following from the domestic worker:
(1) Medical certificate or a health
certificate issued by a local
government health officer;
(2) Barangay and police clearance;
(3) National Bureau of Investigation
(NBI) clearance; and
(4) Duly authenticated birth certificate or
such as voter’s identification card, Termination
baptismal record or passport.
(1) Initiated by the domestic worker
However, Section 12(a), (b), (c) and
The domestic worker may terminate the
(d) shall be standard requirements
employment relationship at any time
when the employment of the
before the expiration of the employment
domestic worker is facilitated
contract for any of the following causes:
through the PEA.
The cost of the foregoing shall be
borne by the prospective employer
or agency, as the case may be.
[Sec. 12, RA 10361]
Time and Manner of Payment:

Payment of wages shall be made
on time directly to the domestic
worker in cash at least once a
month and unless allowed by the
domestic worker through a written
consent, employer shall make no
deductions from the wages other
than that which is mandated by law.
[Sec. 25, RA 10361]
Right against assignment to non-

household work at a wage rate
lower than that mandated for
agricultural or non-agricultural
enterprises depending on the case.
[Sec. 22, RA 10361]
Employment Age of Domestic

Workers: Unlawful to employ any
person below fifteen
(15) years of age as a domestic
worker [Sec. 16, RA 10361]
Persons between 15-18 years old
should only be employed in non-
hazardous work. [DO 4- 99 Sec. 4]
Daily Rest Period: Aggregate of eight
(8) hours per day. [Sec. 20, RA
10361]
Employment Certification: ER shall

give the househelper a written
statement of the nature and
duration of the service and his or
her work performance as
househelper upon severance. [Sec.
35, RA 10361]
(a) Verbal or emotional abuse of the employer, or member/s of the household;
domestic worker by the employer or and
any member of the household;
(b) Inhuman treatment including physical
abuse of the domestic worker by the
employer or any member of the
household;
(c) Commission of a crime or offense
against the domestic worker by the
employer or any member of the
household;
(d) Violation by the employer of the
terms and conditions of the
employment contract and other
standards set forth under this law;
(e) Any disease prejudicial to the health
of the domestic worker, the
employer, or member/s of the
household; and
(f) Other causes analogous to the
foregoing. [Sec. 33, RA 10361]
(2) Initiated by the employer

An employer may terminate the services of
the domestic worker at any time before the
expiration of the contract, for any of the
following causes:
(a) Misconduct or willful disobedience by
the domestic worker of the lawful
order of the employer in connection
with the former’s work;
(b) Gross or habitual neglect or
inefficiency by the domestic worker in
the performance of duties;
(c) Fraud or willful breach of the trust
reposed by the employer on the
domestic worker;
(d) Commission of a crime or offense by
the domestic worker against the
person of the employer or any
immediate member of the employer’s
family;
(e) Violation by the domestic worker of
the terms and conditions of the
employment contract and other
standards set forth under this law;
(f) Any disease prejudicial to the health
of the domestic worker, the
(g) Other causes analogous to 1992), is now Rule XIV, Book III of the
the foregoing. [Sec. 34, RA IRR.
10361]
Industrial homework
Unjust dismissal
(1) Is a system of production under
Neither the domestic worker nor the which work for an employer or
employer may terminate the contractor is carried out by a
contract before the expiration of the homeworker at his/her
term except for grounds provided in
Sec. 33 and 34 of RA 10361.
If the domestic worker is unjustly
dismissed, the domestic worker shall
be paid the compensation already
earned plus the equivalent of 15
days work by way of indemnity.
Leaving without justifiable reason

by the domestic worker
(a) any unpaid salary due not
exceeding the equivalent 15
days work shall be forfeited
AND
(b) the employer may recover
from the domestic worker the
costs incurred related to the
deployment expenses, if any:
Provided, that the service has
been terminated within 6
months from the domestic
worker’s employment.
Notice to end the working relationship

If the duration of the domestic
service is not determined either in
stipulation or by the nature of the
service, the employer or the
domestic worker may give notice to
end the working relationship five (5)
days before the intended
termination of the service.
The domestic worker and the
employer may mutually agree upon
written notice to pre- terminate the
contract of employment to end the
employment relationship. [Sec. 32,
RA 10361]
D.4. HOMEWORKERS
Note: DO 5, DOLE (February 4,
home. Materials may or may not be Liability of Employer
furnished by the employer or
(1) Employer may require homeworker to
contractor.
(2) Decentralized form of production,
where there is ordinarily very little
supervision or regulation of methods
of work. [Sec. 2(a), Rule XIV, Book
III, IRR]
Industrial Homeworker - a worker who is

engaged in industrial homework
Employer means any natural or artificial

person who
(1) Acts as a contractor or subcontractor
– delivers or causes to be delivered
any goods, articles, or materials to be
processed or fabricated in or about a
home and thereafter to be returned
or to be disposed of or distributed in
accordance with employer’s
direction; OR
(2) Sells any goods, articles, or materials
to be processed or fabricated in or
about a home and then rebuys them
after. [Art. 153, LC]
Note: Sec 2(d), Rule XIV, Book III is
substantially similar to the above.
Rights and benefits accorded homeworkers

(1) Right to form, join or assist
organizations [Sec 3, Rule XIV, Book
III, IRR]
(2) Right to acquire legal personality and
the rights and privileges granted by
law to legitimate labor organizations
upon issuance of the certification of
registration [Sec 4, Rule XIV, Book
III, IRR]
(3) Immediate payment upon employer’s
receipt of finished goods or articles
[Sec 6, Rule XIV, Book III, IRR]
(4) SSS, MEDICARE and ECC premium
contributions shall be deducted from
their pay and shall be remitted by
ER/contractor/subcontractor to the SSS
[Sec 6, Rule XIV, Book III, IRR]
redo work improperly and reasonable, and does not exceed
executed without additional actual loss or damage
pay [Sec 9a, Rule XIV, Book
(4) Deduction does not exceed 20% of
III, IRR]
homeworker’s weekly earnings [Sec. 8,
(2) Employer need not pay Rule XIV, Book III, IRR]
homeworker for any work
D.5. NIGHT WORKERS
done on goods or articles not
returned due to homeworker’s
fault [Sec 9b, Rule XIV, Book
III, IRR]
(3) If subcontractor/contractor
fails to pay homeworker,
employer is jointly and
severally liable with the former
to the homeworker for his/her
wage [Sec 11, Rule XIV, Book
III, IRR]
(4) Employer shall assist the
homeworkers in the
maintenance of basic safe and
healthful working conditions at
the homeworkers’ place of
work. [Sec 11, Rule XIV, Book
III, IRR of LC]
Regional Office shall provide

technical assistance to registered
homeworkers’ organizations [Sec 14,
Rule XIV, Book III, IRR of LC]
Prohibited Homework
(1) explosives, fireworks and
articles of like character;
(2) drugs and poisons; and
(3) other articles, the processing of
which requires exposure to toxic
substances. [Sec 13, Rule XIV,
Book III, IRR]
Deductions
No deduction from the homeworker’s
earnings for the value of materials
lost, destroyed or damaged unless:
(1) Homeworker is clearly shown
to be responsible for loss or
damage
(2) Reasonable opportunity to be heard
(3) Amount of deduction is fair
Night worker (d) Facility for eating w/ potable drinking
Any employed person whose work water; AND
requires performance of a substantial (e) Facilities for transportation and/or
number of hours of night work which properly ventilated temporary
exceed a specified limit. This limit shall be sleeping or resting quarters, separate
fixed by the Sec of Labor after consulting for male and female workers, shall be
the workers’ representatives/labor provided except where any of the ff.
organizations and employers. [Art. 154, LC circumstances is present:
as amended by RA 10151]
i. There is an existing company
Any employed person whose work covers guideline, practice or policy, CBA,
the period from 10 o’clock in the evening to or any similar agreement
6 o’clock the following morning, provided providing for an equivalent or
that the worker performs no less than 7 superior benefit; or
consecutive hours of work. [Book III, Rule
XV, Sec. 2, IRR, through DO 119-12] ii. Start or end of the night work
does NOT fall within 12 mn - 5
am; or
Health Assessment iii. Workplace is located in an area
At the worker’s request, they shall have that is accessible 24 hours to
the right to undergo a health assessment public transportation; or
without charge and to receive advice on iv. Number of employees does NOT
how to reduce or avoid health problems exceed a specified number as
associated with their work: may be provided for by the SOLE
(a) Before taking up an assignment as a in subsequent issuances [Art. 156,
night worker; LC as amended by RA 10151;
Book III, Rule XV, Sec. 4, IRR,
(b) At regular intervals during such an through DO 119- 12]
assignment;
(c) If they experience health problems
during such an assignment; Transfer
With the exception of a finding of unfitness If night worker is unfit for night work due to
for night work, the findings of such health reasons as certified by competent
assessments shall be confidential and physician, s/he shall be:
shall NOT be used to their detriment, (1) Transferred in good faith to a job for
subject, however, to applicable company which they are fit to work whenever
policies. [Art. 155, LC as amended by RA practicable, which must be similar
10151; Book III, Rule XV, Sec. 3, IRR, and equivalent position;
through DO 119-12]
(2) If transfer is not practicable, or
workers are unable to render night
Mandatory Facilities work for a continuous period of not
less than 6 months upon certification
Mandatory facilities shall be made of a competent public health
available for workers performing night authority, they shall be granted the
work, which include the following: same benefits as other workers who
(a) Suitable first-aid and emergency are unable to work due to illness.
facilities (3) If workers are certified as temporarily
(b) Lactation station in required unfit to render night work for a period
companies pursuant to RA 10028 of less than 6 months, they shall be
given the same protection against
(c) Separate toilet facilities for men & dismissal or notice of dismissal as
women other workers who are prevented from
working for health reasons.
[Art. 157, LC as amended by
RA
10151; Book III, Rule XV, Sec. 5, IRR, to a woman employee who is not in a position to
through DO 119-12] render night work, she shall be allowed to go on
leave or on extended maternity leave, using her
earned leave credits.
Women Night Workers
Employers shall ensure that measures shall
be taken to ensure that an alternative to
night work for pregnant and nursing
employees who would otherwise be called
upon to perform such work. Such
measures may include:
(1) Transfer to day work – As far as
practicable, pregnant or nursing
employees shall be assigned to day
work, before and after childbirth, for a
period of at least sixteen (16) weeks,
which shall be divided between the
time before and after childbirth;
Medical certificate issued by competent
physician (OB/Gyne/Pedia) is
necessary for the grant of:
(a) additional periods of assignment
to day work during pregnancy or
after childbirth, provided that
such shall not be more than 4
weeks or for a longer period as
may be agreed upon by employer
and worker;
(b) extension of maternity leave; and
(c) clearance to render night work.
(2) Provision of social security benefits -
in accordance with provisions of Act
No 8282 (Social Security Act of
1997) and other existing company
policy or collective bargaining
agreement.
(3) Extension of maternity leave – where
transfer to day work is not possible,
but requires recommendation by
competent physician; without pay or
using earned leave credits, if any
[Art. 158, LC, as amended by RA
10151; Book III, Rule XV, Sec. 6, IRR,
through DO 119-12]
Protection against dismissal and loss of

benefits attached to employment status,
seniority, and access to promotion
Where no alternative work can be provided
A woman employee shall NOT be
dismissed for reasons of pregnancy,
childbirth and childcare
responsibilities as defined under this
Rule. She shall NOT lose the
benefits regarding her employment
status, seniority, and access to
promotion which may attach to her
regular night work position. [Book
III, Rule XV, Sec. 8, IRR, through
DO 119-12]
See Night Shift Differential under p.71

IV. POST- Art. 219, LC
(e)"Employer" includes any person acting
EMPLOYMENT in the interest of an employer, directly or
indirectly. The term shall not include any
labor organization or any of its officers
A. EMPLOYER-EMPLOYEE or agents except when acting as
RELATIONSHIP employer.
(f) "Employee" includes any person in
the employ of an employer. The term
Art. 97, LC: shall not be limited to the employees of
As used in this Title: a particular employer, unless the Code
so explicitly states. It shall include any
(a) "Person" means an individual, individual whose work has ceased as a
partnership, association, corporation, result of or in connection with any
business trust, legal representatives, or current labor dispute or because of any
any organized group of persons. unfair labor practice if he has not
(b) "Employer" includes any person obtained any other substantially
acting directly or indirectly in the interest
of an employer in relation to an The existence or absence of ER-EE
employee and shall include the relationship is a question of law and a
government and all its branches, question of fact, each in its defined sense.
subdivisions and instrumentalities, all The existence of an employer-employee
government-owned or controlled relation is a question of law and being
corporations and institutions, as well as such, it cannot be made the subject of
nonprofit private institutions, or agreement [Tabas et.al. v. California
organizations. Manufacturing Co., et. al., G.R. No. 80680,
(c) "Employee" includes any individual (1989)]. The
employed by an employer. characterization of the law prevails over
that in the contract. In this sense, the
Art. 173, existence of an EE-ER relationship is a
LC matter of law.
As used in this Title, unless the context
indicates otherwise: The existence of an employer-employee
relationship is ultimately a question of fact
(f) "Employer" means any person, natural [SSS v. CA and Ayalde, G.R. No. 100388,
or juridical, employing the services of the (2000)]. The conclusion that an EE-ER
employee. relationship depends upon the facts of
(g) "Employee" means any person each case. In this sense, it is a question of
compulsorily covered by the GSIS under fact.
Commonwealth Act Numbered One
hundred eighty-six, as amended,
including the members of the Armed A.1. TESTS TO DETERMINE EMPLOYER-
Forces of the Philippines, and any EMPLOYEE (ER-EE) RELATIONSHIP
person employed as casual, emergency, A.1.A. Four-Fold Test
temporary, substitute or contractual, or
any person compulsorily covered by the (a) Selection and engagement of the
SSS under Republic Act Numbered employee;
Eleven hundred sixty-one, as amended. (b) Payment of wages;
(h) "Person" means any individual, (c) Power of dismissal; and
partnership, firm, association, trust,
corporation or legal representative thereof. (d) Employer’s power to control the
employee’s conduct with respect to
the means and methods by which the
w ilippines et. al. v. Zamora, G.R. No.
o 48645, (1987)]
r
k
is
t
o
b
e
a
c
c
o
m
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li
s
h
e
d
[
B
r
o
t
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e
r
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o
o
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it
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e
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the worker on his employer.
The most important element is the

employer’s control of the employee’s
conduct, not only as to the result of the
work to be done, but also as to the means
and methods to accomplish it. [Lirio v.
Genovia, G.R. No. 169757, (2011)].
The control test calls merely for the
“existence” of the right to control and not
the “actual exercise” of the right. [Zanotte
Shoes v. NLRC, G.R. No. 100665, (1995)].
Not every form of control will have the
effect of establishing ER-EE relationship.
The line should be drawn between:
(1) Rules that merely serve as guidelines
towards the achievement of mutually
desired results without dictating the
means or methods to be employed in
attaining it. These aim only to
promote the result. In such case, NO
EE-ER relationship exists.
(2) Rules that control or fix the
methodology and bind or restrict the
party hired to the use of such means.
These address both the result and
the means used to achieve it and
hence, EE- ER relationship exists.
[Insular Life Assurance Co, LTD v.
NLRC, G.R. No. 84484, (1989)].
A.1.B. Economic Dependence Test

Two-tiered approach.
(1) First Tier: Control Test (refer to the
Four- Fold Test)
(2) Second Tier: The underlying
economic realities of the activity or
relationship. [Sevilla v. Court of
Appeals, G.R. Nos. L- 41182-3,
(1988)].
The economic realities prevailing within the
activity or between the parties are
examined, taking into consideration the
totality of circumstances surrounding the
true nature of the relationship between the
parties.
The benchmark of economic reality in
analyzing possible employment relationships
for purposes of applying the Labor Code
ought to be the economic dependence of
The standard of “economic continuation of Sceptre; hence, his
dependence” is whether the worker separation pay should be computed from
is dependent on the alleged the time he was hired by Sceptre. The SC
employer for his continued explained that the corporate veil may be
employment in that line of business. pierced when the corporation is just an
[Orozco v. CA, G.R. No. 155207, alter ego of a person or of another
(2008)]. corporation. The doctrine applies only in
three
(3) basic areas: 1) defeat of public
Evidence of employee status convenience as when the corporate fiction
is used as a vehicle for the evasion of an
No particular form of evidence is
existing obligation; 2) fraud cases or when
required to prove the existence of an
the
employer-employee relationship. Any
competent and relevant evidence to
prove the relationship may be
admitted. For, if only documentary
evidence would be required to show
that relationship, no scheming
employer would ever be brought
before the bar of justice, as no
employer would wish to come out
with any trace of the illegality he has
authored considering that it should
take much weightier proof to
invalidate a written instrument.
[Tenazas, et al., v. R. Villegas Taxi
Transport, G.R. No. 192998, (2014)].
The onus probandi rests on the
employer to prove that its dismissal
was for a valid cause. However,
before a case for illegal dismissal
can prosper, an employer-employee
relationship must first be
established. It is incumbent upon the
employee to prove the employer-
employee relationship by substantial
evidence. [Javier v. Fly Ace
Corporation, G.R. No. 192558,
(2012)].
Piercing the corporate veil

In Sarona vs. NLRC [GR No. 185280
(2012)],
the doctrine of piercing the corporate
veil was applied. It involved the
illegal dismissal of Sarona, a security
guard who first worked at Sceptre
but was subsequently assigned to
Royale, where he was illegally
dismissed. In the computation of his
separation pay, Sarona prayed that
the corporate veil of Royale be
pierced as it was a mere
corporate entity is used to justify a wrong, permanent employment, based on reasonable
protect fraud, or defend a crime; or 3) alter standards made known
ego cases, where a corporation is merely a
farce since it is a mere alter ego or
business conduit of a person, or where the
corporation is so organized and controlled
and its affairs are so conducted as to make
it merely an instrumentality, agency,
conduit or adjunct of another corporation.
Because the circumstances indicated that
Spectre and Royale were one and the
same (same office, same officers, same
person exercising control and supervision
over EEs of both companies), and that
Sarona’s transfer to Royale was done in bad
faith, the SC pierced the corporate veil and
ruled in his favor.
A.2. KINDS OF EMPLOYMENT

A.2.A. Probationary
Art. 296 [281], LC
Probationary employment shall not
exceed
6 months from the date the employee
started working, unless it is covered by
an apprenticeship agreement stipulating
a longer period. The services of an
employee who has been engaged on a
probationary basis may be terminated
for a just cause or when he fails to
qualify as a regular employee in
accordance with reasonable standards
made known by the employer to the
employee at the time of his
engagement. An employee who is
allowed to work after a probationary
period shall be considered a regular
employee.
Book VI, Rule 1, Sec. 6(d), IRR: In all
cases of probationary employment, the
employer shall make known to the
employee the standards under which he
will qualify as regular employee at the
time of his engagement. Where no
standards are made known to the
Definition
A probationary employee is one who is
made to go on a trial period by an
employer during which the employer
determines whether or not he is qualified for
to him at the time of engagement. that the employer may set or fix a
[Robinson’s Galleria et al. v. probationary period within which the latter
Ranchez, G.R. No. 177937, (2011)] may test and observe the conduct of the
former before hiring him permanently.
[Grand Motor Parts Corp. v. MOLE, G.R.
Duration [Art. 296(281)] No. L-58958, (1984)]
General Rule: Probationary
employment shall not exceed six (6)
months from the date the employee
started working. Standards to qualify as a regular employee
Exceptions:
(1) When it is covered by an
apprenticeship agreement
stipulating a longer period
(Art. 296[281], LC);
(2) When the parties to the
employment contract agree
otherwise, such as when
established by company policy
or required by the nature of
the work performed by the
employee [San Miguel Corp, v.
del Rosario, G.R. Nos. 168194
& 168603, (2005), citing
Buiser v.
Leogardo, G.R. No. L-63316, (1984)];
or
(3) When it involves the 3 year
probationary period of teachers
[Mercado v. AMA Computer
College, G.R. No. 183572,
(2010)]
Purposes
(1) Observance Period – for
employer to determine if
employee is qualified and for
employee to demonstrate to
the ER his skills
(2) Restrictive - As long as the
termination was made before
the expiration of the six-month
probationary period, the
employer has a right to sever
the employer-employee
relationship
Indeed, the employer has the right
or is at liberty to choose as to who
will be hired and who will be
declined. It is within the exercise of
this right to select his employees
Requirements:
(a) The employer must communicate the
Double probation
regularization standards to the
probationary employee; and
(b) The employer must make such
communication at the time of the
probationary employee’s engagement.
If the employer fails to comply with either,
the employee is deemed as a regular and
not a probationary employee.
An employer is deemed to have made
known the standards that would qualify a
probationary employee to be a regular
employee when it has exerted reasonable
efforts to apprise the employee of what he
is expected to do or accomplish during the
trial period of probation. This goes without
saying that the employee is sufficiently
made aware of his probationary status as
well as the length of time of the probation.
The exception to the foregoing is when the
job is self-descriptive in nature, for
instance, in the case of maids, cooks,
drivers, or messengers. [Abbott Laboratories
Phil. et al. v. Alcaraz, G.R. No. 192571,
(2013)]
In all cases of probationary employment,
the employer shall make known to the
employee the standards under which he
will qualify as a regular employee at the
time of his engagement. Where no
standards are made known to the
employee at that time, he shall be deemed
a regular employee. Conversely, an
employer is deemed to substantially
comply with the rule on notification of
standards if he apprises the employee that
he will be subjected to a performance
evaluation on a particular date after his
hiring. [Alcira v. NLRC, G.R. No. 149859,
(2004)]
Regular status after probation

When the bank renewed the contract after
the lapse of the six-month probationary
period, the employees thereby became
regular employees. No employer is
allowed to determine indefinitely the fitness
of its employees. [Bernardo v. NLRC, G.R.
No. 122917, (1999)]
There is no basis for subjecting an average performance, does not guarantee
employee to a new probationary or that the employee will automatically
temporary employment where he acquire a permanent employment status.
had already become a regular The probationer can only qualify upon
employee when he was absorbed fulfillment of the reasonable standards set
by a sister company. [A Prime for permanent employment as a member of
Security Services, Inc. v. NLRC, the teaching personnel. [Herrera- Manaois
G.R. No. 107023, (2000)] v. St. Scholastica’s College, G.R. No.
188914,(2013)]
Absorbed employees not probationary

The private respondents could not
be considered probationary
employees because they were
already well-trained in their
respective functions. As stressed by
the Solicitor General, while private
respondents were still with the
CCAS they were already clerks.
Respondent Gelig had been a clerk
for CCAS for more than ten (10)
years, while respondent Quijano
had slightly less than ten
(10)years of service. They were,
therefore, not novices in their jobs but
experienced workers. [Cebu
Stevedoring Co., Inc. v. Regional
Director, G.R. No. L-54285, (1988)]
Private school teachers

Questions respecting a private
school teacher’s entitlement to
security of tenure are governed by
the Manual of Regulations for
Private Schools and not the Labor
Code. [Aklan College v. Guarino,
G.R. No. 152949, (2007)]
The legal requisites, therefore, for
acquisition by a teacher of
permanent employment, of security
of tenure are:
(a) A full time teacher;
(b) Must have rendered three
consecutive years of service;
and
(c) Service must have been
satisfactory. [La Salette of
Santiago v. NLRC, G.R. No.
82918, (1991)]
Mere completion of the three-year
probation, even with an above-
These standards should be made known to
the teachers on probationary status at the
start of their probationary period, or at the Limits to termination
very least under the circumstances of the
present case, at the start of the semester
or the trimester during which the
probationary standards are to be applied.
Of critical importance in invoking a failure
to meet the probationary standards, is that
the school should show – as a matter of
due process – how these standards have
been applied. [Colegio del Santisimo
Rosario v. Rojo, G.R. No. 170388, (2013)]
Termination
A probationary employee enjoys only a
temporary employment status. This means
that he is terminable at any time,
permanent employment not having been
attained in the meantime. The employer
could well decide he no longer needed the
probationary employee’s services or his
performance fell short of expectations, etc.
As long as the termination was made
before the termination of the six-month
probationary period, the employer was well
within his rights to sever the employer-
employee relationship. A contrary
interpretation would defect the clear
meaning of the term “probationary.” [De la
Cruz, Jr. v. NLRC, G.R. No. 145417.
(2003)]
A probationary employee can only be

terminated for:
(1) Just causes;
(2) Authorized causes; or
(3) Failure to qualify as a regular
employee in accordance with
reasonable standards made known by
the employer to the employee at the
time of engagement. [Robinson’s
Galleria et al. v Ranchez, G.R. No.
177937, Jan. 19, (2011)]
The probationary employee is entitled to
substantial and procedural due process
before termination.
(1) It must be exercised in
accordance with the specific
requirements of the contract
(2) If a particular time is
prescribed, the termination
must be within such time and
if formal notice is required,
then that form must be used;
(3) The employer’s dissatisfaction
must be real and in good faith,
not feigned so as to
circumvent the contract or the
law;
(4) There must be no unlawful
discrimination in the dismissal.
[Manila Hotel Corporation v.
NLRC, G.R. No. 53453,
(1986)]
In order to invoke “failure to meet

the probationary standards” as a
justification for dismissal, the
employer must show how these
standards have been applied to the
subject employee. [Univac
Development, Inc. v. Soriano, G.R.
No. 182072, (2013)].
A.2.B. R
egular
Art. 295 The provisions of written agreement to
the contrary notwithstanding and
[280], LC regardless of the oral agreement of the
parties, an employment shall be deemed
to be regular where the employee has
been engaged to perform activities
which are usually necessary or desirable
in the usual business or trade of the
employer, except where the employment
has been fixed for a specific project or
undertaking the completion or
termination of which has been
determined at the time of the
engagement of the employee or where
the work or service to be performed is
seasonal in nature and the employment
is for the duration of the season.
An employment shall be deemed to be
casual if it is not covered by the
preceding paragraph: Provided, That
any employee who has rendered at
least one year of service, whether such
service is continuous or broken, shall be
considered a regular employee with
respect to the activity in which he is
Art. 296 [281], Last sentence, LC: An such activity exists. [Forever Richons Trading Corp.
employee who is allowed to work after a v. Molina, G.R. No. 206061, (2013)]
probationary period shall be considered
a regular employee.
Regular employment is not synonymous

with permanent employment, because
there is no such thing as a permanent
employment. Any employee may be
terminated for just cause.
A regular employee is one who is engaged
to perform activities which are necessary
and desirable in the usual business or
trade of the employer as against those
which are undertaken for a specific project
or are seasonal.
Art 295 provides two kinds of regular

employees:
(1) Those engaged to perform activities
which are necessary or desirable in
the usual business or trade of the
employer; and
(2) casual employees who have rendered
at least 1 year of service, whether
continuous or broken, with respect to
the activity in which they are
employed. [Romares v. NLRC, G.R.
No. 122327. (1998)]
Primary standard to determine regular

employment: reasonable connection rule
The primary standard to determine a
regular employment is the reasonable
connection between the particular activity
performed by the employee in relation to
the business or trade of the employer. The
test is whether the former is usually
necessary or desirable in the usual
business or trade of the employer. If the
employee has been performing the job for
at least one year, even if the performance
is not continuous or merely intermittent,
the law deems the repeated and
continuing need for its performance as
sufficient evidence of the necessity, if not
indispensability of that activity to the
business of the employer. Hence, the
employment is also considered regular, but
only with respect to such activity and while
Length of time involved
When applicable
Length of time is not controlling, merely
Art. 295 is not the yardstick for serves as a badge of regular employment.
determining the existence of an [Maraguinot v. NLRC, G.R. No. 120969.
employment relationship because it (1998)]
merely distinguishes between two
kinds of employees, i.e., regular
employees and casual employees, A.2.C. Project employment
for purposes of determining the right
of an employee to certain benefits,
to join or form a union, or to security
of tenure; it does not apply where
the existence of an employment
relationship is in dispute. [Atok Big
Wedge Co., Inc. v. Gison, G.R. No.
169510, (2011)]
Hiring for an extended period

Where the employment of project
employees is extended long after
the supposed project has been
finished, the employees are removed
from the scope of project
employees and considered regular
employees. [Audion Electric Co.,
Inc. v. NLRC, G.R. No. 106648,
(1999)]
While length of time may not be a
controlling test for project
employment, it can be a strong
factor in determining whether the
employee was hired for a specific
undertaking or in fact tasked to
perform functions which are vital,
necessary and indispensable to the
usual business or trade of the
employer. [Tomas Lao Const. v.
NLRC, G.R. No. 116781. (1997)]
Repeated renewal of contract

While the Court has recognized the
validity of contractual stipulations as
to the duration of employment, this
cannot apply where the contract-to-
contract arrangement was but an
artifice to prevent her from acquiring
security of tenure and to frustrate
constitutional decrees. [Beta Electric
Corp. v. NLRC, G.R. No. 86408,
(1990)]
Art. 295 (previously Art 280), 1st par, LC: (1) For a particular job or undertaking
The provisions of written agreement to that is WITHIN the regular or usual
the contrary notwithstanding and business of the employer company,
regardless of the oral agreement of the but which is distinct and separate,
parties, an employment shall be deemed and identifiable as such, from the
to be regular where the employee has other undertakings of the company
been engaged to perform activities (i.e. construction)
which are usually necessary or desirable (2) For a particular job or undertaking
in the usual business or trade of the that is NOT within the regular
employer, except where the employment business of the corporation. Such a
has been fixed for a specific project or job or undertaking must also be
undertaking the completion or identifiably separate and distinct from
termination of which has been the ordinary or regular business
determined at the time of the operations of the employer [Villa v.
engagement of the employee or where NLRC, G.R. No. 117043, (1988)]
the work or service to be performed is
seasonal in nature and the employment
is for the duration of the season.
Two Kinds of Project Employee
A project employee is one who is hired for

carrying out a separate job, distinct from
the other undertakings of the company, the
scope and duration of which has been
determined and made known to the
employees at the time of employment.
[Hanjin Heavy Industries & Const. Co. v.
Ibañez, G.R. No. 170181, (2008)]
Whether or not the project has a direct
relation to the business of the employer is
not important, BUT:
(1) Employee must be informed of the
nature and duration of project
(2) Project and principal business of ER
are two separate things
(3) No attempt to deny security of tenure
to the worker
Rationale for project employment

If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing except waiting
until another project is begun, if at all. In
effect, these stand-by workers would be
enjoying the status of privileged retainers,
collecting payment for work not done, to be
disbursed by the employer from profits not
earned. [De Ocampo, Jr. v. NLRC, G.R. No.
81077, (1990)]
Test of project employment
The litmus test to determine
whether an individual is a project
employee lies in setting a fixed
period of employment involving a
specific undertaking the completion
or termination of which has been
determined at the time of the
particular employee's engagement.
The decisive factor in the term
employment is the day certain
agreed upon by the parties for the
commencement and termination of
their employment relationship, a
day certain being understood to be
that which must necessarily come,
although it may not be known when.
[Caasi v. Kanlungan Centre
Foundation, Inc., G.R. No. 199769,
(2013)]
The repeated and successive
rehiring of project employees do not
qualify them as regular employees,
as length of service is not the
controlling determinant of the
employment tenure of a project
employee, but whether the
employment has been fixed for a
specific project or undertaking, its
completion has been determined at
the time of the engagement of the
employee. [William Uy Construction
Corp. v. Trinidad, G.R. No. 183250,
(2010)]
Indicators of project employment

(1) The duration of the
specific/identified undertaking
for which the worker is
engaged is reasonably
determinable;
(2) Such duration, as well as the specific employee when the following concur:
work/service to be performed, is
defined in an employment;
(3) agreement and is made clear to the
employee at the time of the hiring;
(4) The work/service to be performed by
the employee is in connection with
the particular project/undertaking for
which he is engaged;
(5) The employee, while not employed
and awaiting engagement, is free to
offer his services to any other
employer;
(6) The termination of his employment in
the particular project/undertaking is
reported to the DOLE Regional Office
having jurisdiction over the workplace
following the date of his separation
from work, using the prescribed form
on employees’ terminations
/dismissals/suspensions;
(7) An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies. [Samson v.
NLRC, G.R. No. 11366, (1996)].
Length of time not applicable in

construction industry
Generally, length of service provides a fair
yardstick for determining when an
employee initially hired on a temporary
basis becomes a permanent one, entitled
to the security and benefits of
regularization. But this standard will not be
fair, if applied to the construction industry,
simply because construction firms cannot
guarantee work and funding for its payrolls
beyond the life of each project. And getting
projects is not a matter of course.
[William Uy Construction Corp. v. Trinidad,
G.R. No. 183250, (2010)]
See also: Policy Instructions No. 20 of
1997 and D.O. 19 of 1993
Work pool employee

A project employee or a member of a work
pool may acquire the status of a regular
(1) There is a continuous rehiring employees are not project employees.
of project employees even [Pasos v. Philippine National Construction
after cessation of a project; Corp., G.R. No. 192394, (2013)]
and
Repeated renewal of contract
(2) The tasks performed by the
When an employer renews a contract of
alleged “project employee” are
employment after the lapse of the six-
vital, necessary, and
month probationary period, the employee
indispensable to the usual
thereby becomes a regular employee. No
business or trade of the
employer is
employer. However, the length
of time during which the
employee was continuously
rehired is not controlling, but
merely serves as a badge of
regular employment.
A work pool may exist although the
workers in the pool do not receive
salaries and are free to seek other
employment during temporary
breaks in the business, provided,
that the worker shall be available
when called to report for a project.
Although primarily applicable to
regular seasonal workers, this set-
up can likewise be applied to
project workers insofar as the effect
of temporary cessation of work is
concerned. [Maraguinot v. NLRC,
G.R. No. 120969. (1998)]
Members of a work pool from which
a construction company draws its
project employees, if considered
employees of the construction
company while in the work pool, are
non-project employees or
employees for an indefinite period.
If they are employed in a particular
project, the completion of the
project or any phase thereof will not
mean severance of the employer-
employee relationship. [J. & D.O.
Aguilar Corp. v. NLRC, G.R. No.
116352, (1997)]
Rule on reportorial requirement

A report of termination to the
nearest public employment office
every time their employment was
terminated due to completion of
each construction project. Failure
of the employer to file termination
reports after every project
completion proves that the
allowed
to the employee to determine
at the time indefinitely
of engagement: the fitness
Provided, That any employee who has rendered at least one year of service, whether such se
of its employees. [Malicdem v. Marulas
Industrial Corp., G.R. No. 204406, (2014)]
A.2.D.Seasonal
Seasonal employees are those whose work
or services to be performed are seasonal
in nature, employment is for the duration of
the season.
There is no continuing need for the worker.
A casual employee is engaged to perform a
job, work or service which is merely
“Regular Seasonal” Employees After One incidental to the business of the employer,
Season and such job, work or service is for a
Seasonal workers who are called to work definite period made known to the
from time to time and are temporarily laid employee at the time of engagement.
off during off-season are not separated Someone who is not a regular, project or
from service in said period, but are merely seasonal employee.
considered on leave until reemployed
The nature of their relationship . . . is such
that during off season they are temporarily Requirements to become regular employee:
laid off but during summer season they are (1) One (1) year service, continuous or
reemployed, or when their services may broken with respect to activity
be needed. They are not strictly speaking employed
separated from the service but are merely
considered as on leave of absence without (2) Employment shall continue while
pay until they are re-employed. [Philippine such activity exists
Tobacco Flue-Curing &Redrying Corp. v.
NLRC, G.R. No. 127395, (1998)]
Nature of work
What determines regularity or casualness
A.2.E. Casual is not the employment contract, written or
Art. 295 [280], 2nd par. LC otherwise, but the nature of the job. If the
job is usually necessary or desirable to the
An employment shall be deemed to be main business of the employer, then
casual if it is not covered by the employment is regular. [A. M. Oreta and Co.,
preceding paragraph: Provided, That Inc. v. NLRC, G.R. No. 74004, (1989)]
any employee who has rendered at
least one year of service, whether such
service is continuous or broken, shall be One-year service
considered a regular employee with
As held in Philippine Bank of Communications
respect to the activity in which he is
v. NLRC, a temporary or casual employee,
employed and his employment shall
under Article 281 of the Labor Code,
continue while such activity exists.
becomes regular after service of one year,
unless he has been contracted for a specific
project. [Tabas v. California Marketing Co.,
Book VI, Rule 1, Sec. 5 (b), IRR: Inc., G.R. No. L- 80680, (1989)].
ere is casual employment where an employee is engaged to perform a job, work or service which is
A.2.F.Fixed-Term
Art. 295 [280] has no application to It is a settled rule that seafarers are considered
instances where a fixed period of contractual employees. Their employment is
employment was agreed upon knowingly governed by the contracts they sign everytime they
and voluntarily by the parties, without any are rehired and their employment is
force, duress or improper pressure being
brought to bear upon the employee and
absent any other circumstances vitiating his
consent, or where it satisfactorily appears
that the employer and employee dealt with
each other on more or less equal terms
with no moral dominance whatever being
exercised by the former over the latter.
[Brent School v. Zamora, G.R. No. L-
48494, (1990)]
Conditions for the validity of fixed contract

agreement between employer and
employee
(1) Fixed period of employment was
knowingly and voluntarily agreed
upon by the parties without any force,
duress, or improper pressure or any
other circumstances vitiating his
consent; or
(2) The employer and the employee
dealt with each other on more or less
equal terms with no moral dominance
exercised by the former or the latter.
Project employment and Fixed-term

employment distinguished
A project employee is assigned to carry
out a specific project or undertaking, the
duration and scope of which were
specified at the time the employee is
engaged for the project
The duration of a fixed-term employment
agreed upon by the parties may be any
day certain, which is understood to be
"that which must necessarily come
although it may not be known when." The
decisive determinant in fixed-term
employment is not the activity that the
employee is called upon to perform but the
day certain agreed upon by the parties for
the commencement and termination of the
employment relationship. [GMA Network,
Inc. v. Pabriga, G.R. No. 176419, (2013)]
No implied renewal of employment contract

terminated when the contract
expires. Their employment is
contractually fixed for a certain
period of time. Thus, when a
contract ends, the employment is
deemed automatically terminated,
there being no mutually-agreed
renewal or extension of the expired
contract. [Unica v. Anscor Swire Ship
Management Corp., G.R. No. 184318,
(2014)]
As long as the Brent School v.
Zamora guidelines are satisfied, the
court will recognize the validity of
the fixed-term contract, especially if
they were informed of that their
engagement was for a specific
period. The Brent doctrine is only
applicable in a few special cases
wherein the employer and employee
are on more or less in equal footing
in entering into the contract [Fuji
Television Network Inc v. Espiritu,
G.R. No. 204944-45, (2014)].
A.3. SUB-CONTRACTING VS
LABOR-ONLY CONTRACTING
Articles 106 – 109
Art. 106, LC: Contractor or
subcontractor. Whenever an employer
enters into a contract with another
person for the performance of the
former’s work, the employees of the
contractor and of the latter’s
subcontractor, if any, shall be paid in
accordance with the provisions of this
Code.
In the event that the contractor or
subcontractor fails to pay the wages of
his employees in accordance with this
Code, the employer shall be jointly and
severally liable with his contractor or
subcontractor to such employees to the
extent of the work performed under the
contract, in the same manner and extent
that he is liable to employees directly
employed by him.
The Secretary of Labor and
Employment may, by appropriate
regulations, restrict or prohibit the
contracting-out of labor to protect the
rights of workers established under this
Code. In so prohibiting or restricting, he
may make appropriate distinctions
between labor-only contracting and job
contracting as well as differentiations
employer for purposes of this Code, to This shall apply to:
prevent any violation or circumvention of (1) all parties of contracting and
any provision of this Code. subcontracting arrangements where
There is "labor-only" contracting where ER-EE relationships exist
the person supplying workers to an (2) cooperatives engaging in contracting or
employer does not have substantial subcontracting arrangements
capital or investment in the form of tools,
equipment, machineries, work premises, Contractors and subcontractors referred to
among others, and the workers recruited in these rules are prohibited from engaging
and placed by such person are in recruitment and placement activities as
performing activities which are directly defined in Art. 13(b) of the LC whether for
related to the principal business of such local or overseas employment. [Sec. 2]
employer. In such cases, the person or
intermediary shall be considered merely
as an agent of the employer who shall Contracting or subcontracting refers to an
be responsible to the workers in the arrangement whereby a principal agrees to
same manner and extent as if the latter put out or farm out with a contractor the
were directly employed by him. performance or completion of a specific
job, work or service within a definite or
predetermined period, regardless of
Art. 107, LC: Indirect employer. The whether such job, work or service is to be
provisions of the immediately preceding performed or completed within or outside
article shall likewise apply to any the premises of the principal.
person, partnership, association or
corporation which, not being an
employer, contracts with an independent Service agreement refers to the contract
contractor for the performance of any between the principal and contractor
work, task, job or project. containing the terms and conditions
governing the performance or completion
of a specific job, work or service being
Art. 108, LC: Posting of bond. An farmed out for a definite or predetermined
employer or indirect employer may period.
require the contractor or subcontractor
to furnish a bond equal to the cost of
labor under contract, on condition that Cabo refers to a person or group of
the bond will answer for the wages due persons or a labor groups which, in the
the employees should the contractor or guise of a labor organization, cooperative
subcontractor, as the case may be, fail or any entity, supplies workers to an
to pay the same. employer, with or without any monetary or
other consideration, whether in the
capacity of an agent of the employer or as
Art. 109, LC: Solidary liability. The an ostensible independent contractor.
provisions of existing laws to the contrary
notwithstanding, every employer or
indirect employer shall be held Legitimate contracting or subcontracting
responsible with his contractor or Contracting or subcontracting shall be
subcontractor for any violation of any legitimate if all the following circumstances
provision of this Code. For purposes of occur:
determining the extent of their civil
(1) The contractor must be registered in
accordance with these rules and
D.O. No. 18-A-11: Rules Implementing carries a distinct and independent
Articles 106 to 109 of the LC, as amended business
Coverage (2) The contractor undertakes to perform
the job, work or service on its
own responsibility, according
to its own
manner and method, and free from Agreement.
control and direction of the principal
Due to Employee may opt
in all matters connected with the
expiration of for payment of
performance of the work except as to
separation
the results thereof;
(3) The contractor has substantial capital
and/or investment; and
(4) The Service Agreement ensures
compliance with all the rights and
benefits under Labor laws.
Rights of contractor’s employees

All contractor’s employees, whether
deployed or assigned as reliever, seasonal,
week-ender, temporary, or promo jobbers,
shall be entitled to all the rights and
privileges as provided for in the LC, as
amended.
Security of tenure of contractor’s

employees
It is understood that all contractor’s
employees enjoy security of tenure
regardless of whether the contract of
employment is co- terminus with the
service agreement, or for a specific job,
work, or service, or phase thereof.
Effect of termination of employment

[Sec. 13, D.O. 18-A-11]
Cause Effect
Prior to the
expiration of Governed by Art. 284 –
the Service 292 of LC
Agreement
The right of the

contractor employee to
unpaid wages and other
Prior to
unpaid benefits including
expiration of
unremitted legal
the Service
mandatory contributions,
Agreement and
e.g., SSS, PhilHealth,
not due to
Pag- ibig, ECC, shall be
authorized
borne by the party at
causes
fault, without prejudice to
the solidary liability of
the parties to the Service
corporations, partnerships and
Service benefits as may be cooperatives; in case of single proprietorship,
Agreement, or provided by law or the a net worth of at least P3,000,000.
from the Service Agreement,
completion of without prejudice to
the phase of his/her entitlement to Other prohibitions
the job, work or the completion bonuses
service for or other emoluments, (1) Contracting out of jobs, works or
which the including retirement services when not done in good faith
employee is benefits whenever and
engaged applicable
Prohibition against labor-only contracting

Labor-only contracting, a prohibited
act, is an arrangement where the
contractor or subcontractor merely
recruits, supplies or places workers
to perform a job, work or service for
a principal. [Polyfoam-RGC
International Corp. v. Concepcion,
G.R. No. 172349, (2012)]
ELEMENTS OF LABOR-ONLY
CONTRACTING:
(1) The contractor does not have
substantial capital or
investments in the form of
tools, equipment, machineries,
work premises, among others,
and
(2) The employees recruited and
places are performing activities
which are usually necessary
or desirable to the operation of
the company, or directly
related to the main business
of the principal within a
definite or predetermined
period, regardless of whether
such job, work or service is to
be performed or completed
within or outside the premises
of the principal; or
(3)The contractor does not exercise
the right to control the
performance of the work of the
employee.
Substantial capital – refers to paid-

up capital stocks/shares of at least
P3,000,000 in the case of
not justified by the exigencies of the Art. 248(c) of the LC, as amended.
business such as the following:
(g) Repeated hiring of EEs under an employment
(a) Contracting out of jobs, works or contract of short duration or under a Service
services when the same results
in the termination or reduction of
regular EEs and reduction of
work hours or reduction or
splitting of the bargaining unit.
(b) Contracting out of work with a
Cabo
(c) Taking undue advantage of the
economic situation or lack of
bargaining strength of the
contractor’s EEs, or undermining
their security of tenure or basic
rights, or circumventing the
provisions of regular employment
in any of the following instances:
(i) Requiring them to perform
functions which are currently
being performed by the
regular employees of the
principal; and
(ii) requiring them to sign, as a
precondition to employment
or continued employment, an
antedated resignation letter; a
blank payroll; a waiver of
labor standards including
minimum wages and social or
welfare benefits; or a
quitclaim releasing the
principal, contractor or from
any liability as to payment of
future claims.
(d) Contracting out of a job, work or
service through an in-house
agency.
(e) Contracting out of a job, work or
service that is necessary or
desirable or directly related to the
business or operation of the
principal by reason of a strike or
lockout whether actual or
imminent.
(f) Contracting out of a job, work or
service being performed by union
members when such will interfere
with, restrain or coerce employees
in the exercise of their rights to
self- organization as provided in
Agreement of short business. [Sec. 7,
duration with the D.O. 18-A-11]
same or different
contractors, which
circumvents the LC Mandatory registration
provisions on It shall be mandatory for all persons or
Security of Tenure.
entities, including cooperative, acting as
(h) Requiring EEs under contractors, to register with the Regional
a subcontracting Office of the DOLE where it principally
arrangement to sign a operates.
contract fixing the Failure to register shall give rise to the
period of
presumption that the contractor is engaged
employment to a
in labor-only contracting.
term shorter than the
term of the Service Accordingly, the registration system
Agreement, unless governing contracting arrangements and
the contract is implemented by the Regional Offices of
divisible into phases the DOLE is hereby established, with the
for which Bureau of Working Conditions (BWC) as
substantially different the central registry. [Sec. 14, D.O. 18-A-
skills are required 11]
and this is made
known to the EE at
the time of the
engagements.
(i) Refusal to provide a
copy of the Service
Agreement and the
employment
contracts between
the contractor and
the EEs deployed to
work in the
bargaining unit of the
principal’s certified
bargaining agent to
the sole and
exclusive bargaining
agents.
(j) Engaging or
maintaining by the
principal of
subcontracted EEs in
excess of those
provided in the
applicable CBA or as
set by the Industry
Tripartite Council.
(2) Contracting out of jobs,
works, or services
analogous to the above
when not done in good
faith and not justified by
the exigencies of the
TRILATERAL RELATIONSHIP IN JOB contracted; and
CONTRACTING
Principal
Contractor's
Contractor er-ee
Employee
There are three parties involved:

(1) Principal refers to any employer,
whether a person or entity, including
government agencies and GOCCs,
who/which puts out or farms out a
job, service or work to a contractor.
(2) Contractor refers to any person or
entity, including a cooperative,
engaged in a legitimate
contracting or subcontracting
arrangement providing either
services, skilled worker, temporary
workers or a combination of services
to a principal under a Service
Agreement.
(3) Contractor’s employee includes one
employed by a contractor to perform
or complete a job, work, or service
pursuant to a Service Agreement
with a principal
It shall also refer to regular
employees of the contractor whose
functions are not dependent on the
performance or completion of a
specific job, work or service within a
definite period of time i.e.
administrative staff.
Relationships that exist in a legitimate

contracting or subcontracting:
(1) An employer-employee relationship
between the contractor and the
employees it engaged to perform the
specific job, work or service being
(2) A contractual relationship Code, as amended. (Sec. 27, D.O 18-A-
between the principal and the 11)
contractor as governed by the
provisions of the Civil Code.
[Sec. 5, par. 1, D.O. 18-A-11] Department Circular No. 01-12
The law recognizes and resolves this Applicability of D.O. 18-A-11 to
situation in favor of employees in
BPO
order to protect their rights and
interests from the coercive acts of DO 18-A speaks of a trilateral relationship
the employer. In fact, the employee that characterizes the covered
who is constructively dismissed may contracting/subcontracting arrangement.
be allowed to keep on coming to Thus, vendor-
work. [McMer Corp., Inc. v. NLRC,
G.R. No. 193421, (2014)]
SOLIDARY LIABILITY
i. Indirect/Direct Employer
There exists a solidary liability on
the part of the principal and the
contractor for purposes of enforcing
the provisions of the LC and other
social legislation to the extent of the
work performed under employment
contract.
The principal shall be deemed a
direct employer of the contractor’s
employee in cases where there is a
finding by a competent authority of
labor-only contracting, or
commission of prohibited activities
provided in Section 7 or a violation of
either Sections 8 or 9.
II. Contractor solidarily liable with principal

A finding by competent authority of
labor-only contracting shall render
the principal jointly and severally
liable with the contractor to the
latter's employees, in the same
manner and extent that the principal
is liable to employees directly hired
by him/her, as provided in Article
106 of the Labor Code, as
amended.
A finding of commission of any of
the prohibited activities in Sec. 7, or
violation of either Secs. 8 or 9
hereof shall render the principal the
direct employer of the employees of
the contractor or subcontractor,
pursuant to Article 109 of the Labor
vendee relationship for entire business employees are entitled to security of tenure and
processes covered by the applicable can only be dismissed for just or authorized
provisions of the Civil Code on Contracts is causes and after they
excluded.
DO 18-A contemplates generic or focused

singular activity in one contract between
the principal and the contractor (for
example, janitorial, security,
merchandising, specific production work)
and does not contemplate information
technology-enabled services involving an
entire process (for example, BPO, KPO,
legal process outsourcing, hardware
and/or software support, medical
transcription, animation services, back
office operations/support). These
companies engaged in BPOs may hire
employees in accordance with applicable
laws, and maintain these EEs based on
business requirements, which may or may
not be for different clients of the BPOs at
different periods of the EE’s employment.
Applicability of D.O. 18-A-11 to the

Construction Industry
Licensing and the exercise of regulatory
powers over the construction industry is
lodged with PCAB which is under the
Construction Industry Authority of the
Philippines and not with the DOLE or any
of its regional offices.
Thus, the DOLE, through its regional
offices shall not require contractors licensed
by PCAB in the Construction Industry to
register under DO 18-A. Moreover,
findings of violation/s on labor standards
and occupational health and safety
standards shall be coordinated with PCAB
for its appropriate action, including the
possible cancellation/suspension of the
contractor’s license.
EFFECTS OF LABOR-ONLY CONTRACTING

Employees become regular employees
Where an entity is declared to be a labor-
only contractor, the employees supplied by
said contractor to the principal employer
become regular employees of the latter.
Having gained regular status, the
had been afforded due process. (1994)]
[Norkis Trading v. Buenavista, G.R.
No. 182018. (2012)]
Management Prerogatives and Security of
Tenure
B. TERMINATION FROM An employer may not be compelled to
EMPLOYMENT continue in its employ a person whose
Coverage continuance in the service would patently
be
General rule: All establishments
[Art. 293, LC] [previously Art 278]
Exception: Government, and its
political subdivisions, including
GOCCs without original charter.
[Book VI, Rule 1, Sec. 1. IRR]
Security of
Tenure
Art. 294
[279], LC
Security of Tenure. In case of regular
employment, the employer shall not
terminate the services of an employee
except for a just cause or when
authorized by this Tile. An employee
who is unjustly dismissed from work
shall be entitled to reinstatement without
loss of seniority rights and other
privileges and to his full backwages,
inclusive of allowances, and to his other
benefits or their monetary equivalent
computed from the time his
compensation was withheld from him up
to the time of his actual reinstatement.
Nature of Right/Rationale
It is a constitutionally protected right
(Art. XIII Sec. 3, 1987 Constitution);
it cannot be blotted out by an
employment contract.
Termination of employment is not
anymore a mere cessation or
severance of contractual
relationship but an economic
phenomenon affecting members of
the family. This is the reason why
under the broad principles of social
justice the dismissal of employees
is adequately protected by the laws
of the state. [Alhambra Industries,
Inc. v. NLRC, G.R. No. 106771
inimical to its interests. [Baguio Central In labor cases, substantive issues must be
University v. Gallente, G.R. No. 188267 addressed more than anything else, and so, the
(2013)] Court may forego the matter of procedural
In dismissal cases, the Court must
consider a balancing between the
employees’ tenurial rights and the
employer’s management prerogative.
[Imasen Phil. Manufacturing Corp. v. Alcon
& Papa, GR 194884 (2014)]
Management prerogative must be exercised
in good faith and with due regard to the
rights of the workers in the spirit of fairness
and with justice in mind. [Philbag Industrial
Manufacturing Corp. v. Philbag Workers
Union- Lakas at Gabay ng Manggagawang
Nagkakaisa, G.R. No. 182486 (2012)]
Requisites for the validity of management

prerogative affecting security of tenure
(a) Exercised in good faith for the
advancement of the Employer's
interest, and
(b) Not for the purpose of defeating or
circumventing the rights of the
Employees under special laws or
under valid agreements. [San Miguel
Brewery Sales Force Union v. Ople, G.R.
No. 53515 (1989)]
Guide in disposition of labor disputes

Bare and vague allegations as to the
manner of service and the circumstances
surrounding the same would not suffice. A
mere copy of the notice of termination
allegedly sent by respondent to petitioner,
without proof of receipt, or in the very
least, actual service thereof upon
petitioner, does not constitute substantial
evidence.
There may be cases where the
circumstances warrant favoring labor over
the interests of management but never
should the scale be so tilted if the result is
an injustice to the employer. Justitia nemini
neganda est (Justice is to be denied to
none). [Mansion Printing Center v. Bitara,
Jr., GR 168120. (2012)]
Procedural vis-à-vis substantive issues

infirmities. [Ang v. San Joaquin, Jr., illegality thereof. [MZR Industries v.
G.R. No. 185549 (2013)] Colambot, G.R. No. 179001 (2013)]
In an illegal dismissal case, the onus
probandi rests on the employer to prove
Employer’s Burden of Proof
that its dismissal of an employee was for a
Art. 292 (b), 3rd sentence, LC valid cause. However, before a case for
illegal dismissal can prosper, an employer-
The burden of proving the termination
employee
was for a valid or authorized cause shall
rest on the employer.
It is the employer’s burden to prove

that the dismissal was for a just or
authorized cause. [Temic
Automotive (Phils.), Inc. v. Cantos,
G.R. No. 200729 (2014)]
Unsubstantiated accusations or
baseless conclusions of the
employer are insufficient legal
justifications to dismiss an
employee. The unflinching rule in
illegal dismissal cases is that the
employer bears the burden of proof.
[Garza v. Coca-Cola Bottlers
Philippines, Inc., G.R. No. 180972
(2014)]
In illegal dismissal cases, the

burden of proof is upon the
employer to show that the
employee's termination from service
is for a just and valid cause. The
employer's case succeeds or fails
on the strength of its evidence and
not the weakness of that adduced
by the employee, in keeping with
the principle that the scales of
justice should be tilted in favor of
the latter in case of doubt in the
evidence presented by them.
[Functional, Inc. v. Granfil, G.R. No.
176377 (2011)]
Employee must first establish the

fact of dismissal
Before the employer must bear the
burden of proving that the dismissal
was legal, the employee must first
establish by substantial evidence the
fact of his dismissal from service. If
there is no dismissal, then there can
be no question as to the legality or
relationship must first be established by Termination by Employee. (a) An employee
the employee [Javier v. Fly Ace Corp., may terminate without just cause the
G.R. No. 192558 (2012)] employer- employee relationship by serving
a written notice on the employer at least one
(1) month in advance. The employer upon
Measure of Penalty whom no such notice was served may hold
Not every case of insubordination or willful the employee liable for damages
disobedience by an employee reasonably (b) An employee may put an end to the
deserves the penalty of dismissal. The relationship without serving any notice on
penalty to be imposed on an erring the employer for any of the following
employee must be commensurate with the requirements:
gravity of his offense. [Joel Montallana v.
La Consolacion College Manila, G.R. No. 1. Serious insult by the employer or his
208890 (2014)] representative on the honor and person
of the employee;
While an employer enjoys a wide latitude
of discretion in the promulgation of 2. Inhuman and unbearable treatment
policies, rules and regulations on work- accorded the employee by the employer
related activities of the employees, those or his representative;
directives, however, must always be fair and 3. Commission of a crime or offense by
reasonable, and the corresponding the employer or his representative
penalties, when prescribed, must be against the person of the employee or
commensurate to the offense involved and any of the immediate members of his
to the degree of the infraction. [Moreno v. family; and
San Sebastian College- Recoletos, G.R.
No. 175283 (2008)] 4. Other causes analogous to any of the
B.1. TERMINATION OF EMPLOYMENT BY

EMPLOYEE General Rule: Written notice to resign
1. Resignation submitted one (1) month in advance
2. Bona fide Suspension of Exception: No notice required for any of
Operations/Performance of Military or the following:
Civic Duty (1) Serious insult by the employer or his
3. Forced Resignation representative on the honor and
person of the employee;
4. Resignation for non-payment of wages,
Constructive Dismissal (2) Inhuman and unbearable treatment
accorded the employee by the
employer or his representative;
B.1.a. RESIGNATION vs CONSTRUCTIVE (3) Commission of a crime or offense by
DISMISSAL the employer or his representative
RESIGNATION against the person of the employee
or any of the immediate members of
Art. 300 (previously Art. 285), LC: his family; and
(4) Other causes analogous to any of the
foregoing.
Resignation is the voluntary act of an
employee who finds himself in a situation
where he believes that personal reasons
cannot be sacrificed in favor of the
exigency of the service, such that he has
no other choice but to disassociate
himself from his employment.
[Cervantes v. PAL Maritime Corp.,
G.R. No. 175209, (2013)]
To constitute a resignation, it must be
unconditional and with the intent to operate When Employment Not Deemed Terminated:
as such. There must be an intention to The bona fide suspension of the operation of
relinquish a portion of the term of office a business or undertaking for a period not
accompanied by an act of relinquishment. exceeding six (6) months, or the fulfillment
[Azcor Manufacturing Inc. v. NLRC, G.R. by the employee of a military or civic duty
No. 117963, (1999)] shall not terminate employment. In all such
cases the employer shall reinstate the
“Well-entrenched is the rule that employee to his former position without loss
resignation is inconsistent with the filing of of seniority rights if he indicates his desire to
a complaint for illegal dismissal.” [Blue resume his work not later than one (1)
Angel Manpower and Security Services Inc. month from the resumption of operations of
v Court of Appeals, G.R. No. 161196 his employer or from his relief from the
(2008)] military or civic duty.
The rule requiring an employee to stay or
complete the 30-day period prior to the Sec 12, Rule 1, Book VI, IRR
effectivity of his resignation becomes
discretionary on the part of management Omnibus Rules, Book VI, Rule 1, Sec. 12.
as an employee who intends to resign may Suspension of relationship. — The
be allowed a shorter period before his employer- employee relationship shall be
resignation becomes effective. [Hechanova deemed suspended in case of suspension of
Bugay Vilchez Lawyers v. Matorre, G.R. No. operation of the business or undertaking of
198261 (2013)] the employer for a period not exceeding
six (6) months, unless the suspension is
for the purpose of defeating the rights of
CONSTRUCTIVE DISMISSAL the employees under the Code, and in
case of mandatory fulfillment by the
Constructive dismissal is cessation of work employee of a military or civic duty. The
because continued employment is payment of wages of the employee as well
rendered impossible, unreasonable or as the grant of other benefits and
unlikely; when there is a demotion in rank privileges while he is on a military or civic
or diminution in pay or both; or when a duty shall be subject to special laws and
clear discrimination, insensibility, or decrees and to the applicable individual or
disdain by an employer becomes collective bargaining agreement and
unbearable to the employee. voluntary employer practice or policy.
The test of constructive dismissal is
whether a reasonable person in the Forced Resignation
employee’s position would have felt Mere allegations of threat or force do not
compelled to give up his position under the constitute evidence to support a finding of
circumstances. t is an act amounting to forced resignation. In order for intimidation
dismissal but made to appear as if it were to vitiate consent, the following requisites
not. Constructive dismissal is, therefore, a must concur: (1) that the intimidation
dismissal in disguise. As such, the law caused the consent to be given; (2) that
recognizes and resolves this situation in the threatened act be unjust or unlawful;
favor of employees in order to protect their (3) that the threat be real or serious, there
rights and interests from the coercive acts being evident disproportion between the
of the employer. In fact, the employee who evil and the resistance which all men can
is constructively dismissed may be allowed offer, leading to the choice of doing the act
to keep on coming to work. [McMer Corp., which is forced on the person to do as the
Inc. v. NLRC, G.R. No. 193421 (2014)] lesser evil; and (4) that it produces a well-
grounded fear from the fact that the person
from whom it comes has the necessary
Performance of Military or Civic means or ability to inflict the threatened
Duty Art 301, LC injury to his person or property.
[Ma. Socorro Mandapat v. Add Force Employer’s right to dismiss vis-à-vis
Personnel, G.R. No. 180285 (2010)] employee’s right to security of tenure
The managerial prerogative to transfer
B.2. TERMINATION BY EMPLOYER personnel must be exercised without grave
abuse of discretion, bearing in mind the
B.2.a. Just Causes basic elements of justice and fair play.
1. Serious Misconduct or Willful Having the right should not be confused
Disboedience (Insubordination) with the manner in which that right is
exercised. Thus, it cannot be used as a
2. Gross & Habitual Neglect Of Duties subterfuge by the employer to rid himself of
3. Loss Of Trust & Confidence an undesirable worker. In particular, the
employer must be able to show that the
4. Commission Of A Crime
transfer is not unreasonable, inconvenient
5. Analogous Cases or prejudicial to the employee; nor does it
involve a demotion in rank or a diminution
of his salaries, privileges and other
Art. 297 (Previously Art 282), LC benefits.
Termination by Employer. An employer Nowhere in the law providing for the just
may terminate an employment for any of and authorized causes of termination of
the following causes: employment is there any direct or indirect
reference to filing a legitimate complaint for
(a) Serious misconduct or willful
money claims against the employer as a
disobedience by the employee of the
valid ground for termination
lawful orders of his employer or
representative in connection with his The right of employers to shape their own
work; work force is recognize; however, this
management prerogative must not curtail
(b) Gross and habitual neglect by the
the basic right of employees to security of
employee of his duties;
tenure. There must be a valid and lawful
(c) Fraud or willful breach by the reason for terminating the employment of a
employee of the trust reposed in him worker. Otherwise, it is illegal and would
by his employer or duly authorized be dealt with by the courts accordingly.
representative; [Alert Security and Investigation Agency,
Inc. v. Pasawilan, G.R. No. 182397
(d) Commission of a crime or offense by
(2011)]
the employee against the person of
his employer or any immediate
member of his family or his duly
B.2.A.1. Serious
authorized representatives; and
Misconduct Elements:
(e) Other causes analogous to the
foregoing. a) There must be misconduct;
b) The misconduct must be of such
grave and aggravated character;
Basis
c) It must relate to the performance of the
As a measure of self-protection against
employee’s duties; and
acts inimical to its interest, a company has
the right to dismiss its erring employees. d) There must be showing that the
An employer cannot be compelled to employee becomes unfit to continue
continue employing an employee guilty of working for the employer. [Sec. 5.2.
acts inimical to the employer's interest, (a), DO 147-15]
justifying loss of confidence in him. [Yabut Misconduct refers to the improper or wrong
v. Meralco, G.R. No. 190436 (2012)] conduct that transgresses some
established and definite rule of action, a
forbidden act, a dereliction of duty,
willful in character, and implies
wrongful intent and not mere error
in judgment. But misconduct or
improper
behavior, to be a just cause for termination (a) There must be neglect of duty; and
of employment, must: (a) be serious; (b)
relate to the performance of the employee’s
duties; and
(c) show that the employee has become
unfit to continue working for the employer.
[Northwest Airlines, Inc, v. Del Rosario, G.R.
No. 157633 (2014)]
Accusatory and inflammatory language
used by an employee to the employer or
superior can be a ground for dismissal or
termination. [Nissan Motors Phils. Inc. v.
Angelo, G.R. No. 164181 (2011)]
B.2.A.2. Willful Disobedience

(Insubordination) Elements:
a) There must be disobedience or
insubordination;
b) The disobedience or insubordination
must be willful or intentional
characterized by a wrongful and
perverse attitude;
c) The order violated must be
reasonable, lawful, and made known
to the employee [Mirant Philippines
Corp v.
Sario, G.R. No. 197598 (2012)]; and
e) The order must pertain to the duties
which he has been engaged to
discharge. [Sec. 5.2. (b), DO 147-15]
For willful disobedience to be a valid cause

for dismissal, these two elements must
concur: (1) the employee’s assailed
conduct must have been willful, that is,
characterized by a wrongful and perverse
attitude; and (2) the order violated must
have been reasonable, lawful, made
known to the employee, and must pertain
to the duties which he had been engaged
to discharge. [The Coffee Bean and Tea
Leaf Philippines, Inc. and Chu v Arenas,
G.R. No. 208908 (2015)]
B.2.A.3.Gross and Habitual Neglect of

Duties Elements:
(b) The negligence must be both includes gross inefficiency, negligence and
gross and habitual in carelessness [Century Iron Works, Inc. v.
character. [Sec. 5.2. (c), DO Bañas, G.R. No. 184116 (2013)]
147-15]
Gross negligence has been defined
as the want or absence of or failure
to exercise slight care or diligence, B.2.A.4Loss of Trust and Confidence
or the entire absence of care. It The loss of trust and confidence must be
evinces a thoughtless disregard of
based on willful breach of the trust reposed
consequences without exerting any
in
effort to avoid them. In order to
constitute just cause for an EE’s
dismissal due to negligence, it must
not only be gross, but also habitual.
A single or an isolated act that
cannot be categorized as habitual,
hence, not a just cause for their
dismissal. [National Bookstore v. CA,
G.R. No. 146741 (2002)]
Gross negligence connotes want of
care in the performance of one’s
duties, while habitual neglect
implies repeated failure to perform
one’s duties for a period of time,
depending on the circumstances.
Estoppel by toleration of
management: breach of rules and
regulations which are tolerated by
management cannot serve basis as
termination. The rule only applies
when the violation is not tantamount
to fraud or commission of illegal
activities. One cannot evade liability
based on obedience to the
corporate chain of command. [PNB
v. Padao, G.R. No. 180849, 187143
(2011)]
On the principle of respondeat
superior or command responsibility
alone, a managerial employee may
be held liable for negligence in the
performance of her managerial
duties. [Jumuad v. Hi-Flyer Food,
Inc., G.R. No. 187887 (2011)]
Gross Negligence includes gross

inefficiency
Article 290 of the Labor Code
provides that one of the just causes
for terminating an employment is
the employee's gross and habitual
neglect of his duties. This cause
the employee by his employer. Such breach
is willful if it is done intentionally,
knowingly, and purposely, without Elements of loss of confidence
justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly,
heedlessly or inadvertently. And, in order
to constitute a just cause for dismissal, the
act complained of must be work-related
and shows that the employee concerned is
unfit to continue working for the employer.
In addition, loss of confidence as a just
cause for termination of employment is
premised on the fact that the employee
concerned holds a position of
responsibility, trust and confidence or that
the employee concerned is entrusted with
confidence with respect to delicate
matters, such as handling or case and
protection of the property and assets of the
employer. The betrayal of this trust is the
essence of the offense for which an
employee is penalized. [Villanueva, Jr. v.
NLRC, G.R. No. 176893 (2012)]
The loss of trust and confidence must be
based not on ordinary breach by the
employee of the trust reposed in him by the
employer, but, in the language of Article
282 (c) of the Labor Code, on willful
breach. A breach is willful if it is done
intentionally, knowingly and purposely,
without justifiable excuse, as distinguished
from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. It must rest on
substantial grounds and not on the
employer's arbitrariness, whims, caprices or
suspicion; otherwise, the employee would
eternally remain at the mercy of the
employer. [Johansen World Group Corp. v.
Gonzales III, G.R. No. 198733 (2012)]
Elements of fraud or willful breach of trust:

(a) There must be an act, omission, or
concealment;
(b) The act, omission or concealment
involves a breach of legal duty, trust,
or confidence justly reposed;
(c) It must be committed against the
employer or his/her representative; and
(d) It must be in connection with the
employees’ work. [Sec. 5.2. (d), DO
147- 15]
(a) There must be an act, (3) The loss of trust and confidence must
omission or concealment; be based on a willful breach of trust
and founded on clearly established
(b) The act, omission or
facts. [Wesleyan Universtity –
concealment justifies the loss
Philippines vs. Reyes, G.R. No.
of trust and confidence of the
208321 (2014)]
employer to the employee;
Loss of trust and confidence to be a valid
(c) The employee concerned
cause for dismissal must be based on a
must be holding a position of
willful breach
trust and confidence;
(d) The loss of trust and
confidence should not be
simulated;
(e) It should not be used as a
subterfuge for causes which
are improper, illegal or
unqualified; and
(f) It must be genuine and not a
mere afterthought to justify an
earlier action taken in bad
faith. [Sec. 5.2. (e), DO 147-
15]
Guidelines for the application of the

doctrine of loss of confidence
(1) Loss of confidence should not
be simulated;
(2) It should not be used as a
subterfuge for causes which
are improper, illegal or
unjustified;
(3) It may not be arbitrarily
asserted in the face of
overwhelming evidence to the
contrary; and
(4) It must be genuine, not a mere
afterthought to justify earlier
action taken in bad faith
[Nokom v. NLRC, G.R. No.
140043 (2000)]
Requisites for dismissal on the

ground of loss of trust and
confidence
(1) The Employee concerned is
one holding a position of trust
and confidence.
(2) There must be an act that
would justify the loss of trust
and confidence.
of trust and founded on clearly established The employer has broader discretion in
facts. The basis for the dismissal must be dismissing managerial employees on the ground
clearly and convincingly established but of loss of trust and confidence than
proof beyond reasonable doubt is not
necessary. [Prudential Guarantee and
Assurance Employee Labor Union v.
NLRC, G.R. No. 185335 (2012)]
Positions of trust and confidence

(1) Managerial employees - those
vested with the powers or prerogatives to
lay down management policies and to hire,
transfer, suspend, lay-off, recall,
discharge, assign or discipline employees
or effectively recommend such managerial
actions.
(2) Fiduciary Rank and file - those who in
the normal and routine exercise of their
functions, regularly handle significant
amounts of money or property. Examples
are cashiers, auditors, property custodians,
etc. [Prudential Guarantee and Assurance
Employee Labor Union v. NLRC, G.R. No.
185335 (2012)]
Managerial Fiduciary rank-and-file
Mere existence of a Proof of involvement

basis for the belief of in the alleged events
employee’s guilt in question required;
[Grand Asian mere uncorroborated
Shipping Lines, Inc. assertions and
v. Galvez, accusations
G.R. No. 178184
are not enough
(2014)]
[Etcuban, Jr. v.
Sulpicio Lines, Inc.,
G.R. No. 148410
(2005)]
Employment for a
long time is counted
against the
employee [Salvador
v. Philippine Mining
Service Corp.,
G.R. No. 148766
(2003)]
Managerial Employees: Reason for the

Rule
those occupying ordinary ranks. a. There must be an act or omission
While plain accusations are not punishable/prohibited by law; and
sufficient to justify the dismissal of
b. The act or omission was committed
rank and file employees, the mere
by the employee against the person
existence of a basis for believing
of the employer, any immediate
that managerial employees have
member of his/her family, or his/her
breached the trust reposed on them
duly authorized representative. [Sec.
by their employer would suffice to
5.2. (f), DO 147-15]
justify their dismissal. [Grand Asian
Shipping Lines, Inc. v. Galvez, G.R.
No. 178184 (2014)]
Acquittal in Criminal Case arising

from Misconduct
Notwithstanding petitioner’s
acquittal in the criminal case for
qualified theft, the company had
adequately established the basis for
the company’s loss of confidence as
a just cause to terminate. As
opposed to the "proof beyond
reasonable doubt" standard of
evidence required in criminal cases,
labor suits require only substantial
evidence to prove the validity of the
dismissal [Paulino v. NLRC, G.R.
No. 176184 (2012)]
Betrayal by a long-time employee

Length of service is not a
bargaining chip that can simply be
stacked against the employer. After
all, an employer-employee
relationship is symbiotic where both
parties benefit from mutual loyalty
and dedicated service. If an
employer had treated his employee
well, has accorded him fairness and
adequate compensation as
determined by law, it is only fair to
expect a long-time employee to
return such fairness with at least
some respect and honesty. Thus, it
may be said that betrayal by a long-
time employee is more insulting and
odious for a fair employer. [Moya v.
First Solid Rubber Industries, Inc.,
G.R. No. 184011 (2013)]
B.2.A.5.Commission of
a crime Elements:
Commission of a crime or offense by the (10) Pregnancy out of wedlock
employee against the person of his
employer or any immediate member of his
family or his duly authorized
representatives [Art. 297(d), LC]
The employer may validly dismiss for loss
of trust and confidence an employee who
commits an act of fraud prejudicial to the
interest of the employer. Neither a criminal
prosecution nor a conviction beyond
reasonable doubt for the crime is a
requisite for the validity of the dismissal.
[Concepcion v Minex Import
Corporation/Minerama Corporation, G.R.
No. 153569 (2012)]
B.2.A.6.Analogous Causes
Elements:
(a) There must be an act or omission
similar to those specified just causes;
and
(b) The act or omission must be
voluntary and/or willful on the part of
the employees
No act or omission shall be
considered as analogous cause
unless expressly specified in the
company rules and regulations or
policies. [Sec. 5.2. (g), DO 147-15]
One is analogous to another if it is
susceptible of comparison with the latter
either in general or in some specific detail;
or has a close relationship with the latter.
OTHER CAUSES
(1) Abandonment
(2) Courtesy Resignation
(3) Change of Ownership
(4) Habitual Absenteeism/Tardiness
(5) Poor Performance
(6) Past Offenses
(7) Habitual Infractions
(8) Immorality
(9) Totality of infractions
(11) Conviction/Commission of a office. Adding the word "courtesy" did not
Crime change the essence of resignation.
[Batongbacal v. Associated Bank, G.R.
(12) Temporary “Off-detail” or
No. 72977 (1988)]
“floating status”
Change of Ownership
Abandonment
A mere change in the equity composition
Abandonment is a just cause for
of a corporation is neither a just nor an
dismissal under Art. 297(b), LC. It is
authorized cause that would legally permit
the deliberate and unjustified
the dismissal
refusal of an employee to resume
his employment. It is a form of
neglect of duty. Two factors should
be present: (1) Failure to report for
work or absence without valid or
justifiable reason, (2) Clear intention
to sever ER-EE relationship. The
burden to prove whether the
employee abandoned his or her
work rests on the employer.
[Protective Maximum Security, Inc
vs. Celso E. Fuentes, G.R. No.
169303 (2015)]
Elements:
(a) Failure to report for work or
absence without valid or
justifiable reason, and
(b) A clear intention to sever the
employer- employee
relationship, with the second
element as the more
determinative factor and being
manifested by some overt
acts.
Absence must be accompanied by
overt acts unerringly pointing to the
fact that the employee simply does
not want to work anymore. It has
been ruled that the employer has
the burden of proof to show a
deliberate and unjustified refusal of
the employee to resume his
employment without any intention of
returning. [Tan Brothers Corp. of
Basilan City v. Escudero, G.R. No.
188711 (2013)]
Courtesy Resignation
Resignation per se means voluntary
relinquishment of a position or
of the corporation's employees en masse. Past Offenses
[SME Bank, Inc. v. De Guzman, G.R. No.
184517, 186641 (2013)]
Habitual Absenteeism/ Tardiness

Habitual tardiness is a form of neglect of
duty. Lack of initiative, diligence, and
discipline to come to work on time
everyday exhibit the employee's
deportment towards work. Habitual and
excessive tardiness is inimical to the general
productivity and business of the employer.
This is especially true when the tardiness
and/or absenteeism occurred frequently
and repeatedly within an extensive period
of time. [R.B. Michael Press v. Galit, G.R.
No. 153510 (2008)]
However, there are cases when absenteeism
is not sufficient to justify termination. In the
case of, Cavite Apparel v Michelle Marquez,
GR No. 172044, (2013), the SC held:
“Michelle might have been guilty of
violating company rules on leaves of
absence and employee discipline, still we
find the penalty of dismissal imposed on
her unjustified under the circumstances. As
earlier mentioned, Michelle had been in
Cavite Apparel’s employ for six years, with
no derogatory record other than the four
absences without official leave in question,
not to mention that she had already been
penalized for the first three absences, the
most serious penalty being a six-day
suspension for her third absence on April
27, 2000.”
Poor performance
As a general concept, poor performance is
tantamount to inefficiency and
incompetence in the performance of official
duties. An unsatisfactory rating can be a
just cause for dismissal only if it amounts
to gross and habitual neglect of duties.
Poor or unsatisfactory performance of an
employee does not necessarily mean that
he is guilty of gross and habitual neglect of
duties [INC Shipmanagement Inc. vs. Campo-
Redondo, GR No. 199931 (2015)].
Previous offense may be used as continued employment cannot be
valid justification for dismissal from compartmentalized into tight little cubicles
work only if the infractions are of aspects of character, conduct and ability
related to the subsequent offense separate and independent of each other.
upon which the basis of termination While it may be true that petitioner was
is decreed. [Century Canning penalized for his previous infractions, this
Corporation v. Ramil, G.R. No. does not and should not mean that his
171630 (2010)] employment record would be wiped clean
of his infractions. After all, the record of an
employee is a relevant consideration in
Habitual Infractions
A series of irregularities when put
together may constitute serious
misconduct, which under Article 297
of the Labor Code, as amended, is a
just cause for dismissal [Gustilo v.
Wyeth Phil. Inc., G.R. No. 149629
(2004)]
Immorality
DECS Order No. 92 provides that
disgraceful or immoral conduct can
be used as a basis for termination
of employment [Santos, Jr. v.
NLRC, G.R. No. 115795 (1998)]
The act of engaging in extramarital
affairs was specifically provided for
by the cooperative’s Personnel
Policy as one of the grounds for
termination of employment and said
act raised concerns to the
cooperative as the Board received
numerous complaints and petitions
from the cooperative members
themselves asking for the removal of
Bandiola because of his immoral
conduct, hence, immorality
(extramarital affair) justified
terminating the employment by the
employer [Alilem Credit Cooperative
vs. Bandiola, Jr., G.R. No. 173489
(2013)]
Totality of infractions doctrine

The totality of infractions or the
number of violations committed
during the period of employment
shall be considered in determining
the penalty to be imposed upon an
erring employee. Fitness for
determining the penalty that should be existing contracts are less than the number of
meted out since an employee's past guards in its roster. It also happens in instances
misconduct and present behavior must be where contracts for
taken together in determining the proper
imposable penalty. [Merin v. NLRC, G.R.
No. 171790 (2008)]
Pregnancy Out of Wedlock

Accordingly, when the law speaks of
immoral or, necessarily, disgraceful conduct,
it pertains to public and secular morality; it
refers to those conducts which are
proscribed because they are detrimental to
conditions upon which depend the
existence and progress of human society.
To stress, pre-marital sexual relations
between two consenting adults who have
no impediment to marry each other, and,
consequently, conceiving a child out of
wedlock, gauged from a purely public and
secular view of morality, does not amount
to a disgraceful or immoral conduct under
Section 94(e) of the 1992 MRPS. [Cheryl
Leus v. St. Scholastica College
Westgrove, G.R. No. 187226 (2015)]
Conviction/Commission of a Crime
The charge of drug abuse within the
company’s premises and during work
hours constitutes serious misconduct which
is one of the just causes for termination.
[Bughaw, Jr. v. Treasure Island Industrial,
G.R. No. 173151 (2008)]
Constructive Dismissal
(See discussion on p. 103)
Temporary “Off-Detail” or “floating status”

Temporary "off-detail" or "floating status" is
the period of time when security guards
are in between assignments or when they
are made to wait after being relieved from
a previous post until they are transferred to
a new one. It takes place when the security
agency's clients decide not to renew their
contracts with the agency, resulting in a
situation where the available posts under its
security services stipulate that the and other privileges, the employee may
client may request the agency for not complain that it amounts to a
the replacement of the guards constructive dismissal [Peckson vs.
assigned to it even for want of Robinson’s Supermarket Corp., GR No.
cause, such that the replaced 198534 (2013)]..
security guard may be placed on
temporary "off-detail" if there are no
available posts under the agency's B.2.b Authorized Causes
existing contracts. During such time, a.k.a. Business-related Causes
the security guard does not receive
Art 298 [283], LC
any salary or any financial
assistance provided by law. It does (1) Installation of labor saving device
not constitute a dismissal, as the
assignments primarily depend on
the contracts entered into by the
security agencies with third parties,
so long as such status does not
continue beyond a reasonable time.
When such a "floating status" lasts
for more than six (6) months, the
employee may be considered to
have been constructively dismissed
[Salvaloza vs. NLRC, GR No.
182086 (2010)].
Transfer/Reassignment of Work
Concerning the transfer of
employees, these are the following
jurisprudential guidelines:
(a)a transfer is a movement from
one position to another of
equivalent rank, level or salary
without break in the service or a
lateral movement from one position
to another of equivalent rank or
salary; (b) the employer has the
inherent right to transfer or reassign
an employee for legitimate business
purposes; (c) a transfer becomes
unlawful where it is motivated by
discrimination or bad faith or is
effected as a form of punishment or
is a demotion without sufficient
cause; (d) the employer must be
able to show that the transfer is not
unreasonable, inconvenient, or
prejudicial to the employee [Rural
Bank of Cantilan, Inc. vs. Julve, GR
No. 169750 (2007)].
If the transfer of an employee is not
unreasonable, or inconvenient, or
prejudicial to him, and it does not
involve a demotion in rank or a
diminution of his salaries, benefits
Retrenchment to prevent losses (b) The introduction must be done in
Redundancy good faith;
Closure of Business
(c) The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other
justifiable economic reasons;
(d) There is no other option available to the employer than the introduction of machinery, equipment or
device and
Duethe consequentDue
to labor- termination of employment of those affected thereby; and
to retrenchment,
saving devices or closure, or (e) There must be fair and reasonable
redundancy suspension of criteria in selecting employees to be
operations terminated. [Sec. 5.4. (a), DO 147-
15]
1-month pay, or at 1 month pay, or at
least 1 month pay least ½ month pay
for every year of for every year of Requirements for termination due to
service, whichever service, whichever installation of labor-saving device
is higher. is higher. (1) The employer exercises its
prerogative to install the labor-saving
A fraction of at least six months shall
Basis device in good faith for the
be considered as one year. advancement of its interest and not
Employment is the lifeblood upon which to defeat or circumvent the
the worker and his family owe their employee’s right to security of tenure;
survival. [Flight Attendants and Stewards
Ass'n of the Philippines v. PAL, Inc., G.R. (2) The employer served a written notice
No. 178083 (2009)] both to the employees and to the
DOLE at least 30 days prior to the
intended date of termination; and
5 business-related causes for termination: (3) The employer pays the employees
1. Installation of labor-saving devices separation pay equivalent to one-
month pay or at least one-half (1/2)
2. Retrenchment month pay for every year of service,
3. Redundancy whichever is higher, a fraction of at
least six months being considered as
4. Closure of business one whole year (Samson, 2004)
5. Temporary/bona fide suspension of
operations
B.2.B.2. Retrenchment
Elements of a valid retrenchment:
B.2.B.1. Installation of Labor-Saving
Device (1) The retrenchment is reasonably
necessary and likely to prevent
This refers to the installation of machinery business
to effect economy and efficiency in the
employer’s method of production [Edge (2) The losses, if already incurred, are
Apparel, Inc. v. NLRC, G.R. No. 121314 not merely de minimis, but
(1998)] substantial, serious, actual and real,
or if only expected, are reasonably
imminent as perceived objectively
Elements of a valid termination based on and in good faith by the employer;
installation of labor-saving devices (3) The expected or actual losses must
(a) There must be introduction of be proved by sufficient and
machinery, equipment or other convincing evidence;
devices;
(4) The retrenchment must be in good line or service previously manufactured or
faith for the advancement of its undertaken by the
interest and not to defeat or
circumvent the employees’ right to
security of tenure; and
(5) There must be fair and reasonable
criteria in ascertaining who would be
dismissed and who would be retained
among the employees, such as
status, efficiency, seniority, physical
fitness, age, and financial hardship
for certain workers. [Sec. 5.2. (c), DO
147-15]
(6) That the employer served written
notice both to the employees and to
Employment at least one month prior
to the intended date of retrenchment;
(7) That the employer pays the
retrenched employees separation pay
equivalent to 1 month pay or at least
1⁄2 month pay for every year of
service, whichever is higher;
The employer bears the burden of proving
the existence of the imminence of
substantial losses with clear and
satisfactory evidence that there are
legitimate business reasons justifying a
retrenchment. [Mount Carmel College
Employees Union (MCCEU), et al vs. Mount
Carmel College, Inc. G.R. No. 187621,
(2014)]
The Court recognizes two kinds of losses
which can justify retrenchment — incurred
losses which are substantial, serious, actual
and real, and expected losses which are
reasonably imminent. [Sanoh Fulton Phils.
Inc. v. Bernardo & Tagohoy, G.R. No.
187214 (2013)]
B.2.B.3. Redundancy
Redundancy exists when the service
capability of the workforce is in excess of
what is reasonably needed to meet the
demands of the business enterprise. A
position is redundant when it is
superfluous, and superfluity of a position or
positions could be the result of a number
of factors, such as the overhiring of
workers, a decrease in the volume of
business or the dropping of a particular
enterprise. [Morales v. Metrobank, [Morales v. Metrobank, G.R. No.
G.R. No. 182475 (2012)] 182475 (2012)]
To exhibit its good faith and that there was
a fair and reasonable criteria in
Elements of redundancy:
ascertaining redundant positions, a
(a) There must be superfluous company claiming to be over manned must
positions or services of produce adequate proof of the same. Such
employees; proof includes but is not limited to the new
staffing pattern, feasibility
(b) The positions or services are in
studies/proposals on the viability of the
excess of what is reasonably
newly
demanded by the actual
requirements of the enterprise
to operate in an economical
and efficient manner;
(c) There must be good faith in
abolishing redundant
positions;
(d) There must be fair and
reasonable criteria in selecting
the employees to be
terminated; and
(e) There must be an adequate
proof of redundancy such as
but not limited to the new
staffing patter, feasibility
studies/proposal, on the
viability of the newly created
positions, job description and
the approval by the
management of the
restructuring. [Sec. 5.4. (c), DO
147- 15]
For the implementation of a
redundancy program to be valid,
however, the employer must comply
with the following requisites:
(a) Written notice served on both
the employees and the DOLE
at least one month prior to the
intended date of termination of
employment;
(b) Payment of separation pay
equivalent to at least one
month pay for every year of
service;
(c) Good faith in abolishing the
redundant positions; and
(d) Fair and reasonable criteria in
ascertaining what positions
are to be declared redundant
and accordingly abolished.
created positions, job description and the (4) If the closure or cessation of operations of
approval by the management of the establishment or undertaking is due to
restructuring. [General Milling Corporation serious business losses or financial
v Violeta L. Viajar, G.R. No. 181738
(2013)]
B.2.B.4. Closure of a Business

ELEMENTS OF A VALID CLOSURE OR
CESSATION OF OPERATION
(a) There must be a decision to close or
cease operation of the enterprise by
the management;
(b) The decision was made in good faith;
and
(c) There is no other option available to
the employer except to close or
cease operations. [Sec. 5.4. (d), DO
147-15]
Guidelines in Closure
(1) Closure or cessation of operations of
establishment or undertaking may
either be partial or total
(2) Closure or cessation of operations of
establishment or undertaking may or
may not be due to serious business
losses or financial service reverses.
However, in both instances, proof
must be shown that:
(a) it was done in good faith to
advance the employer's interest
and not for the purpose of
defeating or circumventing the
rights of employees under the law
or a valid agreement; and
(b) Written notice on the affected
employees and the DOLE is
served at least one month before
the intended date of termination
of employment.
(3) The employer can lawfully close shop
even if not due to serious business
losses or financial reverses but
separation pay, which is equivalent to
at least one month pay as provided
for by Article 289 of the Labor Code,
as amended, must be given to all the
affected employees.
reverses, the employer must
prove such allegation in order
to avoid the payment of
separation pay. Otherwise, the
affected employees are
entitled to separation pay.
(5) The burden of proving
compliance with all the above-
stated falls upon the employer.
[Manila Polo Club Employees'
Union v. Manila Polo Club, Inc.,
G.R. No. 172846 (2013)]
Closure of Department
The closure of a department or
division of a company constitutes
retrenchment by, and not closure of,
the company itself. [Waterfront
Cebu City Hotel v. Jimenez, G.R. No.
174214, June 13, 2012]
Corporate acquisitions
Asset Sales Stock Sales
Sale
Corporate entity sells In stock sales, the

all or substantially all individual or
of its assets to corporate
another entity. shareholders sell a
controlling block of
stock to new or
existing shareholders.
Obligation of Seller
Seller in good faith is A shift in the (2) Efficiency,
authorized to dismiss composition of its (3) Physical fitness,
the affected shareholders will not
employees, but is affect its existence (4) Age,
liable for the payment and continuity. (5) Financial hardship, or
of separation pay Notwithstanding the
under the law. stock sale, the (6) Seniority. [Asian Alcohol Corp. v. NLRC,
corporation continues G.R. No. 131108 (1999)]
to be the employer of
its people and
continues to be liable
for the payment of
their just claims.
Obligation of Buyer
The buyer in good The corporation or its

faith, on the other new majority
hand, is not obliged shareholders are not
to absorb the entitled to lawfully
employees affected dismiss corporate
by the sale, nor is it employees absent a
liable for the just or authorized
payment of their cause.
claims. The most
[SME Bank, Inc. v. De
that it may do, for
Guzman, G.R. No.
reasons of public
184517, 186641,
policy and social
(2013)]
justice, is to give
preference to the
qualified separated
personnel of the
selling firm.
Procedural steps required

At least 1 month before the intended date
of termination, Employer is to serve written
notice to:
(1) Affected employees;
(2) DOLE (Art. 298, LC)
Criteria in selecting employees for

dismissal:
Fair and reasonable criteria in ascertaining
who will be affected:
(1) Preferred status (e.g. temporary,
casual or regular Employees),
Retrenchment Redundancy Closure
The reversal of
the fortune of
Reduction of
the employer
personnel
The service whereby there
usually due
of an is a complete
to poor
Employee cessation of
financial
is in excess business
returns so as
of what is operations
to cut down
required by and/or actual
on costs of
an locking-up of
operations in
enterprise the doors of
terms of
the
salaries and
establishment,
wages
usually due to
financial losses
Resorted to
Aims to
primarily to
To save prevent
avoid or
production further
minimize
costs financial drain
business
upon the
losses
Employer
In case of
closure of
business not
Employee
Employee is due to
is entitled
entitled to serious
to
separation business
separation
pay of 1 losses, the
pay of 1
month pay or employer pays
month pay
1/2 month the employees
or 1/2
pay per year terminated
month pay
of service, separation pay
per year of
whichever is of 1 month
service,
higher pay or 1/2
whichever
month pay
is higher
per year of
service,
whichever is
higher
B.2.B.5. Temporary Closure / Bona fide Other Causes
suspension of Operations
Art. 301, LC: When Employment Not

Deemed Terminated: The bona fide
suspension of the operation of a business
or undertaking for a period not exceeding
six (6) months, or the fulfillment by the
employee of a military or civic duty shall
not terminate employment. In all such
cases the employer shall reinstate the
employee to his former position without
loss of seniority rights if he indicates his
desire to resume his work not later than
one
(1) month from the resumption of
operations of his employer or from his
Under Art. 301 of the Labor Code, a bona
fide suspension of business operations for
not more than six (6) months does not
terminate employment. After six (6)
months, the employee may be recalled to
work or be permanently laid off. In this
case, more than six (6) months have
elapsed from the time the Club ceased to
operate. Hence, respondents' termination
became permanent. [SKM Art Craft Corp. v.
Bauca, G.R. Nos. 171282, 183484 (2013)]
An employer may validly suspend
operations for at most 6 months. Not
accepting the workers back to work after
the 6-month period is equivalent to
termination, which should be for cause and
with proper procedure. [Manila Mining
Corp v Amor, GR No 182800 (2015)]
Floating Status
A floating status requires the dire exigency
of the employer’s bona fide suspension of
operation, business or undertaking. It
takes place when (a) the security agency’s
clients decide not to renew their contracts
with the agency and (b) also in instances
where contracts for security services
stipulate that the client may request the
agency for the replacement of the guards
assigned to it. In the latter case, the
employer should prove that there are no
posts available to which the employee
temporarily out of work can be assigned.
[Peak Ventures Corp v. Nestor Villareal,
G.R. No. 184618 (2014)]
(1) Disease incurable in 6 months
[Art. 299, LC]
(2) Enforcement of union security
clause in the CBA
(3) Dismissal of union officers for
the conduct of an illegal strike
[Art. 279 (a), LC]
(4) Dismissal of union members
for participating in the
commission of illegal acts [Art.
279 (a), LC]
(5) Termination in conformity with
existing statute/ qualification
requirements
i. Disease
Art. 299, LC: Disease as Ground for
Termination: An employer may
who has been found to be suffering from
any disease and whose continued
employment is prohibited by law or is
prejudicial to his health as well as to the
health of his co-employees: Provided,
That he is paid separation pay
equivalent to at least one (1) month
salary or to one-half (1/2) month salary
for every year of service, whichever is
greater, a fraction of at least six (6)
months being considered as one (1)
Section 8, Rule I, Book VI of the

Omnibus Rules Implementing the Labor
Code Disease as a ground for dismissal.
— Where the employee suffers from a
disease and his continued employment is
prohibited by law or prejudicial to his
health or to the health of his
coemployees, the employer shall not
terminate his employment unless there
is a certification by competent public
health authority that the disease is of
such nature of at such a stage that it
cannot be cured within a period of six (6)
months even with proper medical
treatment. If the disease or ailment can
be cured within the period, the employee
shall not terminate the employee but shall
ask the employee to take a leave of
absence. The employer shall reinstate
such employee to his former position
immediately upon the restoration of his
Requisites is not characterized by arbitrariness, and always
with due process.
(1) The employee must be suffering from
a disease which cannot be cured within (1)Substantive – whether the termination of
six months, even with proper medical employment was based on the
treatment;
(2) His continued employment is prohibited
by law or prejudicial to his health or
to the health of his co-employees;
and
(3) A certification to that effect must be
issued by a competent public health
authority. [Crayons Processing, Inc.
v. Pula, G.R. No. 167727 (2007), Sec.
5.2. (f), DO 147-15]
The burden falls upon the employer to
establish these requisites, and in the
absence of such certification, the dismissal
must necessarily be declared illegal.
It is only where there is a prior certification
from a competent public authority that the
disease afflicting the employee sought to
be dismissed is of such nature or at such
stage that it cannot be cured within six (6)
months even with proper medical
treatment that the latter could be validly
terminated from his job [Crayons
Processing, Inc. v. Pula, G.R. No. 167727
(2007)]
ii. Enforcement of Union Security Clause in
CBA
Union security is a generic term, which is
applied to and comprehends:
Closed shop – an enterprise in which, by
agreement between the employer and his
employees or their representatives, no
person may be employed in any or certain
agreed departments of the enterprise unless
he or she is, becomes, and, for the duration
of the agreement, remains a member in
good standing of a union entirely
comprised of or of which the employees in
interest are a part.
Union shop – when all new regular

employees are required to join the union
within a certain period as a condition for
their continued employment.
Law authorizes the enforcement of union
security clauses, provided such enforcement
provisions of the Labor Code severance of their employment.
or in accordance with the [Inguillo v. First Phil Scales, G.R.
prevailing jurisprudence; No. 165407 (2009)]
In terminating the employment
of an employee by enforcing
iii. Dismissal of union officers for the
the Union Security Clause, the
conduct of an illegal strike / dismissal of
employer needs only to
union members for participating in the
determine and prove that:
commission of illegal acts
(a) The union security clause
is applicable;
(b) The union is requesting for
the enforcement of the
union security provision in
the CBA; and
(c) There is sufficient
evidence to support the
union's decision to expel
the employee from the
union or company.
(2) Procedural – the manner in
which the dismissal was
effected.
(a) The first written notice to
be served on the
employees should contain
the specific causes or
grounds for termination
against them, and a
directive that the
employees are given the
opportunity to submit their
written explanation within
a reasonable period.
(b) The requirement of a
hearing is complied with
as long as there was an
opportunity to be heard,
and not necessarily that an
actual hearing was
conducted.
(c) After determining that
termination of employment
is justified, the employers
shall serve the employees
a written notice of
termination indicating that:
(1) all circumstances
involving the charge against
the employees have been
considered; and (2)
grounds have been
established to justify the
Art. 279, a, 3rd par., 2nd sen., LC: Any B.2.c. DUE PROCESS
union officer who knowingly participates in
Art. 292 (b), LC: Subject to the
an illegal strike and any worker or union
constitutional right of workers to security
officer who knowingly participates in the
of tenure and their right to be protected
commission of illegal acts during a strike
against dismissal except for a just and
may be declared to have lost his
authorized cause without prejudice to
employment status.
the requirement of notice under Article
283 of this Code, the employer shall
furnish the worker whose employment is
iV. Termination in conformity with existing sought to be terminated a written notice
statute / Qualification requirements containing a statement of the causes for
While the right of workers to security of termination and shall afford the latter
tenure is guaranteed by the Constitution, ample opportunity to be heard and to
its exercise may be reasonably regulated defend himself with the assistance of his
pursuant to the police power of the State to representative if he so desires in
safeguard health, morals, peace, accordance with company rules and
education, order, safety, and the general regulations promulgated pursuant to
welfare of the people. Consequently, guidelines set by the Department of
persons who desire to engage in the learned Labor and Employment. Any decision
professions requiring scientific or technical taken by the employer shall be without
knowledge may be required to take an prejudice to the right of the worker to
examination as a prerequisite to engaging contest the validity or legality of his
in their chosen careers. [St. Lukes’s Medical dismissal by filing a complaint with the
Center Employees Ass'n-AFW v. NLRC, G.R. regional branch of the National Labor
No. 162053 (2007)] Relations Commission. The burden of
proving that the termination was for a
valid or authorized cause shall rest on
Requisites for Valid Dismissal

(1) Substantive due process: The
dismissal must be for any of the
causes provided for in Article 297 –
299 of the Labor Code; and
(2) Procedural due process: The employee
must be afforded an opportunity to be
heard and defend himself. [Fujitsu
Computer Products Corporation of
the Phil. v. Court of Appeals, G.R. No.
158232 (2005)]
Employer may not substitute the required
prior notice & opportunity to be heard with
the mere payment of 30 days' salary. [PNB
v. Cabansag, G.R. No. 157010 (2005)]
Right to Counsel
The right to counsel, a very basic
requirement of substantive due process,
has to be observed. Indeed, the rights to
counsel and to due process of law are two
of the fundamental rights guaranteed by
the 1987 Constitution to
any person under investigation, be the
proceeding
r written explanation within administrative, civil, or
a “reasonable period” orcriminal.
every kind of assistance that management must accord to the employees to enable t
[Salaw
sis for the charge v. the
against NLRC, G.R. No. 90786 (1991)]
employees.
ong the grounds under Art. 288 is being charged against the
Burden of Proof
d; and In illegal dismissal cases, the onus of
provingv. Kemplin,
ed Tourist Promotions that the
G.R.employee was not
No. 205453 (2014)]
dismissed or, if dismissed, that the
dismissal was not illegal, rests on the
employer, failure to discharge which would
mean that the dismissal is not justified and,
therefore, illegal. [Macasero v. Southern
Industrial Gases Philippines, G.R. No. 178524
(2009)] First Notice
Degree of Proof
In labor cases, as in other administrative
proceedings, substantial evidence is required
and it is such relevant evidence as a
reasonable mind might accept as
adequate to support a conclusion.
[Andrada v. Agemar Manning Agency, Inc.,
G.R. No. 194758 (2012)]
Substantial evidence is necessary for an
employer to effectuate any dismissal.
Uncorroborated assertions and accusations
by the employer do not suffice; otherwise
the constitutional guaranty of security of
tenure of the employee would be
jeopardized. [Kulas Ideas & Creations, et.
al. v. Alcoseba & Arao Arao, GR 180123
(2010)] Second Notice
B.2.C.1. TWIN-NOTICE REQUIREMENT

The employer has the burden of proving
that a dismissed worker has been served
two notices:
An employee may be dismissed only if the
(1) First written notice: served on the
grounds mentioned in the pre-dismissal
employee specifying the ground or
notice were the ones cited for the
grounds for termination, and giving
termination of employment. [Erector
said employee reasonable
Advertising Sign Group, Inc. v. Cloma, G.R.
opportunity within which to explain
No. 167218, (2010)]
his side.
(2) Second written notice: served upon
the employee, indicating that upon B.2.C.2. HEARING; MEANING OF
due consideration of all the OPPORTUNITY TO BE HEARD
circumstances, grounds have been
In employee dismissal cases, the essence
established to justify his termination.
of due process is simply an opportunity to
be heard; it is the denial of this
opportunity that
constitutes violation of due process of law. Decision/Award
[Technol Eight Philippines Corporation v.
NLRC, G.R. No. 187605 (2010)]
While a formal hearing or conference is
ideal, it is not an absolute, mandatory or
exclusive avenue of due process. [Perez
v. PT&T, G.R. No. 152048 (2009)]
Guiding principles in hearing requirement

(1) "Ample opportunity to be heard"
means any meaningful opportunity
(verbal or written) given to the
employee to answer the charges
against him and submit evidence in
support of his defense, whether in a
hearing, conference or some other
fair, just and reasonable way.
(2) A formal hearing or conference
becomes mandatory only when
requested by the employee in writing
or substantial evidentiary disputes
exist or a company rule or practice
requires it, or when similar
circumstances justify it.
(3) The "ample opportunity to be heard"
standard in the Labor Code prevails
over the "hearing or conference"
requirement in the implementing rules
and regulations. [Perez v. PT&T,
G.R. No. 152048 (2009)]
Use of Position Paper

It is the labor arbiter who is authorized to
determine whether or not there is a
necessity for conducting formal hearings in
cases brought before them for adjudication
even after the submission of the parties of
their position papers or memoranda. A
formal trial- type hearing is not at all times
and in all instances essential to due process.
It is enough that the parties are given a fair
and reasonable opportunity to explain their
respective sides of the controversy and to
present supporting evidence on which a
fair decision can be based. [Seastar Marine
Services Inc. v. Bul-an, Jr., G.R. No.
142609 (2004)]
It is a requirement of due process retrenchment or voluntarily applied
that the parties to a litigation be for one. [International Hardware, Inc.
informed of how it was decided, v. NLRC, G.R. No. 80770, (1989)]
with an explanation of the factual
(2) Notice must be individual, not
and legal reasons that led to the
collective [Shoppers Gain Supermart v.
conclusions of the court. The court
NLRC, G.R. No. 110731 (1996)]
cannot simply say that judgment is
rendered in favor of X and against Y
and just leave it at that without any
justification whatsoever for its
action. The losing party is entitled to
know why he lost, so he may
appeal to a higher court, if
permitted, should he believe that
the decision should be reversed. A
decision that does not clearly and
distinctly state the facts and the law
on which it is based leaves the
parties in the dark as to how it was
reached and is especially prejudicial
to the losing party, who is unable to
pinpoint the possible errors of the
court for review by a higher tribunal.
[ABD Overseas Manpower
Corporation vs. NLRC, G.R. No.
117056 (1998)]
Procedure to be observed in
termination cases Just Cause
Noticespecifyingthegroundsforwhich dismissal is sought
Hearing or opportunity to be heard
Notice of the decision to dismiss
Authorized
Cause
Notice to:
(1) Employee, and
(2) DOLE at least 1 month prior to
the effectivity of the separation
Requisites
(1) Notice not needed when
Employee consented to the
(3) Voluntary arbitration satisfies notice
requirement for authorized causes
[Revidad v. NLRC, G.R. No. 111105
(1995
Consequences for non-compliance OF PROCEDURAL DUE PROCESS
Validity of
Situation Liability of ER
Dismissal
Just or Authorized Cause No liability.

Valid
+ Due Process Separation pay only in authorized cause
No Just or Authorized Cause Reinstatement or separation pay.

Invalid
+ Due Process If reinstatement not possible, + full backwages
No Just or Authorized Cause Reinstatement or separation pay.

Invalid
+ No Due Process If reinstatement not possible, + full backwages
Just or Authorized Cause Liable for damages due to procedural infirmity.

Valid
+ No Due Process Separation pay if for authorized cause
B.3RELIEFS FOR ILLEGAL DISMISSAL a measure of social justice

The reliefs are cumulative, not
alternative Art. 294, LC:
Security of Tenure. In case of regular

employment, the employer shall not
except for a just cause or when authorized
by this Title. An employee who is unjustly
dismissed from work shall be entitled to
reinstatement without loss of seniority rights
and other privileges and to his full
backwages, inclusive of allowances, and to
his other benefits or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
1. In general
a. Reinstatement
b. Backwages
2. Damages and attorney’s fees
3. Separation Pay
4. Financial assistance/separation pay as
5. Indemnity
6. Interest at 6% p.a. on the total
monetary awards (from finality
of decision until full payment)
7. Solidary liability of corporate officers
B.3.A. In general
B.3.A.1. Reinstatement
Reinstatement means restoration to
a state or condition from which one
had been removed or separated.
The person reinstated assumes the
position he had occupied prior to his
dismissal. [Asian Terminals, Inc. v.
Villanueva, G.R. No. 143219 (2006)]
General Rule: Reinstatement and

backwages Exceptions:
(1) Separation pay
(2) Closure of business [Retuya
v. Hon. Dumarpa, G.R. No.
148848 (2003)]
(3) Economic business conditions
[Union of Supervisors v.
Secretary of Labor, G.R. No. L-
39889 (1981)]
(4) Employee’s unsuitability [Divine Either way, this must be done immediately
Word High School v. NLRC, G.R. No. upon the filing of their appeal, without need
72207 (1986)] of any executory writ.
(5) Employee’s retirement/ overage If the order of reinstatement of the Labor
[New Philippine Skylanders, Inc. v. Arbiter is reversed on appeal, it is
Dakila, G.R. No. 199547 (2012)] obligatory on the part of the employer to
(6) Antipathy and antagonism [Wensha reinstate and pay the wages of the
Spa Center v. Yung, G.R. No. dismissed employee during the period of
185122 (2010)] appeal until reversal by the higher court.
The Labor Arbiter's order of reinstatement
(7) Job with a totally different nature is immediately executory and the employer
[DUP Sound Phils. v. CA, G.R. No. has to either re-admit them to work under
168317 (2011)] the same terms and conditions prevailing
(8) Long passage of time prior to their dismissal, or to reinstate them
in the payroll, and that failing to exercise
(9) Inimical to the employer's interest the options in the alternative, employer
(10) When supervening facts have must pay the employee's salaries [Magana
transpired which make execution on v. Medicard Philippines, Inc., G.R. No.
that score unjust or inequitable or, to 174833 (2010)]
an increasing extent [Emeritus
Security & Maintenance Systems, Inc.
v. Dailig, G.R. No. 204761 (2014)] No refund doctrine
An employee cannot be compelled to
reimburse the salaries and wages he
Prescription Period received during the pendency of his
An action for reinstatement by reason of appeal, notwithstanding the reversal by the
illegal dismissal is one based on an injury, NLRC of the LA's order of reinstatement.
which may be brought within 4 years from [College of the Immaculate Conception v.
the time of dismissal. [Art. 1146, CC] NLRC, G.R. No. 167563 (2010)]
Note, however: Rule XI, Sec. 14 of the
2011 NLRC Rules of Procedure provide for
i. Reinstatement pending appeal
restitution of amounts paid pursuant to
Art. 229, par. 3 LC: In any event, the execution of awards during pendency of
decision of the Labor Arbiter reinstating a the appeal. However, it expressly disallows
dismissed or separated employee, insofar restitution of wages paid due to
as the reinstatement aspect is concerned, reinstatement pending appeal.
shall immediately be executory, pending Section 14. Effect of Reversal of Executed
appeal. The employee shall either be Judgment. Where the executed judgment is
admitted back to work under the same terms totally or partially reversed or annulled by
and conditions prevailing prior to his the Court of Appeals or the Supreme Court,
dismissal or separation or, at the option of the Labor Arbiter shall, on motion, issue
the employer, merely reinstated in the such orders of restitution of the executed
payroll. The posting of a bond by the award, except wages paid during
employer shall not stay the execution for reinstatement pending appeal.
reinstatement provided herein.
payroll.
2 options given to employers:
1) Actually reinstate the dismissed
employees or,
2) Constructively reinstate them in the
ii. Separation pay in lieu of reinstatement
Kinds of separation pay (SP)
(1) SP as a statutory requirement
for authorized causes
(2) SP as financial assistance found in reinstatement. [Quijano v. Mercury Drug Corp.,
the next section G.R. No. 126561 (1998)]
(3) SP in lieu of reinstatement where
reinstatement is not feasible; and
Computation
(4) SP as a benefit in the CBA or
company policy SP as a statutory requirement is computed
by integrating the basic salary with regular
allowances employee has been receiving
Instances when the award of separation [Planters Products, Inc. v. NLRC, G.R. No.
pay, in lieu of reinstatement to an illegally 78524, 78739 (1989)]; allowances include
dismissed employee, is proper: transportation and emergency living
allowances [Santos v. NLRC, G.R. No.
(1) When reinstatement is no longer
76721 (1987)]
possible, in cases where the
dismissed employee's position is no Inasmuch as the words "wages", "pay" and
longer available; "salary" have the same meaning, and
commission is included in the definition of
(2) The continued relationship between the "wage", the logical conclusion, therefore,
employer and the employee is no is, in the computation of the separation pay
longer viable due to the strained of petitioners, their salary base should
relations between them; and include also their earned sales commissions.
(3) When the dismissed employee opted [Songco v. NLRC, G.R. Nos. 50999-51000
not to be reinstated, or the payment (1990)]
of separation benefits would be for A dismissed employee who has accepted
the best interest of the parties separation pay is not necessarily estopped
involved. [Book VI, Rule 1, Section 4 from challenging the validity of his or her
(b), Rule I, IRR] dismissal. Neither does it relieve the
employer of legal obligations. [Anino v.
NLRC, G.R. No. 123226 (1998)]
Separation Pay and Reinstatement, Exclusive
Remedies
The payment of separation pay and B.3.A.2. Backwages
reinstatement are exclusive remedies. The Backwages are earnings lost by a worker
payment of separation pay replaces the due to his illegal dismissal; a form of relief
legal consequences of reinstatement to an that restores the income lost by reason of
employee who was illegally dismissed. such unlawful dismissal; it is not private
[Bani Rural Bank, Inc. v. De Guzman, G.R. compensation or damages; nor is it a
No. 170904 (2013)] redress of a private right but, rather, in the
nature of a command to the employer to
make a public reparation for illegally
Doctrine of Strained Relations
dismissing an employee. [St. Theresa's
Where reinstatement is not feasible, School of Novaliches Foundation v. NLRC,
expedient or practical, as where G.R. No. 122955 (1998)]
reinstatement would only exacerbate the Backwages and reinstatement are two
tension and strained relations between the
reliefs that should be given to an illegally
parties or where the relationship between dismissed employee. They are separate and
the employer and employee has been
distinct from each other. An illegally
unduly strained by reason of their dismissed employee is entitled to (1) either
irreconcilable differences, particularly
reinstatement, if viable, or separation pay if
where the illegally dismissed employee reinstatement is no longer viable, and (2)
held a managerial or key position in the
backwages. Payment of backwages is
company, it would be more prudent to specifically designed to restore an
order payment of separation pay instead of
employee's income that was lost because
of his unjust dismissal. [Aurora
Land Projects Corp. v. NLRC, G.R.
No. 114733 (1997)]
Effect of failure to order backwages
A “plain error” which may be rectified, even was found to be in good faith. [San Miguel
if employee did not bring an appeal
regarding the matter [Aurora Land Projects
Corp. v. NLRC, supra]
i. Computation of backwages
Full backwages means exactly
that, i.e., without deducting from
backwages the earnings derived
elsewhere by the concerned employee
during the period of his illegal dismissal.
[Bustamante v. NLRC, G.R. No. 111651
(1996)]
Awards including salary differentials are
not allowed [Insular Life Assurance Co. v.
NLRC, 1987]
The period of delay in instituting this ULP
charge with claim for reinstatement and
backwages, although within the
prescriptive period, should be deducted
from the liability of the employer to him for
back wages. [Mercury Drug Co. Inc. v. CIR,
G.R. No. L-23357 (1974)]
The salary base properly used should be
the basic salary rate at the time of
dismissal plus the regular allowances;
allowances include:
Emergency cost of living allowances
(ECOLA), transportation allowances, 13th
month pay. [Paramount Vinyl Product
Corp. v. NLRC (1990)]
Also included are vacation leaves, service
incentive leaves, and sick leaves
The effects of extraordinary inflation are
not to be applied without an official
declaration thereof by competent
authorities. [Lantion v. NLRC, G.R. No.
82028 (1990)]
ii. Limited backwages

General rule: An illegally dismissed employee
is entitled to full backwages.
Exceptions
(1) The Court awarded limited
backwages where the employee was
illegally dismissed but the employer
Corporation v. Javate, Jr., Note that according to Nacar v Gallery
G.R. No. L- 54244 (1992)] Frames, when the judgment of the court
awarding a sum of money becomes final
(2) Delay of the EE in filing the
and executory, the rate of legal interest ….
case for illegal dismissal
shall be 6% per annum from such finality
[Mercury Drug Co., Inc.
until its satisfaction, this interim period
v. CIR, supra]
being deemed to be by then an equivalent
to a forbearance of credit. [Nacar v Gallery
Frames, G.R. No. 189871, (2013)]
Rationale
Feati University Club vs. Feati
University (1974) adopted a
consensus policy of pegging the
amount of backwages to their total
equivalent for three years
(depending on the circumstances)
without deduction or qualification.
The rationale for the policy was
stated in the following words:
As has been noted, this formula of
awarding reasonable net backwages
without deduction or qualification
relieves the employees from
proving or disproving their earnings
during their lay-off and the
employers from submitting
counterproofs, and obviates the
twin evils of Idleness on the part of
the employee who would "with
folded arms, remain inactive in the
expectation that a windfall would
come to him" [Itogon Suyoc Mines,
Inc. vs. Sangilo-Itogon Workers Union
(1968), as cited in Diwa ng
Pagkakaisa vs. Filtex International
Corp. (1972)] and attrition and
protracted delay in satisfying such
award on the part of unscrupulous
employers who have seized upon
the further proceedings to
determine the actual earnings of the
wrongfully dismissed or laid-off
employees to hold unduly extended
hearings for each and every
employee awarded backwages and
thereby render practically nugatory
such award and compel the
employees to agree to
unconscionable settlements of their
backwages award in order to satisfy
their dire need. [See La Campana
Food Products, Inc. vs. CIR, (1969)
and Kaisahan ng Mga Manggagawa
vs. La Campana Food Products, Inc.,
(1970)].
Indemnity of Employer
Doctrine in Validity of
Period Liability of ER
effect Dismissal
Prior 1989 Pre-Wenphil Illegal Reinstatement + Backwages
Feb. 1989 – 1999 Wenphil Valid Dismiss now, indemnity pay later
Jan. 2000 – Oct. Full backwages up to reinstatement/finality

Serrano Ineffectual
2004 of decision
Nov. 2004 –
Agabon Valid Nominal damages
present
B.3.B.Damages and Attorney’s The employee is entitled to moral

Fees damages when the employer acted a) in
Article 111, Civil Code bad faith or fraud; b) in a manner
oppressive to labor; or c) in a manner
Attorney’s fees.-- In cases of unlawful contrary to morals, good customs, or public
withholding of wages, the culpable party policy [Montinola vs. PAL, GR No. 198656
may be assessed attorney’s fees (2014).
equivalent to ten percent of the amount of
wages recovered. In labor cases, the court may award
exemplary damages "if the dismissal was
It shall be unlawful for any person to effected in a wanton, oppressive or
demand or accept, in any judicial or malevolent manner." [Garcia vs. NLRC,
administrative proceedings for the GR. No. 110518 (1994)]
recovery of wages, attorney’s fees which
exceed ten percent of the amount of wages
B.3.C. Separation Pay
Art 2208, par. 7, Civil Code
SEPARATION PAY [(Art. 289 & 290, LC, DOLE
In the absence of stipulation, attorney's Handbook on Worker’s Statutory Monetary
fees and expenses of litigation, other than Benefits, 2014)
judicial costs, cannot be recovered, Separation pay is defined as the amount
except: xxx (7) in actions for the recovery of
that an employee receives at the time of
wages of household helpers, laborers and his severance from the service and is
skilled workers
designed to provide the employee with the
wherewithal during the period that he is
looking for another employment. [A’ Prime
Security Services vs NLRC (1993
Coverage
General Rule:
Cause for Termination Entitlement
Art. 288 Termination by Employer
(b) Serious misconduct or
willful disobedience of lawful
orders
(c) Gross and habitual neglect of duties None
(d) Fraud or willful breach of trust
(e) Commission of a crime against
employer or immediate member of his
family or representative
(f) Analogous causes
Art. 289 Installation of labor saving devices Equivalent to at least 1 month pay or 1 month
or redundancy pay for every year of service, whichever is
higher
Art. 289 Retrenchment to prevent losses or
closure or cessations of operations of Equivalent to at least 1 month pay or 1/2
establishments or undertaking not due to month pay for every year of service*, whichever
serious business losses or financial reverses is higher
Art. 290 Disease when continued
Equivalent to at least 1 month pay or 1/2
employment is prohibited by law or is
month pay for every year of service*, whichever
prejudicial to his health or health of co-
is higher
employees
Art. 291 Termination by employee whether
None
with or without just cause
*A fraction of at least 6 months shall be considered 1 whole year
Exceptions: Considerations of equity as in every year of service, a fraction of at least 6
the cases of Filipro, Inc. v. NLRC, Metro months being considered as one whole year, if
Drug Corp. his/her separation from service is due to any of
v. NLRC, Engineering Equipment, Inc. v. the following:
NLRC, San Miguel Corp v. NLRC. [PLDT
vs NLRC (1988)]
An employee who voluntarily resigns is not
entitled to separation pay unless stipulated
in the employment contract, or the
collective bargaining agreement, or is
sanctioned by established practice or
policy of the employer. [Phimco Industries
vs NLRC (1997); Hinatuan Mining Corp vs
NLRC (1997) cited in JPL Marketing
Promotions v. CA (2005)]
Amount
One-Half (1/2) Month Pay per Year of
Service
An employee is entitled to receive
separation pay equivalent to ½ month pay
for every year of service, a fraction of at
least six (6) months being considered as
one whole year, if his/her separation from
the service is due to any of the following
authorized causes:
(1) Retrenchment to prevent losses (i.e.
reduction of personnel effected by
management to prevent losses);
(2) Closure or cessation of operation of
an establishment not due to serious
losses or financial reverses; and,
(3) When the EE is suffering from a
disease not curable within a period of
six (6) months and his/her continued
employment is prejudicial to his/her
health or to the health of his/her co-
employees
In no case will an employee get less than
one
(1)month separation pay if the separation
is due to the above stated causes and
he/she has served for at least six (6)
months. (DOLE Handbook on Workers’
Statutory Monetary Benefits, 2014 ed.)
One-Month Pay per Year of Service

An employee is entitled to separation pay
equivalent to his/her one-month pay for
(1) Installation by employer of used in computing the separation pay
labor-saving devices; should include not just the basic salary but
also the regular allowances that an
(2) Redundancy, as when the
employee has been receiving. [Planters’
position of the employee has
Products, Inc. vs NLRC (1989)]
been found to be excessive or
unnecessary in the operation B.4. PREVENTIVE SUSPENSION
of the enterprise;
(3) Impossible reinstatement of
the employee to his/her former
position or to a substantially
equivalent position for reasons
not attributable to the fault of
the employer, as when the
reinstatement ordered by a
competent authority cannot be
implemented due to closure of
cessation of operations of the
establishment/employer, or the
position to which he/she is to
be reinstated no longer exists
and there is no substantially
equivalent position in the
establishment to which he/she
can be assigned. [Gaco vs
NLRC (1994)]
Notice of Termination
The employer may terminate the
employment of any employee due
to the above-mentioned authorized
causes by serving a written notice
on the employee and the DOLE
through its regional office having
jurisdiction over the place of
business at least 1 month before
the intended date thereof.
Basis of Separation Pay

The computation of separation pay
of an employee shall be based on
his/her latest salary rate. [DOLE
Handbook on Workers’ Statutory
Monetary Benefits, 2014 ed.]
Inclusion of Regular Allowance in

the Computation
In the computation of separation
pay, it would be error not to
integrate the allowance with the
basic salary. The salary base properly
Preventive suspension is a disciplinary [preventive suspension] may be imposed on a
measure for the protection of the respondent during the investigation of the
company's property pending investigation charges against him, [suspension] is the penalty
of any alleged malfeasance or which may only be meted upon him at the
misfeasance committed by the employee. termination of the investigation or the final
The employer may place the worker disposition of the case. [PAL v. NLRC, G.R. No.
concerned under preventive suspension if 114307 (1998)
his continued employment poses a serious
and imminent threat to the life or property
of the employer or of his co- workers.
However, when it is determined that there
is no sufficient basis to justify an
employee's preventive suspension, the latter
is entitled to the payment of salaries during
the time of preventive suspension.
[Gatbonton v. NLRC, G.R. No. 146779
(2006)]
Preventive suspension is justified where
the employee's continued employment
poses a serious and imminent threat to the
life or property of the employer or of the
employee's co-workers. Without this kind
of threat, preventive suspension is not
proper. [Artificio v. NLRC, G.R. No.
172988 (2010)]
DURATION
No preventive suspension shall last longer
than thirty (30) days.
Upon the expiry of such period, the
employer shall thereafter
(1) reinstate the worker in his former or
in a substantially equivalent position
or
(2) the employer may extend the period
of suspension provided that during
the period of extension, he pays the
wages and other benefits due to the
worker. [Sec. 9, Rule XXIII, Book V,
IRR]
PREVENTIVE SUSPENSION AS A
PROTECTIVE MEASURE V. SUSPENSION
AS PENALTY
Preventive suspension is not a penalty in
itself. It is merely a measure of precaution
so that the employee who is charged may
be separated, for obvious reasons, from
the scene of his alleged misfeasance while
the same is being investigated. While
another, and
(3) Employees in retail, service and
C.RETIREMENT
agricultural establishments or
RETIREMENT PAY [RA 7641 - The operations regularly employing not
Retirement Pay Law] more than ten employees [Sec. 2,
IRR, RA 7641]
Retirement - the result of a bilateral
act of the parties, a voluntary
agreement between the employer
and the employee whereby the
latter, after reaching a certain age
agrees to sever his or her
employment with the former ... an
employer is free to impose a
retirement age less than 65 for as
long as it has the employees’
consent… having terminated
petitioner solely on the basis of a
provision of a retirement plan which
was not freely assented to by her,
respondent was guilty of illegal
dismissal [Jaculbe vs Silliman
University, G.R. No. 156934 (2007)]
Retroactive Effect
The Court imposed two (2) essential
requisites in order that R.A. 7641
may be given retroactive effect:
(1) the claimant for retirement
benefits was still in the employ
of the employer at the time the
statute took effect; and
(2) the claimant had complied
with the requirements for
eligibility for such retirement
benefits under the statute.
[Universal Robina Sugar Milling
Corp. vs Caballeda, G.R. No.
156644 (2008)]
C.1. ELIGIBILITY
General Rule: All employees in the
private sector, regardless of their
position, designation, or status, and
irrespective of the method by which
their wages are paid [Sec. 1, IRR,
RA 7641]
Exceptions:
(1) Employees covered by the Civil
Service Law;
(2) Domestic helpers and persons
in the personal service of
Exclusions from coverage retired at the age of 65 years. [Sec. 4, IRR, RA
7641]
R.A. No. 7641, otherwise known as "The
Retirement Pay Law," only applies in a
situation where:
(1) there is no collective bargaining
agreement or other applicable
employment contract providing for
retirement benefits for an employee;
OR
(2) there is a collective bargaining
agreement or other applicable
employment contract providing for
retirement benefits for an employee,
but it is below the requirements set
for by law.
The reason for the first situation is to
prevent the absurd situation where an
employee, who is otherwise deserving, is
denied retirement benefits by the nefarious
scheme of employers in not providing for
retirement benefits for their employees.
The reason for the second situation is
expressed in the Latin maxim pacta private
juri public derogare non possunt. Private
contracts cannot derogate from the public
law. [Oxales vs Unilab, G.R. No. 152991
2008]
Age of retirement
In the absence of a retirement plan or
agreement providing for retirement benefits
of employees in the establishment, an
employee upon reaching the age of sixty
(60) years or more, but not beyond sixty-
five (65) years which is hereby declared
the compulsory retirement age (and have
served the establishment for at least 5
years). [Sec. 1, IRR, RA 7641]
Optional retirement – in the absence of a
retirement plan or other applicable
of EEs in an establishment, an EE may
retire upon reaching the age of 60 or more
if he has served for at least 5 years in said
establishment.
Compulsory retirement – in the absence of

a retirement plan or other applicable
of EEs in an establishment, an EE shall be
be equivalent to one-half month salary for
every year of service, a fraction of at least
Note: For surface mine workers, the six (6) months being considered as one
optional retirement age is 50, while whole year. The benefits under this law are
the mandatory retirement age is other than those granted by the SSS or the
now 60. [Sec. 2, RA 10757] GSIS.
C.2.AMOUNT OF RETIREMENT PAY

The minimum retirement pay shall
be equivalent to one-half (1/2) month
salary for every year of service, a
fraction of at least six
(6) months being considered as
one whole year.
For the purpose of computing
retirement pay, “one-half month
salary” shall include all of the
following:
(1) Fifteen (15) days salary based
on the latest salary rate;
(2) Cash equivalent of five (5) days
of service incentive leave;
(3) One-twelfth (1/12) of the 13th
month pay. (1/12 x 365/12 = .
083 x 30.41 = 2.52)
Thus, “one-half month salary” is equivalent
to
22.5 days. [Capitol Wireless, Inc. vs
Sec. Confessor, 1996; Reyes v
NLRC, 2007]
Other benefits may be included in
the computation of the retirement
pay upon agreement of the ER and
the EE or if provided in the CBA.
Retirement pay under RA 7641 vis-

à-vis retirement benefits under SSS
and GSIS laws
RA 7641 mandates payment of
retirement benefits. All private
sector employees regardless of
their position, designation or status
and irrespective of the method by
which their wages are paid are
entitled to retirement benefits upon
compulsory retirement at the age of
sixty-five (65) or upon optional
retirement at sixty (60) or more but
not 65. The minimum retirement
pay due covered employees shall
Retirement Benefits under a CBA or (b) The EE should have reached the age of 60
Applicable Contract years, and should have rendered at least 5
years of service with the ER.
Any EE may retire or be retired by his/her
ER upon reaching the age established in
the CBA or other applicable
agreement/contract and shall receive the
retirement benefits granted therein;
provided, however, that such retirement
benefits shall not be less than the
retirement pay required under RA 7641,
and provided further that if such retirement
benefits under the agreement are less, the
ER shall pay the difference.
Where both the ER and the EE contribute
to a retirement fund pursuant to the
applicable agreement, the ER’s total
contributions and the accrued interest
thereof should not be less than the total
retirement benefits to which the EE would
have been entitled had there been no such
retirement benefits’ fund. If such total
portion from the ER is less, the ER shall
pay the deficiency.
C.3. RETIREMENT BENEFITS OF WORKERS

WHO ARE PAID BY RESULTS
For covered workers who are paid by result
and do not have a fixed monthly salary
rate, the basis for the determination of the
salary for 15 days shall be their average
daily salary (ADS). The ADS is derived by
dividing the total salary or earning for the
last 12 months reckoned from the date of
retirement by the number of actual working
days in that particular period, provided that
the determination of rates of payment by
results are in accordance with established
regulations.
C.4. RETIREMENT BENEFIT OF PART-

TIME
WORKERS
Part-time workers are also entitled to
retirement pay of “one-month salary” for
every year of service under RA 7641 after
satisfying the following conditions
precedent for optional retirement:
(a) There’s no retirement plan between
the
ER and the EE; and,
Applying the foregoing principle, the
components of retirement benefit of
part-time workers may likewise be
computed at least in proportion to
the salary and related benefits due
them. [DOLE Handbook on
Workers’ Statutory Monetary
Benefits, 2014 ed.]
C.5.TAXABILITY
Any provision of law to the contrary
notwithstanding, the retirement benefits
received by officials and employees of
private firms, whether individual or
corporate , in accordance with a
reasonable private benefit plan
maintained by the employer shall be
exempt from all taxes and shall not be
liable to attachment, garnishment, levy or
seizure by or under any legal or equitable
process whatsoever except to pay a
debt of the official or employee
concerned to the private benefit plan or
that arising from liability imposed in a
criminal action: Provided, That the
retiring official or employee has been in
the service for at least ten (10) years
and is not less than fifty years of age at
the time of his retirement: Provided,
further, That the benefits granted under
this Act shall be availed of by an official
or employee only once; Provided, finally,
That in case of separation of an official
or employee from the service of the
employer due to death, sickness, or
other physical disability or for any cause
beyond the control of the said official or
employee, any amount received by him
or by his heirs from the employer as a
consequence of such separation shall
likewise be exempt as hereinabove
provided.
As used in this Act, the term
"reasonable private benefit plan" means
a pension, gratuity, stock bonus or profit
sharing plan maintained by an employer
for the benefit of some or all of his
officials and employees, wherein
contributions are made by such
employer or officials and employees, or
both, for the purpose of distributing to
such officials and employees the
earnings and principal of the fund thus
accumulated, and wherein it is provided
in said plan that at no time shall any part
BOC STANDARDS
benefit of the said officials than fifty years of age at the time of
and employees.[Sec. 1, RA his retirement;
4917] (b) That the retirement benefits shall be
Any provision of law to the contrary availed of by an official or employee
notwithstanding, the retirement benefits only once; and,
received by officials and employees of (c) That in case of separation of an
private firms, whether individual or official or employee from the service
corporate, in accordance with a of the employer due to death, sickness
reasonable private benefit plan maintained or other physical disability or for any
by the employer cause beyond the control of the said
(1) shall be exempt from all taxes and official or employee, any amount
received by him or by his heirs from
(2) shall not be liable to attachment, the employer as a consequence of
garnishment, levy or seizure by or such separation shall likewise be
under any legal or equitable process exempt as hereinabove provided.
whatsoever [Intercontinental
Broadcasting Corp. v Amorilla, 2006]
Reasonable private benefit plan - means a
pension, gratuity, stock bonus or profit
Exception sharing plan maintained by an employer for
Except to pay a debt of the official or the benefit of some or all of his officials
employee concerned to the private benefit and employees, wherein contributions are
plan or that arising from liability imposed in made by such employer or officials and
a criminal action: employees, or both, for the purpose of
distributing to such officials and employees
the earnings and principal of the fund thus
Additional conditions accumulated, and wherein it is provided in
said plan that at no time shall any part of
(a) That the retiring official or employee the corpus or income of the fund be used
has been in the service of the same for, or be diverted to, any purpose other
employer for at least ten (10) years than for the exclusive benefit of the said
and is not less officials and employees.
PAGE 130 OF
235
V. Management intentional
Prerogative
Sec. 20, Art II, Constitution
Section 20. The State recognizes the
indispensable role of the private sector,
encourages private enterprise, and
provides incentives to needed investments
Sec. 3, pars. 3 and 4, Art XIII, Constitution

The State shall promote the principle of
shared responsibility between workers and
employers and the preferential use of
voluntary modes in settling disputes,
including conciliation, and shall enforce
their mutual compliance therewith to foster
industrial peace.cralaw
The State shall regulate the relations
between workers and employers,
recognizing the right of labor to its just
share in the fruits of production and the
right of enterprises to reasonable returns
to investments, and to expansion and
growth.
The right of an employer to regulate all

aspects of employment, aptly called
“management prerogative,” gives employers
the freedom to regulate, according to their
discretion and best judgment, all aspects
of employment, including work
assignment, working methods, processes
to be followed, working regulations,
transfer of employees, work supervision,
lay-off of workers and the discipline,
dismissal and recall of workers. In this
light, courts often decline to interfere in
legitimate business decisions of employers.
In fact, labor laws discourage interference
in employers’ judgment concerning the
conduct of their business. xxx Among the
employer’s management prerogatives is
the right to prescribe reasonable rules and
regulations necessary or proper for the
conduct of its business or concern, to
provide certain disciplinary measures to
implement said rules and to assure that the
same would be complied with. At the same
time, the employee has the corollary duty
to obey all reasonable rules, orders, and
instructions of the employer; and willful or
disobedience thereto, as a general to his own discretion and judgment, all
rule, justifies termination of the aspects of employment, including hiring,
contract of service and the work assignments, working methods, the
dismissal of the employee [St. time, place and manner of work, work
Luke’s Medical Center, Inc. vs supervision, transfer of employees, lay-off
Sanchez, G.R. 212054 (2015)]. of workers, and discipline, dismissal, and
recall of employees. The only limitations to
The employer’s right to conduct the
the exercise of this prerogative are those
affairs of his business, according to
imposed by labor laws and the principles
its own discretion and judgment, is
of equity and substantial
well-recognized. An employer has a
free reign and enjoys wide latitude
of discretion to regulate all aspects
of employment. This is a
management prerogative, where
the free will of management to
conduct its own affairs to achieve its
purpose takes form. [Torreda vs.
Toshiba, G.R. No. 165960 (2007)]
So long as a company’s
management prerogatives are
exercised in good faith for the
advancement of the employer’s
interest and not for the purpose of
rights of the employees under
special laws or under valid
agreements, this Court will uphold
them… Even as the law is solicitous
of the welfare of the employees, it
must also protect the right of an
employer to exercise what are
clearly management prerogatives.
The free will of management to
conduct its own business affairs to
achieve its purpose cannot be
denied. [Ernesto G. Ymbong vs.
ABS-CBN Broadcasting Corp., G.R.
No. 184885 (2012)]
The law in protecting the rights of
the employees authorizes neither
oppression nor self-destruction of
the employer. It should be made
clear that when the law tilts the
scale of justice in favor of labor, it is
but a recognition of the inherent
economic inequality between labor
and management. Never should the
scale be so tilted if the result is an
injustice to the employer.
[Panuncillo v CAP, G.R. No.
161305 (2007)]
Under the doctrine of management
prerogative, every employer has the
inherent right to regulate, according
justice. [Peckson v Robinson’s The Court disagreed with the company’s
Supermarket defense, stating that the privilege is not
Corporation, G.R. No. 198534, (2013)] absolute but subject to limitations imposed
by law. In this case, it is limited by Sec.
The exercise of management prerogative
236(g), which gives the Secretary the power
is valid provided it is not performed in a
to assume jurisdiction and
malicious, harsh, oppressive, vindictive or
wanton manner or out of malice or spite.
[Magdadaro v. PNB, G.R. No. 166198
(2009)]
Limits to Management Prerogative

(1) Good faith - So long as a company’s
management prerogatives are
defeating or circumventing the rights
of the employees under special laws
or under valid agreements, this Court
will uphold them…Even as the law is
solicitous of the welfare of the
employees, it must also protect the
right of an employer to exercise what
are clearly management prerogatives.
The free will of management to
conduct its own business affairs to
achieve its purpose cannot be
denied. [Ernesto G. Ymbong vs.
ABS-CBN Broadcasting Corp., G.R.
No. 184885 (2012)]
(2) Without grave abuse of discretion -
But, like other rights, there are limits
thereto. The managerial prerogative
to transfer personnel must be
exercised without grave abuse of
discretion, bearing in mind the basic
elements of justice and fair play.
Having the right should not be
confused with the manner in which
the right is exercised. [Tinio vs. CA,
G.R. No. 171764 (2007)]
(3) Law – In one case, a pharmaceutical
company defended its termination of
rank and file employees during a
bargaining deadlock, as an exercise
of management prerogative. This
was after the Labor Secretary had
assumed jurisdiction over the dispute
and enjoined the parties from “any
acts which might exacerbate the
situation.”
resolve labor disputes Forwarders Co., Inc., G.R. No. 163431
involving industries (2013)]
indispensable to national
interest.
Assumption of jurisdiction by the Secretary
The company’s management
of Labor
prerogatives are not being
unjustly curtailed but duly This Court declared that it recognizes the
tempered by the limitations set exercise of management prerogatives and
by law, taking into account its it often declines to interfere with the
special character and the legitimate business decisions of the
particular circumstances in the employer… However, as expressed in PAL
case at bench. [Metrolab vs. NLRC, the privilege is
Industries, Inc. v. Roldan-
Confesor, G.R. No. 108855
(2013)]
(4) Collective Bargaining – The
CBA provisions agreed upon by
the Company and the Union
delimit the free exercise of
management prerogative. The
parties in a CBA may establish
such stipulations, clauses,
terms and conditions as they
may deem convenient
provided these are not
contrary to law, morals, good
customs, public order or public
policy. Where the CBA is clear
and unambiguous, it becomes
the law between the parties
and compliance therewith is
mandated by the express
policy of the law. [Goya v.
Goya, Inc., Employees Union-
FFW, G.R. No. 170054 (2013)]
(5) Equity and/or Substantial
Justice – The Court
recognized the inherent right
of the employer to discipline its
employees but it should still
ensure that the employer
exercises the prerogative to
discipline humanely and
considerately, and that the
sanction imposed is
commensurate to the offense
involved and to the degree of
the infraction. The discipline
exacted by the employer
should further consider the
employee’s length of service
and the number of infractions
during his employment.
[Dongon v. Rapid Movers and
not absolute, but subject to exceptions. B. TRANSFER OF EMPLOYEES
One of these exceptions is when the
Secretary of Labor assumes jurisdiction over An employee’s right to security of tenure does not
labor disputes involving industries give him such a vested right in his position
indispensable to the national interest under
Article 263(g) of the Labor Code.
[University of Immaculate Concepcion Inc.
vs. Sec. of Labor, G.R. No. 151379 (2005)]
A. DISCIPLINE
Management has the prerogative to
discipline its employees and to impose
appropriate penalties on erring workers
pursuant to company rules and
regulations. [Jose P. Artificio vs. NLRC,
G.R. No. 172988 (2010)]
The employer’s right to conduct the affairs
of his business, according to its own
discretion and judgment, includes the
prerogative to instill discipline in its
employees and to impose penalties,
including dismissal, upon erring
employees. The only criterion to guide the
exercise of its management prerogative is
that the policies, rules and regulations on
work-related activities of the employees
must always be fair and reasonable and
the corresponding penalties, when
prescribed, commensurate to the offense
involved and to the degree of the
infraction. [Consolidated Food Corporation
vs. NRLC, G.R. No. 118647 (1999)] [St.
Michael’s Institute vs. Santos, G.R. No.
145280 (2001)]
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee
for just and valid cause, pertains in the first
place to the employer, as well as the
authority to determine the existence of said
cause in accordance with the norms of due
process. [Makati Haberdashery, Inc. vs.
NLRC, G.R. Nos. 83380-81 (1989)]
Although the right of employers to shape
their own work force,is recognized, this
management prerogative must not curtail
the basic right of employees to security of
tenure. [Alert Security & Investigation
Agency, Inc. vs. Saidali Pasawilan, et. al.,
G.R. No. 182397 (2011)]
as would deprive the company of its employee, the rule is settled that the
prerogative to change his employer is charged with the burden of
assignment or transfer him where proving that its conduct and action are for
he will be most useful. valid and legitimate grounds such as
genuine business necessity and that the
The Employer has the right to
transfer is not unreasonable, inconvenient or
transfer or assign Employees from
prejudicial to the employee. If the employer
one area of operation to another, or
cannot overcome this burden of proof, the
one office to another or in pursuit of
employee’s transfer shall be tantamount to
its legitimate business interest,
unlawful constructive dismissal. [Jonathan
Provided there is no demotion in
Morales v. Harbor Centre Port Terminal
rank or diminution of salary,
Inc., G.R. No. 174208 (2012)]
benefits and other privileges and not
motivated by discrimination or made
in bad faith, or effected as a form of
punishment or demotion without
sufficient cause. [Westin Phil. Plaza
Hotel vs. NLRC, G.R. No. 121621
(1999)]
When the transfer is not
unreasonable, or inconvenient, or
prejudicial to the employee, and it
does not involve a demotion in rank
or diminution of salaries, benefits,
and other privileges, the employee
may not complain that it amounts to
a constructive dismissal. [Bisig ng
Manggagawa sa TRYCO v. NLRC,
G.R. No. 151309 (2008)]
It is management prerogative for
employers to transfer employees on
just and valid grounds such as
genuine business necessity. [William
Barroga vs. Data Center College of
the Philippines, G.R. No. 174158
(2011)]
Re-assignments made by
management pending investigation
of irregularities allegedly committed
by an employee fall within the ambit
of management prerogative. The
purpose of reassignments is no
different from that of preventive
suspension which management
could validly impose as a
disciplinary measure for the
protection of the company's
property pending investigation of
any alleged malfeasance or
misfeasance committed by the
employee. [Ruiz s.v Wendel Osaka
Realty Corp., G.R. No. 189082
(2012)]
In cases of a transfer of an
(1989)]. [Traders Royal Bank vs. NLRC, G.R. No.
120592 (1990)]
C.PRODUCTIVITY STANDARD
The employer has the right to demote and
transfer an employee who has failed to
observe proper diligence in his work and
incurred habitual tardiness and absences
and indolence in his assigned work.
[Petrophil Corporation vs. NLRC, G.R. No.
L-64048 (1986)]
In the consolidated cases of Leonardo vs.
NLRC [G. R. No. 125303 (2000)] and Fuerte
vs. Aquino [G. R. No. 126937 (2000)], the
employer claimed that the employee was
demoted pursuant to a company policy
intended to foster competition among its
employees. Under this scheme, its
employees are required to comply with a
monthly sales quota. Should a supervisor
such as the employee fail to meet his
quota for several consecutive months, he
will be demoted, whereupon his
supervisor’s allowance will be withdrawn
and be given to the individual who takes
his place. When the employee concerned
succeeds in meeting the quota again, he is
re-appointed supervisor and his allowance
is restored. The Supreme Court held that
this arrangement is an allowable exercise
of company rights since an employer is
entitled to impose productivity standards
for its workers. In fact, non-compliance
may be visited with a penalty even more
severe than demotion.
D. GRANT OF BONUS
A bonus is "a gratuity or act of liberality of
the giver which the recipient has no right to
demand as a matter of right" [Aragon vs.
Cebu Portland Cement Co., 61 O.G.
4597]. "It is something given in addition to
what is ordinarily received by or strictly due
the recipient." The granting of a bonus is
basically a management prerogative which
cannot be forced upon the employer "who
may not be obliged to assume the onerous
burden of granting bonuses or other
benefits aside from the employee's basic
salaries or wages" xxx [Kamaya Point
Hotel vs. National Labor Relations
Commission, Federation of Free Workers
and Nemia Quiambao, G.R. No. 75289,
The matter of giving a bonus over interests against the possibility that a
and above the worker’s lawful competitor company will gain access to its
salaries and allowances is entirely secrets and procedures. [Star Paper Corp.
dependent on the financial vs. Simbol, G.R. No. 164774 (2006)]
capability of the employer to give it.
[Kimberly-Clark Philippines, Inc. vs.
Dimayuga, G.R. No. 177705 (2009)]
G. POST-EMPLOYMENT BAN
E. CHANGE OF WORKING HOURS
Management retains the
prerogative, whenever exigencies of
the service so require, to change the
working hours of its employees. So
long as such prerogative is
rights of the employees under
special laws or under valid
agreements, this Court will uphold
such exercise. [Sime Darby
Pilipinas Inc. v. NLRC, G.R. No.
119205 (1998)]
F. RULES ON MARRIAGE
BETWEEN EMPLOYEES OF
COMPETITOR- EMPLOYERS
In the recent case of Duncan
Association of Detailman-PTGWO
and Pedro Tecson v. Glaxo Wellcome
Philippines, Inc., we passed on the
validity of the policy of a
pharmaceutical company prohibiting
its employees from marrying
employees of any competitor
company. We held that Glaxo has a
right to guard its trade secrets,
manufacturing formulas, marketing
strategies and other confidential
programs and information from
competitors. We considered the
prohibition against personal or
marital relationships with
employees of competitor companies
upon Glaxo’s employees
reasonable under the
circumstances because
relationships of that nature might
compromise the interests of Glaxo.
In laying down the assailed
company policy, we recognized that
Glaxo only aims to protect its
In cases where an employee assails a
contract containing a provision prohibiting VI. Social Welfare
him or her from accepting competitive
employment as against public policy, the Legislation
employer has to adduce evidence to prove
that the restriction is reasonable and not A. SSS LAW [RA 8282]
greater than necessary to protect the A.1. COVERAGE & EXCLUSIONS
employer’s legitimate business interests.
A.1.a. Coverage [1997, 2000, 2008, 2009 Bar
The restraint may not be unduly harsh or
Question]
oppressive in curtailing the employee’s
legitimate efforts to earn a livelihood and A.1.b. Compulsory [Sec. 9 [a]; Sec. 9-A]
must be reasonable in light of sound public
(1) Employees not over 60 years of age
policy. [Rivera vs. Solidbank, G.R. No.
and their employers, including
163269 (2006)]
domestic helpers with at least P1,000
monthly pay; and
(2) Self-employed as may be determined
by the Commission, but not limited to:
a) Self-employed professionals
b) Partners and single proprietors of
businesses
c) Actors and actresses, directors,
scriptwriters, and news
correspondents who do not fall
within the definition of the term
“employee” under Section 8 [d]
d) Professional athletes, coaches,
trainers and jockeys
e) Individual farmers and fishermen

least one [1] month of service shall be
covered by the Social Security System
[SSS], the Philippine Health Insurance
Corporation [PhilHealth], and the Home
Development Mutual Fund or Pag-IBIG,
and shall be entitled to all the benefits in
accordance with the pertinent provisions
provided by law.
Premium payments or contributions shall
be shouldered by the employer. However,
if the domestic worker is receiving a wage
of Five thousand pesos [P5,000.00] and
above per month, the domestic worker
shall pay the proportionate share in the
premium payments or contributions, as
provided by law.
The domestic worker shall be entitled to all
other benefits under existing laws. [Sec.
30, Kasambahay Law [RA 10361]]
A.1.c.Voluntary [Sec. 9] the services of said contractors.
(1) Spouses who devote full time to
managing household and family
affairs, unless they are also engaged
in other vocation or employment
[which is subject of compulsory
coverage];
(2) OFWs recruited by foreign-based
employers;
(3) Employees [previously under
compulsory coverage] already
separated from employment or those
self-employed [also under
compulsory coverage] with no
realized income for a given month,
who chose to continue with
contributions to maintain right to full
benefit.
Note: Foreign governments, international
organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement
with the Philippine government to include
their employees in the SSS except those
already covered by their civil service
retirement system.
A.1.d. Exclusions from Coverage [Sec.

8 [j]]
(1) Employment purely casual and not
for the purpose of occupation or
business of the employer.
(2) Service performed on or in
connection with an alien vessel by an
employee if he is employed when
such vessel is outside the Philippines;
(3) Service performed in the employ of
the Philippine Government or
instrumentality or agency thereof;
(4) Service performed in the employ of a
foreign government or international
organization, or their wholly-owned
instrumentalities; and
(5) Services performed by temporary
and other employees which may be
excluded by SSS regulation.
Employees of bona fide independent
contractors shall not be deemed
employees of the employer engaging
A.2. DEPENDENTS, BENEFICIARIES is P1,200 for members with at least 10
years credit service, P2,400 for those with
1.Primary
20 years.
(1) Dependent spouse – until
remarriage [see above];
(2) Dependent children
[legitimate, legitimated, A.3.b. Dependents’ pension [Sec. 12-A]
legally adopted, and
illegitimate] [see above];
illegitimate children are
entitled only to 50% of the
share of legitimate
children unless there are
no legitimate children, in
which case, they get
100%.
2. Secondary
Shall only receive when the primary
beneficiaries are absent
(1) Dependent parents
3. Others – shall only receive when
the primary and secondary
beneficiaries are absent
(1) Any other person
designated by member as
his/her secondary
beneficiary.
A.3. BENEFITS
A.3.a. Monthly pension [Sec.12]
Computation of monthly pension
The monthly pension shall be the
highest of the following amounts:
(1) P300 + [20% x [average monthly
credit]]
+ [2% x [average monthly
credit] x [# of cash credited
years of service in excess of 10
years]];
(2) 40% x [average monthly credit];
(3) P1,000; provided, that the
monthly pension shall in no
case be paid for an aggregate
amount of less than 60
months.
Note: Notwithstanding the

abovementioned, minimum pension
(1) Paid on account of members’ Lump Sum Alternative
I. death,
II. retiring, or
III. permanent total disability;
(2) Paid to each child conceived on or
prior to contingency, but not
exceeding 5, beginning with the
youngest and preferring the
legitimate;
(3) Amount is either P250 or 10% of the
monthly pension as computed above,
whichever is higher.
A.3.c. Retirement benefits [Sec. 12-B]

Eligibility requirements
(1) 120 monthly contributions;
(2) Age
I. 65 years old; or
II. a member who has reached 60
years may also avail if he is
already separated from
employment or has ceased to be
self-employed.
Benefit – entitlement to monthly pension
from retirement until death.
The monthly pension shall be suspended
upon the reemployment or resumption of
self- employment of a retired member who
is less than sixty-five [65] years old.
In Case of Death of Member

(1) His/her primary beneficiaries as of
the date of his/her retirement shall be
entitled to receive the monthly
pension; or
(2) If he/she has no primary beneficiaries
AND he/she dies within sixty [60]
months from the start of his/her
monthly pension, his/her secondary
beneficiaries shall be entitled to a
lump sum benefit equivalent to the
total monthly pensions corresponding
to the balance of the five-year
guaranteed period, excluding the
dependents’ pension.
Member may opt to receive his first Lump Sum Alternative
18 monthly pensions in lump sum
A member is entitled to a lump sum benefit
but such is discounted at a
equivalent to the monthly pension times
preferential rate of interest.
the number of monthly contributions paid
to the SSS or twelve [12] times the
monthly pension, whichever is higher.
Lump Sum Eligibility
A 60 year old member with less
than 120 monthly contributions who Lump Sum Eligibility
is no longer employed or self-
employed, and who is not
continuing contributions
independently, he is entitled to a
lump sum equal to his total
contributions paid.
A.3.d.Permanent disability benefits [Sec.

13-A]
Eligibility requirement
(1) 36 monthly contributions prior
to the semester of disability;
same as death benefit; the
only difference is that the
pension is paid directly to the
member.
(2) In case the permanently
disabled member dies, it
would be given the same
treatment as a retiree dying.
(3) For permanent partial
disability, the pension is not
lifetime. [e.g. loss of thumb
entitles member to only 10
months of pension, while loss
of arm 50 months]. It shall be
paid in lump sum if the period
is less than 12 months.
(4) For multiple partial disabilities,
they shall be additive when
related or deteriorating – the
percentage shall be equal to
the number of months the
partial disability is entitled to,
divided by 75 months. [e.g.
loss of sight in one eye
 25/75; loss of arm  50/75;
if both occur due to same
cause, then 25/75 + 50/75 =
100% so treated as if it were
permanent total disability]
A member who has not paid at least 36 Social Security Commission Resolution
monthly contributions No. 669. Moreover, several SSS-issued
Note: A member who [1] has received a circulars such as Circular No. 21-P and No.
lump sum benefit; and [2] is reemployed or 52 pertain to the treatment of salary loans,
has resumed self-employment not earlier sometimes providing for more flexible
than one [1] year from the date of his payment terms or condonation for
disability shall again be subject to delinquent payers; Santiago
compulsory coverage and shall be v. CA and SSS, GR # L-39949 [1984]
considered a new member. resolved an issue involving the treatment of
salary loan repayments; SSS website also
shows loans
In Case of Death of Member
(1) His primary beneficiaries as of the A.3.h. Sickness benefits [Sec. 14]
date of disability shall be entitled to
receive the monthly pension; OR Eligibility requirements and other conditions
(2) If he has no primary beneficiaries (1) Inability to work due to sickness or injury
and he dies within sixty [60] months (2) Confined for at least 4 days either in
from the start of his monthly pension, a hospital or elsewhere with SSS
his secondary beneficiaries shall be approval;
entitled to a lump sum benefit
equivalent to the total monthly (3) At least 3 months of contributions in
pensions corresponding to the the 12 month period immediately
balance of the five-year guaranteed before the semester of sickness or
period excluding the dependents’ injury has been paid;
pension. (4) All company sick leaves with pay for
the current year have been used up;
A.3.e. Death benefits [Sec. (5) Maximum of 120 days per 1 calendar
year [i.e maximum permissible for the
13] Eligibility requirement same sickness and confinement is
36 monthly contributions prior to the 240 days for 2 consecutive years];
semester of death. (6) The employer has been notified, or, if
Benefit – monthly pension to primary or a a separated, voluntary or self-
lump sum benefit equivalent to thirty-six employed member, the SSS directly
[36] times the monthly pension secondary notified within 5 days of confinement;
beneficiaries. (7) Notice to employer or SSS not
To those ineligible – lump sum benefit needed when confinement is in a
which shall be the higher between the two: hospital; notice to employer not
required as well when Employee
 [monthly pension] x 12; or became sick or injured while working
 [monthly pension] x [# of monthly or within premises of the employer.
contributions]
Benefit: daily cash allowance paid for the
A.3.f. Funeral benefits [13-B] number of days a member is unable to
work due to sickness or injury equivalent to
P12,000 in cash or in kind, upon death of 90% x [average daily salary credit]
member
Note: One hundred percent [100%] of the

daily benefits provided in the preceding
A.3.g.Loan paragraph shall be reimbursed by the SSS
to said employer upon receipt of
satisfactory proof of such payment
and legality thereof if the following
conditions are met:
(1) The employer notified the SSS of the [4] deliveries or miscarriages;
confinement within five calendar
days after receipt of the notification
from the employee member
(2) If the notification to the SSS is made
by the employer beyond five calendar
days after receipt of the notification
from the employee member, he shall
be reimbursed only for each day of
confinement starting from the tenth
calendar day immediately preceding
the date of notification to the SSS.
(3) SSS shall reimburse the employer or
pay the unemployed member only for
confinement within the one-year
period immediately preceding the
date the claim for benefit or
reimbursement is received by the
SSS, except confinement in a hospital
in which case the claim for benefit or
reimbursement must be filed within
one [1] year from the last day of
confinement.
A.3.i.Maternity leave benefits [Sec. 14-A]

Eligibility Requirements [2000, 2005, 2007,
2010 Bar Question]
(1) A female member
(2) Paid at least three [3] monthly
contributions in the twelve-month
period immediately preceding the
semester of her childbirth or
miscarriage
(3) She shall have notified her employer
of her pregnancy and the probable
date of her childbirth, which notice
shall be transmitted to the SSS in
accordance with the rules and
regulations it may provide;
Process
The full payment shall be advanced by the
employer within thirty [30] days from the
filing of the maternity leave application;
Coverage
The maternity benefits provided under this
section shall be paid only for the first four
Employer’s Reimbursement B.2.B.Secondary
That the SSS shall immediately Shall only receive when the primary
reimburse the employer of one beneficiaries are absent:
hundred percent [100%] of the
amount of maternity benefits
advanced to the employee by the
employer upon receipt of
satisfactory proof of such payment
and legality thereof.
Note: All of these benefits are tax-exempt.
B. GSIS [RA 8291]

B.1. COVERAGE & EXCLUSIONS
B.1.A. Coverage
All public sector employees below
the compulsory retirement age of
65, irrespective of employment
status. [Sec. 3]
B.1.B. Exclusions from Coverage [Sec.

3]
(1) AFP and PNP;
(2) Members of the Judiciary and
Constitutional Commissions
who are covered ONLY by life
insurance as they have
separate retirement schemes;
(3) Contractual employees with
no employer-employee
relationship with the agency
they serve.
B.2.DEPENDENTS, BENEFICIARIES
B.2.A.Primary
(1) Dependent spouse – until remarriage;
(2) Dependent children
(legitimate, legitimated, legally
adopted, and illegitimate) –
but RA 8291 does not
distinguish share of legitimate
and illegitimate children.
(1) Dependent parents 13] Eligibility requirements [Sec. 13-A]
(2) Legitimate descendants, subject to (1) At least 15 years of service;
the restrictions on dependent
children.
B.3.BENEFITS
Computation of Service [Sec. 10]
From date of original appointment/election,
including periods of service at different
times under one or more employers, those
performed overseas under the authority of
the Republic of the Philippines, and those
that may be prescribed by the GSIS in
coordination with the Civil Service
Commission.
In case of reinstatement in the service of
an employer and subsequent retirement or
separation which is compensable under
this Act, all service credited for retirement,
resignation or separation for which
corresponding benefits have been
awarded under this Act or other laws shall
be excluded in the computation of service
Note: The GSIS may prescribe rules for
the inclusion of part time and other
services with compensation.
B.3.1. Monthly Pension

[Sec. 9] The amount shall
be:
(a) 37.5% x [revalued ave. monthly
compensation]
(b) Plus 2.5 x [revalued ave. monthly
compensation] x [years in service in
excess of 15 years].
 Provided, the monthly pension
shall not exceed 90% of the
average monthly compensation.
 It shall not be less than P2,400
for those with 20 years of service
and not less than P1,300 for
everyone else.
B.3.2.Retirement Benefits [Sec.

(2) At least 60 years of age; and of the use of:
(3) Not receiving pension benefit (i) Any finger
from permanent total
(ii) Any toe
disability.
(iii) One arm
Note: Retirement is compulsory for
employees 65 years of age who (iv) One hand
have rendered at least 15 years of
service; if employee has less than
15 years of service, he may be
allowed to continue in accordance
with civil service laws. [Sec. 13]
Benefit [Sec. 13]: Choice between

(a) 60 x [basic monthly pension]
lump sum payment [Sec. 2] at
the time of retirement plus
basic monthly pension
payable monthly for life after
expiry of the 5-year
guaranteed period which is
already covered by the lump
sum; or
(b) Cash payment equivalent to
18 x [basic monthly pension]
plus monthly pension for life
immediately but with no 5-year
guarantee
Note: Subject to periodic adjustment [Sec.
14]
B.3.3.Permanent Disability Benefits

Disabilities Deemed Total and
Permanent [Sec. 16]
(a) Complete loss of sight of both eyes;
(b) Loss of 2 limbs at or above
the ankle or wrist
(c) Permanent complete paralysis
of 2 limbs
(d) Brain injury resulting in
incurable imbecility or
insanity
(e) Such other cases as may be
determined by the GSIS
Disabilities Deemed Partial and

Permanent [Sec. 17]
(a) Complete and permanent loss
(v) One foot payment equal to 100% of ave. monthly
compensation for each year of service
(vi) One leg
[essentially total
(vii)One or both ears
(viii) Hearing of one or both ears
(ix) Sight of one eye
(b) Such other cases as may be
determined by the GSIS
Eligibility Requirements for Permanent

Total Disability
(1) Disability not due to employee’s own
grave misconduct, notorious
negligence, habitual intoxication, or
willful intention to kill himself or
another; [Sec. 15]
(2) Employee is:
(a) in service at the time of disability;
or
(b) even if separated, he has paid at
least 36 monthly contributions
within the 5-year period
immediately prior to disability or
has paid a total of at least 180
monthly contributions prior to
disability; and
(c) Member is not enjoying old-age
retirement benefit. [Sec. 16]
Benefit for Permanent Total Disability

 Monthly income benefit for life equal
to basic monthly pension – This is
effective from date of disability;
 If member is in service at the time of
disability and he has paid at least
180 monthly contributions, in addition
to the monthly income benefit, he shall
receive an additional cash payment of
18 times basic monthly pension.
To the ineligible
If member has rendered at least 3 years of
service, then he shall receive cash
amount of contributions made] or (b) He has failed to qualify in the
P12,000 whichever is higher. [Sec. prior 2 schemes.
16]
B.3.5.Funeral benefits [Sec. 23]

Partial Disability
The amount shall be fixed by GSIS rules
Paid according to GSIS prescribed and regulations
schedule (this is similar to the
scheme used by SSS); member
availing of permanent partial
disability must satisfy condition
regarding the disability not being
due to his own fault and either
regarding employment status and
services rendered. (See Eligibility
requirements for Permanent Total
Disability)
B.3.4.Death benefits [Sec. 21]

When member dies, the primary
beneficiaries are entitled to only one
of the following:
(1) Survivorship pension
(a) If he was in the service
when he died; or
(b) Even if separated from the
service, he has at least 3
years of service and has
paid 36 monthly
contributions within the 5
years immediately
preceding death; or
(c) Even if separated from the
service, he has paid 180
monthly contributions prior
to death.
(2) Survivorship pension plus cash
payment of 100% ave. monthly
compensation for every year
of service (pension plus total
contributions made)
(a) If he was in the service
when he died; and
(b) With 3 years of service.
(3) Cash payment equivalent to
100% ave. monthly
compensation for each year of
service he paid contributions or
P12,000 whichever is higher
(a) With 3 years of service; and
Who are entitled: P70 whichever is higher.
(1) Active member;
(2) Member separated from service but
still entitled to funeral benefit;
(3) Pensioner;
(4) Retiree who at the time of retirement
was of pensionable age but opted to
retire under RA 1616.
B.3.6.Loan
GSIS website provides for this. The
following are the loans provided online:
(1) Consolidated Loan
(2) Policy Loan
(3) Emergency Loan
(4) Pension Loan
B.3.7. Temporary Disability Benefits

[Sec. 18] Similar to sickness.
Eligibility requirements and other

conditions:
(1) Employee must be:
(a) in service at the time of disability;
or
(b) if separated, he has rendered at
least 3 years of service and paid
at least 6 monthly contributions in
the 12 month period immediately
prior to disability;
(2) All sick leave credits including CBA
sick leaves for the current year has
been used up; and
(3) Maximum of 120 days per 1 calendar
year (so maximum permissible for
the same sickness and confinement
is 240 days for 2 consecutive years).
Benefit
75% of the current daily compensation for
every day or fraction thereof of disability or
B.3.8.Separation Benefits [Sec. 11]
(1) 60 years of age, or separation B.3.10. Survivorship Benefits [Sec.
from service with at least 3
years but not over 15 years 20] Beneficiaries are entitled to the
served following:
(2) Below 60 years of age, but at (1) Basic survivorship pension which is
least 15 years of service 50% of basic monthly pension; (see
rendered. Death Benefits) and
Benefit
(1) For 60 years of age or
separated from service with 3
to 15 years of service: cash
payment of 100% of ave.
monthly compensation for
each year of service (total
amount of all contributions
paid) or P12,000 whichever is
higher.
(2) Below 60 years of age and at
least 15 years of service: cash
payment equivalent to 18 x
[monthly pension] at the time
of resignation or separation
plus an old-age pension
benefit equal to basic monthly
pension.
B.3.9.Unemployment Benefits [Sec. 12]

(1) Employee separated from
service due to abolition of his
office or position; and
(2) Employee has been paying
integrated contributions for at
least 1 year prior to
separation.
Benefit
Monthly cash payments of 50% of
average monthly compensation for
a duration which is proportional to
years rendered, ranging from 2
months to 6 months.
(2) Dependent children’s pension not
exceeding 50% of the basic monthly
pension.
B.3.11. Life Insurance Benefits [Sec. 24]

Note: Judiciary and Constitutional
Commissions are entitled to life insurance
only.
SSS GSIS
RA 1161 as amended by RA
Enabling law RA 8291 amending PD 1146
8282: Social Security Act of
1997
Employer – any person, natural or juridical,
Employer – National government,
domestic or foreign, who carries on in the
its political subdivisions, branches,
Philippines any trade business, industry,
agencies or instrumentalities,
undertaking, and uses the services of
including government-owned or
another person who is under his orders as
controlled corporations and
regards the employment, except those
financial institutions with original
considered as employer under the GSIS. A
charters [GOCCs]; constitutional
self-employed person shall be both
commissions; and judiciary
employer and employee at the same time.
Employee – any person who performs

Employee – any person receiving
services for an employer in which either or
compensation while in service of an
both mental and physical efforts are used
employer whether by election or
and who receives compensation for such
appointment, irrespective of status
Definition of services, where there is an employer—
of appointment; baranggay officials;
employee relationship; also, a self-employed
Terms and sangguniang officials
person who is both employee and
employer at the same time
Self-employed – any person whose income
is not derived from employment, including,
but not limited to:
 self-employed professionals;
 partners and single proprietors of Note: No counterpart for self-
businesses; employed.
 actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition;
 athletes, coaches, trainers, jockeys;
and
 individual farmers and fishers.
BOC STANDARDS
SSS GSIS
Dependents:
 Legal spouse entitled by law to receive
support;
 Child – unmarried, not gainfully
employed, and below 21 or
 Child over 21 if he or she became Same, except that a child here is
permanently incapacitated and below 18
incapable of self-support, physically or
mentally,; child may be legitimate,
legitimated, legally adopted, or
illegitimate;
 Parent who is receiving regular support.
Beneficiaries
Primary
 Dependent spouse – until remarriage
[see above];
 Dependent children [see above];
illegitimate children are entitled only to
50% of the share of legitimate children
unless there are no legitimate children, Same except that RA 8291 does
in which case, they get 100%. not distinguish share of legitimate
Secondary and illegitimate children
 Shall only receive when the primary
beneficiaries are absent: Dependent
parents
Other
 Any other person designated by the
member as his/her secondary
beneficiary.
Compensation – all actual remuneration for

Compensation – basic pay received
employment, including living allowance, as
excluding per diems, bonuses,
well as the cash value of any remuneration
overtime, honoraria, allowances
paid in any medium other than cash except
and other emoluments not
that portion already above the max salary
integrated into the basic pay under
credit under Sec. 18 of the Act.
existing laws.
BOC STANDARDS
PAGE 144 OF 235

BOC STANDARDS
SSS GSIS
Compulsory
 Employers as defined above;
 Employees not over 60 years including
household helpers with at least P1,000
monthly pay; and
 Self-employed.
Public sector employees below the
Voluntary compulsory retirement age of 65.
 Spouses who devote full time to
managing household and family Exceptions:
affairs; (1) AFP and PNP;
 OFWs recruited by foreign-based (2) Members of the Judiciary and
Coverage employers; Constitutional Commissions
 Employees already separated from who are covered only by life
employment or those self-employed insurance as they have
with no realized income for a given separate retirement schemes;
month, who chose to continue with (3) Contractual employees with no
contributions to maintain right to full employee-employer relationship
benefit. with the agency they serve.
Note: Foreign governments, international

organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement
with the Philippine government to include
their employees in the SSS except those
already covered by their civil service
retirement system.
Employer: 1st day of operation
Effective Date
Employee: 1st day at work
of Coverage
Self-employed: upon registration with SSS
(1) Monthly pension (1) Monthly pension

(2) Dependents’ pension (2) Retirement benefits
(3) Retirement benefits (3) Permanent disability benefits
(4) Permanent disability benefits (4) Death Benefits
(5) Death benefits (5) Funeral benefits
Summary of (6) Funeral benefits (6) Loan – GSIS website provides
Benefits (7) Loan – Social Security Commission for this
Resolution No. 669. Moreover, several (7) Temporary disability benefits
SSS-issued circulars such as Circular [similar to sickness]
No. 21-P and No. 52 pertain to the (8) Separation benefits
treatment of salary loans, sometimes
(9) Unemployment benefits – Sec 11
providing for more flexible payment
terms or condonation for delinquent (10) Survivorship benefits
payers; Santiago v. CA and SSS, GR # (11) Life insurance benefits
PAGE 145 OF
235
BOC L-39949 [1984] STANDARDS
resolved an issue
involving the
PAGE 146 OF
235
SSS GSIS
treatment of salary loan repayments; SSS Note: Judiciary and Constitutional
website also shows loans Commissions are entitled to life
(8) Sickness benefits insurance only.
(9) Maternity leave benefits
(1) Employer’s contribution, and
(2) Employee’s obligation to pay Continued membership for the
Effects of
contribution both cease at the end of unemployed member; and
separation
the month of separation; entitlement to whatever benefits he
from
(3) Employee shall be credited with all has qualified to in the event of any
employment
contributions paid on his behalf and compensable contingency.
entitled to all benefits set forth by law.
Social Security Commission CA [Rule GSIS  CA [Rule 43] SC [Rule
Dispute
43; questions of law and fact]  SC [Rule 45];
Settlement
45; questions of law only]
appeal does not stay execution.
Prescriptive
20 years 4 years
Period
of those employed in both sectors at once are to

C. LIMITED PORTABILITY LAW [RA
7699]
C.1 COVERAGE [SEC. 3]
(1) Workers who transfer employment
from one sector to another; or
(2) Those employed in both sectors
(public and private).
C.2. PROCESS
The covered worker shall have his credible
services or contributions in both Systems
credited to his service or contribution
record in each of the Systems and shall be
totalized for purposes of old-age, disability,
survivorship and other benefits in case the
covered member does not qualify for such
benefits in either or both systems without
totalization: Provided, however, That
overlapping periods of membership shall be
credited only once for purposes of
totalization [Sec. 3]
“Totalization” shall refer to the process of
adding up the periods of creditable
services or contributions under each of the
Systems, for purposes of eligibility and
computation of benefits [Sec. 2(e)].
Overlapping periods of membership in case
be counted only ONCE for
purposes of totalization to be able
to satisfy eligibility requirements of
benefits provided for by either SSS or
GSIS. [Sec. 3]
D. EMPLOYEE’S COMPENSATION –
COVERAGE AND WHEN COMPENSABLE
This refers to the Amended Rules
on Employees’ Compensation,
implementing Title II, Book IV of the
Labor Code.
Workmen’s Compensation Program

This is the general and
comprehensive term applied to
those laws providing for
compensation for loss resulting from
the injury, disablement, or death of
workmen through industrial
accident, casualty, or disease.
[Azucena, The Labor Code with
Comments and Cases]
D.1 COVERAGE [SEC. 2, RULE I]

(1) Every employer shall be covered.
(2) Every employee not over sixty
(60) years of age shall be
covered.
(3) An employee over sixty (60) years of out of and in the course of the
age shall be covered if he had been employment.
paying contributions to the System
prior to age sixty (60) and has not (2) For the sickness and the resulting
been compulsorily retired. disability or death to be
compensable, the sickness must be
(4) An employee who is coverable by the result of an occupational disease
both the GSIS and SSS shall be listed under Annex “A” of these Rules
compulsorily covered by both with the conditions set therein
Systems. satisfied, otherwise, proof must be
(5) Filipinos working abroad in the shown that the risk of contracting the
service of an employer as defined in disease is increased by the working
Section 3 hereof shall be covered by conditions.
the System, and entitled to the same
benefits as are provided for
employees working in the Limitation [Sec. 1, Rule IV]
Philippines. [Sec. 5, Rule I] No compensation shall be allowed to the
employee or his dependents when the
injury, sickness, disability, or death was
D.2. EFFECTIVITY [SEC. 6, RULE I] occasioned by any of the following:
Coverage of employees shall take effect on (1) his intoxication;
the first day of employment.
(2) his willful intention to injure or kill
himself or another; or
D.3. WHEN COMPENSABLE (3) his notorious negligence
Grounds [Sec. 1, Rule III]
(1) For the injury and the resulting
disability or death to be
compensable, the injury must be the
result of accident arising
BOC RELATIONS
LABOR LAW
LABOR STANDARDS
PAGE 148 OF
235
VII. Labor Relations contrary to law.
A. RIGHT TO SELF-ORGANIZATION Right to Self-Organization: A Fundamental

Right
Self-organization is a fundamental right
Basis of Right guaranteed by the Philippine Constitution
(1) 1987 Constitution and the Labor Code. Employees have the
right to form, join or assist labor
Sec. 8, Art. III. The right of the people, organizations for the purpose of collective
including those employed in the public bargaining or for their mutual aid and
and private sectors, to form unions, protection. [UST Faculty Union v. Bitonio,
associations, or societies for purposes G.R. No. 131235 (1999)]
not contrary to law shall not be
abridged.
Infringement of the right to self-organization
Sec.3, Art. XIII. The state shall afford full It shall be unlawful for any person to
protection to labor, local and overseas, restrain, coerce, discriminate against or
organized and unorganized, and unduly interfere with employees and
promote full employment and equality of workers in their exercise of the right to self-
opportunities for all. organization (Art. 257)
It shall guarantee the rights of all
workers to self-organization, collective Scope of right to self-organization
peaceful concerted activities, including (1) Right to form, join or assist labor
the right to strike in accordance with organizations of their own choosing for the
purpose of collective bargaining through
(2) Labor Code representatives of their own choosing (Art.
257);
Art. 253. All persons employed in
commercial, industrial and agricultural (2) Right to engage in lawful concerted
enterprises and in religious, charitable, activities for the same purpose (collective
medical, or educational institutions, bargaining) or for their mutual aid and
whether operating for profit or not, shall protection (Art. 257)
have the right to self-organization and to (3) The right of any person to join an
form, join, or assist labor organizations organization also includes the right to leave
of their own choosing for purposes of that organization and join another one.
collective bargaining. [Heritage Hotel Manila v. PIGLAS-Heritage,
Ambulant, intermittent and itinerant G.R. No. 177024 (2009)]
workers, self-employed people, rural (4) The right to form or join a labor
workers and those without any definite organization necessarily includes the right
employers may form labor organizations to refuse or refrain from exercising said
for their mutual aid and protection. right. It is self-evident that just as no one
should be denied the exercise of a right
granted by law, so also, no one should be
Art. 254. Employees of government compelled to exercise such a conferred
corporations established under the right. The fact that a person has opted to
corporation code shall have the right to acquire membership in a labor union does
organize and to bargain collectively with not preclude his subsequently opting to
their respective employers. All other renounce such membership. [Reyes v.
employees in the civil service shall have Trajano, G.R. No. 84433 (1992)]
the right to form associations for
purposes not (5) The right of the employees to self-
organization is a compelling
reason why their
BOC RELATIONS
withdrawal from the cooperative must be employers may form labor organizations for their
allowed. As pointed out by the union, the mutual aid and protection. [Art. 253]
resignation of the member-employees is
Any employee, whether employed for a definite
an expression of their preference for union
period or not, shall, beginning on his first day of
membership over that of membership in
service, be considered an employee
the cooperative. [Central Negros Electric
Cooperative v. SOLE, G.R. No. 94045
(1991)]
(6) Their freedom to form organizations
would be rendered nugatory if they could
not choose their own leaders to speak on
their behalf and to bargain for them. [Pan-
American World Airways, Inc v. Pan-
American Employees Association, G.R. No.
L-25094 (1969)]
(7) Recognition of the tenets of the sect
... should not infringe on the basic right of
self- organization granted by the
[C]onstitution to workers, regardless of
religious affiliation. [Kapatiran sa Meat and
Canning Division v. Calleja, G.R. No.
82914 (1988)]
A.1. WHO MAY UNIONIZE FOR

PURPOSES OF COLLECTIVE
BARGAINING?
(1) All employees
(2) Government employees of
corporations created under the Corporation
Code
(3) Supervisory Employees
(4) Aliens with valid working permits
(5) Security personnel
(1) All Employees

All persons employed in commercial,
industrial and agricultural enterprises and
in religious, charitable, medical or
educational institutions, whether operating
for profit or not, shall have the right to self-
organization and to form, join or assist
labor organizations of their own choosing
for purposes of collective bargaining.
(Presumes an employer- employee
relationship)
Ambulant, intermittent and itinerant
workers, self-employed people, rural
workers and those without any definite
PAGE 150 OF
235
BOCpurposes of membership in any
for RELATIONS effectively recommend such managerial
labor union. [Art. 292(c)] actions if the exercise of such authority is
not merely routinary or clerical in nature
Employee […] shall include any
but requires the use of independent
individual whose work has ceased
judgment. [Art. 219 (m)]
as a result of or in connection with
any current labor dispute or because Supervisory employees shall not be eligible
of any unfair labor practice if he has for membership in the collective bargaining
not obtained any other substantially unit of the rank-and-file employees but
equivalent and regular employment. may join, assist or form separate collective
[Art. 219(f)] bargaining
Employees of non-profit
organizations are now permitted to
form, organize or join labor unions of
their choice for purposes of collective
bargaining [FEU-Dr. Nicanor Reyes
Medical Foundation Inc. v. Trajano,
G.R. No. 76273 (1987)]
(2) Employees of Government

Corporations Created under the
Corporation Code
The right to self-organization shall
not be denied to government
employees. [§2(5), Art. IX-B,
Constitution]
Employees of government
corporations established under the
Corporation Code shall have the right
to organize and to bargain
collectively with their respective
employers
All other employees in the civil
service shall have the right to form
associations for purposes not
contrary to law. [Art. 254]
All government employees can
form, join or assist employees’
organizations of their own choosing
for the furtherance and protection of
their interests. They can also form,
in conjunction with appropriate
government authorities, labor-
management committees, work
councils and other forms of workers’
participation schemes to achieve the
same objectives. [EO 180 §2
(1987)]
(3) Supervisory Employees

Supervisory employees are those
who, in the interest of the employer,
PAGE 151 OF
235
units and/or labor organizations of their No. 87 and 98 [Book V, Rule II, §2]
own. The rank and file union and the
supervisors' union operating within the
same establishment may join the same
federation or national union.[Art. 255]
Rationale
Supervisory employees, while in the
performance of supervisory functions,
become the alter ego of the management
in the making and the implementing of key
decisions at the sub-managerial level.
Certainly, it would be difficult to find unity
or mutuality of interests in a bargaining unit
consisting of a mixture of rank-and-file and
supervisory employees. [Toyota Motor Phil.
Corp. v. Toyota Motor Phil. Corp. Labor
Union, G.R. No. 121084 (1997)]
Effect of Mixed Membership or
Commingling
The inclusion as union members of
employees outside the bargaining unit shall
not be a ground for the cancellation of the
registration of the union. Said employees
are automatically deemed removed from
the list of membership of said union. (Art.
256)
Note: The rank and file union and the
supervisors’ union operating within the
same establishment may join the same
federation or national union. [Art. 255]
(4) Aliens
General rule: All aliens, natural or juridical,
[…] are strictly prohibited from engaging
directly or indirectly in all forms of trade
union activities. [Art. 284]
Exception: Aliens may exercise the right to
self-organization and join or assist labor
unions for purposes of collective
bargaining, provided the following
requisites are fulfilled:
1. With valid working permits issued by
the DOLE; and
2. They are nationals of a country which
grants the same or similar rights to Filipino
workers [Art. 284].
a. As certified by DFA; OR
b. Has ratified either ILO Conventions
(5) Security Guards Managerial employee is one who is vested
with powers or prerogatives to lay down
The security guards and other
and execute management policies and/or
personnel employed by the security
to hire, transfer, suspend, lay-off, recall,
service contractor shall have the
discharge, assign or discipline employees.
right:
[Art. 219 (m)]
(1) To form, join, or assist in the
Managerial employees are not eligible to
formation of a labor organization of
join, assist or form any labor organization.
their own choosing for purposes of
[…] [Art. 255]
collective bargaining and
(2) To engage in concerted
activities which are not contrary to
law including the right to strike.
[D.O. No. 14 Series of 2001
Guidelines Governing the
Employment and Working
Conditions of Security Guards and
Similar Personnel in the Private
Security Industry)
On Dec. 24, 1986, President C.
Aquino issued EO No. 111 which
eliminated the provision which
made security guards ineligible to
join any labor organization. In 1989,
Congress passed RA 6715 which
also did not impose limitations on
the ability of security guards to join
labor organizations. Thus, security
guards “may now freely join a labor
organization of the rank-and-file or
that of the supervisory union,
depending on their rank.” [Manila
Electric Co. v. SOLE, G.R. No. 91902
(1991)]
WHO CANNOT FORM, JOIN OR

ASSIST LABOR ORGANIZATIONS
(1) Managerial employees
(2) Confidential employees
(3) Non-employees
(4) Member-employee of a cooperative
(5) Employees of
international organizations
(6) High-level government employees
(7) Members of the AFP, police
officers, policemen, firemen and jail
guards
(1) Managerial Employees

Managerial functions refer “to powers and jeopardize that interest which they are duty
prerogatives to lay down and execute bound to protect. [Metrolab Industries Inc.
management policies and/or to hire, v. Roldan-Confessor, G.R. No. 108855
transfer, suspend, layoff, recall, discharge (1996)]
or dismiss employees”. [San Miguel
Corporation Supervisors and Exempt Union Employees should not be placed in a
v. Laguesma, G.R. No. 110399 (1997)] position involving a potential conflict of
interests. Management should not be
required to handle labor relations matters
(2) Confidential employees through employees who are represented
by the union with which the company is
Nature of Access Test required to deal and who in the normal
Confidential employees, by the nature of performance of their duties may obtain
their functions, assist and act in a advance information of the company’s
confidential capacity to, or have access to position with regard to contract
confidential matters of, persons who negotiations, the disposition of grievances, or
exercise managerial functions in the field other labor relations matters. [San Miguel
of labor relations. Supervisors and Exempt Union v. Laguesma,
G.R. No. 110399 (1997)]
Requisites: The employee must:
The disqualification of managerial and
(1) Assist or act in a confidential confidential employees from joining a
capacity, AND bargaining unit for rank and file employees
(2) To persons who formulate, determine, is already well-entrenched in
and effectuate management policies in the jurisprudence. While Article 245 [now 255]
field of labor relations of the Labor Code limits the ineligibility to
join, form and assist any labor organization
Stated differently to managerial employees, jurisprudence
(1) the confidential relationship must has extended this prohibition to
exist between the employees and his confidential employees or those who by
supervisor, and reason of their positions or nature of work
are required to assist or act in a fiduciary
(2) the supervisor must handle the
manner to managerial employees and hence,
prescribed responsibilities relating to labor
are likewise privy to sensitive and highly
relations. [San Miguel Supervisors and
confidential records. [Standard Chartered
Exempt Union v. Laguesma, G.R. No.
Bank Employees Union v SCB, G.R. No.
110399 (1997)]
161933 (2008)]
Rationale of Exclusion of Confidential Function Test: Nomenclature is not

Employees controlling
While Art. 245 [now 255] of the Labor mean the extension of the law to persons or
Code singles out managerial employees individuals who are supposed to act in the interest
as ineligible to join, assist or form any of the employers. It is not far-fetched that in the
labor organization, under the doctrine of course of collective bargaining, they might
necessary implication, confidential
employees are similarly disqualified…
If confidential employees could unionize in
order to bargain for advantages for
themselves, then they could be governed
by their own motives rather than the
interest of the employers. Moreover,
unionization of confidential employees for
the purpose of collective bargaining would
The mere fact that an employee is
designated “manager” does not ipso
facto make him one. Designation
should be reconciled with the actual
job description of the employee.
[Paper Industries Corp. of the
Philippines. v. Laguesma, G. R.
No.101738 (2000)]
Confidential information: Must relate

to labor relations and not from a
business standpoint
An employee must assist or act in a
confidential capacity and obtain
confidential information relating to
labor relations policies. Exposure to
internal business operations of the
company is not per se a ground for
the exclusion in the bargaining unit.
[Coca-Cola
Bottlers v. IPTEU, G.R. No. 193798 (2015)] Organizations International organizations are
endowed with
(3) Non-Employees
[Persons who] are not employees of [a
company] are not entitled to the
constitutional right to join or form a labor
organization for purposes of collective
bargaining. […]The question of whether
employer-employee relationship exists is a
primordial consideration before extending
labor benefits under the workmen's
compensation, social security, Medicare,
termination pay and labor relations law.
[Singer Sewing Machine Co. v. Drilon,
G.R. No. 91307, 1991]
But they can still form labor union provided
that they are employees of the contractor.
A labor union can be established to
bargain with the contractor but not the
principal employer. [Professor Battad]
(4) Employee-Member of
Cooperative General Rule:
An employee of a cooperative who is a
member and co-owner thereof cannot
invoke the right to collective bargaining for
certainly an owner cannot bargain with
himself or his co-owners. [Batangas-I
Electric Cooperative Labor Union v. Romeo
A. Young, G.R. No. 62386, (1988)]
Irrespective of the degree of their

participation in the actual management of
the cooperative, all members thereof
cannot form, assist or join a labor
organization for the purpose of collective
bargaining. [Benguet Electric Cooperative
v. Ferrer-Calleja, G.R. No. 79025 (1989)]
Exception:
Employees who withdrew their
membership from the cooperative are
entitled to form or join a labor union for the
negotiations of a Collective Bargaining
Agreement. [Central Negros Electric
Cooperative, Inc. v. DOLE, G.R. No. 94045
(1991)]
(5) Employees of International

some degree of international legal assist or form any labor organization, under
personality. They are granted the doctrine of necessary implication,
jurisdictional immunity, as provided confidential employees are similarly
in their organization’s constitutions, disqualified. This doctrine states that what
to safeguard them from the is implied in a statute is as much a part
disruption of their functions. thereof as that which is expressed.
[Metrolab Industries Inc. v. Roldan-
Immunity […] is granted to avoid
Confessor, G.R. No. 108855 (1996)]
interference by the host country in
their internal workings. The
determination [by the executive
branch] has been held to be a
political question conclusive upon
the Courts in order not to
embarrass a political department of
Government. [Hence], a certification
election cannot be conducted in an
international organization to which
the Philippine Government has
granted immunity from local
jurisdiction. [International Catholic
Migration Commission v. Calleja,
G.R. No. 85750 (1990)]
(6) High-level / Managerial

Government Employees
High-level employees of the
government whose functions are
normally considered as policy-
making or managerial or whose
duties are of a highly confidential
nature shall not be eligible to join
the organization of rank-and- file
government employees. [§3, E.O.
180]
(7) Members of the AFP, Policemen,

Police Officers, Firemen and Jail
Guards
Members of the AFP, Policemen,
Police Officers, Firemen and Jail
Guards are expressly excluded by
EO 180, §4 from the coverage of
the EO 180 which provides
guidelines for the exercise of the
right to organize of government
employees.
A.1.a. Doctrine of necessary implication

While Art. 245 [now 255] of the
Labor Code singles out managerial
employees as ineligible to join,
A.2. COMMINGLING/MIXTURE OF the nature of the organization or force majeure
MEMBERSHIP renders such secret balloting impractical, in which
case the board of directors of the organization
may
employees outside the bargaining unit shall
not be a ground for the cancellation of the
the list of membership of said union [Art.
256].
A.3. RIGHTS AND CONDITIONS OF

MEMBERSHIP
Art. 250. The following are the rights and

conditions of membership in a labor
organization:
a. No arbitrary or excessive initiation
fees shall be required of the members of a
legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and
forfeiture be imposed;
b. The members shall be entitled to full
and detailed reports from their officers and
representatives of all financial transactions
as provided for in the constitution and by-
laws of the organization; and
c. The members shall directly elect their
officers in the local union, as well as their
national officers in the national union or
federation to which they or their local union
is affiliated, by secret ballot at intervals of
five
(5) years. No qualification requirement for
candidacy to any position shall be imposed
other than membership in good standing in
subject labor organization. The secretary
or any other responsible union officer shall
furnish the Secretary of Labor and
Employment with a list of the newly-
elected officers, together with the
appointive officers or agents who are
entrusted with the handling of funds within
thirty (30) calendar days after the election
of officers or from the occurrence of any
change in the list of officers of the labor
organization;
d. The members shall determine by
secret ballot, after due deliberation, any
question of major policy affecting the entire
membership of the organization, unless
make the decision in behalf of the of the organization shall prescribe after
general membership. three (3) years from the date of submission
of the annual financial report to the
e. No labor organization shall
Department of Labor and Employment or
knowingly admit as member or
from the date the same should have been
continue in membership any
submitted as required by law, whichever
individual who belongs to a
comes earlier: Provided, That this provision
subversive organization or who is
shall apply only to a legitimate labor
engaged directly or indirectly in any
organization which has submitted the
subversive activity;
financial report requirements under this
f. No person who has been Code: Provided, further, That failure of any
convicted of a crime involving moral labor organization to comply with the
turpitude shall be eligible for
election as a union officer or for
appointment to any position in the
union;
g. No officer, agent or member of
a labor organization shall collect
any fees, dues, or other
contributions in its behalf or make
any disbursement of its moneys or
funds unless he is duly authorized
pursuant to its constitution and by-
laws;
h. Every payment of fees, dues
or other contributions by a member
shall be evidenced by a receipt
signed by the officer or agent
making the collection and entered
into the record of the organization to
be kept and maintained for the
purpose.
i. The funds of the organization
shall not be applied for any purpose
or object other than those expressly
provided by its constitution and by-
laws or those expressly authorized
by written resolution adopted by the
majority of the members at a
general meeting duly called for the
purpose;
j. Every income or revenue of
the organization shall be evidenced
by a record showing its source, and
every expenditure of its funds shall
be evidenced by a receipt from the
person to whom the payment is
made, which shall state the date,
place and purpose of such
payment. Such record or receipt
shall form part of the financial
records of the organization.
k. Any action involving the funds
periodic financial reports required by law o. The books of accounts and other records of
and such rules and regulations the financial activities of any labor organization
promulgated thereunder six (6) months shall be opened to inspection by any officer or
after the effectivity of this Act shall member thereof during office
automatically result in the cancellation of
union registration of such labor
organization.
l. The officers of any labor organization
shall not be paid any compensation other
than the salaries and expenses due to
their positions as specifically provided for
in its constitution and by-laws, or in a
written resolution duly authorized by a
majority of all the members at a general
membership meeting duly called for the
purpose. The minutes of the meeting and
the list of participants and ballots cast shall
be subject to inspection by the Secretary
of Labor or his duly authorized
representatives. Any irregularities in the
approval of the resolutions shall be a
ground for impeachment or expulsion from
the organization.
m. The treasurer of any labor
organization and every officer thereof who is
responsible for the accounts of such
organization or for the collection,
management, disbursement, custody or
control of the funds, moneys and other
properties of the organization, shall render
to the organization and to its members a
true and correct account of all moneys
received and paid by him since he
assumed office or since the last date on
which he rendered such account and of
the balance remaining in his hands at the
time of rendering such account, and of all
bonds, securities, and other properties of
the organization entrusted to his custody
or under his control. The rendering of such
account shall be made:
1. At least once a year within thirty
(30) days after the close of its fiscal
year.
2. At such other times as may be
required by a resolution of the
majority of the members of the
organization.
3. Upon vacating his office.
n. The account shall be duly audited
and verified by affidavit and copy thereof
shall be furnished the Secretary of Labor.
hours. mete the appropriate penalty. The decision
of the Bureau shall be appealable only on
p. No special assessment or
question of law by certiorari to the
other extraordinary fees may be
Supreme Court.
levied upon the members of a labor
organization unless authorized by a Criminal and civil liabilities arising from
written resolution of a majority of all violation of above rights and conditions of
the members at a general membership shall continue to be under the
membership meeting duly called for jurisdiction of ordinary courts.
the purpose. The secretary of the
organization shall record the
minutes of the meeting including the
list of all members present, the votes
cast, the purpose of the special
assessment or fees and the
recipient of such assessment or
fees. The record shall be attested to
by the president.
q. No special assessments,
attorney's fees, negotiation fees or
any other extraordinary fees may be
checked off from any amounts due
to an employee without an
individual written authorization duly
signed by the employee. The
authorization should specifically
state the amount, purpose and
beneficiary of the deduction; and
r. It shall be the duty of any
labor organization and its officers to
inform its members on the
provisions of its constitution and by-
laws, collective bargaining
agreement, the prevailing labor
relations system and all their rights
and obligations under existing labor
laws.
s. For this purpose, registered
labor organizations may assess
reasonable dues to finance labor
relations seminars and other labor
education activities.
Any violation of the above rights
and conditions of membership shall
be a ground for cancellation of
union registration or expulsion of an
officer from office whichever is
appropriate. At least 30 per cent of
all the members of a union or any
member or members specifically
concerned may report such
violation to the Bureau. The Bureau
shall have the power to hear and
decide any reported violation and to
Admission and Discipline of Members when they seek the disintegration and destruction
of the very union to which they belong, they
No arbitrary or excessive initiation fees or
thereby forfeit their rights to remain as members
fines
of the union which they seek to destroy. [Villar v.
No arbitrary or excessive initiation fees
shall be required of the members of a
forfeiture be imposed. [Article 250(e)]
Prohibition on subversive activities or

membership
No labor organization shall knowingly
admit as members or continue in
membership any individual who:
(a) belongs to a subversive organization;
or
(b) who is engaged directly or indirectly
in any subversive activity;
Unions cannot arbitrarily exclude qualified

applicants
Unions are not entitled to arbitrarily
exclude qualified applicants for
membership, and a closed•-shop provision
would not justify the employer in
discharging, or a union in insisting upon
the discharge of, an employee whom the
union thus refuses to admit to
membership, without any reasonable
ground therefor. Needless to say, if said
unions may be compelled to admit new
members, who have the requisite
qualifications, with more reason may the
law and the courts exercise the coercive
power when the employee involved is a long
standing union member, who, owing to
provocations of union officers, was impelled
to tender his resignation, which he
forthwith withdrew or revoked. [Salunga v.
CIR, No. L•- 22456 (1967)]
Members who seek destruction of union

lose right to remain as members
Inherent in every labor union, or any
organization for that matter, is the right of
self•-preservation. When members of a
labor union, therefore, sow the seeds of
dissension and strife within the union;
Inciong, No. L•-50283-•84 (1983)] condonation doctrine, which was declared
abandoned in Morales v. Court of Appeals
[G.R. Nos. 217126- 27 (2015)]
Election of
Officers
Submission of names not a requirement to
Manner of allow members to vote
election Submission of the employees’ names with
the BLR as qualified members of the union
Members shall directly elect their
is not a condition sine qua non to enable
officers, including those of the
said members to vote in the election of
national union or federation, to
union’s
which they or their union is
affiliated, by secret ballot at
intervals of five
(5) years. [Art. 250(c)]
Qualifications of officers
No requirements other than
membership in good standing. [Art.
250(c)]
No person who has been convicted
of a crime involving moral turpitude
shall be eligible for election as a
union officer or for appointment to
any position in the union. [Art.
250(f)]
Acts done in prior term is not a

ground to remove a public officer
The Court should never remove a
public officer for acts done prior to
his present term of office. To do
otherwise would be to deprive the
people of their right to elect their
officers. When the people have
elected a man to office, it must be
assumed that they did this with
knowledge of his life and character,
and that they disregarded or
forgave his faults or misconduct, if
he had been guilty of any. It is not
for the court, by reason of such
faults or misconduct to practically
overrule the will of the people.
[Kapisanan ng Manggagawang
Pinagyakap v. Trajano, G.R. No. L•-
62306 (1985), citing Pascual v.
Provincial Board of Nueva Ecija,
G.R. No. L-62306 (1959)]
N.B.: Pascual set forth the

officers. [...] The question of eligibility to No. 127374 (2002)]
vote may be determined through the use
of the applicable payroll period and
employee’s status. [Tancinco v. Ferrer-
Calleja, G.R. No. L-
•78131 (1988)]
Disqualification does not render those who

garner the 2nd highest number of votes as
the winners
Disqualification of winning candidates will
not result in the declaration of those who
garnered the second highest number of
votes as winners. The mere fact that they
obtained the second highest number of
votes does not mean that they will thereby
be considered as the elected officers if the
true winners are disqualified. [Manalad v.
Trajano, G.R. Nos. 72772•-73 (1989)]
A.3.a. Nature of relationship
A.3.a. i. Member-Labor union
The nature of the relationship between the

union and its members is fiduciary in
nature, which arises from the dependence
of the employee on the union, and from the
comprehensive power vested in the union
with respect to the individual. The union
may be considered but the agent of its
members for the purpose of securing for
them fair and just wages and good working
conditions. [Heirs of Cruz v. CIR, G.R. No.
L-23331-32 (1969)]
A.3.a.ii.Labor union-Federation
Local unions do not owe their creation and
existence to the national federation to
which they are affiliated but, instead, to the
will of their members. [...] The local unions
remain the basic units of association, free
to serve their own interests subject to the
restraints imposed by the constitution and
by-laws of the national federation, and free
also to renounce the affiliation upon the
terms laid down in the agreement which
brought such affiliation into existence.
[Philippine Skylanders, Inc. v. NLRC, G.R.
Definition
A.3.a.ii.a.Disaffiliation “Bargaining Unit” refers to a group of

employees sharing mutual interests within
A local union has the right to a given employer unit, comprised of all or
disaffiliate from its mother union or less than all of the entire body of
declare its autonomy. A local union, employees in the employer unit or any
being a separate and voluntary specific occupational or geographical
association, is free to serve the grouping within such employer
interests of all its members
including the freedom to disaffiliate
or declare its autonomy from the
federation to which it belongs when
circumstances warrant, in accordance
with the constitutional guarantee of
freedom of association. [Malayang
Samahan ng mga Manggagawa sa
M. Greenfield, Inc. v. Ramos, G.R.
No. 113907 (2000)]
[The federation] is entitled to

receive the dues from [the
employer] as long as the [local]
union is affiliated with it and [the
employer is] authorized by their
employees (members of [the local]
union) to deduct union dues.
Without said affiliation, the
employer has no link to the
[federation]. [...] A contract between
an employer and the [federation] as
bargaining agent for the employees
is terminated by the disaffiliation of
the local [union] of which the
employees are members.
[Volkschel Labor Union v. BLR,
G.R. No. L- 45824 (1985)]
A.3.a.ii.b.Substitutionary Doctrine
Even during the effectivity of a

collective bargaining agreement
executed between employer and
employees thru their agent, the
employees can change said agent
but the contract continues to bind
then up to its expiration date. They
may bargain however for the
shortening of said expiration date.
[Elisco- Elirol Labor Union v. Noriel,
G.R. No. L-41955 (1977)]
B. BARGAINING UNIT
unit. [§1(e), Rule I, Book V] operators and discipline officers from the
bargaining unit of rank-and-file employees in the
It is “a group of employees of a given
1986 CBA does not bar any re-negotiation for the
employer, comprised of all or less than all
future inclusion of the said employees
of the entire body of employees, which the
collective interests of all the employees
indicate to be best suited to serve
reciprocal rights and duties of the parties
consistent with equity to the employer.
[Belyca Corp. v. Calleja, G.R. No. 77395
(1988) citing Rothenberg]
Functions of an Appropriate Bargaining Unit

(1) An ELECTORAL DISTRICT. – It marks
the boundaries of those who may
participate in a certification election.
(2) An ECONOMIC UNIT. – They are a
group of employees with community of
interests.
(3) A SOVEREIGN BODY. – It selects
the sole and exclusive bargaining agent.
Role of a bargaining unit

The labor organization designated or
selected by the majority of the employees
in an appropriate collective bargaining unit
shall be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining. [Art. 267]
Right of individual or group of employees

to present grievances
An individual employee or group of
employees shall have the right at any time
to present grievances to their employer.
[Art. 267]
CBA Coverage
As regular employees, the petitioners fall
within the coverage of the bargaining unit
and are therefore entitled to CBA benefits
as a matter of law and contract. [Farley
Fulache, et al. v. ABS-CBN, G.R. No.
183810 (2010)]
Effect of Prior Agreement

The express exclusion of the computer
in the bargaining unit. During the Federation Local v. Ople, G.R. No. L-44493-
freedom period, the parties may not 94 (1980)]
only renew the existing collective
Exception: Pervasive Unitary Aspect of
bargaining agreement but may also
Management Doctrine
propose and discuss modifications or
amendments thereto. [De La Salle The cross-linking of the agencies’
University v. DLSU Employees command, control, and communication
Association EA, G.R. No. 109002, systems indicate their unitary corporate
(2000)] personality. Accordingly, the veil of
corporate fiction [...]
Rationale
[A prior agreement] as to the
exclusion [of monthly-paid rank-and-
file employees] from the bargaining
union of the [daily-paid] rank- and-
file or from forming their own union
[…] can never bind subsequent
federations and unions as
[employees were not privy to that
agreement]. And even if [they were
privy], it can never bind subsequent
federations and unions because it is
a curtailment of the right to self•-
organization guaranteed by the
labor laws [General Rubber &
Footwear Corp. v. BLR, G.R. No.
74262 (1987)]
Effect of Inclusion of Employees

Outside the Bargaining Unit or
Commingling
General Rule: It shall not be a
ground for the cancellation of the
registration of the union. Said
employees are automatically
deemed removed from the list of
membership of said union. [Art. 256]
Exception: Unless such mingling was
brought about by misrepresentation,
false statement or fraud under
Article 247 (Grounds for cancellation
of Union Registration) of the Labor
Code. [SMCC-Super v. Charter
Chemical and Coating Corporation,
G.R. No. 169717 (2011)]
Corporate Entities
General Rule: Two companies having
separate juridical personalities shall
NOT be treated as a single
bargaining unit. [Diatagon Labor
should be lifted for the purpose of allowing (1) Will of the Employees (Globe Doctrine)
the employees of the three agencies to
(2) Affinity and unity of employees’ interest
form a single labor union. [Philippine Scouts
(Substantial Mutual Interests Rule)
Veterans v. Torres, G.R. No. 92357 (1993)]
A settled formulation of the doctrine of
piercing the corporate veil is that when two
business enterprises are owned,
conducted, and controlled by the same
parties, both law and equity will, when
necessary to protect the rights of third
parties, disregard the legal fiction that
these two entities are distinct and treat
them as identical or as one and the same.
[Ang Lee v. Samahang Manggagawa ng
Super Lamination, G.R. No. 193816
(2016)]
Determining whether or not to establish

separate bargaining units
The fact that the businesses are related,
that some of the employees are the same
persons working in the other company and
the physical plants, offices and facilities
are in the same compound are NOT
sufficient to justify piercing the corporate
veil. [Indophil Textile Mills Workers Union v.
Calica, G.R. No. 96490 (1992)] )
Spun-off corporations
The transformation of the companies is a
management prerogative and business
judgment which the courts cannot look into
unless it is contrary to law, public policy or
morals. [...] Considering the spin-offs, the
companies would consequently have their
respective and distinctive concerns in terms
of the nature of work, wages, hours of work
and other conditions of employment. [...]
The nature of their products and scales of
business may require different skills,
volumes of work, and working conditions
which must necessarily be commensurate
by different compensation packages. (San
Miguel Union v Confesor, 1996)
TEST TO DETERMINE THE

CONSTITUENCY OF AN APPROPRIATE
BARGAINING UNIT
4 Factors:
(3) Prior collective bargaining history and other subjects of collective bargaining.
[UP v. Ferrer-Calleja, G.R. No. 96189,
(4) Employment status
(1992)]
[Democratic Labor Association v.
Cebu Stevedoring Co. Inc, G.R. No. Rationale
L-10321 (1958); University of the There are greater chances of success for
Philippines v. Ferrer-Calleja, G.R. No.
the collective bargaining process. The
96189 (1992)]
bargaining
Note: Where the employment
status was not at issue but the
nature of work of the
employees concerned; the
Court stressed the importance
of the 2nd factor. [Belyca Corp.
v. Calleja, G.R. No. 77395
(1988)] Other factors:
(5) Geography and Location

(6) Policy of avoiding
fragmentation of the bargaining unit
(1) Globe Doctrine

A practice designated as the "Globe
doctrine," sanctions the holding of a
series of elections, not for the
purpose of allowing the group
receiving an overall majority of
votes to represent all employees,
but for the specific purpose of
permitting the employees in each of
the several categories to select the
group which each chooses as a
bargaining unit. [Kapisanan ng mga
Manggagawa sa Manila Road Co.
v. Yard Crew Union, G.R. Nos. L-
16292-94 (1960)]
Rationale
Highly skilled or specialized technical
workers may choose to form their
own bargaining unit because they
may be in better position to bargain
with the employer considering the
market value of their skills.
(2) Community or Mutuality of Interests

The basic test in determining the
appropriate bargaining unit is that a
unit, to be appropriate, must affect a
grouping of employees who have
substantial, mutual interests in
wages, hours, working conditions
BOC RELATIONS
unit is designed to maintain the mutuality greater benefit of the employees working force."
of interest among the employees in such The philosophy is to avoid fragmentation of the
unit. bargaining unit so as to strengthen the
When the interest between groups has
changed over time, there is reason to
dissolve, change or expand a certain
bargaining unit.
(3)Prior Collective Bargaining History

The existence of a prior collective
bargaining history is neither decisive nor
conclusive in the determination of what
constitutes an appropriate bargaining unit.
[Sta. Lucia East Commercial Corporation
v. SOLE, G.R. No. 162355 (2009)]
(4) Employment status

Among the factors to be considered [is the]
employment status of the employees to be
affected [regular, casual, seasonal,
probationary, etc.], that is the positions and
categories of work to which they belong [ ]
[Belyca Corp. v. Calleja, G.R. No. 77395
(1988)]
(5) Geography and Location

Geography and location only play a
significant role if:
(1) The separation between the camps [ ]
and the different kinds of work in each [ ] all
militate in favor of the system of separate
bargaining units;
(2) [When] the problems and interests of
the workers are peculiar in each camp or
department;
(3) The system of having one collective
bargaining unit in each camp [...] [has
operated satisfactorily in the past.]
[Benguet Consolidated Inc. and Balatok
Mining Co. v. Bobok Lumberjack
Association, G.R. No. L- 11029 (1958)]
(6) Policy of avoiding fragmentation of the

bargaining unit
It bears noting that the goal of the DOLE is
[geared] towards "a single employer wide
unit which is more to the broader and
PAGE 160 OF
235
employees’
BOC bargaining power with RELATIONS Procedure [Rule VII, Book V]
the management. To veer away
(1) File Request of SEBA Certification
from such goal would be contrary,
inimical and repugnant to the (§1) Who: Any legitimate labor
objectives of a strong and dynamic
organization
unionism. [Phil. Diamond Hotel and
Resort Inc v Manila Diamond Hotel
and Employees Union, GR No.
158075 (2006)]
Confidential employees lumped with

management
Since the confidential employees are
very few in number and are by
practice and tradition identified with
the supervisors in their role as
representatives of management vis-
a-vis the rank and file employees,
such identity of interest has allowed
their inclusion in the bargaining unit
of supervisors-managers for
purposes of collective bargaining in
turn as employees in relation to the
company as their employer.
[Filoil Refinery Corp. v. Filoil
Supervisory and Confidential
Employees Union, G.R. No. L-
26736 (1972)]
C. BARGAINING REPRESENTATIVE
C.1. DETERMINATION OF
REPRESENTATION STATUS
Methods of Establishing Majority Status

1. Sole and Exclusive Bargaining
Agent (SEBA) Certification
2. Consent Election
3. Run-Off Election
4. Certification Election
5. Re-Run election
Note: D.O. 40-I-15 replaced
Voluntary Recognition with SEBA
certification, as of September 7,
2015.
SEBA CERTIFICATION
PAGE 161 OF
235
File where: Regional Office which issued within five (5) working days for the
its certificate of registration or certificate of SUBMISSION of:
creation of chartered local
(a) Names of employees in the covered
(2) Indicate in the request (§2): bargaining unit who signify support for
(a) Name and address of the requesting certification; [and these] employees comprise
legitimate labor organization; at least majority of the number of
employees in the covered bargaining unit;
(b) Name and address of the company and
where it operates;
(b) Certification under oath by the
(c) Bargaining unit sought to be president of the requesting union or local
represented; that all documents submitted are true and
(d) Approximate number of employees in correct based on personal knowledge
the bargaining unit; and (B) With more than 1 legitimate labor
(e) Statement of the existence/non- organization
existence of other labor Regional Director shall refer it to the
organization/CBA. Election Officer for conduct of certification
Certificate of Duly certified election.
by
Both
Registration President of certificates IF: ORGANIZED ESTABLISHMENT
requesting should be
union attached to Regional Director shall refer it to the
the request mediator-arbitrator for determination and
Creation of President of propriety of conducting a certification
chartered the election.
local federation of
the local
(4) Regional Director shall act on the
submission (§4.1)
(3) Regional Director shall act on the
request (§3) Incomplete The request shall
requirement be referred to
When: Within one (1) day from submission s Election Officer for
of request the conduct of
Action: election pursuant
to Rule IX.
o Determine whether request is compliant
Complete Regional Director
with §2 and whether the bargaining unit sought conference
requirement shall issue a
to be represented is organized or not; and
s certification as
o Request a copy of the payroll SEBA
If the Regional Director finds it deficient,
he/she shall advise the requesting union or
local to comply within ten (10) days from
notice. Failure to comply within the
prescribed period shall be deemed
withdrawal of the request.
IF: UNORGANIZED ESTABLISHMENT

(A) With only 1 legitimate labor
organization Regional Director shall call a
(5) Regional Director shall post
the SEBA Certification (§4.1)
Period: Fifteen (15) consecutive days
Where: At least two (2) conspicuous
places in the establishment or
covered bargaining unit.
Effect of SEBA Certification

Upon the issuance of the [SEBA
Certification], the certified union or
local shall enjoy all the rights and
privileges of an exclusive bargaining
agent of all the employees in the
covered bargaining unit (§4.2).
The certification shall bar the filing of a (15) consecutive days in at least two (2)
[PCE] by any labor organization for a conspicuous places in the establishment or
period of one bargaining unit where the union seeks to operate;
(1) year from the date of its issuance.
(3) The approximate number of employees
Upon expiration of this one-year period,
any legitimate labor organization may file a
[PCE] in the same bargaining unit
represented by the certified labor
organization, unless a [CBA] between the
employer and the certified labor
organization was executed and registered
with the Regional Office in accordance
with Rule XVII.
SEE: VOLUNTARY RECOGNITION

Note: D.O. 40-I-15 replaced Voluntary
Recognition with SEBA certification. This
section is ONLY FOR COMPARISON with
SEBA certification.
Voluntary Recognition refers to the process
by which a legitimate labor union is
recognized by the employer as the
exclusive bargaining representative or
agent in a bargaining unit, reported with
the Regional Office in accordance to Rule
VII, Sec 2 of these Rules. (Book V, Rule I,
§1 [bbb])
Requirements
Substantive Requirements
(1) Unorganized establishment;
(2) Only one union asking for recognition;
(3) The members of the bargaining unit
did not object to the projected recognition
of the union. (Book V, Rule VII, §2)
Procedural Requirements
The notice of voluntary recognition shall be
accompanied by the original copy and two
(2) duplicate copies of the following
documents:
(1) A joint statement under oath of
voluntary recognition attesting to the fact of
voluntary recognition
(2) Certificate of posting of the joint
statement of voluntary recognition for
fifteen
in the bargaining unit, accompanied Election Officer by raffle in the presence of
by the names of those who support representatives of the contending unions if
the voluntary recognition comprising they so desire
at least a majority of the members
3. First pre-election conference is
of the bargaining unit; and
scheduled within ten (10) days from the
(4) A statement that the labor date of the agreement. Subsequent
union is the only legitimate labor conferences may be called to expedite and
organization operating within the facilitate the holding of the consent
bargaining unit. election.
All accompanying documents of the
notice for voluntary recognition shall
be certified under oath by the
employer representative and
president of the recognized labor
union.
The employer may voluntarily
recognize the representation status
of a union in unorganized
establishments. However, in cases
where an establishment is already
organized, as when a petition for
certification election has already
been filed by a union, if the company
voluntarily recognizes a different
union during such time, then the
company’s voluntary recognition is
void. (SLECC v Sec. of Labor, 2009)
CONSENT ELECTION
"Consent Election" means the
election voluntarily agreed upon by
the parties with or without the
intervention by DOLE (Book V, Rule
I, §1(i)) Procedure (Book V, Rule VIII,
§11)
1. The parties may agree to hold
a consent election
a. Where no petition for
certification election was filed;
or
b. Where a petition for
certification election had been
filed, and upon the intercession
of Med-Arbiter (Book V, Rule VIII,
§25)
2. Mediator-Arbiter shall call for
the consent election, reflecting the
parties’ agreement and the call in
the minutes of the conference.
Regional Director or authorized
representative shall determine the
RUN-OFF ELECTION election.
A "Run-Off election" refers to an election The labor union receiving the GREATER number
between the labor unions receiving the two of VALID VOTES cast shall be certified
(2) highest number of votes in a
certification or consent election when the
following requisites have been complied
with:
1. Valid election;
2. The certification or consent election
provides for three (3) or more choices (“No
Union” is considered one choice –
Professor Battad);
3. None of the contending UNIONS
received a majority of the VALID VOTES
cast;
4. No objections or challenges which if
sustained can materially alter the results;
and
5. The total number of votes for all
contending UNIONS is at least fifty (50%)
of the number of VOTES cast [Art. 268;
§1(uu), Rule I, Book V; §1, Rule X]
Illustration
The CBU has 100 members and 80 of
which voted. Union “A”= 30; Union “B”= 15;
Union “C”=15 and No Union= 20. There
were no invalid votes. Since none got the
majority of the 80 valid votes (40) and the
contending unions obtained 60 votes
(which is at least 50% of the VOTES cast),
a run-off election is proper. The run-off will
be between the labor unions receiving “the
two highest number of votes.” The run-off is
NOT between two unions but between “two
highest votes”. Thus, the run-off will be
among Union “A”, “B” and “C.” (Azucena)
Procedure for Run-Off Election

Election Officer shall motu proprio conduct
a run-off election within ten (10) days from
the close of the election proceedings
between the labor unions receiving the two
highest number of votes.
“No Union” shall not be a choice in the run-
off election [§1, Rule X, Book V].
Same voters’ list used in the certification
election shall be used in the run-off
as the winner [§2, Rule X, Book V]. orders or redress of rights, but culminates
solely in an official designation of
Note: Please note the difference
bargaining units and an affirmation of the
between valid votes cast versus
employees’ expressed choice of
votes cast – valid votes excludes
bargaining agent. [Angat River Irrigation
spoiled votes.
System v. Angat River Worker’s Union
CERTIFICATION ELECTION (PLUM), G.R. Nos. L- 10943 and L-10944
(1957)]
Definition
“Certification Election" is the
process of determining, through
secret ballot, the sole and exclusive
representative of the employees in an
appropriate bargaining unit for
purposes of collective bargaining or
negotiation. [§1(i), Rule I, Book V]
Purpose
The purpose of a certification
election is precisely the
ascertainment of the wishes of the
majority of the employees in the
appropriate bargaining unit: to be or
not to be represented by a labor
organization, and in the affirmative
case, by which particular labor
organization. [Reyes v. Trajano,
G.R. No. 84433 (1992)]
Nature of proceeding
Certification election is the most
effective and the most democratic
way of determining which labor
organization can truly represent the
working force in the appropriate
bargaining unit of a company
[Samangang Manggawa sa
PERMEX v SOLE, G.R. No. 107792
(1998)]
It is a fundamental postulate that the
will of the majority given expression
in an honest election with freedom
on the part of the voters to make
their choice, is controlling. [PLUM
Federation of Industrial and Agrarian
Workers v. Noriel, G.R. No. L-48007
(1978)]
[It] is not a ‘litigation’ [...] but a mere
investigation of a non-adversary,
fact-finding character. [...] The
determination of the proceeding
does not entail the entry of remedial
Technical rules and objections should not bargain collectively and no existing CBA)
hamper the correct ascertainment of the
labor union that has the support or
confidence of the majority of the workers
and is thus entitled to represent them in
their dealings with management. [Port
Workers Union v. Laguesma, G.R. Nos.
94929-30, (1992)]
Certification Election Union Election

To determine the To elect union
Exclusive Bargaining officers
Agent
All members of the Only union
appropriate bargaining members may
unit may vote. vote.
Who may vote [§6, Rule IX, Book V]

All employees who are members of the
appropriate bargaining unit three (3)
months prior to the filing of the
petition/request shall be eligible to vote. An
employee who has been dismissed from
work but has contested the legality of the
dismissal in a forum of appropriate
jurisdiction at the time of the issuance of
the order for the conduct of a certification
election shall be considered a qualified
voter, unless his/her dismissal was
declared valid in a final judgment at the
time of the conduct of the certification
election.
In case of disagreement over the voters’
list or over the eligibility of voters, all
contested voters shall be allowed to vote.
But their votes shall be segregated and
sealed in individual envelopes.
Who may file a petition for certification

election [§1, Rule VIII, Book V]
(1) Legitimate labor organization
(2) Local/chapter that has been issued a
charter certificate
(3) National union or federation that has
issued a charter certificate to its
local/chapter [in behalf of the latter]
(4) Employer (when requested to
(1) Legitimate Labor Organization 2. No existing registered CBA in the unit
[Art. 270]
"Legitimate labor organization"
means any labor organization duly
registered with the Department of
Bystander rule
Labor and Employment, and
includes any branch or local The employer shall not be considered a
thereof. [Art. 219 (h)] party [to the petition] with a concomitant
right to oppose a petition for certification
election.
(2) Local/Chapter
A duly registered federation or
The employer’s participation shall be limited
national union may directly create a
local chapter by issuing a charter
certificate indicating the
establishment of the local chapter.
The chapter shall acquire legal
personality only for purposes of
filing a petition for certification
election from the date it was issued
a charter certificate. [Art. 241]
(3)National Union/Federation
A group of legitimate labor unions in
a private establishment organized
for collective bargaining or for
dealing with employers concerning
terms and conditions of
employment for their member
unions or for participating in the
formulation of social and
employment policies, standards and
programs, registered with the BLR
in accordance with Rule III §2-B.
[Book V Rule 1
§1 (ll)]
The national union or federation
shall not be required to disclose the
names of the local chapter’s officers
and members. [Art. 268; §1, Rule
VIII, Book V]
(4) E
mplo
yer
Req
uisit
es:
1. Employer is requested to
bargain collectively; AND
to: File with the Regional Office which issued the
petitioning union’s certificate of registration or
(1) being notified or informed of petitions
certificate of creation of chartered local.
of such nature
At [petitioner’s option], [it may file] the
(2) submitting the list of employees
petition and its supporting documents [...]
during the pre-election conference should
the Med- Arbiter act favorably on the
petition [Art. 271]
The principle of the employer as by-
stander shall be strictly observed
throughout the conduct of certification
election. The employer shall not harass,
intimidate, threat[en], or coerce employees
before, during and after elections. [§1,
Rule IX, Book V]
However, manifestation of facts that would
aid the [Med-Arbiter] in expeditiously
resolving the petition such as existence of
a contract-bar, one year bar or deadlock
bar may be considered. [§1, Rule VIII,
Book V]
The employer is not a party to a
certification election, which is the sole or
exclusive concern of the workers. [...] The
only instance when the employer may be
involved in that process is when it is
obliged to file a petition for certification
election on its workers’ request to bargain
collectively pursuant to Art. 258 [now Art.
270]. [Hercules Industries, Inc. v Sec. of
Labor, G.R. No. 96255 (1992)]
[The employer] did not possess the legal
personality to file a motion to dismiss the
petition for certification election even if
based on the ground that its supervisory
employees are in reality managerial
employees. It is well- settled that an
employer has no standing to question a
certification election since this is the sole
concern of the workers. The only exception
to this rule is Art. 258 [now Art. 270]. [PT&T
v Laguesma, G.R. No. 101730 (1993)]
[A] company’s interference in the
certification election below by actively
opposing the same [...] unduly creates a
suspicion that it intends to establish a
company union. [Oriental Tin Can Labor
Union v. Secretary of Labor, G.R. No.
116751 (1998)]
Venue for filing the petition

online. [§2, Rule VIII, Book V] (1) File a verified petition questioning the
majority.
Two or more petitions involving same
bargaining unit [§2, Rule VIII, Book (2) It must be filed within the 60-day period
V]
Automatically
Filed in one consolidated with [Med-
Regional Arbiter] who first acquired
Office jurisdiction
The Regional Office in
Filed in which the petition was
different first filed shall exclude all
Regiona others; [...] The latter
l shall indorse the petition
Offices to the former for
consolidation
CERTIFICATION ELECTION IN AN
UNORGANIZED ESTABLISHMENT
Unorganized Establishment
[It is an] establishment where there
is no certified bargaining agent. [Art.
269]
Procedure [Art. 269]
(1) File a petition for certification election.
(2) Upon filing of the petition, the
Med- Arbiter shall automatically
conduct a certification election.
Filing of petition is by a legitimate
labor organization
It cannot be filed by an unregistered
labor organization. Art. 251
enumerates the rights granted to a
legitimate labor organization and
one of those rights is the right to be
chosen as the exclusive bargaining
representative. This is one way the
law encourages union registration.
CERTIFICATION ELECTION IN AN
ORGANIZED ESTABLISHMENT
Organized Establishment
Refers to an enterprise where there
exists a recognized or certified sole
and exclusive bargaining agent.
[§1(ll), Rule I, Book V]
Procedure [Art. 268]
before expiration of CBA (freedom period)
(3) Supported by written consent of at
Inapplicable to Motions for Intervention
least 25% of ALL employees in the
bargaining unit (substantial support)
(4) Med-Arbiter shall automatically order
an election.
WHEN PETITION MUST BE FILED

Freedom Period
Rationale of prohibition of filing outside the
freedom period
To ensure industrial peace between the
employer and its employees during the
existence of the CBA. [Republic Planters
Bank Union v. Laguesma, G.R. No. 119675
(1996)]
Signing of authorization is merely

preparatory
What is prohibited is the filing of the
petition for certification election outside the
60-day freedom period. [...] The signing of
the authorization to file was merely
preparatory to the filing of the Petition for
Certification Election, or an exercise of
[the] right to self- organization. [PICOP
Resources Inc. v. Ricardo Dequita, G.R.
No. 172666 (2011)]
25% Substantial Support Rule

In organized establishments, the
incumbent sole bargaining agent should
not be easily replaced for that would
disturb industrial peace. To justify the
disturbance, it must appear that at least a
substantial number (25% requirement)
seeks to have a new exclusive bargaining
unit.
Discretionary rule
The [Med-Arbiter], in the exercise of sound
discretion, may order a certification
election notwithstanding the failure to meet
the [25%] requirement [in petitions for
certification election in an organized
establishment]. [Scout Albano Memorial
College v. Noriel, G.R. No. L-48347 (1978)]
[The] requisite written consent of at same as that of a petition for certification
least 20% (now 25%) of the workers election.
in the bargaining unit applies to
[§9, Rule VIII, Book V]
certification election only, and not to
motions for intervention. Nowhere in
the legal provisions [and in the
Effect of withdrawal of signatures
Omnibus Rules] does it appear that
a motion for intervention in a The employees’ withdrawal from a labor union
certification election must be made
accompanied by a similar written
consent. [PAFLU v. Calleja, G.R.
No. 79347 (1989)]
Intervenors
1. Incumbent bargaining agent
as forced intervenor;
2. Legitimate labor union other
than the incumbent bargaining
agent operating within the
bargaining unit.
(1) Forced Intervenor: Incumbent

bargaining agent
The incumbent bargaining agent
shall automatically be one of the
choices in the certification election as
forced intervenor. [§8, Rule VIII,
Book V]
(2) Legitimate labor union as an

intervenor
When a petition for certification
election was filed in an organized
establishment, any legitimate labor
union other than the incumbent
bargaining agent operating within
the bargaining unit may file a
motion for intervention with the
Med-Arbiter during the freedom
period of the collective bargaining
agreement.
In an unorganized establishment,
the motion shall be filed at any time
prior to the decision of the Med-
Arbiter. The motion shall be
resolved in the same decision
issued in the petition for certification
election.
In both cases, the form and
contents of the motion shall be the
(1) Before the filing of the petition for affect the [petition]. [S.S. Ventures
certification election is presumed International vs. S.S. Ventures Labor
voluntary, Union, G.R. No. 161690 (2008)]
(2) After the filing of such petition is
considered to be involuntary and does
not
Organized vs. Unorganized Establishment
Art. 268: Organized Art. 269: Unorganized

Sole and Existing, has one None
exclusive
Bargaining agent
Petition filed Must be VERIFIED No need to be verified
No petition for Certification election Not applicable.
EXCEPT within 60 days before the
No freedom period.
expiration of the collective bargaining
agreement (See Art. 264 & 265) Can file petition anytime.
Take note how SC interpreted the term
Freedom Period “WITHIN”.
What is the rationale of freedom period in
Organized establishments, why is there none
in unorganized establishments?
It has something to do with industrial peace
Must be duly supported by 25% of ALL THE NO substantial support rule.

MEMBERS OF THE APPROPRIATE
BARGAINING UNIT.
Rationale
Rationale
Substantial support rule Intention of law is to bring in
Law wants to know the intention of the
the union, to implement
employees – If they really want a
policy behind Art. 218A.
Certification election, since they already
have a bargaining agent.
PROCEDURE AFTER FILING OF PETITION VIII]; and
1. Raffling of case to Med-Arbiter (e) Such other matters as may be relevant
2. Preliminary Conference and hearing
3. Conduct of hearings
4. Determine if petition should be
dismissed on grounds stated in Section 15
5. Order/Decision on the petition
6. Appealing the order/decision on the
petition
7. Raffling of the case to an Election
Officer
8. Pre-Election Conference
9. Conduct of election
10. Challenging of votes and on the spot
questions
11. Protesting
12. Canvassing of votes
13. Nullification of Election Results
14. Proclamation and Certification of the
result of the election
15. Appeal from Certification Election
Orders
(1) Raffle of case to Med-Arbiter

The Regional Director or his/her duly
authorized representative shall
immediately assign it by raffle to a [Med-
Arbiter]. The raffle shall be done in the
presence of the petitioner if the latter so
desires. [§5, Rule VIII, Book V]
(2) Preliminary Conference

Med-Arbiter shall conduct a preliminary
conference and hearing within ten (10)
days from receipt of the petition to
determine the following:
(a) The bargaining unit to be
represented;
(b) Contending labor unions
(c) Possibility of a consent election
(d) Existence of any of the bars to
certification election under Section 3[, Rule
for the final disposition of the case (f) In an organized establishment, the
[§10, Rule VIII, Book V] failure to submit the 25% signature
requirement to support the filing of the
Note: If contending unions agree to
petition.
holding of an election, [...]it shall be
called a consent election. [§11, (g) Non-appearance of the petitioner for
Rule VIII, Book V] two (2) consecutive scheduled
conferences
(3) Med-Arbiter to conduct hearings

If contending unions fail to agree to
a consent election during the
preliminary conference, the Med-
Arbiter may conduct as many
hearings as he/she may deem
necessary, but in no case shall the
conduct thereof exceed fifteen (15)
days from date of scheduled
preliminary conference/hearing,
after which the petition shall be
considered submitted for decision.
[...]
Within the same 15-day period [...],
the contending labor unions may file
such pleadings as they may deem
necessary for the immediate
resolution of the petition.
Extensions of time shall not be
entertained. [§12, Rule VIII, Book V]
(4) Determine if petition should be

dismissed based on grounds stated in
Section 15.
The grounds to dismiss the petition are:
(a) Petitioning union or national
union/federation is:
(i) Not listed in DOLE’s registry
of
legitimate labor unions; or
(ii) Registration
certificate has been cancelled
with finality
(b) Failure of a local/chapter or
national union/federation to submit
a duly issued charter certificate
upon filing of the petition for
certification election
(c) Contract Bar rule
(d) One-Year Bar rule
(e) Negotiation and Deadlock Bar Rule
BOC RELATIONS
before the [Med-Arbiter] despite due establishment;
notice; and
(h) Absence of employer-employee
relationship between all the members of
the petitioning unit and the establishment
where the proposed bargaining unit is
sought to be represented.
NOTE: See page 164 for the 4 Bars to
Certification Election (One-year bar rule,
Negotiation bar rule, Deadlock bar rule,
Contract bar rule)
Commingling is not a ground

employees outside the bargaining unit [is]
not a ground for cancellation of the
the list of membership. [§16, Rule VIII,
Book V]
Posting of notice of Petition for Certificate
Election
The Regional Director or his/her
authorized DOLE personnel, and/or the
petitioner shall be responsible for the
posting of the notice of petition for
certification election. . [§7, Rule VIII, Book
V]
(5) Order or decision on the petition

[Med-Arbiter] shall issue a ruling granting or
denying the petition
When
● General rule: Within ten (10) days
from last hearing
● Exception: In organized establishments,
grant of the petition can only be made after
the lapse of the freedom period [§14, Rule
VIII, Book V]
How
● Personally to the parties
● Copy furnished to the employer
The ruling for the conduct of a certification
election shall state the following:
(a) Name of the employer or
PAGE 170 OF
235
BOC Description of the bargaining unit; RELATIONS
(b)
(c) Statement that none of the
grounds for dismissal [...] in Section
14 exists;
(d) Names of the contending labor
unions [...] in the following order:
(i) Petitioner unions in
the order of the date of filing of
their respective petitions
(ii) The forced intervenor
(iii) “No union”
(e) [If] the local/chapter is one the
contending unions, a directive to an
unregistered local/chapter or a
federation/national union
representing all unregistered
local/chapter to personally submit to
the Election Officer its certificate of
creation at least five (5) working
days before the actual conduct of
the certification election. [This is to
afford an individual employee-voter
an informed choice.]
Non-submission of this requirement
as certified by Election Officer shall
disqualify the local/ chapter from
participating in the certification
election
(f) Directive to the employer and
the contending unions to submit
within ten (10) days from receipt of
order:
(i) The certified list of
employees in the bargaining
unit, or where necessary,
(ii) Payrolls covering the
members of the bargaining unit
for the last three (3) months
prior to the issuance of the
order
(6) Appealing the order granting or

denying the conduct of certification
election [§19-20, Rule VIII, Book V]
Organized Dismissed
or denied
Appeal to
Granted
Office of
PAGE 171 OF
235
Unorganized
BOC Dismissed Secretary RELATIONS
or denied
Granted Unappealable
PAGE 172 OF
235
When filed Exception: Restrained by appropriate court
Within ten (10) days from receipt of the [§24, Rule VIII, Book V]
order [of the Med-Arbiter].
(7) Raffling of the case to an Election Officer

Where filed Regional Director shall cause the raffle of
Regional Office where the petition the case to an Election Officer who shall
originated have control of:
(a) Pre-election conference; and
Form of appeal (b) Election proceedings
● Verified under oath When: Within twenty-four (24) hours from
receipt of notice of entry of final judgment
● [Consists of] a memorandum of granting the conduct of a certification
appeal specifically stating the grounds election [§2, Rule IX, Book V]
relied upon by appellant with the
supporting arguments and evidence
(8) Pre-Election Conference
Effect of filing memorandum of appeal Notice of Pre-Election Conference [§3, Rule
IX, Book V]
Stays the holding of any certification
election. [§23, Rule VIII, Book V] The Election Officer shall cause the
issuance of notice of pre-election
conference upon the contending unions
Reply to Appeal When: Within twenty-four (24) hours from
Reply by any party to the petition shall be the [Election Officer’s] receipt of
filed within ten (10) days from receipt of assignment for the conduct of a
the memorandum of appeal [...] and filed certification election
directly with the office of the Secretary.
Schedule of pre-election conference
When: Within ten (10) days from receipt of
When no appeal is filed the assignment
The decision shall be final and executory if Completed within thirty (30) days from the
no appeal is filed within the ten (10) day date of the first hearing [§5, Rule IX, Book
period. [§21, Rule VIII, Book V] V]
Decision of the Secretary Employer to submit: [§3, Rule IX, Book V]

Period to decide: Fifteen (15) days from (a) Certified list of employees in the
receipt of entire records of the petition to bargaining unit; or where necessary,
decide the appeal.
(b) Payrolls covering the members of the
Secretary’s decision shall be final and bargaining unit at the time of the filing of
executory within ten (10) days from receipt petition
by parties. [§23, Rule VIII, Book V]
Failure of party to appear during pre-
Note: No motion for reconsideration of election conference despite notice [§4, Rule
decision shall be entertained. [§23, Rule IX, Book V]
VIII, Book V]
Implementation of decision
This shall be considered a waiver of right to:
General Rule: Shall not be stayed
(a) To be present; and
(b) To question or object to any of
the agreements reached in the pre-
election
conference to belong to a bargaining unit. [Airtime
Specialists, Inc. v Ferrer-Calleja, G.R. No.
80612-16 (1990)]
Shall NOT deprive the non-appearing party
of the right to:
(a) Be furnished notices; and
(b) To attend subsequent pre-election
conferences
Minutes of pre-election conference [§5,
Rule IX, Book V]
Election Officer shall keep the minutes of
matters raised and agreed upon.
Parties shall acknowledge the
completeness and correctness of entries in
the minutes by affixing their signatures.
When parties refuse to sign the minutes,
the Election Officer shall note such fact in
the minutes, including the reason for
refusal to sign the same.
In all cases, parties shall be furnished a
copy of the minutes.
QUALIFICATION OF VOTERS
Eligible Voter
Eligible voter refers to a voter belonging to
the appropriate bargaining unit that is the
subject of the petition for certification
election [§1(r), Rule VIII, Book V]
All employees who are members of the
appropriate bargaining unit three (3)
months prior to the filing of the petition
shall be eligible to vote. [§6, Rule IX, Book
V]
Note: Rule VIII, Sec. 14 (f) and Rule IX,
Sec. 6 refer to employees as those
employed 3 months prior to the issuance of
the order/the filing of the petition for
certification election while Rule IX, Sec. 3
reckon the period of employment from the
“time of filing the petition”. This difference
has not been resolved in any case before the
Supreme Court.
All rank and file employees in the
appropriate bargaining unit, whether
probationary or permanent are entitled to
vote. [...] The Code makes no distinction
as to their employment status. [...] All they
need to be eligible to support the petition is
NOTICE REQUIREMENT [§7, Rule IX, Book V]
Rationale for Non-Distinction Policy Posting of Notice
Collective bargaining covers all WHO: Election Officer and/or authorized

aspects of the employment relation DOLE personnel shall cause the posting
and the resultant CBA binds all WHAT: Notice of election
employees in the bargaining unit. All
rank and file employees,
probationary or permanent, have a
substantial interest in the selection
of the bargaining representative.
[Airtime Specialists, Inc. v Ferrer-
Calleja, G.R. No. 80612-16 (1990)]
Dismissed employees [§6, Rule IX, Book V]

General Rule: [Dismissed]
employees [who] contested legality
of the dismissal in a forum of
appropriate jurisdiction at the time of
the issuance of the order for conduct
of a certification election
Exception: Dismissal was declared
valid in a final judgment at the time
of the conduct of the certification
election.
Disagreement over voters’ list over eligibility
of voters [§6, Rule IX, Book V]
All contested voters shall be allowed
to vote [but] their votes shall be
segregated and sealed in individual
envelopes.
Voting List and Voters

The basis of determining voters may
be agreed upon by the parties (i.e.
the use of payroll). [Acoje Workers
Union v NAMAWU, G.R. No. L- 18848
(1963)]
Non-participation in previous
election has no effect
[Failure to take part in previous
elections is no bar to the right to
participate in future elections.] No
law, administrative rule or precedent
prescribes forfeiture of the right to
vote by reason of neglect to
exercise the right in past certification
elections. [Reyes v. Trajano, G.R.
No. 84433 (1992)]
WHERE: 2 most conspicuous places in the
● Polling place;
company premises
● Ballot boxes; and
WHEN: At least ten (10) days before the
actual [election date] ● Polling booths
Contents of Notice [§7, Rule IX, Book V] Prohibition on certain devices

(1) Date and time of the election; General Rule: No device that could record
or identify the voter or otherwise
(2) Names of all contending unions;
undermine the secrecy and sanctity of the
(3) Description of the bargaining unit; ballot shall be allowed within the premises
(4) List of eligible and challenged voters. Exception: Devices brought in by the
Election Officer
Posting of the list of employees comprising
the bargaining unit shall be done by the Consequence: Any other device found
DOLE personnel. within the premises shall be confiscated by
the Election Officer and returned to its
owner after conduct of the certification
What cannot be waived by contending election.
unions or employer:
(1) Posting of the notice of election
Preparation of Ballots [§9, Rule IX,
(2) Information required to be included
Book V] Election Officer shall prepare the
therein
ballots in:
(3) Duration of the posting
(a) English; and
The parties agreed to conduct the election
on [...] a regular business day [but a strike (b) Filipino or the local dialect
was held on that day.] The alleged strike
Number of ballots should correspond to
and/or picketing of some employees at the
the number of voters in the bargaining unit
company’s premises which coincided with
plus a reasonable number of extra ballots
the actual conduct of certification election
for contingencies
might, perhaps have affected the actual
performance of works by some employees, All ballots shall be signed at the back by:
but did not necessarily make said date an (a) Election Officer; and
irregular business day of the company.
[Asian Design and Manufacturing Corp. vs. (b) An authorized representative each of
Ferrer•-Calleja, G.R. No. L-77415 (1989)] the contending unions
Refusal or failure of party to sign ballots
(9) Conduct of Election Party waives its right to do so and the
Election Officer shall enter the fact of
Inspection to ensure secrecy and sanctity
refusal or failure and the reason therefor in
of ballot [§8, Rule IX, Book V]
the records of the case
By whom:
● Election Officer, together with Casting of Votes [§10, Rule IX, Book
● Contending unions ’ authorized V] Voter must put:
representative; and
(a) Cross (x)
● Employer';
(b) Check (✓)
When: Before start of actual
Where: Square opposite the
voting Shall inspect:
(a) Name of the chosen union; or
(b) “No Union”
Spoiled Ballots Opening of envelopes and question of
eligibility
A ballot that is torn, defaced, or contains
marking which can lead another to clearly Shall be passed upon by the Med-Arbiter
identify the voter who casts such vote only if the number of segregated votes will
[§1(ww), Rule I, Book V] materially alter the results of the election.
If the voter inadvertently spoils a ballot, he
shall return it to the Election Officer who
On-the-spot Questions
shall destroy it and give him/her another
ballot. [§10, Rule IX, Book V] What the Election Officer shall rule on:
Member unintentionally omitted the in Any question relating to and raised during
master list of voters may either be: the conduct of election
(a) May be allowed to vote if both parties
agree; [OR]
What the Election Officer SHALL NOT rule on:
(b) Allowed to vote but the ballot is
Question of eligibility which shall be
segregated
decided by the Mediator-Arbiter
Failure of representative/s of the
(10) Challenging of votes and on the spot contending unions to appear [§15, Rule IX,
questions [§11-12, Rule IX, Book V] Book V]
Ballot of the voter who has been properly Considered a waiver of the right to be
challenged during the pre-election present and to question the conduct
conferences shall be: thereof
(a) Placed in an envelope sealed by
Election Officer in the presence of:
(11) Protest [§13, Rule IX, Book
(i) the voter; and
V] Who may file: Any party-in-
(ii) representatives of the
interest
contending unions.
Ground: On the conduct or mechanics of
(b) Election Officer shall indicate on the
the election
envelope the:
How to protest:
(i) Voter’s name;
(1) [Record the protest] in the minutes of
(ii) Union challenging the voter;
the election proceedings; AND
and
(2) Formalize [the] protest with the Med-
(iii) Ground for the challenge
Arbiter, with specific grounds, arguments
(c) Sealed envelope shall be signed by: and evidence within five (5) days after the
close of the election proceedings
(i) Election Officer; and
(ii) Representatives of the
contending unions Protests deemed dropped
Protests [which are]:
Election Officer shall: (2) Not recorded in the minutes; AND
(a) Note all challenges in the minutes of (3) Formalized within the prescribed period
the election proceedings; and
General Reservation to file protest prohibited
(b) Have custody of all envelopes
Protesting party shall specify the grounds
containing the challenged votes
for protest.
Failure to formalize within 5-days
cannot be taken against the union.
[The petitioner union misrepresented that election proceedings and results of the election.
they were independent which caused the
members to disaffiliate and form a new
union and their protest was not filed within
the 5-day period. The] failure to follow
strictly the procedural technicalities
regarding the period for filing their protest
should not be taken against them. Mere
technicalities should not be allowed to
prevail over the welfare of the workers.
What is essential is that they be accorded
an opportunity to determine freely and
intelligently which labor organization shall
act on their behalf. [DHL-URFA-FFW v.
BMP, G.R. No. 152094 (2004)]
Note:
Election Proceedings refer to the period
during a certification, consent or run-off
election, and election of union officers
Included:
(a) Starting from the opening to the
closing of the polls
(b) Counting, tabulation and
consolidation of votes
Excluded:
(1) Period for the final determination of
the challenged votes
(2) Canvass of the challenged
votes [§1(q), Rule I, Book V]
(12) Canvassing of Votes [§15, Rule IX,

Book V]
Election precincts shall open and close on
the date and time agreed upon during the
pre- election conference.
The opening and canvass of votes shall
proceed immediately after the precincts
have closed
Procedure [§14, Rule IX, Book V]
● [Election Officer shall count and
tabulate the votes] in the presence of the
representatives of the contending unions.
● Upon completion of canvass, the
Election Officer shall give each
representative a copy of the minutes of the
● Ballots and tally sheets shall election. [§1(a), Rule I, Book V]
be sealed in an envelope and
Spoiled Ballot: Refers to a ballot that is
signed by the Election Officer and
torn, defaced, or contains markings which
the representatives of the
can lead another to clearly identify the
contending unions and transmitted
voter who casts such vote. [§1(ww), Rule I,
to the Med-Arbiter together with the
Book V]
minutes and results of the election
within twenty-four (24) hours from
the completion of the canvass.
Election conducted in more than
one region Consolidation of results
shall be made within fifteen (15)
days from the conduct thereof.
(13) Certification of the Collective

Bargaining Agent
Double Majority Rule
1. There must be a valid
certification or consent election; and
Valid Election: At least majority of
the number of eligible voters have
cast their votes (VOTES CAST) [§17,
Rule IX, Book V]
2. The winning union must
garner majority of the VALID VOTES
CAST [§16, Rule IX, Book V]
Winning union certifies as SEBA if
there is no protest [§16, Rule IX,
Book V]
The [winning union] shall be
certified as the [SEBA] in the
appropriate bargaining unit within
five (5) days from date of election,
provided no protest is recorded in
the minutes of the election.
When winning choice is local
chapter without certificate of
creation of chartered local
It must submit its DOLE issued
certificate of creation within five (5)
days from the conclusion of election
Note: Please note that valid votes
differ from mere votes as the former
excludes spoiled ballots.
Abstention: Refers to a blank or
unfilled ballot validly cast by an
eligible voter. It is not considered as
a negative vote. However, it shall
be considered a valid vote for
purposes of determining a valid
Failure of Election [§17, Rule IX, Book V] Within the same period from receipt of the
The Election Officer shall declare a failure minutes and results of election, [the Med-
of election in the minutes of the election
proceedings when:
(1) Number of VOTES CAST is less than
the majority of the number of eligible
voters; AND
(2) There are no material challenged
votes
Effect of Failure of Election [§19, Rule IX,

Book V]
Shall not bar the filing of a motion for the
immediate holding of another certification
or consent election within six (6) months
from date of declaration of failure of
election.
Motion for another election after failure of
election [§20, Rule IX, Book V]
Within twenty-four (24) hours from receipt
of the motion, the Election Officer shall:
● Immediately schedule another
election within fifteen (15) days from
receipt of motion
● Cause posting of the notice of
election
o At least ten (10) days prior to the
scheduled date of election
o In two (2) most conspicuous places
in the establishment
Same guidelines and list of voters shall be
used.
Note: Another effect is a RE-RUN
ELECTION, which “shall likewise refer to
an election conducted after a failure of
election has been declared by the Election
Officer and/or affirmed by the [Med-
Arbiter].” [§1(tt), Rule I, Book V]
(14) Certification of the Collective

Bargaining Agent [§21, Rule IX, Book V]
Within 24 hours from final canvass of
votes, there being a VALID election, the
Election Officer shall transmit the records
of the case to the Med-Arbiter.
Arbiter] shall issue an order Grounds for denying a Petition for
proclaiming the results of the Certification Election
election and certifying the union as
the [SEBA] under any of the
following conditions: (1) One-year bar rule
(a) No protests were filed, or No certification election may be held within 1
even if one was filed, [it] was not
perfected within the five-day period
(b) No challenge or eligibility
issue was raised, or even if one
was raised, [its] resolution will not
materially change the results of the
elections.
Winning union shall have the rights,
privileges, and obligations of a duly
certified collective bargaining agent
from the time the certification is
issued.
Majority of valid votes cast results in “no
Union”
obtaining majority
Med-Arbiter shall declare such fact
in the order
(15) Appeal from Certification

Election Orders [Art. 272]
WHO APPEALS: Any party to an election
WHAT IS APPEALED: Order or
results of the election
APPEAL TO: Directly to SOLE
GROUND: Rules and regulations
established by the SOLE for the
conduct of the election have been
violated.
BARS TO CERTIFICATION ELECTION

Petition for certification may
be filed: General Rule:
Anytime
Exceptions:
(1) One-year bar rule
(2) Negotiation bar rule
(3) Deadlock bar rule
(4) Contract bar rule
NOTE: See Page 16 for the
year from the time a valid certification, synonymous with the word impasse which [...]
consent or run-off election has been “presupposes reasonable effort at good faith
conducted within the bargaining unit. bargaining which, despite noble intentions, does
not conclude in agreement between the parties”
[If the order of the Med-Arbiter certifying
[Divine World
the results of the election has been
appealed], the running of the one-year
period shall be suspended until the
decision on the appeal becomes final and
executory. [§3(a), Rule VIII, Book V
NOTE: This bar also applies to a SEBA

Certification under Rule VII. “The
certification shall bar the filing of a petition
for certification election by any labor
organization for a period of one (1) year
from the date of its issuance.” [§4.2, Rule
VII, Book V]
(2) Negotiation bar rule

No certification of election may be filed
when:
(1) Within 1 year after the valid
(2) The DULY CERTIFIED union has
COMMENCED AND SUSTAINED negotiations
in good faith with the employer
(3) In accordance with Art. 261 of the
Labor Code §3(b), Rule VIII, Book V
(3) Deadlock bar rule

No certification of election may be filed
when:
(1) The incumbent or certified bargaining
agent is a party;
(2) A bargaining deadlock had been:
(a) submitted to conciliation or arbitration
or;
(b) Had become the subject of a valid
notice of strike or lockout [§3(c), Rule VIII,
Book V]
A “deadlock” is defined as the
“counteraction of things producing entire
stoppage; a state of inaction or of
neutralization caused by the opposition of
persons or of factions (as in government or
voting body): standstill.” [...] The word is
University v. SOLE, G.R. No. 91915 employees, G.R. No. 141471, (2000)]
(1992)] Petition for cancellation of union
registration DOES NOT suspend or
prevent filing of certification election
(4) Contract Bar Rule
A petition for cancellation of union
BLR shall not entertain any petition
registration shall not:
for certification election or any other
action which may disturb the (a) suspend the proceedings for
administration of DULY
REGISTERED existing collective
bargaining agreements affecting the
parties. except under Arts. 264,
265, and 268 [(60-day freedom
period)]. [Art. 238]
No petition for certification election
may be filed when a [CBA] between
the employer and a SEBA has been
registered in accordance with Art.
237. Where such [CBA] is
registered, the petition may be filed
only within sixty (60) days prior to
its expiry. [§3(d), Rule VIII, Book V].
The five-year representation status
acquired by an incumbent
bargaining agent either through
single enterprise collective
bargaining or multi-employer
bargaining shall not be affected by
a subsequent [CBA] executed
between the same bargaining agent
and the employer during the same
five-year period. [§7, Rule XVII,
Book V]
Despite an agreement for a CBA
with a life of more than five years,
either as an original provision or by
amendment, the bargaining union’s
exclusive bargaining status is
effective only for five years and can
be challenged within sixty (60) days
prior to the expiration of the CBA’s
first five years. [FVC Labor Union-
PTGWO v. SANAMA-FVC-SIGLO,
G.R. No. 176249 (2009)]
(1)
. The rule is that despite the lapse
of the formal effectivity of the CBA
the law still considers the same as
continuing in force and effect until a
new CBA shall have been validly
executed. Hence, the contract bar
rule still applies. . [Colegio de San
Juan de Letran v. Association of
certification election; nor proceedings shall commence upon a
(b) prevent the filing of a petition for
certification election. [Art. 246]
A certification election can be conducted
despite pendency of a petition to cancel
the union registration certificate. For the
fact is that at the time the [union], whose
registration certificate is sought to be
cancelled, filed its petition for certification,
it still had the legal personality to perform
such act absent an order directing its
cancellation. [Association of Court of Appeals
Employees vs. Calleja, G.R. No. 94716,
(1991)]
PREJUDICIAL QUESTION
Prejudicial Question Rule
Labor claims cannot proceed
independently of:
● A bankruptcy liquidation proceeding;
and
● Suspension order in a rehabilitation
case. The law is clear, upon the creation of
a management committee or the
appointment of a rehabilitation receiver, all
claims for actions “shall be suspended
accordingly.” No exception in favor of
labor claims is mentioned in the law. Since
the law makes no distinction or
exemptions, neither should this Court.
In RA 10142, a claim refers to “all claims or
demands of whatever nature or character
against the debtor or its property, whether
for money or otherwise, liquidated or
unliquidated, fixed or contingent, matured
or unmatured, disputed or undisputed,
including, but not limited to; (1) all claims of
the government, whether national or local,
including taxes, tariffs and customs duties;
and (2) claims against directors and
officers of the debtor arising from acts done
in the discharge of their functions falling
within the scope of their authority:
Provided, That, this inclusion does not
prohibit the creditors or third parties from
filing cases against the directors and
officers acting in their personal capacities.”
NOTE: Under the Financial Rehabilitation
and Insolvency Act (FRIA), rehabilitation
Commencement Order which includes would be decertified and the whole
a Stay or Suspension Order election proceedings would be rendered
[suspending] all actions or useless and nugatory. [B.F. Goodrich Phils.
proceedings, in court or otherwise, Marikina v. B.F. Goodrich Confidential and
for the enforcement of claims Salaried Employees Union, G.R. No. L-
against the debtor [§16(q)(1)]. 34069-70, (1973)]
In liquidation proceedings, upon the
issuance of a Liquidation Order, no
RE-RUN ELECTION
separate action for the collection of
an unsecured claim shall be allowed [§18, Rule IX, Book V]
[§113]. Under a Liquidation Plan,
credits for services rendered by
employees or laborers to the debtor
shall enjoy first preference under
Article 2244 of the Civil Code, unless
the claims constitute legal liens
under Articles 2241 and 2242 thereof
[§133].
Claim shall refer to all claims or
demands of whatever nature or
character against the debtor or its
property [§4(c)].
Rationale
These claims would spawn needless
controversy, delays, and confusion.
[Lingkod Manggagawa sa
Rubberworld, Adidas-•Anglo vs.
Rubberworld (Phils.), Inc., G.R. No.
153882 (2007)]
Allegation of company union a
prejudicial question to a petition for
A complaint for unfair labor practice
may be considered a prejudicial
question in a proceeding for
certification election when it is
charged therein that one or more
labor unions participating in the
election are being aided, or are
controlled, by the company or
employer [company union] [United
CMC Textile Worker’s Union v. BLR,
(1984)].
Rationale:
The certification election may lead to
the selection of an employer-
•dominated or company union as the
employees’ bargaining
representative, and when the court
finds that said union is employer-
•dominated in the unfair labor
practice case, the union selected
Situation Contemplated days from said election.
A certification, consent or run-off election When will re-run be conducted
results to a tie between two (2) choices.
Within ten (10) days after the posting of the
Duty of Election Officer notice
(a) Notify parties of a re-run election Declared as winner and certified
(b) Cause posting of notice within five (5) Choice receiving the HIGHEST VOTES CAST.
Certification election Consent Election

Aimed at determining the sole and Merely to determine the issue of
exclusive bargaining agent of all majority representation of all the
employees in an appropriate bargaining workers in the appropriate
unit for the purpose of collective collective bargaining unit
Purpose bargaining
1st Level of Choice: Yes Union or No
Union 2nd Level of Choice: If “Yes Union”
wins, WHICH union.
[UST Faculty Union v. Bitonio, G.R. No.
131235 (1999)]
Ordered by the DOLE Voluntarily agreed upon by the
Conduct parties, with or without
intervention from DOLE
UNION-MEMBER RELATIONS membership any individual who:

Nature of Relationship (a) belongs to a subversive organization; or
The nature of the relationship between the
union and its members is fiduciary in
nature which arises from the dependence
of the employee on the union, and from the
comprehensive power vested in it with
respect to the individual. The union is but
the agent of its members to secure fair and
just wages and good working conditions.
[Heirs of Cruz v. CIR, G.R. No. L-23331-32
(1969)]
Admission and Discipline of Members

No arbitrary or excessive initiation fees or
fines
No arbitrary or excessive initiation fees
shall be required of the members of a
forfeiture be imposed. [Article 250(e)]
Prohibition on subversive activities or
membership
No labor organization shall knowingly
admit as members or continue in
(b) who is engaged directly or
indirectly in any subversive activity;
Unions cannot arbitrarily exclude

qualified applicants
Unions are not entitled to arbitrarily
exclude qualified applicants for
membership, and a closed•-shop
provision would not justify the
employer in discharging, or a union
in insisting upon the discharge of,
an employee whom the union thus
refuses to admit to membership,
without any reasonable ground
therefor. Needless to say, if said
unions may be compelled to admit
new members, who have the
requisite qualifications, with more
reason may the law and the courts
exercise the coercive power when
the employee involved is a long
standing union member, who, owing
to provocations of union officers, was
impelled to tender his resignation,
which he forthwith withdrew or
revoked. [Salunga v. CIR, No. L•-
22456 (1967)]
Members who seek destruction of

union lose right to remain as
members
Inherent in every labor union, or any
organization for that matter, is the
right of
BOC RELATIONS
self•-preservation. When members of a N.B.: Pascual set forth the condonation doctrine,
labor union, therefore, sow the seeds of which was declared abandoned in Morales v.
dissension and strife within the union; Court of Appeals [G.R. Nos. 217126- 27 (2015)]
when they seek the disintegration and
destruction of the very union to which they
belong, they thereby forfeit their rights to Submission of names not a requirement to
remain as members of the union which
they seek to destroy. [Villar v. Inciong, No.
L•-50283-•84 (1983)]
Election of
Officers Manner of
election
Members shall directly elect their officers,
including those of the national union or
federation, to which they or their union is
affiliated, by secret ballot at intervals of
five
(5) years. [Art. 250(c)]
Qualifications of
officers
No requirements other than membership in
good standing. [Art. 250(c)]
No person who has been convicted of a
crime involving moral turpitude shall be
eligible for election as a union officer or for
appointment to any position in the union.
[Art. 250(f)]
Acts done in prior term is not a ground to

remove a public officer
The Court should never remove a public
officer for acts done prior to his present
term of office. To do otherwise would be to
deprive the people of their right to elect
their officers. When the people have
elected a man to office, it must be
assumed that they did this with knowledge
of his life and character, and that they
disregarded or forgave his faults or
misconduct, if he had been guilty of any. It
is not for the court, by reason of such
faults or misconduct to practically overrule
the will of the people. [Kapisanan ng
Manggagawang Pinagyakap v. Trajano,
G.R. No. L•-62306 (1985), citing Pascual
v. Provincial Board of Nueva Ecija, G.R.
No. L-62306 (1959)]
PAGE 180 OF
235
BOC members to vote
allow RELATIONS A retainer’s contract
Submission of the employees’ names A retainer’s contract of a union counsel is
with the BLR as qualified members a major policy matter affecting the entire
of the union is not a condition sine membership. [Halili v. CIR, No. L•-24864
qua non to enable said members to (1985)]
vote in the election of union’s
Union Dues
officers. [...] The question of
eligibility to vote may be determined
through the use of the applicable
payroll period and employee’s
status. [Tancinco v. Ferrer-Calleja,
G.R. No. L-
•78131 (1988)]
Disqualification does not render

those who garner the 2nd highest
number of votes as the winners
Disqualification of winning
candidates will not result in the
declaration of those who garnered
the second highest number of votes
as winners. The mere fact that they
obtained the second highest
number of votes does not mean that
they will thereby be considered as
the elected officers if the true
winners are disqualified. [Manalad
v. Trajano, G.R. Nos. 72772•-73
(1989)]
Major Policy Matters

Procedure of determining question
of major policy affecting the entire
membership of the organization
[Art. 250(d)]
General Rule:
(1) Members shall determine by
secret ballot; AND
(2) After due deliberation
Exception: Board of directors of the
organization may make the decision
in behalf of the general membership
if:
(1) Nature of the organization
renders such secret ballot
impractical
(2) Force majeure renders such
secret ballot impractical
PAGE 181 OF
235
Union dues are payments to meet the There are two concepts of attorney's fees. In the
union’s general and current obligations. The ordinary sense, attorney's fees represent the
payment must be regular, periodic, and reasonable compensation paid to a lawyer by his
uniform. [Azucena] client for the legal services rendered to the latter.
On the other hand, in its
Every payment of fees, dues or other
contributions by a member shall be
evidenced by a receipt signed by the officer
or agent making the collection and entered
into the record of the organization to be
kept and maintained for the purpose. [Art.
250 (h)]
Attorney’s Fees
Payment of Attorney’s fees cannot be
imposed
in individual member
No attorney’s fees, negotiation fees, or
similar charges of any kind arising from
any collective bargaining agreement or
conclusion of the collective agreement
shall be imposed on any individual
member. [Art. 228(b)]
Proper charging of attorney’s fees
(1) Charges against union funds; AND
(2) In an amount agreed upon by the
parties
Any contract, agreement, or arrangement
of any sort to the contrary shall be void.
[Art. 228(b)]
Different types of Attorney’s Fees

Ordinary Extraordinary
Reasonable Indemnity for damages
compensation paid to a ordered by the court to
lawyer for legal be paid by the losing
services rendered party to the winning
party
Agreed upon by the Awarded by the NLRC
parties
Payable to the lawyer Payable to the client
Not limited (freedom Limited by Art. 111 to
to contract) 10%
[Kaisahan at Kapatiran ng mga

Manggagawa at Kawani sa MWC-East Zone
Union v. Manila Water, G.R. No. 174179
(2011)]
extraordinary concept, attorney's fees membership meeting called for the
may be awarded by the court as purpose;
indemnity for damages to be paid
(2) Secretary’s record of the minutes of the
by the losing party to the prevailing
meeting; AND
party, such that, in any of the cases
provided by law where such award (3) Individual written authorization for
can be made, e.g., those authorized check off duly signed by the employees
in Article 2208 of the Civil Code, the concerned which indicates the:
amount is payable not to the lawyer
a. Amount
but to the client, unless they have
agreed that the award shall pertain
to the lawyer as additional
compensation or as part thereof.
[Masmud v NLRC, G.R. No. 183385
( 2009)]
In Masmud, the contingency
agreement between lawyer and
client consisting of 39% of the
monetary award was deemed not
unconscionable by the SC.
D. Rights of labor organization

D. 1. CHECK-OFF, ASSESSMENT,
AGENCY FEES
Special assessments are payments
for a special purpose, especially if
required only for a limited time.
[Azucena]
No special assessment or other
extraordinary fees may be levied
upon the members of a labor
organization unless authorized by a
written resolution of a majority of all
the members at a general
membership meeting duly called for
the purpose. [Art. 250 (n)]
Other than for mandatory activities
under the Code, no special
assessments, attorney’s fees,
negotiation fees or any other
extraordinary fees may be checked
off from any amount due to an
employee without an individual
written authorization duly signed by
the employee. The authorization
should specifically state the amount,
purpose and beneficiary of the
deduction. [Art. 250 (o)]
Requisites for a Valid Special Assessment
(1) Authorization by a written
resolution of the majority of ALL the
members at the general
b. Purpose Requirements:
c. Beneficiary of deduction
[Gabriel v. SOLE, G.R. No. 115949 (2000)]
Strict compliance for special assessment
There must be strict and full compliance
with the requisites. Substantial compliance
is not enough. [Palacol v. Ferrer-Calleja,
G.R. No. 85333 (1990)]
Mandatory Activity
Definition
A judicial process of settling dispute laid
down by the law. [Vengco v. Trajano, G.R.
No. 74453 (1989)]
Placement of re•negotiations for a CBA
under compulsory arbitration does not
make it a “mandatory activity”. [Galvadores
v. Trajano, No. •70067 (1986)]
It dispenses with the requirement of the
individual written authorization duly signed
by the employee [Art. 250(o)]
AGENCY FEES
An amount, equivalent to union dues,
which a non-union member pays to the
union because he benefits from the CBA
negotiated by the union. [Azucena]
Rationale for allowing agency fees
The legal basis of the union’s right to
agency fees is neither contractual nor
statutory, but quasi-contractual, deriving
from the established principle that non-
union employees may not unjustly enrich
themselves by benefiting from employment
conditions negotiated by the bargaining
union. [Holy Cross of Davao College, Inc v.
Hon. Joaquin, G.R. No. 110007 (1996)]
When Agency Fee assessed
If such non-union member accept the
benefits under the collective bargaining
agreement. [Art. 259(e)]
Measure of fee
A reasonable fee equivalent to the dues
and other fees paid by members of the
recognized collective bargaining agent.
[Art. 259(e)]
(1) Non-member of SEBA A duly registered federation or national
union may directly create a local chapter
(2) Member of Collective Bargaining Unit
by issuing a charter certificate indicating
(3) Reasonable fee equivalent to the establishment of the local chapter. The
the dues and other fees paid by chapter shall acquire legal personality only
members for purposes of filing a petition for
certification
(4) Acceptance of CBA benefits
A.2.I. UNION CHARTERING/ AFFILIATION

DEFINITIONS
Affiliate
An independent union affiliated with
a federated, national union or a
chartered local which was
subsequently granted independent
registration but did not disaffiliate
from its federation, reported to the
Regional Office and the Bureau in
accordance with Rule III, Secs. 6
and 7 [§1(b), Rule I, Book V]
Independent Union
A labor organization operating at the
enterprise level that acquired legal
personality through independent
registration under Art. 234 of the
Labor Code and Rule III,
§2-A [§1(x), Rule I,
Book V National
Union or Federation
A group of legitimate labor unions in
a private establishment organized
for collective bargaining or for
dealing with employers concerning
terms and conditions of employment
for their member union or for
participating in the formulation of
social and employment policies,
standards and programs, registered
with the BLR in accordance with
Rule III §2-B[§1(ll), Rule I, Book V]
Chartered Local (Local Chapter)
A labor organization in the private
sector operating at the enterprise
level that acquired legal personality
through registration with Regional
Office [§1(j), Rule I, Book V]
election from the date it was issued a V], each of which must be a duly recognized
charter certificate. collective bargaining agent [Art. 244]
The chapter shall be entitled to all other
rights and privileges of a legitimate labor
organization only upon the submission of
the following documents in addition to its
charter certificate:
a. The names of the chapter's officers,
their addresses, and the principal office of
the chapter; and
b. The chapter's constitution and by-laws:
Provided, That where the chapter's
constitution and by-laws are the same as
that of the federation or the national union,
this fact shall be indicated accordingly.
The additional supporting requirements
shall be
● Certified under oath by:
o Secretary; or
o Treasurer
● Attested by: Its president [Art.
241] Lesser requirements for Chartered
locals
The intent of the law in imposing less
requirements in the case of a branch or
local of a registered federation or national
union is to encourage the affiliation of a
local union with a federation or national
union in order to increase the local unions’
bargaining powers respecting terms and
conditions of labor. [SMCEU-PTGWO v.
SMPEU-PDMP, G.R. No. 171153 (2007)]
Trade Union Centers cannot create locals
or chapters
Art. 241 mentions only “a duly registered
federation or national union.”
The solemn power and duty of the Court to
interpret and apply the law does not include
the power to correct by reading into the law
what is not written therein. [SMCEU-PTGWO
v. SMPEU-PDMP, G.R. No. 171153 (2007)]
National Union or Federation v. Trade
Unions National Union or Federation
Trade Unions
With at least ten (10) locals or chapters (or
independent unions [§2-B(5), Rule III, Book
Composed of a group of neither does it give the mother federation
registered national unions or the license to act independently of the
federations local union. It only gives rise to a contract
of agency, where the former acts in
Can directly create local or chapter
representation of the latter. Hence, local
[Art. 241] Cannot [SMCEU-
unions are considered principals while the
PTGWO v. SMPEU-
federation is deemed to be merely their
PDMP, G.R. No. 171153 (2007)]
agent. [Insular Hotel Employees Union
NFL v
PURPOSE OF AFFILIATION
To foster the free and voluntary
organization of a strong and united
labor movement [Art. 218-A(c)]
The sole essence of affiliation is to
increase, by collective action, the
common bargaining power of local
unions for the effective enhancement
and protection of their interests.
Admittedly, there are times when
without succor and support local
unions may find it hard, unaided by
other support groups, to secure
justice for themselves. [Philippine
Skylanders, Inc. v. NLRC, G.R. No.
127374 (2002)]
NATURE OF RELATIONSHIP: AGENCY

The mother union, acting for and in
behalf of its affiliate, had the status
of an agent while the local union
remained the basic unit of the
association, free to serve the common
interest of all its members subject
only to the restraints imposed by the
constitution and by-laws of the
association. [...] The same is true
even if the local is not a legitimate
labor organization. [Filipino Pipe and
Foundry Corp v. NLRC, G.R. No.
115180 (1998)]
EFFECT OF AFFILIATION
Inclusion of [the federation’s initials]
in the registration is merely to stress
that they are its affiliates at the time
of registration. It does not mean that
said local unions cannot stand on
their own. [Adamson v CIR, G.R.
No. L-35120 (1984)]
Mere affiliation does not divest the
local union of its own personality,
Waterfront Insular Hotel, GR No. 174040- Period of Disaffiliation
41 (2010)]
Generally, a labor union may disaffiliate from the
mother union to form a local or
SUPERVISOR AND RANK AND FILE
UNION AFFILIATION
General Rule: The rank and file union and

the supervisors' union operating within the
same establishment MAY JOIN the SAME
federation or national union. [Art. 255]
DISAFFILIATION
Nature of Right and Legality
Such a phenomenon is nothing new in the
Philippine labor movement. Nor is it open
to any legal objection. It is implicit in the
freedom of association explicitly ordained
by the Constitution. There is then the
incontrovertible right of any individual to
join an organization of his choice. That
option belongs to him.. [Philippine Labor
Alliance Council (PLAC) v. BLR, No. L-
41288 (1977)]
We upheld the right of local unions to
separate from their mother federation on
the ground that as separate and voluntary
associations, local unions do not owe their
creation and existence to the national
federation to which they are affiliated but,
instead, to the will of their members.
[[Philippine Skylanders, Inc. v. NLRC, G.R.
No. 127374 (2002)]]
A local union, being a separate and
voluntary association, is free to serve the
interests of all its members including the
freedom to disaffiliate or declare its
autonomy from the federation which it
belongs when circumstances warrant, in
accordance with the constitutional
guarantee of freedom of association. Such
disaffiliation cannot be considered
disloyalty. In the absence of specific
provisions in the federation’s constitution
prohibiting disaffiliation or the declaration
of autonomy of a local union, a local may
dissociate with its parent union. [Malayang
Samahan ng mga Manggagawa sa
M. Greenfield, Inc. v. Ramos, G.R. No.
113907 (2000)]
independent union only during the and all power to act in representation of
60-day freedom period immediately the union. Thus, any act performed by [the
preceding the expiration of the federation] affecting the interests and
CBA. However, even before the affairs of the [local union] is rendered
onset of the freedom period, without force and effect. [ANGLO v.
disaffiliation may be carried out Samana, G.R. No. 118562 (1996)]
when there is a shift of allegiance
on the part of the majority of the
members of the union. [ANGLO v. SUBSTITUTIONARY DOCTRINE
Samana Bay, G.R. No. 118562 The “substitutionary” doctrine provides that
(1996)] the employees cannot revoke the validly
Effect of
disaffiliation
On legal
personality
A registered independent union
retains its legal personality while a
chartered local loses its legal
personality unless it registers itself.
No effect on CBA
A disaffiliation does not disturb the
enforceability and administration of
a collective agreement; it does not
occasion a change of administrators
of the contract nor even an
amendment of the provisions thereof.
[Volkschel Labor Union v. BLR, No.
L•45824 (1985)]
Obligation to pay union dues is
coterminous with membership
The obligation of an employee to
pay union dues is coterminous with
his affiliation or membership. “The
employees’ check-•off
authorization, even if declared
irrevocable, is good only as long as
they remain members of the union
concerned”. A contract between an
employer and the parent
organization as bargaining agent for
the employees is terminated by the
disaffiliation of the local of which the
employees are members. [Volkschel
Labor Union v. BLR, No. L•45824
(1985)]
Power to represent principal severed
By [the local union’s disaffiliation
from the federation], the vinculum
that previously bound the two
entities was completely severed.
[The federation] was divested of any
executed collective bargaining contract
with their employer by the simple
expedient of changing their bargaining Statutory Policies
agent. And it is in the light of this that the
phrase “said new agent would have to
respect said contract” must be understood.
It only means that the employees, thru
their new bargaining agent, cannot renege
on their collective bargaining contract,
except of course to negotiate with
management for the shortening thereof.
[Benguet Consolidated v. BCI Employees
and Workers Union-PAFLU, G.R. No. L-
24711 (1968)]
Conditions to apply the doctrine
(1) change of bargaining agent (through
affiliation, disaffiliation, or other means);
and
(2) existing CBA with the previous
bargaining agent [Benguet Consolidated v.
BCI Employees and Workers Union-PAFLU,
G.R. No. L-24711 (1998)]
Effects:
(1) new bargaining agent cannot revoke
and must respect the existing CBA; and
(2) it may negotiate with management to
shorten the existing CBA’s lifetime
D.2. COLLECTIVE BARGAINING
GENERAL CONCEPTS
Constitutional Policies
(1) [The State] shall guarantee the rights
of all workers to self-organization,
collective bargaining and negotiations […]
[1987 Constitution, Art. XIII, §3, par. 2]
(2) The State shall promote the principle
of shared responsibility between workers
and employers and the preferential use of
voluntary modes in settling disputes,
their mutual compliance therewith to foster
industrial peace. [1987 Constitution, Art.
XIII,
§3, par. 3]
(1) To promote and emphasize the management, make their own rules by
primacy of free collective bargaining coming to terms [...] to govern themselves
and negotiations, including in matters that really count. [United
voluntary arbitration, mediation and Employees Union of Gelmart Industries v.
conciliation, as modes of settling Noriel, 1975]
labor or industrial disputes. [Art.
218-A(a)]
Right to Suspend Free Collective Bargaining
(2) It is the policy of the State to
promote and emphasize the The assailed PAL-PALEA agreement was
primacy of free and responsible the result of voluntary collective bargaining
exercise of the right to self- negotiations undertaken in the light of the
organization and collective severe financial situation faced by the
bargaining, either through single
enterprise level negotiations or
through the creation of a
mechanism by which different
employers and recognized certified
labor unions in their establishments
bargain collectively. [Book V, Rule
XVI, §1]
(3) To encourage a truly
democratic method of regulating the
relations between the employers
and employees by means of
agreements freely entered into
through collective bargaining, no
court or administrative agency or
official shall have the power to set or
fix wages, rates of pay, hours of
work or other terms and conditions
of employment, except as otherwise
provided under this Code [Art. 218-
B]
Definition, Nature, and Purpose

Collective bargaining which is
defined as negotiations towards a
collective agreement, is one of the
democratic frameworks under the
[Labor] Code, designed to stabilize
the relations between labor and
management and to create a climate
of sound and stable industrial
peace. It is a mutual responsibility of
the employer and the Union and is
characterized as a legal obligation.
[Kiok Loy v. NLRC, G.R. No. L-
54334 (1986)]
The institution of collective
bargaining is [...] a prime
manifestation of industrial
democracy at work. The two parties
to the relationship, labor and
employer, with the peculiar and unique appropriate collective bargaining unit is the
intention of not merely promoting industrial exclusive representative of the employees in such
peace at PAL, but preventing the latter’s unit for the purpose of collective bargaining. The
closure. [...] It was PALEA, as the exclusive union is admittedly not the exclusive
bargaining agent of PALs ground representative of
employees, that voluntarily entered into the
CBA with PAL. It was also PALEA that
voluntarily opted for the 10-year suspension
of the CBA. Either case was the union’s
exercise of its right to collective bargaining.
The right to free collective bargaining, after
all, includes the right to suspend it. [Rivera
v. Espiritu, 2000]
D.2.A.DUTY TO BARGAIN COLLECTIVELY
I. IN GENERAL
Definition
Art. 263. Meaning of duty to bargain
collectively. — The duty to bargain
collectively means the performance of a
mutual obligation to meet and convene
promptly and expeditiously in good faith for
the purpose of negotiating an agreement
with respect to wages, hours of work, and
all other terms and conditions of
employment including proposals for
adjusting any grievances or questions
arising under such agreement and executing
a contract incorporating such agreements
if requested by either party, but such duty
does not compel any party to agree to a
proposal or to make any concession.
Jurisdictional Preconditions of Duty to

Bargain
(1) Possession of the status of majority
representation of the employees’
representative in accordance with any of
the means of selection or designation
provided for by the Code;
(2) Proof of majority representation;
AND Demand to bargain under Art. 261(a)
[Kiok Loy v. NLRC, G.R. No. L-54334
(1986) ]
[Citing Art. 267], only the labor

organization designated or selected by the
majority of the employees in an
the majority of the employees [...], in the absence of collective bargaining
hence, it could not demand from [the agreements.
employer] the right to bargain — In the absence of an agreement or
collectively in their behalf. [Phil. other voluntary arrangement providing for
Diamond Hotel and Resort Inc v a more expeditious manner of collective
Manila Diamond Hotel and bargaining, it shall be the duty of the
Employees Union, GR No. 158075 employer and the representatives of the
(2006)] employees to bargain collectively in
accordance with the provisions of this
Code.
Meaning of Bargaining in Good Faith
[T]here is no per se test of good
faith in bargaining. Good faith or bad
faith is an inference to be drawn
from the facts. [Union of Filipro
Employees v. Nestle Philippines,
Inc.,
G.R. Nos. 158930-31 (2008)][T]he
failure to reach an agreement after
negotiations continued for a
reasonable period does not
establish a lack of good faith. The
laws invite and contemplate a
collective bargaining contract, but
they do not compel one. [Tabangao
Shell Refinery Employees
Association vs. Pilipinas Shell
Petroleum Corporation, G.R. No.
170007 (2014)]
Duty to Bargain does not include:

(1) Any legal duty [on the
employer] to initiate contract
negotiation [Kiok Loy v NLRC, G.R.
No. L-54334 (1986)]
(2) The obligation to reach an
agreement: While the law makes it
an obligation for the employer and
the employees to bargain
collectively with each other, such
compulsion does not include the
commitment to precipitately accept
or agree to the proposals of the
other. All it contemplates is that both
parties should approach the
negotiation with an open mind and
make reasonable effort to reach a
common ground of agreement. [Union
of Filipro Employees v. Nestle, G.R.
Nos. 158930-31 (2008)]
II. WHEN THERE IS AN ABSENCE OF A
CBA
Art. 262. Duty to bargain collectively
III. WHEN THERE IS A free collective bargaining and negotiations [Art.
CBA General Rule
The duty to bargain collectively shall also
mean that neither party shall terminate nor
modify such agreement during its lifetime.
[Art. 264]
● Substitutionary doctrine - Even

during the effectivity of a collective
bargaining agreement executed between
employer and employees [through] their
agent, the employees can change said
agent but the contract continues to bind
then up to its expiration date. They may
bargain however for the shortening of said
expiration date.[Elisco- Elirol Labor Union
v Noriel, G.R. No. L-41955 (1977)].
Exception
At least sixty (60) days prior to the
expiration of the collective bargaining
agreement, either party can serve a written
notice to terminate or modify the
agreement [Art. 264].
‘Note: During this 60-day period, a verified
petition questioning the majority status of
the incumbent bargaining agent may also
be filed [Art. 268].
Effect on existing CBA

It shall be the duty of both parties to keep
the status quo and to continue in full force
and effect the terms and conditions of the
existing agreement during the 60-day
period and/or until a new agreement is
reached by the parties. [Art. 264]
B.3 BARGAINING PROCEDURE [ART. 262]

General Rule: Private Procedure - The
bargaining procedure shall be governed by
[the parties’] agreement or other voluntary
arrangement providing for a more
expeditious manner of collective bargaining
[Art. 262]
● Rationale - It is the policy of the state
to promote and emphasize the primacy of
218-A(a)] may declare a “deadlock” which is a
ground to file a petition for preventive
Exception
mediation or a notice of strike or notice of
Labor Code Procedure – In lockout with the NCMB.
absence of a private agreement, the
collective bargaining procedure
under Art. 261 shall be followed. Period to Reply; Bad Faith
i. Written notice and statement [The period to reply] is merely procedural,
of proposals. When a party desires and non-compliance cannot be
to negotiate an agreement, it shall automatically
serve a written notice upon the
other party with a statement of its
proposals.
ii. Reply. The other party shall
make a reply thereto not later than
ten (10) calendar days from receipt
of such notice.
iii. Conference. Should differences
arise on the basis of such notice
and reply, either party may request
for a conference which shall begin
not later than ten (10) calendar
days from the date of request.
iv. Board intervention and
conciliation. If the dispute is not
settled, the [NCMB] shall intervene
upon request of either or both
parties or at its own initiative and
immediately call the parties to
conciliation meetings. The [NCMB]
shall have the power to issue
subpoenas requiring the attendance
of the parties to such meetings. It
shall be the duty of the parties to
participate fully and promptly in the
conciliation meetings the Board
may call;
v. Voluntary arbitration. The
[NCMB] shall exert all efforts to
settle disputes amicably and
encourage the parties to submit
their case to a voluntary arbitrator.
vi. Prohibition against disruptive
acts. During the conciliation
proceedings in the Board, the
parties are prohibited from doing
any act which may disrupt or
impede the early settlement of the
disputes. [Book V, Rule XII,
§1]
vii. Deadlock. When the parties
have reached an impasse in
negotiations, either or both of them
deemed to be an act of unfair labor to law, morals, good customs, public order or
practice. [National Union of Restaurant public policy. [Manila Fashions
Workers vs. CIR, G.R. No. L-20044 (1964)]
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a
counter- proposal [...] is an indication of its
bad faith. Where the employer did not
even bother to submit an answer to the
bargaining proposals of the union, there is
a clear evasion of the duty to bargain
collectively, [...] making it liable for unfair
labor practice. [General Milling Corp. v.
CA, G.R. No. 146728 (2004)]
Bargainable Issues
(1) Mandatory Bargainable Issues
a. Wages
b. Hours of work
c. All other terms and conditions of
employment including proposals for adjusting
any grievances or questions arising under
such agreement [Art. 263]
Examples:
i. Vacations and holidays
ii. Bonuses
iii. Seniority, Transfer, and Layoffs
iv. Employee workloads
v. Work rules and regulations
vi. Union security arrangements
vii. Pension and insurance benefits for
active employees
(2) Permissive Issues:
a. Unilateral benefits extended by the
employer [cf., Union of Filipino Employees
v. Nestle, G.R. Nos. 158930-31 (2008)]
A collective bargaining agreement refers to
the negotiated contract between a
legitimate labor organization and the
employer concerning wages, hours of work
and all other terms and conditions of
employment in a bargaining unit […]. As in
all other contracts, the parties in a CBA
may establish such stipulations, clauses,
terms and conditions as they may deem
convenient provided they are not contrary
v. NLRC, G.R. No. 117878 (1996)] guilty of ULP. [Samahang Manggagawa sa
Top Form v. NLRC, G.R. No. 113856
(1998)]
Test for Mandatory Bargainable Issues
The NEXUS Between the Nature of
Minutes of Negotiation
Employment and the Nature of the
Demand: For “other terms and Where a proposal raised by a contracting
conditions of employment” to party does not find print in the CBA, it is
become a mandatory bargainable not a part
issue, they must have a connection
between the proposal and the
nature of the work.
In order for a matter to be subject to
mandatory collective bargaining, it
must materially or significantly affect
the terms and conditions of
employment. Whether the
agreement concerns a mandatory
subject of bargaining depends not
on its form, but on its practical
effect. [Azucena]
Importance of Determining the

character of the Bargaining Issue
The question as to what are
mandatory and what are merely
permissive subjects of collective
bargaining is of significance on the
right of a party to insist on his
position to the point of stalemate. A
party may refuse to enter into a
collective bargaining contract unless
it includes a desired provision as to
a matter which is a mandatory
subject of collective bargaining[. But]
a refusal to contract unless the
agreement covers a matter which is
not a mandatory subject is in
substance a refusal to bargain about
matters which are mandatory
subjects of collective bargaining;
and it is no answer to the charge of
refusal to bargain in good faith that
the insistence on the disputed
clause was not the sole cause of the
failure to agree or that agreement
was not reached with respect to
other disputed clauses.
Such refusal will not be deemed as
an unfair labor practice. However, if
a party refuses to contract based on
an issue which is not a mandatory
bargainable issue, the party will be
thereof and the proponent has no claim Proceedings
whatsoever to its implementation. [...] The
Information and statements made at conciliation
Minutes [only] reflects the proceedings and
proceedings shall be treated as
discussions undertaken in the process of
bargaining for worker benefits in the same
way that the minutes of court proceedings
show what transpired therein. At the
negotiations, it is but natural for both
management and labor to adopt positions
or make demands and offer proposals and
counter-proposals. However, nothing is
considered final until the parties have
reached an agreement. [Samahang
Manggagawa sa Top Form v. NLRC, G.R.
No. 113856 (1998)]]
Suspension of Bargaining Negotiations

In order to allow the employer to validly
suspend the bargaining process there must
be a valid petition for certification election
raising a legitimate representation issue.
Hence, the[Colegio de San Juan de Letran
v. Association of Employees, 2000]
Bargaining Deadlock
A “deadlock” is defined as the
“counteraction of things producing entire
stoppage: a state of inaction or of
neutralization caused by the opposition of
persons or of factions: a standstill. There is
a deadlock when there is a “complete
blocking or stoppage resulting from the
action of equal and opposed forces.” The
word is synonymous with the word
impasse which, within the meaning of the
American federal labor laws, “presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the
parties.” [Divine World Tacloban v
Secretary of Labor, G.R. No. 91915
(1992)]
Collective Bargaining Deadlock is defined
as the situation between the labor and the
management of the company where there
is failure in the collective bargaining
negotiations resulting in a stalemate. [San
Miguel Corp. v NLRC, 1999].
Privileged Communication in Conciliation

privileged communication and shall labor contracts must yield to the common
not be used as evidence in the good. [Halagueña v. Philippine Airlines,
Commission. Conciliators and G.R. No. 172013 (2009)]
similar officials shall not testify in
any court or body regarding any
matters taken up at conciliation Beneficiaries of the CBA
proceedings conducted by them.
Art. 267 Exclusive bargaining representation
[Art. 233]
Rationale
i. a person is entitled to ‘buy his
or her peace’ without danger of
being prejudiced in case his or her
efforts fail
ii. offers for compromise are
irrelevant because they are not
intended as admissions by the
parties making them [Pentagon
Steel v. CA, 2009]
D.2.B. COLLECTIVE
BARGAINING AGREEMENT (CBA)
GENERAL CONCEPTS
Definition
Collective Bargaining Agreement or
“CBA” refers to the negotiated
contract between a legitimate labor
organization and the employer
concerning wages, hours of work
and all other terms and conditions
of employment in a bargaining unit.
[§1(k), Rule I, Book V]
Nature of the CBA
It is a familiar and fundamental
doctrine in labor law that theCBA is
the law between the parties and
they are obliged to comply with its
provisions. [Zuellig Pharma
Corporation vs. Alice Sibal, G.R.
No. 173587 (2013)]
Although it is a rule that a contract
freely entered between the parties
should be respected, since a
contract is the law between the
parties, said rule is not absolute. [...
Citing Art. 1700,] the relations
between capital and labor are not
merely contractual. They are so
impressed with public interest that
and workers' participation in policy and G.R. No. 103090 (1993)]
decision-making, [1st par.] — The labor
organization designated or selected by the
majority of the employees in an
appropriate collective bargaining unit shall
be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining.
. When a collective bargaining contract is

entered into by the union representing the
employees and the employer, even the
non- member employees are entitled to the
benefits of the contract. To accord its
benefits only to members of the union
without any valid reason would constitute
undue discrimination against non-
members. [New Pacific Timber and Supply
v. NLRC, G.R. No. 124224 (2000)]
Contract Interpretation
Art. 1702, Civil Code. In case of doubt, all
labor legislation and all labor contracts
shall be construed in favor of the safety
and decent living for the laborer.
A CBA, as a labor contract within the
contemplation of Article 1700 of the Civil
Code of the Philippines which governs the
relations between labor and capital, [it] is
not merely contractual in nature but
impressed with public interest, thus, it must
yield to the common good. As such, it must
be construed liberally rather than narrowly
and technically, and the courts must place
a practical and realistic construction upon
it, giving due consideration to the context
in which it is negotiated and purpose which
it is intended to serve. [Davao Integrated
Port Stevedoring Services vs. Abarquez, G.R.
No. 102132 (1993)]
General Rule: [W]here the CBA is clear
and unambiguous, it becomes the law
between the parties and compliance
therewith is mandated by the express
policy of the law. [Zuellig Pharma
Corporation v Alice Sibal, G.R. No.173587
(2013)]
Exception: If the words appear to be
contrary to the evident intention of the
parties, the latter shall prevail over the
former. [Kimberly Clark Phils. v. Lorredo,
Constitutional Basis
D.2.b.1.MANDATORY PROVISIONS OF §3, Art. XIII, 1987 Constitution - The State

CBA shall promote the principle of shared
responsibility between workers and
employers and the preferential use of
(1) Grievance Procedure[Art. 273] voluntary modes in settling disputes,
The parties to a Collective their mutual compliance therewith to foster
Bargaining Agreement shall: industrial peace. [
1) Include provisions that will Who is a voluntary arbitrator
ensure the mutual observance of its
terms and conditions.
2) Establish a machinery for the
adjustment and resolution of
grievances arising from:
a) The interpretation or
implementation of their CBA; and
b) those arising from the
interpretation or enforcement of
company personnel policies.
All grievances submitted to the
grievance machinery which are not
settled within 7 calendar days from
the date of its submission shall be
automatically referred to voluntary
arbitration prescribed in the CBA.
[Art. 273]
[A] grievance procedure is part of
the continuous process of collective
bargaining. It is intended to promote
a friendly dialogue between labor
and management as a means of
maintaining industrial peace.
[Master Iron Labor Union v. NLRC,
G.R. No. 92009 (1993)]
No particular setup for a grievance
machinery is required by law. [Art.
273] [...] provides for only a single
grievance machinery in the
company to settle problems arising
from interpretation or
implementation of their collective
bargaining agreement and those
arising from the interpretation or
enforcement of company personnel
policies. [Caltex Refinery Employees
Association v. Brillantes, G.R. No.
123782 (1997)]
(2) Voluntary
Arbitration
A “voluntary arbitrator” is any person dispute to one is valid. Being part of a contract
accredited by the [National Conciliation between the parties, it is binding and enforceable
and Mediation Board] as such, or any in court in case one of them neglects, fails or
person named or designated in the refuses to arbitrate. Going a step further, in the
Collective Bargaining Agreement by the event that they declare
parties to act as their Voluntary Arbitrator,
or one chosen, with or without the
assistance of the National Conciliation and
Mediation Board, pursuant to a selection
procedure agreed upon in the Collective
Bargaining Agreement, or any official that
may be authorized by the Secretary of
Labor and Employment to act as Voluntary
Arbitrator upon the written request and
agreement of the parties to a labor dispute
[Art. 219n)]
Automatic Referral If Grievance Machinery
Fails
All grievances submitted to the grievance
machinery which are not settled within 7
calendar days from the date of its
submission shall automatically be referred
to voluntary arbitration prescribed in the
CBA. [Art. 273]
Provision for Voluntary Arbitration in the
CBA
(1) Parties to a CBA shall:
a. Name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, OR
b. Include in the agreement a
procedure for the selection of such
Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly
accredited by the Board.
(2) In case the parties fail to select a
Arbitrators, the Board shall designate the
Arbitrators, as may be necessary, pursuant
to the selection procedure agreed upon in
the [CBA], which shall act with the same
force and effect as if the has been selected
by the parties as described above. [Art.
273]
Voluntary Arbitration as a Condition
Precedent
The stipulation to refer all future disputes
to an arbitrator or to submit an ongoing
their intention to refer their [and] adequate prerogative is aimed at
differences to arbitration first before accomplishing the rationale of the law on
taking court action, this constitutes voluntary arbitration – speedy labor justice.
a condition precedent, such that [Goya, Inc. vs. Goya, Inc. Employees
where a suit has been instituted Union- FFW, G.R. No. 170054 (2013)]
prematurely, the court shall
Procedure of Voluntary Arbitration
suspend the same and the parties
shall be directed forthwith to (1) All parties to the dispute shall be
proceed to arbitration. [...] A court entitled to attend the arbitration
action may likewise be proper proceedings.
where the arbitrator has not been (2) Hearing may be adjourned for cause or
selected by the parties. [Chung Fu
Industries v. CA, G.R. No. 96283
(1992)]
Arbitrable Issues
1. interpretation or
implementation of the CBA [Art.
274]
2. interpretation or enforcement
of company personnel policies [Art.
274]
3. violations of a CBAwhich are
not gross in character (gross being
flagrant and/or malicious refusal to
comply with the economic
provisions of [the CBA]) [Art. 274]
4. all other labor disputes
including ULP and bargaining
deadlock, if the parties agree [Art.
275]
5. Wage distortions arising from
application of any wage orders in
organized establishments [Art. 124]
6. Unresolved grievances arising
from the interpretation and
implementation of the productivity
incentives program under RA 6971
[Book V, Rule XIX, §4]
In general, the arbitrator [“VA”] is
expected to decide those questions
expressly stated and limited in the
submission agreement. However,
since arbitration is the final resort for
the adjudication of disputes, the
arbitrator can assume that he has
the power to make a final
settlement. [...] [The VA has]
plenary jurisdiction and authority to
interpret the [CBA] and to determine
the scope of his [or her] own
authority. [...] Subject to judicial
review, this leeway of authority
upon agreement by the parties. he can bring a special civil action for certiorari
before the Supreme Court.
(3) Unless the parties agree otherwise, it
shall be mandatory for voluntary arbitrator
or panel of voluntary arbitrators to render
an award or decision within twenty (20)
calendar days from the date of submission
for resolution [Art. 276]
Powers of voluntary arbitrators during
arbitration proceeding
(1) hold hearings
(2) receive evidence
(3) take whatever action is necessary to
resolve the issue or issues subject of
dispute, including efforts to effect a
voluntary settlement between parties
(4) determine attendance of any third
parties
(5) determine exclusion of any witness
(6) issue writ of execution for sheriff of
NLRC or regular courts to execute the final
decision, order, or award [Art. 276]
Finality of the final decision, Order, or

Award - after ten (10) calendar days from
receipt of the copy of the award or decision
by the parties [Art. 276]
Motion for Reconsideration
The absence of a categorical language in
Art.
[276] does not preclude the filing of a
motion for reconsideration of the VA’s
decision within the 10-day period. [Teng v
Pahagac, G.R. 169704 (2010)]
Clearly, before a petition for certiorari
under Rule 65 of the Rules of Court may
be availed of, the filing of a motion for
reconsideration is a condition sine qua non
to afford an opportunity for the correction
of the error or mistake complained of. So
also, considering that a decision of the
Secretary of Labor is subject to judicial
review only through a special civil action of
certiorari and, as a rule, cannot be
resorted to without the aggrieved party
having exhausted administrative remedies
through a motion for reconsideration, the
aggrieved party, must be allowed to move
for a reconsideration of the same so that
[PIDLTRANCO Service Enterprises Inc v therein a proportionate sharing scheme on
PWU the cost of the voluntary arbitration
– AGLO, GR No. 180962 (2014)] including the Voluntary Arbitrator’s fee. […]
[Art. 277]
The rule, therefore, is that a
Voluntary Arbitrator’s award or Voluntary Arbitrator's Fee
decision shall be appealed before […] The fixing of the fee of the Voluntary
the Court of Appeals within 10 days
Arbitrators or panel of Voluntary
from receipt of the award or
Arbitrators, whether shouldered wholly by
decision. Should the aggrieved party
the parties or subsidized by the special
choose to file a motion for
voluntary arbitration fund, shall take into
reconsideration with the Voluntary
account the following factors:
Arbitrator, the motion must be filed
within the same 10-day period since
a motion for reconsideration is filed
"within the period for taking an
appeal." [PHILEC v Court of Appeals,
GR No. 168612 (2014)]
Appeal
While there is an express mode of
appeal from the decision of a labor
arbiter, Republic Act No. 6715 is
silent with respect to an appeal from
the decision of a voluntary arbitrator.
[...]
Assuming arguendo that the
voluntary arbitrator or the panel of
voluntary arbitrators may not strictly
be considered as a quasi- judicial
agency, board or commission, still
both he and the panel are
comprehended within the concept
of a "quasi-judicial instrumentality."
A fortiori, the decision or award of
the voluntary arbitrator or panel of
arbitrators should likewise be
appealable to the Court of Appeals.
[Luzon Development Bank v. Assoc.
of Luzon Dev’t Employees, G.R. No.
120319 (1995)]
The decisions of the voluntary
arbitrator are akin to those of the
Regional Trial Court, and, therefore,
should first be appealed to the
Court of Appeals before being
elevated to [the Supreme Court].
[Centro Escolar University Faculty
and Allied Workers Union v. Court
of Appeals, G.R. No. 165486
(2006])
Costs
The parties to a Collective
Bargaining Agreement shall provide
(1) nature of the case; III. ADMINISTRATION AND ENFORCEMENT
(2) time consumed in hearing the case;
(3) professional standing of the voluntary
arbitrator;
(4) capacity to pay of the parties;
(5) fees provided for in the [...] Rules of
Court[Art. 277]
(3) No Strike-No Lockout Clause

A "no strike, no lock-out" provision in the
[CBA] is a valid stipulation although the
clause may be invoked by an employer
only when the strike is economic in nature
or one which is conducted to force wage or
other concessions from the employer that
are not mandated to be granted by the law
itself. It would be inapplicable to prevent a
strike which is grounded on unfair labor
practice. [Panay Electric Co. v. NLRC, G.R.
No. 102672 (1995); Malayang Samahan ng
mga Manggagawa sa Greenfield v. Ramos,
G.R. No. 113907 (2000)]
(4) Labor Management Council

Any provision of law to the contrary
notwithstanding, workers shall have the
right, subject to such rules and regulations
as the Secretary of Labor and Employment
may promulgate, to participate in policy
and decision-making processes of the
establishment where they are employed
insofar as said processes will directly
affect their rights, benefits and welfare. For
this purpose, workers and employers may
form labor-management councils. […] [Art.
267]
Selection of Representatives
In organized establishments, the workers’
representatives to the council shall be
nominated by the exclusive bargaining
representative. In establishments where no
legitimate labor organization exists, the
workers representative shall be elected
directly by the employees at large. [§2,
Rule XXI, Book V]
OF CBA Exception: Even if there was no
ratification, the CBA will not be invalid or
Substandard CBA
void considering that the employees have
A CBA that falls below the minimum enjoyed benefits from it.
standards required by law is
● [The employees] cannot receive
prohibited. Nonetheless, RA 9481
benefits under provisions favorable to them
removed substandard CBAs as a
and later insist that the CBA is void simply
ground for the cancellation of
because other provisions turn out not to
registration of union registration.
the liking of
Note: A substandard CBA cannot
bar a petition for certification
election under the contract-bar rule.
[Prof. Battad]
Ratification
Within thirty (30) days from the
execution of a collective bargaining
agreement, the parties shall submit
copies of the same directly to the
Bureau or the Regional Offices of
Employment for registration
accompanied with verified proofs of its
posting in two conspicuous places in
the place of work and ratification by
the majority of all the workers in the
bargaining unit. [Art. 237; Book V,
Rule XVII, §2 (c)]
[T]he posting of copies of the
collective bargaining agreement is
the responsibility of the employer.
The fact that there were "no
impartial members of the unit" is
immaterial. The purpose of the
requirement is precisely to inform
the employees in the bargaining unit
of the contents of said agreement so
that they could intelligently decide
whether to accept the same or not.
[Associated Labor Unions v Ferrer-
Calleja, G.R. No. L-77282 (1989)]
Effect of Non-ratification
General Rule: The collective
bargaining agreement should be
ratified by the majority of all the
members of the bargaining unit.
Non-compliance with this
requirement renders the CBA
ineffective. [Associated Trade Unions
v. Trajano, 1988]
certain employees. [Planters Products Inc.
Specific information submitted in confidence
v. National Labor Relations Commission,
G.R. No. 78524 (1989)] General rule: Shall not be disclosed
Note: Ratification of the CBA by the
employees in the bargaining unit is not
needed when the CBA is a product of an
arbitral award as a result of voluntary
arbitration under Art. 275 or from the
secretary’s assumption of jurisdiction or
certification under Art. 278 (g).
To require ratification of the CBA in case of
arbitral awards will be inconsistent with the
nature of arbitration, which entails
submission to the judgment of an impartial
third person. The settlement device would
be circuitous and the very nature of
arbitration would be contradicted if the
arbitrator’s decision, would be dependent
on the employees’ acceptance.
Registration
Within thirty (30) days from the execution
of a Collective Bargaining Agreement, the
parties shall submit copies of the same
directly to the Bureau or the Regional
Offices of the Department of Labor and
Employment for registration […]. [Art. 237]
Requirements for Registration

The application for CBA registration shall
be accompanied by the original and two
(2) duplicate copies of the following
documents which must be certified under
oath by the representative(s) of the
employer(s) and labor union(s) concerned:
(1) The collective bargaining agreement
(2) A statement that the collective
bargaining agreement was posted in at
least two (2) conspicuous places in the
establishment or establishments
concerned for at least five (5) days before
its ratification
(3) A statement that the collective
bargaining agreement was ratified by the
majority of the employees in the bargaining
unit of the employer or employees
concerned. [§2, Rule XVII, Book V]
Exceptions:
(1) authorized by Secretary of Labor
Hold Over Principle
(2) when it is at issue in any
Art. 264. Duty to bargain collectively
judicial litigation
when there exists a collective bargaining
(3) public interest or national agreement.
security requires [Art. 237]
— [...I]It shall be the duty of both parties
to keep the status quo and to continue in
Effect of Unregistered CBA
An unregistered CBA is binding
upon the parties but cannot serve
as a bar to a petition for certification
election under the contract- bar
rule.
§3, Rule VIII, Book V states: A
petition for certification election may
be filed anytime, except: [...] (d)
when a collective bargaining
agreement between the employer
and a duly recognized or certified
bargaining agent has been
registered in accordance with Article
231 [renumbered 237] of the Labor
Code.
IV.EFFECTIVITY AND
DURATION OF COLLECTIVE
BARGAINING AGREEMENT
CBA Effectivity
If it is the first ever CBA, the
effectivity date is whatever date the
parties agree on.
If it is renegotiated CBA, the
retroactivity of the date of effectivity
depends upon the duration of
conclusion [Art. 265].
(1) If it is concluded within 6
months from the expiry date,
the new CBA will retroact to
the date following the expiry
date [Illustration: expiry
date: December 13;
renegotiations concluded on
November 30: effectivity date:
December 14].
(2) If it is concluded beyond 6
months from the expiry date,
the matter of retroaction and
effectivity is left with the
parties.
resolved in favor of labor. In upholding the
force and effect the terms and conditions
assailed orders of respondent Secretary, this
of the existing agreement during the 60- Court is only giving meaning to this rule. Indeed,
day period and/or until a new agreement the
is reached by the parties.
The last sentence of Article 264, which

provides for automatic renewal [upon
expiry], pertains only to the economic
provisions of the CBA and does not
include representational aspect of the
CBA. A [CBA which continues to take
effect beyond its expiration date] cannot
constitute a bar to a filing of petition for
certification election. When there is a
representational issue, the status quo
provision insofar as the need to await the
creation of a new agreement will not apply.
Otherwise, it will create an absurd situation
where the union members will be forced to
maintain membership by virtue of the
union security clause existing under the
CBA and, thereafter, support another
union when filing a petition for certification
election. If we apply it, there will always be
an issue of disloyalty whenever the
employees exercise their right to self-
organization. The holding of a certification
election is a statutory policy that should not
be circumvented, or compromised. [PICOP
Resources, Inc. v. Taneca et al., G.R. No.
160828 (2010)]
Arbitrated CBA
In the absence of an agreement between
the parties, an arbitrated CBA takes on the
nature of any judicial or quasi-judicial
award. [Manila Electric Company vs.
Quisumbing, 1999]
[I]n the absence of the specific provision of

law prohibiting retroactivity of the effectivity
of the arbitral awards issued by the
Secretary of Labor pursuant to Article
263(g) of the Labor Code, [the Secretary]
is deemed vested with plenary powers to
determine the effectivity thereof.
[T]o deprive respondent Secretary of such

power and discretion would run counter to
the well-established rule that all doubts in
the interpretation of labor laws should be
Court should help labor authorities transferee of an enterprise, labor contracts
in providing workers immediate being in personam, is binding only
benefits, without being hampered between the parties. As a general rule,
by arbitration or litigation processes there is no law requiring a bona fide
that prove to be not only nerve- purchaser of the assets of an on-going
wracking but financially burdensome concern to absorb in its employ the
in the long run. [LMG Chemicals v. employees of the latter. However, although
Secretary of Labor, G.R. No. the purchaser of the assets or enterprise is
127422 (2001)] not legally bound to absorb in its
CBA Duration
Any Collective Bargaining Agreement
that the parties may enter into shall,
insofar as the representation aspect
is concerned, be for a term of five
(5) years. [...] All other provisions of
the Collective Bargaining
Agreement shall be renegotiated
not later than three (3) years after
its execution. [...] [Art. 265]
CBA Duration for economic provisions

3 years.
CBA Duration for non-economic provisions

5 years for representational or
political issues; cannot be
renegotiated to extend beyond 5
years. [FVC Labor Union-PTGWO v.
SANAMA- FVC-SIGLO, G.R. No.
176249 (2009)]
CBA Duration: Freedom Period

No petition questioning the majority
status of the incumbent bargaining
agent shall be entertained and no
certification election shall be
conducted by the DOLE outside of
the sixty- day period immediately
before the date of the expiry of such
five year term of the Collective
Bargaining Agreement. [Art. 265]
CBA and 3rd Party Applicability

Labor contracts such as
employment contracts and CBAs
are not enforceable against a
employ the employees of the seller of such [Union security clause] is an indirect restriction
assets or enterprise, the parties are liable on the right of an employee to self-
to the employees if the transaction between
the parties is colored or clothed with bad
faith. [Sundowner Development Corporation v.
Drilon, G.R. No. 82341 (1989)]
Where the change of ownership is in bad
faith or is used to defeat the rights of labor,
the successor-employer is deemed to
have absorbed the employees and is held
liable for the transgressions of his or her
predecessor [Philippine Airlines, Inc. v.
NLRC, G.R. No. 125792, (1998)]
General Rule: An innocent transferee of a

business establishment has no liability to
the employees of the transferor to continue
employing them. Nor is the transferee
liable for past unfair labor practices of the
previous owner.
Exception: When the liability therefore is
assumed by the new employer under the
contract of sale, or when liability arises
because of the new owner's participation
in thwarting or defeating the rights of the
employees. The most that the transferee
may do, for reasons of public policy and
social justice, is to give preference to the
qualified separated employees in the filling
of vacancies in the facilities of the
purchaser. [Manlimos v. NLRC, G.R. No.
113337 (1995)]
C.2.UNION SECURITY
C.2.A.UNION SECURITY
CLAUSES Definition
Union security is a generic term which is
applied to and comprehends “closed
shop,” “union shop,” “maintenance of
membership” or any other form of
agreement which imposes upon employees
the obligation to acquire or retain union
membership as a condition affecting
employment. [NUWHRAIN v. NLRC, G.R.
No. 179402 (2008)]
organization. It is a solemn conditions. […] For this reason, the law
pronouncement of a policy that while has sanctioned stipulations for the union
an employee is given the right to join shop and closed shop as a means of
a labor organization, such right encouraging the workers to join and
should only be asserted in a manner support the labor union of their own choice
that will not spell the destruction of vis-à-vis the employer. [Liberty
the same organization. [Tanduay
Distillery Labor Union v. NLRC, G.R.
No. 75037 (1987)]
[Employees], although entitled to
disaffiliation from their union to form
a new organization of their own,
must, however, suffer the
consequences of their separation
from the union under the security
clause of the CBA. [Villar v. Inciong,
G.R. No. L-50283-84 (1983)].
Statutory Basis and Rationale

Art. 259(e) - Nothing in this Code or in any
other law shall stop the parties from
requiring membership in a recognized
collective bargaining agent as a condition
for employment, except those employees
who are already members of another union
at the time of the signing of the collective
bargaining agreement.
The law has allowed stipulations for

'union shop' and 'closed shop' as
means of encouraging workers to
join and support the union of their
choice in the protection of their
rights and interests vis-a-vis the
employer. [Del Monte Philippines v.
Salvidar, G.R. No. 158620 (2006)]
Purpose
To safeguard and ensure the
existence of the union and thus,
promote unionism in general as a
state policy.
It is the policy of the State to
promote unionism to enable the
workers to negotiate with the
management on the same level and
with more persuasiveness than if
they were to individually and
independently bargain for the
improvement of their respective
Flour Mills Employees v. Liberty Flour Mills, 1) Closed shop
G.R. No. 58768-70 (1989)]
Condition for employment
Coverage [BPI v. BPI Employees Union-

Davao Chapter, G.R. No. 164301 (2010)]
General Rule: All employees in the
bargaining unit covered by the union
security clause are subject to its terms
Exception:
(1) Employees who are already
members of another union at the
time of the signing of the collective
bargaining agreement may not be
compelled by any union security
clause to join any union. [Art. 254
(e)]
(2) Employees already in service at the
time the closed shop union security
clause took effect
● A closed shop provision in a
CBA is not to be given a
retroactive effect as to
preclude its being applied to
employees already in service.
[Guijarno v. CIR, G.R. No. L-
28791-93 (1973)]
(3) Any employee who at the time the
union security clause took effect is
a bona fide member of religious
organization which prohibits its
members from joining labor unions
on religious grounds
(4) Confidential employees who are
excluded from the rank-and-file
bargaining unit
(5) Employees excluded from the
union security provisions by express
terms of the agreement
C.2.B.TYPES OF UNION SECURITY

CLAUSE
An agreement where only union until they are promoted or transferred out
members may be employed and, for of the bargaining unit or the agreement is
the duration of the agreement, terminated. [General Milling Corporation
remains a member in good standing (GMC) v. Casio, G.R. No. 149552 (2010)]
of a union.
A closed shop may be defined as an
3) Union shop
enterprise in which, by agreement
between the employer and his Condition for continued employment
employees or their representatives,
no person may be employed in any
or certain agreed departments of
the enterprise unless he or she is,
becomes, and, for the duration of
the agreement, remains a member
in good standing of a union entirely
comprised of or of which the
employees in interest are a part.
[General Milling Corporation (GMC)
v. Casio, G.R. No. 149552 (2010)]
The closed shop provision is the

most prized achievement of
unionism. However it can also be a
potent weapon wielded by the union
against the workers whom the union
is supposed to protect in the first
place. Hence, any doubt as to the
existence of a closed shop
provision in the CBA will be
resolved in favor of the nonexistence
of the closed shop provision.
[Azucena]
2) Maintenance of membership shop

Condition for continued employment
An agreement where present and
future employees are not compelled
to join the SEBA, but once so joined,
they must maintain their
membership as a condition for
continued employment until they are
promoted or transferred out of the
bargaining unit or the agreement is
terminated
There is maintenance of
membership shop when
employees, who are union
members as of the effective date of
the agreement, or who thereafter
become members, must maintain
union membership as a condition
for [their] continued employment
There is union shop when all new regular employment, the authorized bargaining
employees are required to join the union representative gains more numbers and
within a certain period as a condition for strengthens its position as
their continued employment. [General
Milling Corporation (GMC) v. Casio, G.R.
No. 149552 (2010)]
Non-members may be hired, but to retain
employment, they must become union
members after a certain period. The
requirement applies to present and future
employees. [Azucena]
4) Modified union shop

Condition for continued employment of
future employees
Employees who are not union members at
the time of signing the contract need not
join the union, but all workers hired
thereafter must join. [Azucena]
5) Agency shop
Employees belonging to an appropriate
collective bargaining unit who are not
members of the recognized collective
bargaining agent may be assessed a
reasonable fee equivalent to the dues and
other fees paid by members of the
recognized collective bargaining agent, if
such non-union members accept the
benefits under the collective agreement:
Provided, That the individual authorization
required under Article [250], paragraph (o)
of [the Labor] Code shall not apply to non-
members of the recognized collective
bargaining agent [Art. 259(e)]
C.2.C.ENFORCEMENT OF UNION SECURITY

CLAUSE
Termination due to Union Security
Provision
Termination of employment by virtue of a
union security clause embodied in a CBA
is recognized and accepted in our
jurisdiction. This practice strengthens the
union and prevents disunity in the
bargaining unit within the duration of the
CBA. By preventing member disaffiliation
with the threat of expulsion from the union
and the consequent termination of
against other unions which may law in determining whether or not an
want to claim majority employee was validly terminated must still
representation. [Alabang Country be followed even if it is based on a [union
Club v. NLRC, G.R. No. 170287 security clause] of a CBA, i.e. the
(2008)] substantive as well as the procedural due
process requirements. [Del Monte v.
Saldivar, G.R. No. 158620 (2006)]
Requisites for the enforcement of
Union Security Clauses
In terminating the employment of an
employee by enforcing the union
security clause, the employer needs
only to determine and prove that:
1) The union security clause is
applicable
2) The union is requesting for
the enforcement of the union
security provision in the CBA
3) There is sufficient evidence to
support the union’s decision
to expel the employee from
the union. [Alabang Country
Club v. NLRC, G.R. No. 170287
(2008)]
Company must conduct separate

investigation or hearing
While company may validly dismiss
the employees expelled under the
union security clause upon the
recommendation by the union, this
dismissal should not be done hastily
and summarily thereby eroding the
employees' right to due process,
self-organization and security of
tenure. The enforcement of union
security clauses is authorized by law
provided such enforcement is not
characterized by arbitrariness, and
always with due process. Even if
there are valid grounds to expel the
union officers, due process requires
that these union officers be
accorded a separate hearing by
respondent company. [Malayang
Samahan ng Manggagawa sa M.
Greenfield v. Ramos, G.R. No.
113907 (2000)]
Requirement of Due Process

The requirements laid down by the
Obligations and Liabilities concerned to the Bureau.
Where the employer dismissed his Note: Secretary of Labor or his duly authorized
employees in the belief in good faith that representative may inquire into financial activities
such dismissal was required by the [union of legitimate labor orgs – UPON filing of
security provision] of the collective complaint under oath and supported by written
bargaining agreement with the union, he consent of at least 20% of total
may not be ordered to pay back
compensations to such employees
although their dismissal is found to be
illegal. [Confederated Sons of Labor v.
Anakan Lumber Co., G.R. No. L-12503
(1960)]
As dictated by fairness, […] the union shall
be liable to pay their backwages. This is
because management would not have
taken the action it did had it not been for
the insistence of the labor union seeking to
give effect to its interpretation of a closed
shop provision. [Guijarno v. CIR, G.R. No.
L-28791-93 (1973)]
C.2.D. CHECK-OFF, UNION DUES,

AGENCY FEES
Check-off
A check-off is a process or device whereby
the employer, on agreement with the
Union, recognized as the proper
bargaining representative, or on prior
authorization from the employees, deducts
union dues or agency fees from the latter’s
wages and remits them directly to the
Union. [Marino v. Gamilla, G.R. No.
149763 (2009)]
The system of check-off is primarily for the
benefit of the Union, and only indirectly, for
the benefit of the individual employees.
[Marino v. v Gamilla, G.R. No. 149763
(2009)]
Note: For a check-off to be valid, it must
comply with the requirements of a valid
special assessment. Refer to page X [update
X before finalizing reviewer].
Jurisdiction over Check-off Disputes

The Bureau of Labor Relations has
jurisdiction to hear, decide and to mete out
punishment any violation under Article 250
upon report of at least 30% of the union
membership OR members specially
membership, Provided, such inquiry (2) [I]t shall be the duty of employer and
shall not be conducted during (60)- the representatives of the employees
day freedom period nor within the to bargain collectively in accordance with
thirty (30) days immediately the provisions of this Code. [Art. 262]
preceding the date of election of
union officials. [Art. 289]
Acts deemed as refusal to bargain
C.2.E. UNFAIR LABOR

PRACTICE IN COLLECTIVE
BARGAINING
Both employers and labor
organizations can commit acts of
unfair labor practices in collective
bargaining. However, the labor
organization must be the
representative of the employees
before any act it does may be
considered as a violation of the duty
to bargain collectively. [Art. 259 (g)
and Art. 260 (c)]
Four forms of Unfair Labor Practice

in Bargaining
(1) Failure or Refusal to meet and convene
(2) Evading the mandatory
subjects of bargaining
(3) Bargaining in bad faith
(4) Gross violation of the CBA
C.2.F.. FAILURE OR REFUSAL TO

BARGAIN
Statutory Basis:Employers
(1) To violate the duty to bargain
collectively as prescribed by this
code. [Art. 259 (g)]
(2) [I]t shall be the duty of
employer and the
representatives of the
employees to bargain collectively
in accordance with the provisions
of this Code. [Art. 262]
Statutory Basis:Labor Organizations

(1) To violate the duty, or refuse to
bargain collectively with the
employer, provided it is the
representatives of the
employees; [Art. 2606 (c)]
BOC RELATIONS
Refusal to bargain when there is an (5) Refusal to bargain where the union demands
unresolved petition for union cancellation for recognition and bargaining within the year
following a certification election, and the clear
“That there is a pending cancellation
choice is no union
proceedings against the union is not a bar
to set in motion the mechanics of collective
bargaining. […] Unless [the union’s]
certificate of registration and status as the
certified bargaining agent is revoked, [the
employer], by express provision of the law,
is duty bound to collectively bargain with
the Union.” [Capitol Medical Center v.
Trajano, G.R. No. 155690 (2005)]
Employer’s suspension of operations in order
to
forestall a demand for collective bargaining
By admitting that the closure [of the
business] was due to irreconcilable
differences between the Union and the
school management, […] SJCI in effect
admitted that it wanted to end the
bargaining deadlock and eliminate the
problem dealing with the demands of the
union. [St. John Colleges Inc. v. St. John
Academy Faculty and Employees Union,
G.R. No. 167892 (2006)]
Implied refusal
The school is guilty of unfair labor practice
when it failed to make a timely reply to the
proposals of the union more than one
month after the same were submitted by
the union. In explaining its failure to reply,
the school merely offered a feeble excuse
that its Board of Trustees had not yet
convened to discuss the matter. Clearly, its
actuation showed a lack of sincere desire to
negotiate. [Colegio de San Juan de Letran v.
Association of Employees and Faculty of
Letran, G.R. No. 141471 (2000)]
Acts not deemed refusal to bargain

(1) Adoption of an adamant bargaining
position in good faith, particularly
where the company is operating at a
loss
(2) Refusal to bargain over demands for
commission of unfair labor practices
(3) Refusal to bargain during period of
illegal strike
(4) Not initiating the bargaining
PAGE 200 OF
235
BOCand no ad interim significant RELATIONS demands in negotiations by either or both
change has taken place in the labor and management, where neither
unit concedes anything and demands the
impossible." It actually is not collective
(6) Refusal to bargain because the
bargaining at all. [Roberts Dictionary of
other party is making unlawful
Industrial Relations as cited in Standard
bargaining demands
Bank Chartered Employees Union v.
Confesor, 2004]
C.2.G. EVADING THE MANDATORY
SUBJECTS OF BARGAINING
The refusal to negotiate a
mandatory subject of bargaining is
an unfair labor practice although
either party has every desire to reach
agreement and earnestly and in all
good faith bargains to that end. […]
However, the duty to bargain does
not obligate the parties to make
concessions or yield a position fairly
held. [Azucena]
The duty to bargain is limited to
mandatory bargaining subjects; as
to other matters, he is free to
bargain or not to bargain. Over
mandatory subjects, a party may
insist on bargaining, even to the
point of deadlock, and his
insistence will not be construed as
bargaining in bad faith.
Over a non-mandatory subject, on
the other hand, a party may not
insist on bargaining to the point of
impasse, otherwise his insistence
can be construed as bargaining in
bad faith.
C.2.H. BARGAINING IN BAD FAITH

The crucial question whether a
party has met his statutory duty to
bargain in good faith typically turns
on the facts of the individual case.
There is no per se test of good faith
in bargaining. Good faith or bad
faith is an inference to be drawn
from the facts of the case.
[Hongkong and Shanghai Banking
Corp. Employees Union v. NLRC,
G.R. No. 125038 (1997)]
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as
"unrealistic and unreasonable
PAGE 201 OF
235
Surface Bargaining Art. 274, Jurisdiction of Voluntary
Surface bargaining is defined as "going Arbitrators. - Accordingly, violations of a
through the motions of negotiating," Collective Bargaining Agreement, except
without any real intent to reach an those which are gross in character, shall
agreement. [Roberts Dictionary of no longer be treated as unfair labor
Industrial Relations as cited in Standard practice and shall be resolved as
Bank Chartered Employees Union v.
grievances under the Collective
Confesor, G.R. No. 114974 (2004)]
Bargaining Agreement. For purposes of
this article, gross violations of Collective
It violates the Act's requirement that Bargaining Agreement shall mean
parties negotiate in "good faith." It is flagrant and/or malicious refusal to
prohibited because, as one commentator
explained: The bargaining status of a union
can be destroyed by going through the
motions of negotiating almost as easily as
by bluntly withholding recognition […] As
long as there are unions weak enough to
be talked to death, there will be employers
who are tempted to engage in the forms of
collective bargaining without the
substance. [K-MART Corporation v.
NLRB, 1980 626 F.2d 704
Individual Bargaining
It is an unfair labor practice for an
employer operating under a CBA to
negotiate with his employees individually.
That constitutes interference because the
company is still under obligation to bargain
with the union as the bargaining
representative.
Individual bargaining contemplates a
situation where the employer bargains with
the union through the employees instead
of the employees through the union. [The
Insular Life Assurance Co. Ltd., Employees
Assn. v. Insular Life Assurance Co. Ltd,
G.R. No. L- 25291 (1971)]
C.2.I.GROSS VIOLATIONS OF THE CBA

(2) The employer is also protected
comply with the economic provisions of
from ULP committed by a labor
such agreement. organization.
The public is also protected because it has
D.UNFAIR LABOR PRACTICE (ULP) an interest in continuing industrial peace.
D.1. NATURE, ASPECTS

Employer-Employee Relationship Required
Unfair labor practice refers to acts
that violate the workers’ right to
organize. The prohibited acts are
related to the workers’ right to self-
organization and to the observance
of a CBA. Without that element, the
acts, no matter how unfair, are not
unfair labor practices. The only
exception is Art. 259 (f) [i.e. to
dismiss, discharge or otherwise
prejudice or discriminate against an
employee for having given or being
about to give testimony under this
Code]. [Philcom Employees Union v.
Phil. Global, G.R. No. 144315
(2006)]
NATURE OF ULP
(1) inimical to the legitimate
interests of both labor and
management, including their
right to bargain collectively and
otherwise deal with each other
in an atmosphere of freedom
and mutual respect
(2) disrupt industrial peace
(3) hinder the promotion of healthy
and stable labor-management
relations
(4) violations of the civil rights of
both labor and management but
are also criminal offenses [Art.
258]
Purpose of the Policy Against ULPs

Protection of right to self-
organization and/or collective
bargaining:
(1) The employee is not only
protected from the employer
but also from labor
organizations.
General Rule - An unfair labor practice Exception: when interrogation interferes
may be committed only within the context with or restrains employees' right to self-
of an employer-employee relationship organization. [Phil. Steam Navigation Co.
[American President Lines v. Clave, G.R. v. Phil. Marine Officer’s Guild, G.R. Nos. L-
No. L-51641 (1982)] 20667 and 20669 (1965)]
Exception
“Yellow Dog” condition or contract: to Speech
require as a condition of employment that
a person or an employee shall not join a The acts of a company which subjects a
labor organization or shall withdraw from union to vilification and its participation in
one to which he belongs. [Art 259 (b)] soliciting membership for a competing
union are also acts constituting a ULP.
[Phil. Steam Navigation Co. v. Phil. Marine
Parties Not Estopped from Raising ULP by Officer’s Guild, G.R. Nos. L-20667 and
Eventual Signing of the CBA 20669 (1965)]
The eventual signing of the CBA does not An employer may not send letters
operate to estop the parties from raising containing promises or benefits, nor of
unfair labor practice charges against each threats of obtaining replacements to
other. [Standard Chartered Bank Union v. individual workers while the employees are
Confesor, G.R. No. 114974 (2004)] on strike due to a bargaining deadlock.
This is tantamount to interference and is
not protected by the Constitution as free
Statutory Construction speech. [Insular Life Assurance Co.
Employees Assn. v. Insular Life Assurance
The Labor Code does not undertake the
Co. Ltd, G.R. No. L-25291 (1971)]
impossible task of specifying in precise
and unmistakable language each incident
which constitutes an unfair labor practice. Espionage
Rather, it leaves to the court the work of
applying the law's general prohibitory Espionage and/or surveillance by the
language in light of infinite combinations of employer of union activities are instances
events which may be charged as violative of interference, restraint or coercion of
of its terms. [HSBC Employee Union v. employees in connection with their right to
NLRC, G.R. No. 125038 (1997)] organize, form and join unions as to
constitute unfair labor practice. […] The
information obtained by means of
D.2. ULP BY EMPLOYERS espionage is invaluable to the employer
and can be used in a variety of cases to
break a union. [Insular Life Assurance Co.
(1) Interference/ Restraint/ Coercion Employees Assn. v. Insular Life Assurance
[Art. 250 (a)] Co. Ltd, G.R. No. L-25291 (1971)]
An act which restrains, coerces, or
interferes with employees in the exercise
of their right to self-organization is an (2) Yellow Dog Contracts [Art. 259 (b)]
Unfair Labor Practice. Yellow dog contracts require, as a
condition of employment that a person or
an employee shall not join a labor
Interrogation organization or shall withdraw from one to
General rule: employer may interrogate its which he belongs.
employees regarding their union affiliation
for legitimate purposes and with the
assurance that no reprisals would be taken Requisites of a Yellow Dog Contract:
against the unionists. (1) a representation by the employee
that he is not a member of a
labor organization
(2) a promise by the employee
that he will not join a union
(3) a promise by the employee that Those employees who are already members
upon joining a labor organization, of another union at the time of the signing
he will quit his employment of the collective bargaining agreement.
3) Contracting Out to Discourage Unionism 6) Discrimination for Having Given or About

General rule: contracting out is not a ULP, to Give Testimony [Art. 259 (f)]
but is covered by the employer’s
management prerogative. It is an act of ULP by an employer to
dismiss, discharge or otherwise prejudice
Exception [Art. 259 (c)]: or discriminate against an employee for
(1) contracted-out services or functions having given or being about to give
are performed by union members testimony under this Code.
AND
(2) contracting out will interfere with, Note: This is broader than the prohibition
restrain, or coerce employees in under Art. 118 because Art. 259 (f) covers
the exercise of their right to self- testimony under the whole Code, while Art.
organization. 118 only covers testimony under Book I:
Pre- Employment, Title II: Wages
4) Company Union [Art. 259 (d)]
"Company union" means any labor 7) Violate duty to bargain collectively [Art.
organization whose formation, function or 259 (g)]
administration has been assisted by any Duty to bargain collectively is a continuous
act defined as unfair labor practice by this process, non-compliance of which
Code. [Art. 219(i)] constitutes ULP. Collective bargaining does
The employer commits ULP if it initiates, not end with the execution of an
dominates, or otherwise interferes with the agreement. Being a continuous process,
formation or administration of any labor the duty to bargain necessarily impose on
organization. the parties the obligation to live up to the
terms of such a collective bargaining
Example: giving out financial aid to any
agreement if entered into, it is undeniable
union's supporters or organizers. that non-compliance therewith constitutes
an unfair labor practice. [Shell Oil Workers
Union v. Shell Co., G.R. No. L-28607
5) Discrimination to Encourage/
(1971)]
Discourage Unionism [Art. 259 (e)]
Note: Refer to previous topic B.6 on ULP
General rule: it is ULP to discriminate in
in Collective Bargaining
regard to wages, hours of work and other
terms and conditions of employment in
order to encourage or discourage 8) Payment of negotiation or attorney's
membership in any labor organization. fees [Art. 259 (h)]
Exception:Union Security Clause: Sweetheart contracts are favorable both to
Nothing in this Code or in any other law the union and the employer at the expense
shall stop the parties from requiring of the employees. The settlement of
membership in a recognized collective bargaining issues must be made by fair
bargaining agent as a condition for bargaining in good faith, and not through
employment. the payment of negotiation or attorney's
fees which will ultimately lead to
sweetheart contracts.
Exception to exception:
9) To violate a collective bargaining
agreement [Art. 259 (i)]
Flagrant and/or malicious refusal to comply 260 (c)]
with economic provisions required
Please refer to part B.4 for some examples.
Violations of collective bargaining
agreements, except flagrant and/or malicious
refusal to comply with its economic
provisions, shall not be considered unfair
labor practice and shall not be strikeable.
[IRR]
Note: The list in Art. 259 is not exhaustive.

Other acts which are analogous to those
enumerated can be ULPs.
The alleged violation of the CBA, even

assuming it was malicious and flagrant, is
not a violation of an economic provision,
thus not an Unfair Labor Practice. [BPI
Employees Union-Davao FUBU v. BPI, G.R.
No. 174912 (2013)]
An employer cannot be considered to have
committed a gross and economic violation
of the CBA when it, in good faith, withheld
union dues and death benefits from the
union upon written request of the union
members in light of the conflict between
the members and the union officers and
instead deposited such amount to the
DOLE. [Arellano University Employees
and Workers Union vs. Court of Appeals,
G.R. 139940 (2006)]
D.3. ULP OF LABOR ORGANIZATIONS

1)Restraint, or coercion [Art. 260 (a)]
“Interfere” is not included in Art. 260 simply
because any act of a labor organization
amounts to interference to the right of self-
organization.
2) Discrimination: Encourage/ Discourage
Unionism [Art. 260 (b)]
General rule: it is a ULP for a labor
organization to cause an employer to
discriminate against an employee.
Exception: provisions of a valid union
security clause and other company policies
applicable to all employees.
3) Violate duty to bargain or the CBA [Art.

Note: Refer to previous topic B.6 on
ULP in Collective Bargaining
4) Illegal Exaction (Featherbedding)

[Art. 260 (d)]
The practice of the labor organization
to cause or attempt to cause an
employer to pay or deliver or agree
to pay or deliver money or other
things of value from the employer in
return for services which are not
performed or are not to be
performed, including the demand
for a fee for union negotiations.
5) Asking or accepting negotiation

and other attorney's fees [Art. 260
(e)]
See counterpart in ULP by
employers (sweetheart contracts).
6) Violate a collective bargaining

agreement [Art. 260 (f)]
Flagrant and/or malicious refusal required
Violations of collective bargaining
agreements, except flagrant and/or
malicious refusal to comply with its
economic provisions, shall not be
considered unfair labor practice
[Art. 274] and shall not be strikeable
[§5, Rule XXII, Book V].
E. RIGHT TO PEACEFUL
CONCERTED ACTIVITIES
Basis
Constitution, Art. XIII, §3 - [The State]
shall guarantee the rights of all workers
to self- organization, collective
peaceful concerted activities, including
the right to strike in accordance with law.
Art. 278(b) - Workers shall have the right

to engage in concerted activities for
purposes of collective bargaining or for
their mutual benefit and protection. The
right of legitimate labor organizations to
strike and
Forms
picket and of employers to lockout, consistent with the national of concerted
interest, activities
shall continue to be recognized and respected.
employer may declare a lockout on grounds Concerted Activities by
Employees:
(a) Strike
(b) Picketing
involving inter-union andintra-union
(c) Boycott
disputes.
(d) Slow down
Definition Response to Concerted Activities available to
Employers:
A concerted activity is one undertaken by
two or more employees to improve their (e) Lockout
terms and conditions of work.
E.1. BY LABOR ORGANIZATION

Art. 257. Non-abridgment of right to self-
E.1.a. Strike
organization. —
(a)Strike
It shall be unlawful for any person to
restrain, coerce, discriminate against or A strike is any temporary stoppage of work
by the concerted action of employees as a
unduly interfere with employees and
result of an industrial or labor dispute. [Art.
workers in their exercise of the right to 219(o)]
self- organization. Such right shall
Labor Dispute - includes any controversy
include the right to form, join, or assist
or matter concerning terms and conditions
labor organizations for the purpose of of employment or the association or
collective bargaining through representation of persons in negotiating,
representatives of their own choosing fixing, maintaining, changing or arranging
and to engage in lawful concerted the terms and conditions of employment,
activities for the same purpose or for their regardless of whether or not the disputants
mutual aid and protection, subject to the stand in the proximate relation of
employers and employees. [Solidbank Corp.
provisions of Article [279] of this Code.
v. EU Gamier, G.R. No. 159460 and G.R.
No. 159461 (2010)]
Limitation: Concerted activities must be in
accordance with law Strikes not limited to work stoppages
The strike is a powerful weapon of the The term “strike” shall comprise not only
working class. Precisely because of this, it concerted work stoppages, but also
must be handled carefully, like a sensitive slowdowns, mass leaves, sit-downs,
explosive, lest it blow up in the workers’ attempts to damage, destroy or sabotage
own hands. Thus, it must be declared only plant equipment and facilities, and similar
after the most thoughtful consultation activities. [Samahang Manggagawa v.
among them, conducted in the only way Sulpicio Lines, G.R. No. 140992 (2004)]
allowed, that is, peacefully, and in every
case conformably to reasonable regulation.
Any violation of the legal requirements and As coercive measure by employees
strictures will render the strike illegal, to the
detriment of the very workers it is supposed A strike is a coercive measure resorted to
to protect. [Batangas Laguna Tayabas Bus by laborers to enforce their demands. The
Co. v. NLRC, G.R. No. 101858 (1992)] idea behind a strike is that a company
engaged in a profitable business cannot
afford to have its production or activities
interrupted, much less, paralyzed.
[Phil. Can Co. v. CIR, G.R. No. L-
3021 (1950)]
No severance of employer-employee allowed by law.
relationship during lawful strike
(2) Illegal strike – one staged for a purpose not
Although during a strike the worker
renders no work or service and receives no
compensation, yet his relationship as an
employee with his employer is not severed
or dissolved. [Elizalde Rope Factory, Inc. v.
SSS, G.R. No. L-15163 (1962)]
Payment of wages during lawful strikes

General rule: Striking employees are not
entitled to the payment of wages for un-
worked days during the period of the strike
pursuant to the “no work-no pay” principle.
Exception: If there is no work performed by

the employee there can be no wage or pay
unless the laborer was able, willing and
ready to work but was illegally locked out,
suspended or dismissed or otherwise
illegally prevented from working. For this
exception to apply, it is required that the
strike be legal. [Visayas Community
Medical Center vs Yballe, G.R. No. 196156
(2014)]
Reinstatement after a lawful strike

When strikers abandon the strike and apply
for reinstatement despite the existence of
valid grounds but the employer either:
(a) refuses to reinstate them or
(b) imposes upon their reinstatement
new conditions then the employer
commits an act of ULP.
The strikers who refuse to accept the new
conditions and are consequently refused
reinstatement are entitled to the losses of
pay they may have suffered by reason of
the employer’s discriminatory acts from the
time they were refused reinstatement.
[Philippine Marine Officers’ Guild v.
Compania Maritima, G.R. No. L-20662 and
L-20663 (1968)]
E.1.a.i. Valid vs. Illegal Strikes

(1) Legal strike – one called for a valid
purpose and conducted through means
recognized by law, or if for a management to grant their demands.
valid purpose, conducted
A slowdown is inherently illicit and
through means not sanctioned
unjustifiable because while the
by law.
employees continue to work, they, at
Effect of Illegality / Liability of the same time, select what part of their
participating members/officers of duties they perform. In essence, they
the union work on their own terms. It is a strike
on installment basis. [Ilaw at Buklod ng
(1) Ordinary Striking Worker –
Manggagawa v. NLRC, G.R. No.
cannot be terminated for
91980 (1991)]
mere participation in an illegal
strike; proof must be adduced II. Wild-cat strike – one declared and
showing that he or she staged without filing the required notice
committed illegal acts during of strike and without the majority
the strike. approval of the recognized bargaining
agent.
(2) Participating Union Officer –
may be terminated, not only III. Sit-down strike – one wherein workers take
when he actually commits an
illegal act during a strike, but
also if he knowingly
participates in an illegal strike
[Phimco Industries, Inc. v.
PILA, G.R. No. 170830
(2010)]
Other
Forms of
strikes As
to grounds
(1) Economic strike – one staged
by workers to force wage or
other economic concessions
from the employer which he is
not required by law to grant
[Consolidated Labor
Association of the Phil. v.
Marsman and Company, G.R.
No. L-17038 (1964)]
(2) ULP strike – called against a
company's unfair labor
practice to force the employer
to desist from committing
such practices.
As to how committed
I. Slowdown strike – one by
which workers, without a
complete stoppage of work,
retard production or their
performance of duties and
functions to compel
over possession of the property of placards and other signs making known the
such business to cease production and facts involved in a labor dispute. As applied to
to refuse access to owners. a labor dispute, to picket means the stationing
of one
IV. Sympathetic strike – one in which the
striking workers have no demands of
their own, but strike to make common
cause with other strikers in other
establishments.
V. Mass leave – one in which workers
collectively abandon or boycott regular
work causing temporary stoppage of
work
Conversion from economic to ULP strike

It is possible for a strike to change its
character from an economic to a ULP
strike. In the instant case, initially, the strike
staged by the Union was meant to compel
the Company to grant it certain economic
benefits set forth in its proposal for collective
bargaining. However, the strike changed its
character from the time the Company
refused to reinstate complainants because
of their union activities after it had offered
to admit all the strikers and in fact did
readmit the others. It was then converted
into an unfair labor practice strike.
[Consolidated Labor Association of the Phil.
v. Marsman and Company, G.R. No. L-
17038 (1964)]
Strike cannot be converted to a lockout by
a return to work offer
A strike cannot be converted into a pure
and simple lockout by the mere expedient
filing before the trial court a notice of offer
to return to work during the pendency of
the labor dispute between the union and
the employer. [Rizal Cement Workers Union
v. CIR, G.R. No. L-18442 (1962)]
E.1.b. Picketing
The right of legitimate labor organizations
to strike and picket and of employers to
lockout, consistent with the national
interest, shall continue to be recognized and
respected. [Art. 278(b)]
Picketing involves merely the marching to
and fro at the premises of the employer,
usually accompanied by the display of
or more persons to observe and lockout The employer [Art.
attempt to observe. The purpose of
278(b)]
pickets is said to be a means of
peaceable persuasion. [Sta. Rosa
Coca-Cola Plant Employees Union v.
E.3REQUISITES FOR A VALID STRIKE
Coca- Cola Bottlers Philippines, Inc.,
G.R. Nos. 164302-03 (2007)]
Peaceful Picketing is the right of
workers during strikes consisting of
marching to and fro before an
establishment involved in a labor
dispute generally accompanied by the
carrying and display of signs, placards
and banners intended to inform the
public about the dispute. [Guidelines
Governing Labor Relations, October 19,
1987] [NCMB Manual, §1]
E.2.Lockout
Lockout is the temporary refusal of an
employer to furnish work as a result of
an industrial or labor dispute. [Art. 219
(p)]
Illegal strike and illegal lockout/In Pari
Delicto Doctrine
When the employer engaged in illegal
lockout and the employee engaged in
illegal strike, both parties are in pari
delicto and such situation warrants the
restoration of the status quo ante and
bringing the parties back to the
respective positions before the illegal
strike and illegal lockout. [Philippines
Inter-Fashion Inc. v. NLRC, G.R. No. L-
59847 (1982)]
E.2 WHO MAY DECLARE A STRIKE

OR LOCKOUT?
Who may declare a strike
(1) The certified or duly recognized
bargaining representative
(2) Any legitimate labor
organization in the absence of
a certified or duly recognized
bargaining representative, but
only on grounds of ULP [§6,
Rule XXII, Book V]
Who may declare a

A valid strike must have a lawful ground breaker. [Art. 279(c)]
and must conform with the procedural
(3) By public official or police force. No public
requirements set by law.
Substantial Requirements/Grounds
A strike or lockout may be declared in
cases of:
(1) Bargaining deadlocks
(2) ULP [Art. 278(c)]
When violations of collective bargaining

strikeable as ULP
Only gross violations of the economic
provisions of the CBA are treated as ULP.
[BPI Employees Union-Davao FUBU v. BPI,
G.R. No. 174912 (2013)]
(G)ross violations of Collective Bargaining
Agreement shall mean flagrant and/or
malicious refusal to comply with the
economic provisions of such agreement.
[Art. 274]
When no lawful strike can be declared

(1) Ground is an inter-union or intra-union
dispute
(2) Non-compliance with the procedural
requirements
a. No notice of strike
b. No strike vote obtained and
reported to the NCMB
(3) After assumption or certification by the
Secretary of Labor
(4) Wage Distortion (as described previously
in Part 1 of the Reviewer)
Prohibited activities in strike

(1) By anyone. No person shall obstruct,
impede, or interfere with, by force,
violence, coercion, threats, or
intimidation, any peaceful picketing by
employees [Art. 279(b)]
(2) By employer. No employer shall use or
employ any strike-breaker, nor shall
any person be employed as a strike-
official or employee, including proof of a request for conference to settle
officers and personnel of the differences. In cases of unfair labor
New Armed Forces of the practices, the notice shall, as far as
Philippines or the Integrated practicable, state the acts complained of,
National Police, or armed and efforts taken to resolve the dispute
person, shall bring in, introduce amicably. [§4, Rule XXII, Book V]
or escort in any manner, any
individual who seeks to replace
strikers in entering or leaving the
premises of a strike area, or
work in place of the strikers. [Art.
279(d)]
Procedural requirements[Art. 278]

(1) Effort to bargain (for bargaining
deadlock strikes)
(2) Filing and service of notice of strike
(3) Observance of cooling-off period
i. 15 days for ULP
1. No cooling-off period
when the ULP can be
considered union
busting (dismissal of
duly elected union
officers from
employment)
ii. 30 days for bargaining deadlock
(4) Notice of strike vote meeting to
NCMB within 24 hours before
the strike vote [§ 10, Rule XXII,
Book V]
(5) Strike vote
(6) Strike vote report sent to NCMB
(7) Observance of the waiting
period (7-day strike ban)
(1) Effort to bargain

No labor organization […] shall
declare a strike […] without first
having bargained collectively in
accordance with Title VII of this
Book […] [Art. 279(a)]
In case of bargaining deadlocks, the
notice shall, as far as practicable,
further state the unresolved issues in
the bargaining negotiations and be
accompanied by the written
proposals of the union, the counter-
proposals of the employer and the
The Implementing Rules use the words as 2) Nature of the industry to which the
far as practicable. In this case, attaching
the counter-proposal of the company to the
notice of strike of the union was not
practicable. It was absurd to expect the
union to produce the company’s counter-
proposal which it did not have. One cannot
give what one does not have. Indeed,
compliance with the requirement was
impossible because no counter-proposal
existed at the time the union filed a notice
of strike. [Club Filipino, Inc. vs. Bautista,
2009]
(2) Filing and service of notice of

strike Bargaining deadlocks
Art. 278(c) - [T]he duly certified or
recognized bargaining agent may file a
notice of strike […] with the Department
at least 30 days before the intended date
thereof. […]
Unfair Labor Practice; Union Busting

Art. 278(c) - [I]n cases of unfair labor
practice, the period to file notice of strike
shall be 15 days and in the absence of a
duly certified or recognized bargaining
agent, the notice of strike may be filed by
any legitimate labor organization in
behalf of its members. However, in case
of dismissal from employment of union
officers duly elected in accordance with
the union constitution and by-laws, which
may constitute union busting where the
existence of the union is threatened, the
15-day cooling-off period shall not apply
and the union may take action
immediately.
Note: The notice must be served to the
employer. Failure to do so will constitute
noncompliance with the procedural
requirements and will result to an illegal
strike. [Filipino Pipe and Foundry Corp v.
NLRC, G.R. No. 115180 (1999)]
Rationale: Due process. [IRR]
Contents of Notice of Strike
1) Names and addresses of the
employer and the union involved
employer belongs (3) Observance of cooling-off periods
3) Number of union members Cooling off periods
and of workers in the
1) Bargaining deadlock – 30 days
bargaining unit
2) ULP but not union busting – 15 days
4) Such other relevant data as
may facilitate the settlement 3) ULP and union busting – no
of the dispute. cooling- off period
Additional Requirements
In case of Bargaining Deadlocks:
1) Statement of unresolved
issues in the bargaining
negotiations
2) Written proposals of the union
3) Counter-proposals of the employer
4) Proof of a request for
conference to settle the
differences. [§4, Rule XXII,
Book V]
In cases of ULP:
1) Statement of acts complained of
2) Efforts taken to resolve the
dispute amicably. [§4, Rule
XXII, Book V]
Action on Notice
1. Upon receipt of a valid notice
of strike or lockout, the
NCMB, through its
Conciliator-Mediators, shall
call the parties to a
conference the soonest
possible time in order to
actively assist them to
explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator
may suggest/offer proposals
as an alternative avenue for
the resolution of their
disagreement/conflict which
may not necessarily bind the
parties.
3. If conciliation/mediation fails,
the parties shall be
encouraged to submit their
dispute for voluntary
arbitration.
Purpose of Cooling Off Period Art. 278(f) - [T]he Department may, at its
Art. 278(e) - During the cooling-off own initiative or upon the request of any
period, it shall be the duty of the Ministry affected party, supervise the conduct of
[now DOLE] to exert all efforts at the secret balloting. […]
mediation and conciliation to effect a
voluntary settlement. Should the dispute
(6) Strike Vote Report
remain unsettled until the lapse of the
requisite number of days from the Art. 278(f) - [I]n every case, the union or
mandatory filing of the notice, the labor the employer shall furnish the
union may strike or the employer may Department the results of the voting at
declare a lockout. least 7 days before the intended strike1
or lockout, subject to the cooling-off
The purpose of the cooling-off period is to period herein provided.
provide an opportunity for mediation and
conciliation. [National Federation of Sugar
(7) Observance of the 7-day “waiting period”
Workers v. Ovejera, G.R. No. L-59743
(1982)] The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management
(4) Notice of Strike-Vote Meeting to take the appropriate remedy in case the
strike or lockout vote report is false or
inaccurate. [National Federation of Sugar
§10, Rule XXII, Book V - In every case,
Workers v. Ovejera, G.R. No. L-59743
the union or the employer shall furnish
(1982)]
the regional branch of the Board the
notice of meetings referred to in the The waiting period is intended to give the
preceding paragraph at least twenty-four DOLE an opportunity to verify whether the
(24) hours before such meetings… projected strike really carries the
imprimatur of the majority of the union
members. [Lapanday Workers Union v.
(5) Strike Vote NLRC, G.R. Nos. 95494-97 (1995)]
Requirements for a declaration of a strike Compliance with Both Cooling-off and
in a strike vote Waiting Periods
1) approval by a majority of the total The observance of both periods must be
union membership in the complied with, although a labor union may
bargaining unit concerned take a strike vote and report the same
2) approval is obtained by secret within the statutory cooling-off period. The
ballot in a meeting/referendum cooling- off and 7-day strike ban provisions
called for the purpose of law constitute a valid exercise of police
power of the State. [National Federation of
Duration of the Validity of the Strike-Vote Sugar Workers v. Ovejera, G.R. No. L-
Art. 278(f) - [T]he decision shall be valid 59743 (1982)]
for the duration of the dispute based on Strike-vote Reported within the Cooling-off
substantially the same grounds considered Period
when the strike or lockout vote was When the strike-vote is reported within the
taken. […] cooling-off period, the phrase “at least 7
days before the intended strike or lockout,
subject to the cooling-off period herein
DOLE intervention provided.” in Article 278(f) admits two
interpretations:
(1) Mutually exclusive periods (used in the
NCMB Manual). The cooling off period and
1
7-day “Waiting Period”.
the 7-day period are mutually (1) Effort to bargain
exclusive. Thus, in the case of Capitol
Medical Center v. NLRC [G.R. No. Art. 279(a) - No employer shall declare a
147080 (2005)], the […] lockout without first having bargained
Court held that when the strike vote is collectively in accordance with Title VII of
conducted within the cooling-off period, this Book.
the 7-day requirement shall be counted
from the day following the expiration of
the cooling off period. (2) Filing and service of Notice of
(2) Coexistent periods. The cooling-off Lockout Bargaining deadlocks
period and the 7-day requirement may
coexist. After all, the purpose of the 7- Art. 278(c) - [T]he duly certified or
day requirement is to give time for the recognized bargaining agent may file […]
DOLE to verify if the projected strike is a notice of lockout with the Department at
supported by the majority. There is no least 30 days before the intended date
reason to add it to the cooling-off
thereof. […]
period.
Unfair Labor Practice; Union Busting
E.4 REQUISITES FOR A VALID LOCKOUT Art. 278(c) - [I]n cases of unfair labor
Limitations practice, the period to file notice of strike
shall be 15 days and in the absence of a
Art. 278(b) - [N]o employer may declare duly certified or recognized bargaining
a lockout on grounds involving inter- agent, the notice of strike may be filed by
union and intra-union disputes. any legitimate labor organization in behalf
of its members. However, in case […] of
Grounds union busting (dismissal of duly elected
union officers from employment), the
Similar to a strike, the proper grounds for a
lockout are cooling period shall not apply and the
union may take action immediately.
1) bargaining deadlock
2) ULP by labor organizations
Note: The notice must be served to the
employees through the SEBA or the
Requisites
legitimate labor organization (if no SEBA).
1. Effort to bargain (in case of
Contents of notice
bargaining deadlock)
2. Filing and service of notice of 1) Names and addresses of the
lockout to the NCMB employer and the union involved
3. Observance of cooling-off period 2) Nature of the industry to which the
a. 15 days for ULP employer belongs
b. 30 days for bargaining 3) Number of union members and of
deadlock workers in the bargaining unit
4. Notice of lockout vote meeting 4) Such other relevant data as may
within 24 hours before the intended facilitate the settlement of the dispute.
vote [§10, Rule XXII, Book V]
Additional Requirements [§8, Rule XXII,
5. Lockout vote Book V]
6. Report of lockout vote
In cases of bargaining deadlocks
7. Observance of the waiting period
(7- day strike ban) 1) Statement of unresolved issues in the
bargaining negotiations
2) Written proposals of the union
3) Counter-proposals of the employer Art. 278(f) - A decision to declare a
4) Proof of a request for conference to lockout must be approved by a majority of
settle the differences. the board of directors of the corporation or
association
In cases of ULP
1) Statement of acts complained of
2) Efforts taken to resolve the dispute
amicably.
Action on notice
1. Upon receipt of a valid notice of strike
or lockout, the NCMB, through its
Conciliator-Mediators, shall call the
parties to a conference the soonest
possible time in order to actively assist
them to explore all possibilities for
amicable settlement.
2. The Conciliator-Mediator may
suggest/offer proposals as an
alternative avenue for the resolution of
their disagreement/conflict which may
not necessarily bind the parties.
3. If conciliation/mediation fails, the
parties shall be encouraged to submit
their dispute for voluntary arbitration.
[§9, Rule XXII, Book V]
(3) Observance of Cooling-off

Periods Lockout cooling-off
periods:
● based on bargaining deadlock – 30
days
● based on ULP – 15 days.
(4) Notice of Lockout Vote Meeting
§10, Rule XXII, Book V - In every case, the

union or the employer shall furnish the
regional branch of the Board the notice of
meetings referred to in the preceding
paragraph at least twenty-four (24) hours
before such meetings [...]
(5) Lockout Vote

any public officer from taking any
or of the partners in a partnership,
measure necessary to maintain peace
obtained by secret ballot in a meeting and order, protect life and property,
called for that purpose. The decision shall and/or enforce the law and
be valid for the duration of the dispute
based on substantially the same grounds
considered when the strike or lockout vote
was taken.
(5) Report of Lockout Vote

Art. 278(f) - In every case, the union or
the employer shall furnish the Ministry the
results of the voting at least seven days
before the intended strike or lockout,
subject to the cooling-off period herein
provided.
(6) Observance of Waiting

Period (7 days) See notes
under strike.
Effect of Illegal Lockout

Art. 279(a) par. 3, 1st Sentence - Any
worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages.
E.5 REQUISITES FOR LAWFUL

PICKETING
Prohibited activities in picketing
1. By any person. No person shall
obstruct, impede, or interfere
with, by force, violence, coercion,
threats or intimidation, any
peaceful picketing by
employees during any labor
controversy or in the exercise of
the right to self-organization or
collective bargaining, or shall
aid or abet such obstruction or
interference. [Art. 279(b)]
2. By police force. The police force
shall keep out of the picket lines
unless actual violence or other
criminal acts occur therein:
Provided, That nothing herein
shall be interpreted to prevent
legal orders. [Art. 279(d)] Peaceful picketing is legal even in the absence of
employer-employee relationship
3. By person engaged in picketing. No
person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress
to or egress from the employer’s
premises for lawful purposes, or
obstruct public thoroughfares. [Art.
279(e)]
Picketing as Part of Freedom of

Speech/Expression
General rule: picketing enjoys
constitutional protection as part of freedom
of speech and/or expression.
Exceptions/limitations:
1) When picketing is coercive rather
than persuasive [Security Bank
Employees Union v. Security Bank,
G.R. No. L- 28536 (1968)]
2) When picketing is achieved through
illegal means [Mortera v. CIR, , G.R.
No. L-1340 (1947)]
3) Courts may confine the
communication/demonstration to
the parties to the labor dispute
[PCIB v. Philnabank Employees
Association, G.R. No. L-29630
(1981)]
4) Innocent bystander rule. Courts
may insulate establishments or
persons with no industrial
connection or having interest totally
foreign to the context of the dispute
Association, G.R. No. L-29630
(1981)]
Picketing and Libel

Libel laws are not applied strictly
considering that there is emotional tension
in the picket lines and expected
discourteous and impolite exchanges
between the employees and the employer.
Association, G.R. No. L-29630 (1981)]
Picketing, peacefully carried out, is 1.Secretary of Labor and Emplotyment
not illegal even in the absence of
2. President
employer-employee relationship, for
peaceful picketing is a part of the
freedom of speech guaranteed by
Industries Indispensable to the National
the Constitution. [De Leon v. National
Interest
Labor Union, G.R. No. L-7586
(1957)] a. Hospital sector
b. Electric power industry
c. Water supply service, to exclude small
E.6. ASSUMPTION OF
JURISDICTION BY THE DOLE
SECRETARY
When Sec. of Labor can Assume

Jurisdiction [Art. 278]:
(1) Labor dispute in an industry
indispensable to the national
interest; and
(2) Such dispute is causing or is
likely to cause a strike or
lockout
E.6.a. Nature
Powers of the Secretary of Labor
(alternative)
1) Assumption of jurisdiction.
The Secretary of Labor will
decide the labor dispute
himself/herself.
2) Certification for compulsory
arbitration. The Secretary of
Labor will certify the labor
dispute to the NLRC for
compulsory arbitration.
Powers of the President (Not
precluded by the powers of the
Secretary of Labor)
1. Determine the
industries
indispensable to the national
interest
2. Assume jurisdiction over any
such labor dispute to settle
or terminate such dispute
Who determines industries

indispensable to the national interest
[Art. 278(g)]
water supply services such as can be compelled. So imperative is the order in
bottling and refilling stations fact that it is not even considered violative
d. Air traffic control
e. Other industries as may be
recommended by the National
Tripartite Industrial Peace Council
(TIPC) [§16, Rule XXII, Book V, as
amended by DO 40-H-13]
E.6.b. Effect Of Assumption Of

Jurisdiction
(1) Automatic injunction
(2) Return-to-work and admission
(3) Immediately executory
(1) Automatic injunction of intended of

impending strike or lockout
Art.278(g)-[S]uchassumption or of or
certificationshallhavetheeffect
automatically enjoining the intended
impending strike or lockout as specified in the assumption or certification order. […]
(2) Return-to-work and readmission if strike

or lockout has already taken place
Art. 278(g) - [I]f one has already taken place at the time of assumption or certification, all striking or locked out employees
immediately return-to-work andthe

employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. […]
Nature of return-to-work order

[T]he return-to-work order not so much
confers a right as it imposes a duty; and
while as a right it may be waived, it must
be discharged as a duty even against the
worker's will. Returning to work in this
situation is not a matter of option or
voluntariness but of obligation. The worker
must return to his job together with his co-
workers so the operations of the company
can be resumed and it can continue
serving the public and promoting its
interest. That is the real reason such return
of the right against involuntary Art. 279(a), par. 2 - No strike or lockout
servitude. [Kaisahan ng Mga shall be declared after assumption of
Manggagawa sa Kahoy v. Gotamco jurisdiction by the President or the
Sawmills, GR No. L-1573 (1948)]
Minister or after certification or submission
of the dispute to compulsory or voluntary
(3) Immediately executory arbitration or during the pendency of
cases involving the same grounds for the
The assumption and certification
strike or lockout.
orders are executory in character
and must be strictly complied with
Strike/lockout becomes illegal
by the parties. [Allied Banking v.
NLRC, G.R. No. 116128 (1996)]
Strikes and lockouts in hospitals,

clinics and similar medical
institutions
It shall be the duty of the striking
union or locking-out employer to
provide and maintain an effective
skeletal workforce of medical and
other health personnel, whose
movement and services shall be
unhampered and unrestricted, as
are necessary to insure the proper
and adequate protection of the life
and health of its patients, most
especially emergency cases, for the
duration of the strike or lockout.
In such cases, therefore, the
Secretary of Labor and Employment
may immediately assume, within
twenty four (24) hours from
knowledge of the occurrence of
such a strike or lockout, jurisdiction
over the same or certify it to the
Commission for compulsory
arbitration. [Art. 278, par. 2]
Rationale
The highest respect is accorded to
the right of patients to life and
health.
Effect of defiance of assumption or

certification orders
A strike undertaken despite the issuance (3) Noncompliance with procedural
by the Secretary of Labor of an
assumption or certification order becomes
a prohibited activity and thus, illegal,
pursuant to Article 279(a) of the Labor
Code. [Allied Banking v. NLRC, G.R. No.
116128 (1996)]
See notes on liabilities of employer, union
officers, and ordinary workers under illegal
strike.
Summary of Liabilities of Participants in an

Illegal Strike/Lockout [Art. 279]
1) Employer in an illegal lockout –
workers terminated due to illegal
lockout shall be entitled to
reinstatement plus full backwages.
2) Union officers who participated in
illegal strike – deemed to have lost
their employment
3) Union officers who participated in
illegal acts during a LAWFUL strike –
deemed to have lost their employment.
4) Ordinary workers – deemed to have
lost their employment only if they
participated in illegal acts.
Stricter penalties for non-compliance with

orders, prohibitions, and/or injunctions issued
by the Secretary of Labor in strikes
involving hospitals, clinics, and similar
medical institutions
1) Immediate disciplinary action against
both union and employer
2) Dismissal/loss of employment for
members of the striking union
3) Payment by employer of
backwages, damages, and other
affirmative relief
4) Criminal prosecution against either
or both the union and employer
E.7.ILLEGAL STRIKE
Reasons for being illegal
(1) Prohibited by law
(2) Improper grounds
requirements such belief. [Interwood Employees Assoc.
v. Int’l Hardwood, G.R. No. L-7409 (1956)]
(4) Unlawful means and methods
(5) Violation of injunction order
(3) Noncompliance with procedural
(6) No strike/lockout provisions
requirements
in the CBA [Citing Ludwig
Teller in Toyota Motors v. See notes under procedural requirements of
NLRC, G.R. Nos. 158786 & a valid strike.
158787 (2007)]
(1) Prohi
bited by law
Government
employees
While the Constitution guarantees
the right of government employees
to organize, they are not allowed to
strike.
(2) Improper grounds

A legal strike must be based on a
bargaining deadlock and/or a ULP
act only.
Intra-union and inter-union disputes
are not proper grounds to strike.
Good faith strike
Good faith may be used as a
defense if the strike is held on the
basis of an act of ULP by the
employer even if it turned out that
there was no act of ULP. However,
the mandatory procedural
requirements cannot be dispensed
with (notice of strike, cooling-off
period, strike vote, strike vote
report). [Grand Boulevard Hotel v.
GLOWHRAIN, G.R. No. 153664
(2003)]
Good faith strike requires rational basis
A mere claim of good faith would
not justify the holding of a strike
under the aforesaid exception as, in
addition thereto, the circumstances
must have warranted such belief. It
is, therefore, not enough that the
union believed that the employer
committed acts of ULP when the
circumstances clearly negate even
a prima facie showing to sustain
A strike which does not strictly comply with ● commit any act of violence, coercion, or
the procedural requirements set by law intimidation or
and the rules is an unlawful/illegal strike.
● obstruct the free ingress to or egress from
[Sta. Rosa Coca-Cola Plant Employees Union
the employer's premises for
v. Coca-Cola Bottlers Philippines, Inc., G.R.
Nos. 164302-03 (2007)]
Good faith strike must still comply with

procedural requirements
Even if the union acted in good faith in the
belief that the company was committing an
unfair labor practice, if no notice of strike
and a strike vote were conducted, the said
strike is illegal. [Grand Boulevard Hotel v.
GLOWHRAIN, G.R. No. 153664 (2003)]
GR: A strike based on a non-strikeable
ground is an illegal strike; a strike
grounded on ULP is illegal if no such acts
actually exist.
Exception: Even if no ULP acts are
committed by the employer, if the
employees believe in good faith that ULP
acts exist so as to constitute a valid
ground to strike, then the strike held
pursuant to such belief may be legal.
[NUWHRAIN v. NLRC, G.R. No. 125561
(1998)]
(4) Unlawful means and

methods Purpose and means
test
There must be concurrence between the
validity of the purpose of the strike and the
means of conducting it.
A strike is a legitimate weapon in the
universal struggle for existence. It is
considered as the most effective weapon in
protecting the rights of the employees to
improve the terms and conditions of their
employment. But to be valid, a strike must
be pursued within legal bounds. The right
to strike as a means for the attainment of
social justice is never meant to oppress or
destroy the employer. The law provides
limits for its exercise. Among such limits
are the prohibited activities under Art.
[279], particularly paragraph (e), which
states that no person engaged in picketing
shall:
lawful purposes or awareness that in labor conflicts,
the tension that fills the air as well
● obstruct public
as the feeling of frustration and
thoroughfares. [Association of
bitterness could break out in
Independent Unions in the
sporadic acts of violence.
Philippines (AIUP), et. al. v.
NLRC, G.R. No. 120505
(1999)] If there be in this case a weighing of
interests in the balance, the ban the law
imposes on
A legal strike may turn into an illegal strike
Even if the strike is valid because its
objective or purpose is lawful, the
strike may still be declared invalid
where the means employed are
illegal. [Phil. Diamond Hotel and
Resort, Inc.
v.Manila Diamond Hotel Employees
Union, G.R. No. 158075 (2006)]
Examples of unlawful means and methods
1) Acts of violence and terrorism
2) Destruction of
property Guidelines and
balancing of Interest
(1) A strike otherwise valid, if
violent in character, may be
placed beyond the pale.
(2) Care is to be taken especially
where an unfair labor practice
is involved, to avoid
stamping it with illegality just
because it is tainted by such
acts. To avoid rendering
illusory the recognition of the
right to strike, responsibility in
such a case should be
individual and not collective.
(3) A different conclusion would
be called for if the existence
of force while the strike lasts
is pervasive and widespread,
consistently and deliberately
resorted to as a matter of
policy. It could be reasonably
concluded then that even if
justified as to ends, it
becomes illegal because of
the means employed'.
(4) This is not by any means to
condone the utilization of
force by labor to attain its
objectives. It is only to show
unfair labor practices by management that worker or union officer who knowingly participates
could provoke a strike and its requirement in the commission of illegal acts during a strike
that it be conducted peaceably, it would may
be, to repeat, unjustified, considering all
the facts disclosed, to stamp the strike with
illegality. It is enough that individual liability
be incurred by those guilty of such acts of
violence that call for loss of employee
status. Such an approach is reflected in our
recent decisions. [Shell Oil Workers Union
v. Shell Co. of the Phils, G.R. No. L-28607
(1971)]
The Labor Code regulates the exercise of
said right by balancing the interests of
labor and management in the light of the
overarching public interest. Thus,
paragraphs (c) and (f) of Article
278mandate the following procedural steps
to be followed before a strike may be
staged: filing of notice of strike, taking of
strike vote, and reporting of the strike vote
result to the DOLE. It bears stressing that
these requirements are mandatory, meaning,
non-compliance therewith makes the strike
illegal. The evident intention of the law in
requiring the strike notice and strike-vote
report is to reasonably regulate the right to
strike, which is essential to the attainment
of legitimate policy objectives embodied in
the law. [Stamford Mark Corp. v. Julian,
G.R. No. 145496 (2004)]
(5) Violation of injunction order

An automatic injunction under Article
278(g) or a valid injunction order under the
exceptions to Article 279must be complied
with. Otherwise, the strike becomes illegal.
(6) No strike/lockout provisions in the CBA

A “no strike, no lock-out” is a valid
provision in the CBA. However, it only
applies to economic provisions. It cannot
prevent a strike which is grounded on
unfair labor practice. [Malayang Samahan
ng mga Manggagawa sa Greenfield v.
Ramos, G.R. No. 113907 (2000)]
LIABILITY OF UNION OFFICERS

Any union officer who knowingly
participates in an illegal strike and any
be declared to have lost his is not deemed waived
employment status. [Art. 279(a)]
The ruling cited in the Bisaya case that the
Note: Mere participation in an illegal employer waives his defense of illegality of
strike by a union officer is sufficient the strike upon reinstatement of strikers is
ground to terminate his applicable only to strikers who signified
employment. In case of a lawful their
strike, the union officer must commit
illegal acts during a strike for him to
be terminated. [Article 279(a)]
LIABILITY OF ORDINARY WORKERS

General rule: Participation by a
worker in a lawful strike is not
ground for termination of his
employment. [Art. 279(a)]
Exception: When the worker
participated in illegal acts during the
strike.
When the strike is or becomes
illegal, the workers who participate
in it are not deemed to have lost
their employment status by express
omission in the second sentence of
the third paragraph of Art. 279. Only
the union officers are deemed to
have lost their employment status.
LIABILITY OF EMPLOYER
Any worker whose employment has
been terminated as a consequence
of any unlawful lockout shall be
entitled to reinstatement with full
backwages. [Art. 279(a)]
WAIVER OF ILLEGALITY OF STRIKE

When defense of illegality of strike
is deemed waived
An employer can be deemed to
have waived the defense that a
strike is illegal. In one case, the
Court held that:
“Admitting for the sake of argument
that the strike was illegal for being
premature, this defense was waived
by the [Company], when it voluntarily
agreed to reinstate the radio
operators.” [Bisaya Land
Transportation Co., Inc. v. CIR, G.R.
No. L-10114 (1957)]
When defense of illegality of strike

intention to return to work and were Requisites for injunction to issue (in accordance
accepted with the Powers of the NLRC)
back. […]
1. actual or threatened commission of a
Truly, it is more logical and reasonable
for condonation to apply only to strikers
who signified their intention to return and
did return to work. The reason is obvious.
These strikers took the initiative in
normalizing relations with their employer
and thus helped promote industrial peace.
However, as regards the strikers who
decided to pursue with the case, […] the
employer could not be deemed to have
condoned their strike, because they had
not shown any willingness to normalize
relations with it. [Philippine Inter-Fashion,
Inc. v. NLRC, G.R. No. L-59847 (1982)]
However, the mere act of entering into a
compromise agreement cannot be deemed
to be a waiver of the illegality of the strike,
unless it such a waiver is clearly shown in
the agreement. The court has emphasized
that “[for] a waiver to be valid and effective
[it] must be couched in clear and
unequivocal terms which leave no doubt
as to the intention of a party to give up a
right or benefit which legally pertains to
him.” [Filcon Manufacturing Corp v. Lakas
Manggagawa sa Filcon – Lakas
Manggagawa Labor Center, G.R. No.
150166 (2004)]
E.8. INJUNCTIONS
Art. 266 - No temporary or permanent
injunction or restraining order in any case
involving or growing out of labor disputes
shall be issued by any court or other
entity, except as otherwise provided in
Articles [225] and [279] of this Code. [
General Rule: Injunctions are prohibited.

Exceptions: Those provided under Art. 225
(referring to the Powers of the NLRC) in
connection with Art. 279(on Prohibited
Activities) under the Labor Code.
F. REQUISITES FOR LABOR

INJUNCTIONS
prohibited or unlawful act employment status: Provided, That
OR requirement of mere participation of a worker in a
performance of a particular lawful strike shall not constitute
act in a labor dispute sufficient ground for termination of his
employment, even if a replacement
2. if unrestrained or
had been hired by the employer during
unperformed, the act will
such lawful strike.
cause substantial and
irreparable damage to any (b) No person shall obstruct, impede, or
party OR render ineffectual interfere with, by force, violence,
any decision in favor of such coercion, threats or intimidation, any
party peaceful picketing by employees
during any labor
3. complainant has no adequate
remedy at law
4. public officers charged with
the duty to protect
complainant’s property are
unable or unwilling to furnish
adequate protection [Art.
225(e)]
Prohibited Activities [Art. 279]
(a) No labor organization or
employer shall declare a strike
or lockout without first having
bargained collectively in
accordance with Title VII of this
Book or without first having filed
the notice required in the
preceding Article or without the
necessary strike or lockout vote
first having been obtained and
reported to the Ministry [DOLE].
No strike or lockout shall be
declared after assumption of
jurisdiction by the President or
the Minister or after certification
or submission of the dispute to
compulsory or voluntary
arbitration or during the
pendency of cases involving the
same grounds for the strike or
lockout.
Any worker whose employment
has been terminated as a
consequence of any unlawful
lockout shall be entitled to
reinstatement with full
backwages. Any union officer
who knowingly participates in an
illegal strike and any worker or
union officer who knowingly
participates in the commission
of illegal acts during a strike
may be declared to have lost his
controversy or in the exercise of the Rationale
right to self-organization or collective
The right [to picket] may be regulated at the
bargaining, or shall aid or abet such
instance of […] `innocent bystanders' if it
obstruction or interference.
(c) No employer shall use or employ any
strike-breaker, nor shall any person be
employed as a strike-breaker.
(d) No public official or employee, including
officers and personnel of the New
Armed Forces of the Philippines or the
Integrated National Police, or armed
person, shall bring in, introduce or
escort in any manner, any individual
who seeks to replace strikers in
entering or leaving the premises of a
strike area, or work in place of the
strikers. The police force shall keep out
of the picket lines unless actual
violence or other criminal acts occur
therein: Provided, That nothing herein
shall be interpreted to prevent any
public officer from taking any measure
necessary to maintain peace and order,
protect life and property, and/or enforce
the law and legal order.
(e) No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress
to or egress from the employer’s
premises for lawful purposes, or
obstruct public thoroughfares.
H. “INNOCENT BYSTANDER RULE”

Test to Determine if a Party is an “Innocent
Bystander”
An "innocent bystander," who seeks to
enjoin a labor strike, must satisfy the court
that aside from the grounds specified in
Rule 58 of the Rules of Court, it is entirely
different from, without any connection
whatsoever to, either party to the dispute
and, its interests are totally foreign to the
context thereof. [MSF Tire and Rubber Inc.
v. CA, G.R. No. 128632 (1999)]
Injunction Available to Innocent Bystanders

An innocent by-stander is entitled to
injunction if it is affected by the activities of
a picketing union.
appears that the inevitable result of
its exercise is [1] to create an
impression that a labor dispute with
which they have no connection or
interest exists between them and the
picketing union or [2] constitute an
invasion of their rights. [Liwayway
Publishing v. Permanent Concrete
Worker's Union, G.R. No. L-25003
(1981)]
when there is non-compliance by any of the
VIII. Jurisdiction and parties. [Art. 233]
Remedies (10) Other cases as may be provided by law.
A. LABOR ARBITER
A.1 JURISDICTION
Except as otherwise provided under the
Code the Labor Arbiters shall have original
and exclusive jurisdiction to hear and
decide:
(1) Unfair labor practices cases;
(2) Termination disputes;
(3) If accompanied with a claim for
reinstatement, those cases that
workers may file involving wages, rates
of pay, hours of work and other terms
and conditions of employment;
(4) Claims for actual, moral, exemplary
and other forms of damages arising
from the employer-employee relations;
(5) Cases arising from any violation of Art.
[279] of this Code, including questions
involving the legality of strikes and
lockouts;
(6) Except claims for Employees
Compensation, Social Security, Medicare
[Philhealth] and maternity benefits, all
other claims, arising from employer-
employee relations, including those of
persons in domestic or household
service, involving an amount exceeding
five thousand pesos (P5,000)
regardless of whether accompanied
with a claim for reinstatement. [Art.
224]
(7) Money claims arising out of employer-
employee relationship or by virtue of
any law or contract, involving claims for
actual, moral, exemplary and other
forms of damages, as well as
employment termination of OFWs;
(8) Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties. [Art.
124]
(9) Enforcement of compromise agreements
ECC/Medicare [Philhealth] claims,
is within the jurisdiction of a labor
Requisites of LA’s jurisdiction over Money arbiter if:
Claims
(2) The claim, regardless of amount, is
(1) Money claims arose from ER-EE accompanied with a claim of
relations, and reinstatement; or
(2) Money claims arose from law or (3) The claim exceeds P5,000, whether or
contracts other than a CBA
● Employer-employee
relationship is a jurisdictional
requisite, absent of which,
the NLRC has no jurisdiction
to hear and decide the case.
[Hawaiian- Philippine
Company v. Gulmatico, G.R.
No. 106231 (1994)]
If money claims do not arise from

ER-EE relations
Regular courts have jurisdiction
If money claims arise from ER-EE

relations but by virtue of
implementation of CBA
Voluntary Arbitrator has jurisdiction
“Exclusive and Original” Jurisdiction subject

to
Article 275
The voluntary arbitrator or panel of
voluntary arbitrators, upon
agreement of the parties, shall also
hear and decide all other labor
disputes including unfair labor
practices and bargaining deadlocks.
[Art. 275]
A case under Art 224 may be
lodged instead with a voluntary
arbitrator. The policy of the law is to
give primacy to voluntary modes of
settling dispute.
A.1.a.VERSUS REGIONAL DIRECTOR
[Art. 129]
Jurisdiction on Money Claims (Labor
Arbiter vs. Regional Director)
(1) A money claim arising from
employer- employee
relations, except SSS,
not there is a claim for agreement of the parties or when the [NLRC]
reinstatement. or [LA] before whom the case is pending so
orders,
The Regional Director has jurisdiction if:

(1) the money claim is not
accompanied by a claim for
reinstatement AND
(2) the claim does not exceed P5,000
PROCEDURE BEFORE LABOR ARBITER

Where to File [§1, Rule IV, 2011 NLRC Rules
of Procedure]
All cases which Labor Arbiters have
authority to hear and decide may be filed
in the Regional Arbitration Branch (RAB)
having jurisdiction over the workplace of
the complainant or petitioner
● Workplace - place or locality where
the employee is regularly assigned
at the time the cause of action
arose. It shall include the place
where the employee is supposed to
report back after a temporary
detail, assignment, or travel.
● In the case of field employees,
ambulant or itinerant workers, their
workplace is (a) where they are
regularly assigned or (b) where
they are supposed to regularly
receive their salaries and wages or
work instructions from, and report
the results of their assignment to
their employers.
Some Rules on Venue

1. Exclusion. Where 2 or more RABs
have jurisdiction over the workplace of
the complainant, that first which
acquired jurisdiction over the case
shall exclude others.
2. Waiver. When venue is not objected to
before the filing of position papers,
such issue shall be deemed waived.
3. Transfer. Venue of an action may be
transferred to a different Regional
Arbitration Branch other than where the
complaint was filed by written
upon motion by the proper party Note: If the last day of the reglementary
in meritorious cases. period falls on a Sunday or a holiday, the
last day shall be the next working day.
4. OFW Cases. Cases involving
overseas Filipino workers may Grounds of Appeal [Art. 229]
be filed before the RAB having
1) If there is prima facie evidence of
jurisdiction over the place where
abuse of discretion on the part of
the complainant resides or
the
where the principal office of any
of the respondents is situated, at
the option of the complainant.
NATURE OF THE PROCEEDING

Proceedings before the LA are non-
litigious. The Labor Arbiter is not
bound by the technical rules of
procedure.
The Labor Arbiter shall use all
reasonable means to ascertain the
facts in each speedily and
objectively. [Art. 227]
B. NATIONAL LABOR
RELATIONS COMMISSION
(NLRC)
B.1 JURISDICTION
NLRC divisions
(1) Original Jurisdiction: Over
petitions for injunction or
temporary restraining order
under Art. 225(e).
(2) Exclusive Appellate Jurisdiction:
over all cases decided by labor
arbiters (Art 224[b]) and the
DOLE regional directors under
Art 129.
Period of Appeal
(1) Labor Arbiter to NLRC: Decisions,
awards, or ordersof the [LA] shall
be final and executory unless
appealed to the [NLRC] by any
or both parties within 10
calendar days from receipt
[thereof]. [Art. 229] Regional
director to NLRC: Decisions of
the Regional director shall be
final and executory unless
appealed within 5 days from
receipt thereof. [Art. 129]
Labor Arbiter or Regional Director; period. [Garcia v. Philippine Airlines, Inc., G.R. No.
164856 (2009)]
2) If the decision, resolution or order
was secured through fraud or
coercion, including graft and
corruption;
3) If made purely on questions of law;
and/or
4) If serious errors in the findings of
fact are raised which, if not
corrected, would cause grave or
irreparable injury to the appellant
It is clear from the NLRC Rules of
Procedure that appeals must be verified
and certified against forum-shopping by
the parties-in- interest themselves. The
purpose of verification is to secure an
assurance that the allegations in the
pleading are true and correct and have
been filed in good faith. [Antonio B.
Salenga, et al. v. CA, 2012]
Reinstatement Pending Appeal and Effect

of NLRC reversal of Labor Arbiter’s order
of reinstatement
In any event, the decision of the Labor
Arbiter reinstating a dismissed or
separated employee, insofar as the
reinstatement aspect is concerned, shall
immediately be executory, even pending
appeal. The employee shall either be
admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or, at the option of
the employer, merely reinstated in the
payroll. The posting of a bond by the
employer shall not stay the execution for
reinstatement provided herein. [Art. 229]
Even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is
obligatory on the part of the employer to
reinstate and pay the wages of the
dismissed employee during the period of
appeal until reversal by the higher court.
On the other hand, if the employee has
been reinstated during the appeal period
and such reinstatement order is reversed
with finality, the employee is not required
to reimburse whatever salary he received
for he is entitled to such, more so if he
actually rendered services during the
Remedies (4) Subject to the provisions of Article
Requisites for Perfection of Appeal to [225] of the Labor Code, once the
the Court of Appeals appeal is perfected in accordance with
these Rules, the Commission shall limit
[Rule VI, 2011 NLRC Rules of Procedure] itself to reviewing and deciding only the
(1) The appeal shall be: specific issues that were elevated on
appeal.
● Filed within the reglementary
period;
● Verified by the appellant Certified cases
himself in accordance with Definition
§4, Rule 7 of the Rules of
Court;
● In the form of a
memorandum of appeal
which shall state the
grounds relied upon and the
arguments in support
thereof, the relief prayed for,
and with a statement of the
date the appellant received
the appealed decision,
resolution or order;
● In three (3) legibly
typewritten or printed
copies; and
● Accompanied by (a) proof of
payment of the required
appeal fee; (b) posting of a
cash or surety bond as
provided in Section 6 of the
NLRC Rules; and (c) proof of
service upon the other
parties.
(2) A mere notice of appeal without
complying with the other
requisites aforestated shall not
stop the running of the period
for perfecting an appeal.
(3) The appellee may file with the
Regional Arbitration Branch or
Regional Office where the
appeal was filed, his answer or
reply to appellant’s
memorandum of appeal, not
later than 10 calendar days from
receipt thereof. Failure on the
part of the appellee who was
properly furnished with a copy
of the appeal to file his answer
or reply within the said period
may be construed as a waiver
on his part to file the same.
Certified labor disputes are cases certified Secretary of Labor and Employment.
to the Commission for compulsory
2. If a work stoppage has already taken place at
arbitration under Art. 278(g) of the Labor
the time of the certification, all striking
Code. [§2, The 2011 NLRC Rules and
Procedures]
Art. 278(g) - When, in his opinion, there
exists a labor dispute causing or likely to
cause a strike or lockout in an industry
indispensable to the national interest, the
Secretary of Labor and Employment may
assume jurisdiction over the dispute and
decide it or certify the same to the
Commission for compulsory arbitration.
Such assumption or certification shall
have the effect of automatically enjoining
the intended or impending strike or
lockout as specified in the assumption or
certification order.
Function of the NLRC

When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the
NLRC is not sitting as a judicial court but
as an administrative body charged with the
duty to implement the order of the
Secretary. Its function only is to formulate
the terms and conditions of the CBA and
cannot go beyond the scope of the order.
Moreover, the Commission is further
tasked to act within the earliest time
possible and with the end in view that its
action would not only serve the interests of
the parties alone, but would also have
favorable implications to the community
and to the economy as a whole. This is the
clear intention of the legislative body in
enacting Art. 278 paragraph (g) of the
Labor Code, as amended by Section 27 of
R.A. 6175 [Union of Filipino Employees v.
NLRC, G.R. No. 91025 (1990)]
Effects of Certification
1. Upon certification, the intended or
impending strike or lockout is
automatically enjoined, notwithstanding
the filing of any motion for
reconsideration of the certification
order nor the non- resolution of any
such motion which may have been
duly submitted to the Office of the
or locked out employees shall backwages, damages and/or other
immediately return to work and affirmative relief, even criminal prosecution
the employer shall immediately against the liable parties.
resume operations and readmit
The Commission may also seek the
all workers under the same
assistance of law enforcement agencies to
terms and conditions prevailing
ensure compliance and enforcement of its
before the strike or lockout.
orders and resolutions. [§ 4, Rule VIII,
3. All cases between the same 2011 NLRC Rules and Procedures]
parties, except where the
certification order specifies
otherwise the issues submitted
for arbitration which are already
filed or may be filed, and are
relevant to or are proper
incidents of the certified case,
shall be considered subsumed
or absorbed by the certified
case, and shall be decided by
the appropriate Division of the
Commission.
4. The parties to a certified case,
under pain of contempt, shall
inform their counsels and the
Division concerned of all cases
pending with the Regional
Arbitration Branches and the
Voluntary Arbitrators relative or
incident to the certified case
before it.
5. When a certified labor dispute
involves a business entity with
several workplaces located in
different regions, the Division
having territorial jurisdiction over
the principal office of the
company shall acquire
jurisdiction to decide such labor
dispute; unless the certification
order provides otherwise.
[Section 3, 2011 NLRC Rules
and Procedures]
Effects of Defiance
Non-compliance with the
certification order of the SOLE shall
be considered as an illegal act
committed in the course of the
strike or lockout and shall authorize
the Commission to enforce the same
under pain of immediate disciplinary
action, including dismissal or loss of
employment status or payment by
the locking-out employer of
Strict Compliance of Assumption and C. BUREAU OF LABOR RELATIONS
Certification Orders
(BLR)
The Secretary's assumption and
certification orders being executory in
character are to be strictly complied with
by the parties even during the pendency of
a petition questioning their validity for this
extraordinary authority given by law to the
Secretary of Labor is "aimed at arriving at
a peaceful and speedy solution to labor
disputes, without jeopardizing national
interests." [Union of Filipino Employees v.
NLRC, G.R. No. 91025 (1990)]
Procedure in certified cases

(a) When there is no need to conduct a
clarificatory hearing, the Commission
shall resolve all certified cases within
30 calendar days from receipt by the
assigned Commissioner of the
complete records, which shall include
the position papers of the parties and
the order of the SOLE denying the
motion for reconsideration of the
certification order, if any.
(b) Where a clarificatory hearing is
needed, the Commission shall, within 5
calendar days from receipt of the
records, issue a notice to be served on
the parties through the fastest means
available, requiring them to appear and
submit additional evidence, if any. All
certified cases shall be resolved by the
Commission within 60 calendar days
from receipt of the complete records by
the assigned Commissioner.
(c) No motion for extension or
postponement shall be entertained.
[§5, Rule VIII, 2011 NLRC Rules and
Procedures]
Execution of Judgment
Upon issuance of the entry of judgment,
the Commission motu propio or upon
motion by the proper party, may cause the
execution of the judgment in the certified
case. [§ 6, Rule VIII, 2011 NLRC Rules
and Procedures]
Nature of proceedings
C.1. JURISDICTION Conciliation and mediation is non-
litigious/non-adversarial, less expensive, and
Art. 232 - The Bureau of Labor Relations expeditious. Under this informal set-up, the
and the Labor Relations Divisions in the
regional offices of the Department of
Labor and Employment shall have original
and exclusive authority to act, at their own
initiative or upon request of either or both
parties, on all inter- union and intra-union
conflicts, and all disputes, grievances or
problems arising from or affecting labor-
management relations in all workplaces
whether agricultural or non- agricultural,
except those arising from the
implementation or interpretation of
collective bargaining agreements which
shall be the subject of grievance
procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15)
calendar days to act on labor cases
before it, subject to extension by
Original Jurisdiction
Decisions of the BLR through its
original jurisdiction are appealable
to the Secretary of Labor and
Employment [§15, Rule XI, Book V].
Appellate Jurisdiction
BLR has the power to review the
decisions of the Regional Director
[§15, Rule XI, Book V].
Decisions rendered through its
appellate power are final and
executory [§20, Rule XI, Book V].
Hence, the remedy of the aggrieved
party is to seasonably avail of the
special civil action of certiorari under
Rule 65 of the Rules of Court (“no
appeal, nor plain, speedy and
adequate remedy in the ordinary
course of law” [§1, Rule 65, Rules of
Court]).
D. NATIONAL CONCILIATION AND

MEDIATION BOARD
parties find it more expedient to fully E. DOLE REGIONAL DIRECTORS
ventilate their respective positions without
running around with legal technicalities
and, in the course thereof, afford them
wider latitude of possible approaches to
the problem.
D.1. CONCILIATION VS. MEDIATION

Conciliation
A mild form of intervention by a neutral
third party, the Conciliator-Mediator,
relying on his persuasive expertise, takes
an active role in assisting parties by trying
to keep disputants talking, facilitating other
procedural niceties, carrying messages
back and forth between the parties, and
generally being a good fellow who tries to
keep things calm and forward-looking in a
tense situation.
Mediation
A mild intervention by a neutral third party,
the Conciliator-Mediator, wherein the CM
advises the parties or offers solutions or
alternatives to the problems with the end in
view of assisting them towards voluntarily
reaching their own mutually acceptable
settlement of the dispute.
Conciliation Mediation
C-M facilitates C-M assists parties to
disputants to keep voluntarily reach
things calm, delivers mutually acceptable
messages back and settlement.
forth between the
parties.
D.2. PREVENTIVE MEDIATION

Preventive mediation case — refers to the
potential or brewing labor dispute which is
the subject of a formal or informal request
for conciliation and mediation assistance
sought by either or both parties in order to
remedy, contain or prevent its
degeneration into a full blown dispute
through amicable settlement.
E.1. RECOVERY/ADJUDICATORY POWER
Small money claims
Art. 129 - Recovery of wages, simple
money claims and other benefits. —Upon
complaint of any interested party, the
Regional Director of the Department of
Labor and Employment or any of the duly
authorized hearing officers of the
Department is empowered, through
summary proceeding and after due notice,
to hear and decide any matter involving
the recovery of wages and other monetary
claims and benefits, including legal
interest, owing to an employee or person
employed in domestic or household service
or househelper under this Code, arising
from employer- employee relations:
Provided, That such complaint does not
include a claim for reinstatement:
Provided, further, That the aggregate
money claims of each employee or
househelper do not exceed five thousand
pesos (P5,000).
The Regional Director or hearing officer
shall decide or resolve the complaint
within thirty
(30) calendar days from the date of the
filing of the same.
Any sum thus recovered on behalf of any
employee or househelper pursuant to this
Article shall be held in a special deposit
account by, and shall be paid, on order of
the Secretary of Labor and Employment
or the Regional Director directly to the
employee or househelper concerned.
Any such sum not paid to the employee or
househelper, because he cannot be
located after diligent and reasonable effort
to locate him within a period of three (3)
years, shall be held as a special fund of
the Department of Labor and Employment
to be used exclusively for the amelioration
and benefit of workers.
The Secretary of Labor and Employment
including legal interest, found owing to any standards provisions of this Code and
employee or househelper under this Code. other labor legislation based on the
findings of labor employment and
enforcement officers or industrial safety
NOTE: See RA 10361 (Kasambahay Law) on engineers made in the course of inspection.
settlement of disputes.
The Secretary or his duly authorized
representatives shall issue writs of execution
Sec. 37, RA 10361. Mechanism for Settlement to the appropriate authority for the
of Disputes. – All labor-related disputes enforcement of their orders, except in
shall be elevated to the DOLE Regional cases where the employer contests the
Office having jurisdiction over the findings of the labor employment and
workplace without prejudice to the filing of enforcement officer and raises issues
a civil or criminal action in appropriate supported by documentary proofs which
cases. The DOLE Regional Office shall were not considered in the course of
exhaust all conciliation and mediation
Art. 37. Visitorial Power. - The Secretary of
efforts before a decision shall be rendered.
Labor or his duly authorized
Ordinary crimes or offenses committed under representatives may, at any time, inspect
the Revised Penal Code and other special the premises, books of accounts and
penal laws by either party shall be filed records of any person or entity covered by
with the regular courts. this Title, require it to submit reports
regularly on prescribed forms, and act on
violation of any provisions of this Title.
F. DOLE SECRETARY
Art. 289 - Visitorial Power - The Secretary
F.1 VISITORIAL AND ENFORCEMENT of Labor and Employment or his duly
POWERS authorized representative is hereby
empowered to inquire into the financial
Art. 128 - The Secretary of Labor and
Employmentorhisduly activities of legitimate labor organizations
authorized regulation employer’s
upon the filing of a complaint under oath
representatives, including labor
officers, shall have access to and duly supported by the written consent
of at least twenty percent (20%) of the total
yee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of
membership
ts, the Secretary of Labor and Employment or his duly authorized representatives shall haveofthethe labor
power organization
to issue compliance orders to give
concerned and to examine their books of
accounts and other records to determine
compliance or non-compliance with the
law and to prosecute any violations of the
law and the union constitution and by-
laws: Provided, That such inquiry or
examination shall not be conducted during
the sixty (60)-day freedom period nor
within the thirty (30) days immediately
preceding the date of election of union
F.2 POWER TO SUSPEND/EFFECTS OF

TERMINATION
Art. 292(b), last sentence - The Secretary of
the Department of Labor and Employment
may
suspend the effects of the termination G. VOLUNTARY ARBITRATOR
pending resolution of the dispute in the
event of a prima facie finding by the G.1. JURISDICTION
appropriate official of the Department of
Grievance is any question by either the ER
Labor and Employment before whom such
or the union regarding the interpretation or
dispute is pending that the termination application of the CBA or company
may cause a serious labor dispute or is in personnel policies or any claim by either
the implementation of a mass lay-off. party that the other party is violating any
provisions of the CBA or company
personnel policies.
Assumption of jurisdiction
It is a complaint or dissatisfaction arising
Art. 278(g) - When in his opinion, there from the interpretation or implementation
exist a labor dispute causing or likely to of the CBA and those arising from
cause a strike or lockout in an industry interpretation or enforcement of personnel
indispensable to the national interest, the policies.
SOLE may assume jurisdiction over the Grievance Machinery
dispute and decide it or certify the same to
It refers to the mechanism for the
the Commission for compulsory arbitration.
adjustment and resolution of grievances. It
is part of the continuing process of
collective bargaining.
Appellate jurisdiction
a. Orders issued by the duly authorized
representative of the SOLE under Art.
128 may be appealed to the latter.
b. Denial of application for union
registration or cancellation of union Exclusive and Original Jurisdiction Over
registration originally rendered by the Grievances
BLR may be appealed to the SOLE (if The VA or panel of VAs shall have original
originally rendered by the Regional and exclusive jurisdiction to hear and
Office, appeal should be made to the decide all unresolved grievances.
BLR)
Violations of a CBA, except those which
Decisions of the Med-Arbiter in certification are gross in character, shall no longer be
election cases are appealable to the SOLE treated as ULP and shall be resolved as
[Art. 272] (decisions of med-arbiters in grievances under the CBA.
intra-union disputes are appealable to the
BLR [§15, Rule XI, Book V]) Note: Gross violations of CBA shall mean
flagrant and/or malicious refusal to comply
with the economic provisions of such
Voluntary arbitration powers agreement. [Art. 274]
Art. 278(h) - Before or at any stage of the Art. 274 - The Commission, its Regional
compulsory arbitration process, the parties Offices and the Regional Directors of the
may opt to submit their dispute to DOLE shall not entertain disputes,
voluntary arbitration. grievances or matters under the exclusive
and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators
Art. 278(i) - The Secretary of Labor and Other Laborimmediately
Disputes dispose and refer
and shall
Employment […] shall decide or resolve
the same to the grievance machinery or
the dispute […].
Voluntary Arbitration provided in the
Collective Bargaining Agreement.
Art. 275 - The VA or panel of VAs, upon Finality
agreement of the parties, shall also hear
and decide all other labor disputes
including ULP and bargaining deadlocks.
Even if the specific issue brought before

the arbitrators merely mentioned the
question of “whether an employee was
discharged for just cause,” they could
reasonably assume that their powers
extended beyond the determination thereof
to include the power to reinstate the
employee or to grant back wages. In the
same vein, if the specific issue brought
before the arbitrators referred to the date of
regularization of the employee, law and
jurisprudence gave them enough leeway as
well as adequate prerogative to determine
the entitlement of the employees to higher
benefits in accordance with the finding of
regularization. [Manila Pavilion Hotel, etc.
vs. Henry Delada, G.R. No. 189947 (2011)]
PROCEDURE
[Omnibus Rules, Book V, Rule XI]
Hearing
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the
exclusion of any witness from the
proceedings shall be determined by the VA
or panel of Vas. Hearing may be adjourned
for cause or upon agreement by the
parties.
Days to render an award/decision

Unless the parties agree otherwise, it shall
be mandatory for the VA or panel of VAs to
render an award or decision within 20
calendar days from the date of submission
of the dispute to voluntary arbitration.
Form of award/decision
The award or decision of the VA or panel
of VAs must state in clear, concise and
definite terms the facts, the law
and/contract upon which it is based.
It shall be final and executory after
10 calendar days from the receipt of
the copy of the award or decision by
the parties.
NOTE: See Page 39 on availability
of motion for reconsideration.
Execution of award/decision
Art. 275 - The VA or panel of VAs, upon
agreement of the parties, shall also hear
and decide all other labor disputes
including ULP and bargaining deadlocks.
Upon motion of any interested party,
the Voluntary Arbitrator or panel of
Voluntary Arbitrators or the Labor
Arbiter in the region where the
movant resides, in case of the
absence or incapacity of the
Voluntary Arbitrator or panel of
Voluntary Arbitrators, for any
reason, may issue a writ of
execution requiring either the sheriff
of the Commission or regular courts
or any public official whom the
parties may designate in the
submission agreement to execute the
final decision, order or award. [Art.
276]
G.2.REMEDIES
The decision of a Voluntary
Arbitrator or panel of Voluntary
Arbitrators is appealable by ordinary
appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of
Appeals. [AMA Computer College-
Santiago City, Inc. v. Nacino, G.R.
No. 162739 (2008)]
NOTE: See Page 39 on availability

of motion for reconsideration.
H. COURT OF APPEALS
H.1 APPEAL VIA RULE 65, RULES Section 1. Petition for certiorari. — When
OF COURT any tribunal, board or officer exercising
judicial or quasi-judicial functions has
acted without or in excess its or his
jurisdiction, or with grave abuse of
discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any
plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved
proper court, alleging the facts with enjoyment of a right or office to which such
certainty and praying that judgment be other is entitled, and there is no other
rendered annulling or modifying the plain, speedy and adequate remedy in the
proceedings of such tribunal, board or ordinary course of law, the person
officer, and granting such incidental reliefs aggrieved thereby may file a verified
as law and justice may require. petition in the proper court, alleging the
The petition shall be accompanied by a facts with certainty and praying that
certified true copy of the judgment, order judgment be rendered commanding the
or resolution subject thereof, copies of all respondent, immediately or at some other
pleadings and documents relevant and time to be specified by the court, to do the
pertinent thereto, and a sworn certification act required to be done to protect the
of non-forum shopping as provided in the rights of the petitioner, and to pay the
third paragraph of section 3, Rule 46. damages sustained by the petitioner by
reason of the wrongful acts of the
performance of an act which the law specifically
Section 2.Petition for prohibition. — When enjoins as a duty resulting from an office, trust, or
the proceedings of any tribunal, station, or
corporation, board, officer or person, unlawfully excludes another from the use and
whether exercising judicial, quasi-judicial
or ministerial functions, are without or in
excess of its or his jurisdiction, or with
grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is
no appeal or any other plain, speedy, and
adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a
verified petition in the proper court,
alleging the facts with certainty and
praying that judgment be rendered
commanding the respondent to desist from
further proceedings in the action or matter
specified therein, or otherwise granting
such incidental reliefs as law and justice
may require.
The petition shall likewise be accompanied
by a certified true copy of the judgment,
order or resolution subject thereof, copies
of all pleadings and documents relevant
and pertinent thereto, and a sworn
certification of non-forum shopping as
provided in the third paragraph of section
3, Rule 46.
Section 3.Petition for mandamus. — When

any tribunal, corporation, board, officer or
person unlawfully neglects the
I. SUPREME COURT
[A]ll references in the amended Section 9
of
B.P. No. 129 to supposed appeals
from the NLRC to the Supreme
Court are interpreted and hereby
declared to mean and refer to
petitions for certiorari under Rule
65. Consequently, all such petitions
should hence forth be initially filed in
the Court of Appeals in strict
observance of the doctrine on the
hierarchy of courts as the
appropriate forum for the relief
desired. [St. Martin Funeral Home vs.
NLRC, 1998]
I.1.RULE 45, RULES OF COURT

Section 1. Filing of petition with Supreme
Court. — A party desiring to appeal by
certiorari from a judgment or final order or
resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court
or other courts whenever authorized by law,
may file with the Supreme Court a verified
petition for review on certiorari. The
petition shall raise only questions of law
which must be distinctly set forth.
Appeal from CA to SC should be
under Rule 45 (Petition for Review
on Certiorari) and not Rule 65
(Special Civil Action for Certiorari).
[Sea Power Shipping Enterprises,
Inc. vs. CA, 2001]
Since the Court of Appeals had
jurisdiction over the petition under
Rule 65, any alleged errors
committed by it in the exercise of its
jurisdiction would be errors of
judgment which are reviewable by
timely appeal and not by a
BOC RELATIONS
special civil action of certiorari. If the the general law on prescription applies.
aggrieved party fails to do so within the Article 1150 of the Civil Code provides that:
reglementary period, and the decision
accordingly becomes final and executory, Article 1150. The time for prescription for
he cannot avail himself of the writ of all kinds of actions, when there is no
certiorari, his predicament being the effect special provision which ordains otherwise,
of his deliberate inaction. [Tirazona v Phil shall be counted from the day they may be
EDS Techno-Service Inc, 2009] brought.
J.PRESCRIPTION OF ACTIONS The day the action may be brought is the
day a claim started as a legal possibility. In
Art. 207 - No claim for compensation shall
the present case, the day came when
be given due course unless said claim is petitioner learned of Asiakonstrukt’s
filed with the System [SSS or GSIS, as the deduction from his salary of the amount of
case may be] within three (3) years from advances he had received but had, by his
the time the cause of action accrued. [As claim, been settled, the same having been
amended by Section 5, Presidential reflected in his payslips, hence, it is
Decree No. 1921] assumed that he learned of it at the time
he received his monthly paychecks.
[Anabe v. Asian Const, et al., 2009]
J.1. MONEY CLAIMS
J.2.ILLEGAL DISMISSAL
In illegal dismissal cases, the employee
concerned is given a period of four years
Art. 306. Money claims. – All money claims from the time of his dismissal within which
arising from employer-employee relations to institute a complaint. This is based on
accruing during the effectivity of this Code Article 1146 of the New Civil Code which
shall be filed within three (3) years from states that actions based upon an injury to
the time the cause of action accrued; the rights of the plaintiff must be brought
within four years. [Victory Liner, Inc. v.
otherwise they shall be forever barred. Race, 2007]
All money claims accruing prior to the Art. 1146, Civil Code. The following
effectivity of this Code shall be filed with actions must be instituted within four
the appropriate entities established under years:
this Code within one (1) year from the date
of effectivity, and shall be processed or 1) Upon an injury to the rights of the
determined in accordance with the plaintiff;
implementing rules and regulations of the 2) Upon a quasi-delict;
Code; otherwise, they shall be forever However, when the action arises from or
barred. out of any act, activity, or conduct of any
public officer involving the exercise of
Workmen's compensation claims accruing powers or authority arising from Martial
prior to the effectivity of this Code and Law including the arrest, detention and/or
during the period from November 1, 1974 trial of the plaintiff, the same must be
up to December 31, 1974, shall be filed
brought within one
with the appropriate regional offices of the
(1) year. [As amended by PD No. 1755, Dec.
Department of Labor not later than March
31, 1975; otherwise, they shall forever be J.3.UNFAIR LABOR PRACTICE
barred. The claims shall be processed and
adjudicated in accordance with the law and
rules at the time their causes of action
PAGE 230 OF
235
Art. 305. Offenses penalized under this
Code and the rules and regulations issued
UP LAW LABOR pursuant thereto shall prescribe LABOR LAW
in three
BOC RELATIONS
(3) years. All unfair labor practice arising
The Labor Code has no specific provision
on when a monetary claim accrues. Thus, from Book V shall be filed with the
again appropriate agency within
PAGE 231 OF
235
one (1) year from accrual of such unfair Art. 305 - Offenses penalized under this
labor practice; otherwise, they shall be Code and the rules and regulations issued
forever barred. pursuant thereto shall prescribe in three
(3) years.
Art. 258. Concept of unfair labor practice J.5.ILLEGAL RECRUITMENT

and procedure for prosecution thereof. – §7, RA 8040. Prescription. Illegal
[…] No criminal prosecution under this recruitment cases under this Rule shall
Title may be instituted without a final prescribe in five (5) years; Provided,
judgment finding that an unfair labor however, that illegal recruitment cases
practice was committed, having been first involving economic sabotage shall
obtained in the preceding paragraph. prescribed in twenty (20) years.
J.6. Kasambahay Law
During the pendency of such
administrative proceeding, the running of §41 - All existing arrangements between a
the period of prescription of the criminal domestic worker and the employer shall be
offense herein penalized shall be adjusted to conform to the minimum
considered interrupted: Provided, standards set by this Act within a period of
however, that the final judgment in the sixty (60) days after the effectivity of this
administrative proceedings shall not be Act: Provided, That adjustments pertaining
binding in the criminal case nor be to wages shall take effect immediately
considered as evidence of guilt but merely after the determination and issuance of the
as proof of compliance of the requirements appropriate wage order by the RTWPBs:
therein set forth. [As amended by Batas Provided, further, That nothing in this Act
Pambansa Bilang 70, May 1, 1980 and shall be construed to cause the diminution
later further amended by Section 19, or substitution of any benefits and
privileges currently enjoyed by the
J.4. OFFENSES PENALIZED BY THE LABOR
domestic worker hired directly or through
CODE AND IRR ISSUED PURSUANT
THERETO an agency.
PROCEDURE FOR UNION REGISTRATION
Filing of application
If federation,
If independent union, chartered local or workers' national union or workers' association operating in more than one region
association
File with Regional Office File with BLR
Act within 1 day from receipt Act within 30 days
Approve application Deny application for failure to comply with requirements
issue certificate of registration Within the day, notify applicant of

uirements andreqthin
order completion wi
30 days
Completed Not completed
Issue certificate of registration Denial without prejudice
Appeal within 10 days from receipt of notice to BLR/SOLE
BLR/SOLE to decide within 20 days from receipt of records of case
Decision can be appealed to CA via Rule 65
CA decision can be appealed to SC via Rule 45

BOC STANDARDS
Worker’s association
National Union or
Independent Union Chartered Local Worker’s Association operating in more
Federation
than one region
Requirements (1) Name of labor 1) Name of (1) Charter 1) Name of Same as worker’s
for union and its federation and its certificate issued by association and its association
application principal address principal addresses national union or principal address
+
Name of its officers 2) Name of its federation Name of officers
and their respective officers and their and their respective 7) Resolution of
addresses respective addresses membership of each
Other requirements (to
addresses member association,
(2) Approximate be entitled to all other 2) Minutes of
3) Minutes of duly approved by its
number of rights and privileges of organizational
organizational board of directors
employees in the LLO) meetings and list of
bargaining unit meetings and list of participating
participating (a) Names of
where it seeks to local/chapter’s members
operate employees 3) Annual financial
4) Annual financial officers and their
(3) Statement that addresses reports (if it has
it is not a chartered reports (if it has been in existence
been in existence (b) Principal office
local of any of local/chapter for more than one
federation or nat’l for more than one year) or statement
year) or statement (c) Chapter’s CBL,
union that no collection
that no collection or statement that
(4) Minutes of has been made
has been made chapter has
organizational 4) CBL, minutes its
5) CBL, minutes of adopted the CBL of
meetings and list of of adoption and
its adoption and federation or
participating ratification, list of
ratification, and list national union
employees participating
(d) Certification
(5) Name of all its of participating members, and date
under oath by
members comprising employees (list may of ratification
secretary and
at least 20% of be dispensed with if (unless ratification
attestation by
employees in BU ratification was was done during
President
done during
organizational
PAGE 233 OF
235
(6) Annual financial meeting) organizational
reports (if it has 6) Resolution of meeting)
been in existence affiliation of at least 5) Registration fee
for more than 1 10 LLOs (P50.00)
year) or statement (independent or 6) Certification
that no collection chartered locals) under oath by
has been made which are the SEBA Secretary or
(7) CBL, minutes of in their BU treasurer and
its adoption and 7) Names and attestation by
ratification, and list addresses of President
of participating EEs companies where
(which can be affiliates operate
dispensed with if and list of all
CBL adopted members of
during affiliates in each
organizational company involved
meeting) 8) Registration fee
(8) Registration (P50.00)
Fee (P50.00) 9) Certification
(9) Certification under oath by
under oath by secretary or
secretary or treasurer and
treasurer and attestation by
attestation by President of all the
President of all the requirements
requirements
LABOR DISPUTE CASE FLOW
Appeal to SOLE Case Referral by NCMB - - - Rule 43 - - - Rule 45
PAGE 235 OF
235

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1”

Prof. Concepcion L. Jardeleza

Prof. Ma. Gisella N. Dizon-Reyes

Christine Joy F. Angat

Prof. Evelyn (Leo) D.

Elaine Marcilla LABOR LAW i Jolinna Ysabelle Mari A. Chan

Krizia Camille P. Nicolas

Ellen Charmane S. Cala

Victor John Dominguez

The ownership of the work belongs to the University of the

All rights reserved.

LABOR STANDARDS C.4.

I. FUNDAMENTAL PRINCIPLE AND

III. LABOR STANDARDS..........................57

such, it must be construed liberally rather than

Compliance with law

And also includes

Provided, That any person or entity which,

What constitutes recruitment?

Worker – refers to any member of the

Overseas Filipino Worker – is a person

Private Employment Agency – means any

Private Recruitment Entity – means any

Recruitment of Local and

In addition to the acts enumerated

Profit or lack thereof is immaterial

Accused must give the impression

Illegal recruitment for Migrant

Illegal recruitment shall mean any

Law Applicability Acts Punishable Who can be punished

activity within the meaning of "recruitment

If the offender is a corporation,

Common Rules on Liability

Common Rules on Illegal Recruitment

 all claims and liabilities

Purpose of Solidary Liability

A.6. TERMINATION OF CONTRACT OF

...shall entitle the worker to full

Rule before Serrano (1995-2009): 3-month

Rule after Serrano: invalidated the 3-

NB: In 2010, a year after Serrano, RA

Enforceability of the license

Who can suspend or cancel the license?

B.2. REGULATORY AND

B.3. REMITTANCE OF FOREIGN EXCHANGE

Amount required to be remitted [Executive

Individuals exempted from the mandatory

Article 43, Labor Code (LC)

Covered: All aliens employed or seeking

C.2CONDITIONS FOR GRANT OF

C.3 VALIDITY OF AEP Officer who Denies AEP: Regional Director

Conditions under which children

Integrating both the abovementioned

Requisites for Employment of Apprentices:

Terms and conditions

Incentives for employers

Requisites of the deduction:

Working scholars – there is no

Practical training whether or not such