2 2022 LABOR LAW - PREWEEKxLMT

SAN BEDA UNIVERSITY
COLLEGE OF LAW
RGCT - Bar Operations Center
PRE-WEEK
LAST MINUTE TIPS
LABOR LAW
LABOR LAW
Mary Joy R. Candelario
Subject Chair
Janyn Mariella Montealegre

Assistant Subject Chair
Ana Maria Beatrice G. Dimailig

Subject Electronic Data Processing
Micah Marie F. Naadat

Subject Head for labor standards
Jenica Anne S. Tavares

Subject Head for labor relations
May D. Garcia
Subject Head for social legislation
Subject Members
Aran Khristian A. Mendoza
Jose Arturo A. Topacio III
Judessa Garing
Kyle Liven Dave Andrino
Florence Malapitan
Romar Fajardo
Mujaheed Abdul Jamil S. Mabuhay
Michelle Ann B. Orendain
EDITORS
Rochelle S. Enrile
Chairperson for Academics
Academics Core Members

Mia Carmina Buencamino
Yzzabel Danganan
Ray Robin Ravelas
Jerenel Rendon
William Paul Sale
Gabrielle Anne S. Endona

Vice-Chairperson for
Electronic Data Processing
Electronic Data Processing

Committee Core Members
Micah P. Calip
Roemma Kara G. Palo
TABLE OF CONTENTS
LABOR LAW
I. GENERAL PRINCIPLES
Basic Policy on Labor 5
Construction in Favor of Labor 5
Burden of Proof and Quantum of Evidence in Labor Cases 5
Legal Basis under the 1987 Constitution, Civil Code and Labor 6
Code Recruitment and Placement of Workers 7
II. RECRUITMENT AND PLACEMENT OF WORKERS

Recruitment and Placement (Labor Code and RA 8042, as 7
amended by RA 10022)
Employment of Non-Resident Aliens 13
III. LABOR STANDARDS

Conditions of Employment 15
Wages 18
Leaves 20
Special Groups of Employees 22
Sexual Harassment in the Work Environment 26
IV. SOCIAL WELFARE LEGISLATION

SSS Law (RA 8282 as amended by RA 11199) 27
Government Service Insurance System Law (RA 8291) 33
Limited Portability Law (RA 7699) 37
Disability and Death Benefits 37
V. LABOR RELATIONS
Right to Self-organization 38
Legitimate Labor Organizatio 41
Bargaining Representative 43
Collective Bargaining 45
Unfair Labor Practices 47
Peaceful Concerted Activities 50
VI. TERMINATION OF EMPLOYMENT

Security of Tenure 56
Termination by Employer 59
Termination by Employee 68
Preventive Suspension 71
Floating Status 72
Retirement 72
VII. MANAGEMENT PREROGATIVE

Discipline 73
Transfer of Employees 74
Productivity Standards 75
Bonus 75
Change of Working Hours 75
Bona Fide Occupational Qualifications 76
Post-Employment Restrictions 76
Clearance Procedures 77
Limitations on Management Prerogative 77
VIII. JURISDICTION AND RELIEFS
Mandatory Conciliation-mediation, SENA 78
Labor Arbiter 79
National Labor Relations Commission 81
Judicial Review of Labor Rulings 82
Bureau of Labor Relations (BLR) 84
National Conciliation and Mediation Board 85
Philippine Overseas Employment Administration 85
DOLE Regional Director 86
DOLE Secretary 87
Grievance Machinery 87
Voluntary Arbitrator 87
Prescription of Actions 88
LIST OF ABBREVIATIONS 90
LABOR LAW
PRE-WEEK AND LAST MINUTE TIPS
General Principles
Basic Policy on Labor
What is the basic policy on labor?

The State shall afford protection to labor, promote full employment, equal work opportunities regardless of sex,
race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers
to self-organization, collective bargaining, security of tenure and just and humane conditions of work (LABOR
CODE, Art. 3).
Construction in Favor of Labor
N Manufacturing hired O as a shipping expediter on a probationary basis for a period of six (6) months.
Before the end of the probationary period, O received a memorandum terminating his employment
in view of his failure to meet performance standards set by the company but without indicating the
particular acts or instances showing O’s poor performance. To contest the dismissal, O filed a complaint
for illegal dismissal. N Manufacturing argued that O, being a mere probationary employee, may be
validly dismissed when he failed to qualify reasonable standards and that employers should be given
leeway in the application of his right to choose efficient workers. If you were the judge, how will you
rule on the given argument?
If I were the judge, I will not sustain the argument of N Manufacturing. Article 4 of the Labor Code provides that
all doubts in the implementation and interpretation of the provisions of the Labor Code shall be resolved in favor
of labor. Thus, in the interpretation of the protection to labor and social justice provisions of the Constitution
and the labor laws and rules and regulations implementing the constitutional mandate, the Supreme Court has
always adopted the liberal approach which favors the exercise of labor rights. While the right of an employer to
freely select or discharge his employees is recognized, the same is subject to regulation by the State in the exercise
of its paramount police power. In this case, N Manufacturing failed to substantiate its claim that O was indeed
inefficient and failed to meet its performance standards (Euro-Linea v. NLRC, G.R. No. 75782, December 1, 1987).
A was employed by X Company as a sales assistant. M, the store manager, accused A of stealing money
from the cashier box and thereafter dismissed A. In the illegal dismissal case filed by A before the Labor
Arbiter, A denied the allegations. In ruling in favor of A, the Labor Arbiter held that the sole testimony
of B was doubtful and thus applied Article 4 of the Labor Code in the appreciation of the evidence in
favor of A as a laborer. On appeal to the NLRC, the decision of the Labor Arbiter was reversed when
it was held that Article 4 cannot be applied if the doubt relates to the evidence. NLRC explained that
Article 4 applies only when the doubt involves the “implementation and interpretation” of the Labor
Code provisions. Is the NLRC correct?
No, the NLRC is not correct. Article 4 of the Labor Code provides that all doubts in the implementation and
interpretation of the provisions of the Labor Code shall be resolved in favor of labor. The rule enunciated in Article
4 of the Labor Code has been consistently applied in the appreciation of evidence in labor proceedings. Thus, the
consistent rule is that if doubt exists between the evidence presented by the employer and that by the employee,
the scales of justice must be tilted in favor of the latter. In the case at bar, M failed to establish his accusation with
substantial evidence. As between the bare allegation of M and the clear denial of A, the scales of justice shall be
tilted in favor of A (Dreamland Hotel Resort v. Johnson, G.R. No. 191455, March 12, 2014).
Burden of Proof and Quantum of Evidence in Labor Cases
What is the quantum of evidence required in Labor cases?

In administrative or quasi-judicial proceedings like those conducted in the NLRC, the standard of proof is
substantial evidence which is understood to be more than just a scintilla or such amount of relevant evidence which
a reasonable mind might accept as adequate to justify a conclusion (Morales v. Harbour Centre Port Terminal Inc.,
G.R. No. 174208, January 25, 2012).
San Beda University College of Law 5 RGCT - Bar Operations Center 2022
LABOR LAW
Legal Basis under the 1987 Constitution, Civil Code, and Labor Code
What provisions in the 1987 Constitution are relevant to Labor Law?

The following are the constitutional provisions relevant to Labor Law:
1. State Policies (CONST., Art. II, Secs. 9, 10, 18, and 20)
a. Sec. 9. The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide adequate
social services, promote full employment, a rising standard of living, and an improved quality of life
for all;
b. Sec. 10. The State shall promote social justice in all phases of national development;
c. Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare; and
d. Sec. 20. The State recognizes the indispensable role of the private sector, encourages private enterprise,
and provides incentives to needed investments.
2. Bill of Rights (CONST., Art. III, Sections 4, 8, 10, 16, and 18(2))
a. Sec. 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the
right of the people peaceably to assemble and petition the government for redress of grievances;
b. Sec. 8. The right of the people, including those employed in the public and private sectors, to form
unions, associations, or societies for purposes not contrary to law, shall not be abridged;
c. Sec. 10. No law impairing the obligation of contracts shall be passed;
d. Sec. 16. All persons shall have the right to a speedy disposition of their cases before all judicial, quasi-
judicial, or administrative bodies; and
e. Sec. 18 (2). No involuntary servitude in any form shall exist except as a punishment for a crime
whereof the party shall have been duly convicted.
3. Social Justice (CONST., Art. XIII, Sections 2, 3, 13, and 14)

a. Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities
based on freedom of initiative and self-reliance;
b. Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be
entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate
in policy and decision-making processes affecting their rights and benefits as may be provided by law.
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.
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 on
investments, and to expansion and growth;
c. Sec. 13. The state shall establish a special agency for disabled persons for their rehabilitation, self-
development and self-reliance and their integration into the mainstream of society; and
d. Sec. 14. The State shall protect working women by providing safe and healthful working conditions,
taking into account their maternal functions, and such facilities and opportunities that will enhance
their welfare and enable them to realize their full potential in the service of the nation.
What Civil Code provisions are relevant to Labor Law?

The following are the Civil Code provisions relevant to Labor Law:
1. Article 1700. The relations between capital and labor are not merely contractual. They are so impressed
with public interest that labor contracts must yield to the common good. Therefore, such contracts are
subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
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2. Article 1701. Neither capital nor labor shall act oppressively against the other or impair the interest or
convenience of the public.
3. Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of
the safety and decent living of the laborer.
4. Article 1703. No contract which practically amounts to involuntary servitude, under any guise
whatsoever, shall be valid.
Who are not covered by the Labor Code? (CELFIG)

The following persons and entities are not covered by the Labor Code:
1. Corporate officers involved in intra-corporate disputes under PD 902-A fall under the jurisdiction of
Regular Courts in accordance with the Securities Regulation Code (SRC) (Nacpil v. IBC, G.R. No.
144767, March 21, 2002);
2. Employees of government-owned or controlled (GOCC) created by special or original charter. Such
employees are governed by the Civil Service (Juco v. NLRC, G.R. No. 98107, August 18, 1997);
Note: The phrase “with original charter” refers to corporations chartered by special law as distinguished
from corporations organized under the Corporation Code (NASECO v. NLRC, G.R. No. L-69870,
November 29, 1988).
3. Local water districts (Tanjay Water District v. Gabaton, G.R. Nos. L-63742 and 84300, April 17, 1989);
Note: An exception is when NLRC jurisdiction is voluntarily invoked to secure affirmative relief, the party
is estopped from denying that very same jurisdiction (Zamboanga City Water District v. Buat, G.R. No.
104389, May 27, 1994).
4. Foreign governments (JUSMAG-PHL v. NLRC, G.R. No. 108813, December 15, 1994);
5. International Agencies (Lasco v. UNRFNRE, G.R. Nos. 109095-109107, February 23, 1995) and
employees of intergovernmental or international organizations (SEAFDEC-AQD v. NLRC, G.R. No.
86773, February 14, 1992); and
6. Government agencies which are covered by the civil service rules and regulations (CONST., Article IX-B,
Sec. 2).
Recruitment and Placement of Workers
Recruitment and Placement (Labor Code and RA 8042, as amended by RA 10022)
While in Iloilo, V introduced herself to L, M, N and O as a recruiter of workers for Malaysia and
showed them a job order and calling card. Believing such representations, L, M, N and O submitted
their applications and paid PhP10,000 to V. After about a month, V informed them that they cannot
be deployed and that the fees collected cannot be returned anymore. V explained that the visa or the
medical certificates had already expired. Suspicious on the matter, they later discovered upon inquiry
that V did not have authority to recruit. Is V guilty of any crime?
Yes, V is guilty of illegal recruitment in large scale. Article 38 of the Labor Code provides that any recruitment
activity to be undertaken by non-licensee or non-holders of authority shall be deemed illegal and punishable.
Section 6 of RA 8042, as amended, also provides that illegal recruitment includes the 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. In either case, such illegal
recruitment is deemed committed in large scale if committed against three or more persons individually or as a
group. In the present case, A was a non-licensee or non-holder of authority to recruit workers for deployment
abroad; she offered or promised employment abroad to more than three private complainants; she received monies
from said complainants purportedly as placement or processing fees and complainants were not actually deployed
to Malaysia (People of the Philippines v. Gilda Abellanosa, G.R. No. 214340, July 19, 2017).
H was introduced to M as a person who can facilitate papers for workers. During a meeting, H explained
the requirements for working as a teaching personnel in UK. H also showed pictures of other people
she had supposedly helped to get employment. With such representations, M agreed to apply for work
in the UK. M paid PhP150,000 for which H promised to personally process the visa application. After
repeated but vain follow-ups, M discovered that H did not have any license or authority to recruit. In
LABOR LAW
the case for illegal recruitment, H did not dispute her lack of license or authority to conduct recruitment
activities, but she maintained that the transaction was only for securing a visa which did not qualify as
a “recruitment activity”. Is the argument of H tenable?
The argument is not tenable. Illegal recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad for employment purposes.
Non-license holders are liable by the simple act of engaging in recruitment and placement activities. Under
Article 13(b) of the Labor Code of the Philippines, recruitment and placement refers to “any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contact services,
promising or advertising for employment, locally or abroad, whether for profit or not. It is the absence of the
necessary license or authority to recruit and deploy workers that renders the recruitment activity unlawful. To
prove illegal recruitment, it must be shown that the accused gave the complainants the distinct impression that
she had the power or ability to deploy the complainants abroad in a manner that they were convinced to part with
their money for that end (People of the Philippines v. Erlinda A. Sison “Margarita S. Aguilar”, G.R. No. 187160,
August 9, 2017).
X, President and General Manager of XYZ Company, engaged in business of overseas recruitment
as licensed by the POEA. XYZ Company promised employment abroad to A, B, C, D, and E in
consideration of placement and documentary fees. XYZ Company failed to deploy A, B, C, D, and E, and
no reimbursements were made on their expenses relating to documentation and processing for purposes
of deployment. In a prosecution for illegal recruitment in large scale, X claimed that A, B, C, D, and E
did not pay any money to him or to XYZ Company. Is X liable for illegal recruitment in large scale?
Yes, X is liable for illegal recruitment in large scale. Under Section 6(m) of RA 8042, as amended, failure of any
person, whether or not a holder of license or authority, to reimburse documentation and processing expenses
incurred by the worker when the deployment did not occur without the worker’s fault. As President and General
Manager of XYZ company, X had control, management, and direction of the business. He knew, or ought to have
known the failure to deploy the applicants without their fault and the need to reimburse the applicants. Therefore,
X is liable for illegal recruitment for his failure to comply with the law to immediately reimburse A, B, C, D, and E
for all their documentation and processing expenses after they were not deployed for work abroad. (People v. Rios
y Catagbui, G.R. No. 226140, February 26, 2020, Caguioa Case)
What are the other prohibited activities under Art. 34, and considered as illegal recruitment under RA
8042, as amended by RA 10022? (IF2-PIHO-AFA-TUNA)
The following acts are the prohibited activities under Art. 34, and considered as illegal recruitment under Sec. 6 of
RA 8042, as amended by RA 10022:
1. Illegal exaction – To charge greater amount than that specified in the schedule of allowable fees;
2. False information – To furnish any false information in relation to recruitment or employment;
3. False statements – To give any false notice, testimony, etc. or commit any act of misrepresentation to secure
a license or authority;
4. Pirating – To induce or attempt to induce a worker to quit his job in lieu of another offer unless it is
designed to liberate the worker from oppressive terms of employment;
5. Influencing not to employ – To influence or attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency;
6. Harmful jobs – To engage in the recruitment or placement of jobs harmful to public health, morality or
to the dignity of the Philippines;
7. Obstruct inspection – To obstruct or attempt to obstruct inspection by the Labor Secretary or his
authorized representatives;
8. Alteration of contracts – To substitute or alter employment contracts without the approval of the Labor
Secretary;
9. Failure to comply with rules and regulations – To fail to file reports on the status of employment,
placement, etc. and such other matters as may be required by the Labor Secretary;
10. Travel Agency Officer Recruiting – To become an officer or member of the board of any corporation
engaged in the management of a travel agency;
11. Withholding Travel Documents – To withhold travel documents from applicant workers before departure
for unauthorized monetary considerations;
12. Unjustified non-deployment – Failure to deploy a contracted worker without a valid reason as determined
by the DOLE;
LABOR LAW
13. Non-reimbursement upon failure – Failure to reimburse expenses incurred by the worker in connection
with the documentation and processing for purposes of deployment, in cases where the deployment does
not actually take place without the worker’s fault; and
14. Delegation to an Alien – To allow a non-Filipino citizen to head or manage a licensed recruitment/
manning agency.
K was employed with R Agency as a cashier. Under direction of her employer, K recruited A, B, C, D
and E for overseas employment and assured them that R Agency can deploy them to Taiwan as factory
workers. Being the cashier, K received the payments of the said applicants and transmitted the same to
the company treasurer. However, the applicants were never deployed. When they found out that K did
not have any license or authority to recruit, they filed a criminal complaint for illegal recruitment in
large scale against K. In her defense, K contended that she cannot be held liable for illegal recruitment
because she did not benefit from the transaction and that only her employer should be held liable. Is the
contention correct?
No, the contention is not correct. For illegal recruitment in large scale to prosper, the prosecution has to prove
three essential elements: (1) the accused undertook a recruitment activity under Article 13(b) or any prohibited
practice under Article 34 of the Labor Code; (2) the accused did not have the license or the authority to lawfully
engage in the recruitment and placement of workers; and (3) the accused committed such illegal activity against
three or more persons individually or as a group. In this case, all the elements are present. K cannot escape liability
by conveniently limiting her participation as a cashier of R Agency. Section 6 of RA 8042, as amended, is equivocal
that illegal recruitment may or may not be for profit. It is immaterial therefore whether K remitted the placement
fee to the agency treasurer or appropriated them. Even if K was a mere cashier, such fact did not make her any less
an employee to be held liable for illegal recruitment as principal by direct participation, together with the employer,
as it was shown that she actively and consciously participated in the recruitment process (People v. Chua, G.R. No.
184058, March 10, 2010).
When is illegal recruitment considered a crime of economic sabotage? Explain briefly. (2002, 2007,
2015 Bar)
Under Section 6 of RA 8042, as amended, illegal recruitment is considered a crime of economic sabotage when
committed by a syndicate or in large scale. Illegal recruitment is deemed committed by a syndicate if carried out by a
group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful
or illegal transaction, enterprise or scheme which is an act of illegal recruitment. Meanwhile, illegal recruitment is
deemed committed in large scale if committed against three (3) or more persons individually or as a group.
Differentiate illegal recruitment and estafa.

The following are the differences between illegal recruitment and estafa:
Illegal Recruitment Estafa
As to Nature
It is malum prohibitum. The criminal intent of the It is malum in se. The criminal intent is necessary
accused is not necessary.
As to Governing Law
It is penalized under the Labor Code. It is penalized under the Revised Penal Code.
As to Scope
It is limited in scope. It is wider in scope and covers deceits whether related or
not to recruitment activities.
(CHAN, The Labor Code of the Philippines, Annotated Vol. 1, 2019, p. 266).
X, a seafarer, signed a POEA-approved contract of employment with RV Company, with a duration of nine
(9) months. The employment contract provides that the employer-employee relationship shall commence
only upon the seafarer’s actual departure from the port in the point of hire in Manila. Five days before
the departure from Manila to Canada, the company informed X that he would not be allowed to leave
LABOR LAW
for Canada because the company feared that he might jump ship. X filed a complaint for illegal dismissal,
overtime pay, damages and attorney’s fees with the Labor Arbiter against RV Company. In its defense, RV
Company argued that the jurisdiction of the Labor Arbiter is limited to claims arising out of an employer-
employee relationship and since such relationship did not commence without the seafarer’s actual departure,
it moved for the dismissal of the complaint for lack of jurisdiction. Is the motion to dismiss proper?
No, the motion to dismiss is not proper. Section 10 of RA 8042 (as amended), provides that the Labor Arbiter
shall have the original and exclusive jurisdiction to hear and decide claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary, and other forms of damage. In Santiago v. CF Sharp Crew Management, the Supreme
Court made a distinction between the perfection of the employment contract and the commencement of the
employer-employee relationship. The perfection of the employment contract occurs when the parties agree on the
object and cause, as well as the rest of the terms and conditions therein. On the other hand, the employer-employee
relationship commences when the worker is actually deployed from the point of hire. Thus, even before the start
of the employer-employee relationship, contemporaneous with the perfection of the employment contract is the
birth of certain right and obligations, the breach of which may give rise to a cause of action against the erring
party. Applying to the case at bar, the claim is based on the employment contract entered into between X and RV
Company for overseas employment. Therefore, X’s claims are cognizable by the Labor Arbiter (Santiago v. CF
Sharp Crew Management, Inc., G.R. No. 162419, July 10, 2007).
In 2012, H filed a complaint for permanent total disability against X Manning Agency and B, the
company president. H alleged that he fell on deck while lifting heavy loads of lube oil drum, with his
left arm hitting the floor. The incident resulted in his being permanently unfit for further sea service.
While the LA and NLRC held that there was no permanent disability, X Manning Agency and B were
held solidarily liable for payment of temporary disability benefits. B contended that he cannot be held
liable without showing that he acted beyond the scope of his authority or with malice. Is the argument
of B correct?
No, B’s argument is incorrect. Section 10 of RA 8042, as amended by RA 10022, expressly provides for joint and
solidary liability of corporate directors and officers with the recruitment/placement agency for all money claims
or damages that may be awarded to Overseas Filipino Workers (OFWs). While a corporate director, trustee, or
officer who entered into contracts in behalf of the corporation generally cannot be held personally liable for the
liabilities of the latter, in deference to the separate and distinct legal personality of a corporation from the persons
composing it, personal liability of such corporate director, trustee, or officer, along (although not necessarily) with
the corporation, may validly attach when he is made by a specific provision of law personally answerable for his
corporate action, as in this case (Gargallo v. Dohle Seafront Crewing et al., G.R. No. 215551, August 17, 2016).
S, a local recruitment agency, deployed D to Hongkong under a 12-month contract as a domestic helper
for the foreign employer, Y. Unknown to the local agency, D and Y agreed to extend the employment
for two more years under a second contract. When D returned to the Philippines, she filed a complaint
against S for underpayment of salaries and refund of tax payments under such second contract. In its
defense, S argued that it cannot be held liable under the extended contract which it had no knowledge
of. Meanwhile, D insists that S, as local recruitment agency, is solidarily liable because he is charged with
knowledge of the extended contract under the theory of imputed knowledge. Is the argument of D
valid?
No, the argument of D is not valid. The theory of imputed knowledge ascribes the knowledge of the agent to the
principal-foreign employer, and not the other way around. The knowledge of the principal-foreign employer Y
cannot, therefore, be imputed to its agent S. There being no substantial proof that S knew of and consented to
be bound under the 2-year employment contract extension, it cannot be said to be privy thereto. As such, it and
its “owner” cannot be held solidarily liable for any of D’s claims arising from the 2-year employment extension
(Sunace International Management Service v. NLRC, G.R. No. 161757, January 25, 2006).
Note: Section 10 of RA 8042, as amended by RA 10022 provides that unlawfully dismissed overseas workers are
entitled to the reimbursement of his or her placement fee with an interest rate of 12% per annum. BSP Circular No.
799 which revised the interest rate for forbearance from 12% to 6% in the absence of stipulation is not applicable
when there is a law that states otherwise. However, awards of salary for the unexpired portion of the employment
contract under RA 8042 are covered by Circular No. 799 because the law does not provide for a specific interest
rate that should apply (RA 8042, as amended; Sameer Overseas Placement v. Cabiles, August 5, 2014).
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Who are disqualified from engaging in the recruitment and placement of workers for overseas
employment? (TOP-I-DO)
The following persons and entities are disqualified to participant or engage in the recruitment and placement of
workers for overseas employment:
1. Travel agencies and sales agencies of airline companies;
2. Officers or members of the Board of any corporation or partners in a partnership engaged in the business
of a travel agency;
3. Corporations and Partnerships, where any of its officers, members of the board or partners is also an officer,
member of the board or partner of a corporation or partnership engaged in the business of a travel agency;
4. Individuals, partners, officers or directors of an Insurance company who make, propose or provide an
insurance contract under the compulsory insurance coverage for agency-hired OFWs;
5. Sole proprietors, partners or officers and members of the board with Derogatory records, such as, but not
limited to the following:
a. Those convicted, or against whom probable cause or prima facie finding of guilt is determined by a
competent authority, for illegal recruitment, or for other related crimes or offenses committed in the
course of, related to, or resulting from, illegal recruitment, or for crimes involving moral turpitude;
b. Those agencies whose licenses have been revoked for violation of RA 8042, as amended by RA 10022
(Migrant Workers and Overseas Filipinos Act of 1995), PD 442 (Labor Code of the Philippines), as
amended, and RA 9208 (Trafficking in Persons Act of 2003), as amended, and their implementing
rules and regulations; and
c. Those agencies whose licenses have been cancelled, or those who, pursuant to the Order of the
Administrator, were included in the list of persons with derogatory record for violation of recruitment
laws and regulations; and
6. Any Official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA,
CFO, NBI, PNP, Civil Aviation Authority of the Philippines (CAAP), international airport authorities,
and other government agencies directly involved in the implementation of RA 8042, as amended by RA
10022, and/or any of his/her relatives within the fourth (4th) civil degree of consanguinity or affinity (2016
POEA Rules & Regulations Governing Overseas Employment, Part II, Rule I, Sec. 3).
Who are disqualified from engaging in the business of recruitment and placement for local employment?
(PRICES2)
The following are disqualified from engaging in the business of recruitment and placement for local employment:
1. Those against whom Probable cause or prima facie finding of guilt for illegal recruitment or other related
cases exist particularly to owners or directors of agencies who have committed illegal recruitment or other
related cases;
2. Those agencies whose licenses have been previously Revoked or cancelled by the Department;
3. Those who are convicted of Illegal recruitment, trafficking in persons, anti- child labor violation, or crimes
involving moral turpitude;
4. Cooperatives whether registered or not under the Cooperative Act of the Philippines;
5. Law Enforcers and any official and employee of the Department of Labor and Employment (DOLE);
6. Sole proprietors of duly licensed agencies are prohibited from securing another license to engage in
recruitment and placement; and
7. Sole proprietors, partnerships or corporations licensed to engage in private recruitment and placement
for local employment are prohibited from engaging in job contracting or subcontracting activities (DO
141-14, Sec. 5).
What are the differences between a license and an authority?

The following are the differences between a license and an authority:
License Authority
As to Definition
A license means a documentissued by the Department An authority means a document issued by the
of Labor authorizing a person or entity to operate a Department of Labor authorizing a person or
private employment agency (LABOR CODE, Art. association to engage in recruitment and placement
13(d)). activities as a private recruitment entity (LC, Art. 13(f))
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License Authority
As to Whom it is Issued
License is issued for privateemployment agency. Authority is given for privaterecruitment agency.
(CHAN, Bar Reviewer on Labor Law (2019), p. 39-40).
Who may suspend and/or cancel a license or authority?

1. 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 (Trans Action Overseas Corporation v. DOLE
Secretary, G.R. No. 109583, September 5, 1997).
2. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees
for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas
Employment Development Board, or for violation of the provisions of this and other applicable laws, General
Orders and Letters of Instructions (LABOR CODE, Art. 35).
3. The POEA shall suspend or revoke the license of a recruitment agency for failure to maintain the required
qualifications or conditions for the issuance of a license as provided in this Rule (2016 POEA Rules &
Regulations Governing Overseas Employment, Part II, Rule II, Sec. 18).
X Agency hired P as an assistant cook onboard Royale, a cruise ship belonging to a foreign principal,
Z Cruise Lines. He signed a one-year contract where he was mainly tasked to assist the chief cook in
preparing meals. Sometime during his 3rd month, C began harassing P while at work. In dire need
of income, P tolerated the acts of the chief cook until he was suddenly told that his services would
be terminated as soon as the cruise ship arrives at the next port, in Thailand. P had to spend his own
money to go back home. Upon arriving in the Philippines, P filed a money claim with the NLRC, which
ruled that there was illegal dismissal. Thus, the NLRC awarded full reimbursement of his placement
fee with interest at 12% per annum and the payment of his salaries for the unexpired portion of the
contract. X Agency and Z Cruise Lines argued that pursuant to RA 8042, as amended by RA 10022,
P shall only be entitled to three months for every year of the unexpired term, since it is less than the
unexpired term of the contract. Is the contention of X Agency and Z Cruise Lines tenable?
No, the contention is not tenable. Section 10 of RA 8042, as amended by RA 10022, provides that in case of
termination of overseas employment without just, valid or authorized cause as defined by law or contract, the
worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%)
per annum, plus 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. In the case of Serrano v. Gallant Maritime Services Inc., the
Court has declared the clause “or for three (3) month for every year of the unexpired term, whichever is less” as
unconstitutional for violating the equal protection clause and substantive due process. Accordingly, P is entitled
to full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the
unexpired portion the contract (RA 8042, as amended by RA 10022; Sameer Overseas Placement v. Cabiles, G.R.
No. 170139, August 5, 2014).
A was hired as hired by XYC Company, Canadian company, through its local manning agency IPAMS
as safety officer in Madagascar for 19 months. However, 3 months after deployment, A received a notice
of pre-termination of employment due to diminishing workload and was repatriated. A then filed
a complaint for illegal dismissal. A argued that XYC Company never offered any valid reason and
sufficient notice for the early termination. On the other hand, XYC argued that Canadian laws will
govern the contract following the principle of lex loci celebretionis. The pre-termination was valid
for being consistent with the provision of both the Expatriate Policy and laws of Canada which only
require written notice of termination. Will Canadian Law govern the contract?
No, the contention is not tenable. The general rule is that the Philippine laws apply even to overseas employment
contracts. This rule is rooted in the constitutional provision of Section 3,Article XIII that the State shall afford
full protection to labor, whether local or overseas. Hence, even if the OFW has his employment abroad, it does not
strip him of his right to security of tenure, humane conditions of work and a living wage under our Constitution.
As an exception, the parties may agree that a foreign law shall govern the employment contract. A synthesis of the
existing laws and jurisprudence reveals that this exception is subject to the following requisites:
1. That it is expressly stipulated in the overseas employment contract that a specific foreign law shall govern;
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2. That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on evidence;
3. That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals,
good customs, public order, or public policy of the Philippines; and
4. That the overseas employment contract must be processed through the POEA.
With these requisites, the State would be able to abide by its constitutional obligation to ensure that the rights and
well-being of our OFWs are fully protected.
In this problem, the foreign law was not expressly specified in the employment contract. Further, the foreign law
invoked is contrary to the Constitution and the Labor Code because it does not require any ground for the early
termination of employment and allows the employer to dispense with the prior notice of termination by simply
paying the employee a severance pay computed. Requisite No. 1 and 3 are lacking, thus, Canadian Law will not
govern the contract.
What is the rule on direct hiring of migrant workers?

Article 18 of the Labor Code provides that no employer may hire a Filipino worker for overseas employment
except through the Boards and entities authorized by the Secretary of Labor. Thus, no employer shall directly
hire an Overseas Filipino Worker for overseas employment (LABOR CODE, Art. 18; Revised POEA Rules and
Regulations Governing the Recruitment and Employment of Landbased OFW, Sec. 123).
However, the rule is not absolute. The 2016 Revised POEA Rules and Regulations state that the following are
exempted from the ban on direct hiring:
1. Members of the diplomatic corps;
2. International organizations;
3. Heads of state and government officials with the rank of at least deputy minister; or
4. Other employers as may be allowed by the Secretary of Labor and Employment, such as:
a. Those provided in (a), (b) and (c) who bear a lesser rank, if endorsed by the POLO, or Head of Mission
in the absence of the POLO;
b. Professionals and skilled workers with duly executed/authenticated contracts containing terms and
conditions over and above the standards set by the POEA. The number of professional and skilled
Overseas Filipino Workers hired for the first time by the employer shall not exceed five (5). For the
purpose of determining the number, workers hired as a group shall be counted as one; or
c. Workers hired by a relative/family member who is a permanent resident of the host country (Revised
POEA Rules and Regulations Governing the Recruitment and Employment of Landbased OFW, Sec.
124).
Employment of Non-Resident Aliens
A, a non-resident Chinese, went to your office asking for legal advice because he intends to work for a
local telecommunications company. What advice will you tell him so that he may lawfully engage in
gainful employment in the Philippines. Discuss fully.
I will explain to A that as a general rule, all foreign nationals who intend to engage in gainful employment in the
Philippines shall apply for an Alien Employment Permit or AEP (DO 146-15, Sec. 1).
NOTE: In case the employment involves practice of profession, the foreign national shall apply for a Special
Temporary Permit (STP) from the PRC (RA 8981, Sec. 7, par (j)). If employment is in nationalized or partially
nationalized industry, the foreign national shall apply for Authority to Employ Alien (AEA) from the DOJ (CA
108, as amended by PD 715). For the employment of foreign nationals in mining operation, the employer shall
secure Authority to Hire Foreign National (AHFN) from the DENR (RA 7942 or the Philippine Mining Act of
1995, Sec 62).
However, he may be exempted from securing an AEP if he falls under any of the following categories of aliens:
1. All members of the diplomatic service and foreign government officials accredited by and with reciprocity
agreement with the Philippine government;
2. Officers and staff of international organizations of which the Philippine government is a member and their
legitimate spouses;
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3. Owners and representatives of foreign principals whose companies are accredited by the POEA who come
to the Philippines for a limited period and solely for interviewing Filipino applicants for employment
abroad;
4. Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in
universities and colleges;
5. Permanent resident foreign nationals, and probationary or temporary resident visa holders;
6. Refugees and Stateless persons recognized by DOJ; and
7. Foreign nationals granted exemption by law (DO 186-17, Sec. 2).
Meanwhile, if he falls under any of the following categories who are excluded from securing an AEP, he may
instead secure a Certificate of Exclusion from the Regional Office:
1. Members of the governing board with voting rights only and do not intervene in the management of the
corporation or in the day to day operations of the enterprise;
2. Corporate officers
3. President and Treasurer, who are part-owner of the company;
4. Those providing consultancy services who do not have employers in the Philippines;
5. Intra corporate transferee who is a manager, executive, or specialist and an employee of the foreign service
supplier for at least one year continuous employment prior to deployment to a branch, subsidiary affiliate
or representative office in the Philippines;
6. Contractual service supplier who is a manager, executive, or specialist of a foreign service supplier which
has no commercial presence in the Philippines: (i) who enters the Philippines temporarily to supply a
service pursuant to a contract between his/her employer and a service consumer in the Philippines; (ii)
must possess the appropriate educational and professional qualifications; and (iii) must be employed by
the foreign service supplier for at least one year prior to the supply of service in the Philippines;
7. Representative of the Foreign Principal/Employer assigned in the Office of Licensed Manning Agency
(OLMA) (DO 186-17, Sec. 3-4).
Labor Standards
What are the tests to determine employer-employee relationship?

The tests to determine employer-employee relationship are:
1. Four-fold test (Atok Big Wedge Company Inc. v. Gison, G.R. No. 169510, August 8, 2011); and
2. Two-tiered test (Francisco v. NLRC, G.R No. 170087, August 31, 2006).
What is the four-fold test? (SPDC)

It is settled that “to determine the existence of an employer-employee relationship, four elements generally need to
be considered, namely:
1. The Selection and engagement of the employee;
2. The Payment of wages;
3. The power of Dismissal; and
4. The power to Control the employee’s conduct (Fernandez v. Kalookan Slaughterhouse, Inc., G.R. No.
225975, June 19, 2019, Caguioa Case).
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 (Sumifru (Philippines) Corp. v.
Nagkahiusang Mamumuo sa Suyapa Farm, G.R. No. 200499, October 4, 2017, Caguioa Case).
What is the two-tiered test?

Under the two-tiered test, the following determines the existence of an employer-employee relationship (PE):
1. The putative employer’s Power to control the employee with respect to the means and methods by which
the work is to be accomplished; and
2. The underlying Economic realities of the activity or relationship (Francisco v. NLRC, G.R. No. 170087,
August 31, 2006).

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ABC Corporation is engaged in providing janitorial services to its clients. A, one of its employees, was
sent by ABC Corporation to be one of XYZ Corporation’s janitors. However, after years of providing
janitorial services with XYZ, they decided to terminate the service contract between them. As a result
of the contract’s termination, ABC dismissed 30 of its employees and A was among those employees.
A alleged that being a regular employee, ABC Corporation cannot just dismiss him, hence an illegal
dismissal case was filed by A. On the contrary, ABC claimed that A was just a project employee and that
his employment is dependent on the service contract of its employer with their client. Was there illegal
dismissal? Decide on the case.
Yes, there was illegal dismissal. The primary standard in determining regular employment is the reasonable
connection between the particular activity performed by the employee and the employer’s business or trade. Guided
by this test, A’s work as a janitor, service crew, and sanitation aide are necessary or desirable to ABC Corporation’s
business of providing janitorial and manpower services to its clients as an independent contractor. Hence, A is
a regular employee and his employment did not depend on the service contract entered by ABC with its client
(Universal Robina Sugar Milling Corp. v. Acibo, G.R. No. 186439, January 15, 2014).
What is the difference between employees and independent contractors?

Independent contractors often present themselves to possess unique skills, expertise or talent to distinguish
them from ordinary employees. The control test is the most important test our courts apply in distinguishing
an employee from an independent contractor. This test is based on the extent of control the hirer exercises over
a worker. The greater the supervision and control of the hirer exercises, the more likely the worker is deemed
an employee. The converse holds true as well - the less control the hirer exercises, the more likely the worker is
considered an independent contractor (Sonza v. ABS-CBN Broadcasting Corporation, G.R. No. 138051, June 10,
2004).
Is a labor organization an employer of its members?

No. The Labor Code expressly excludes labor organizations from the definition of an employer, except when they
directly hire employees to render services for the union or association (Haveria v. Social Security System, G.R. Nos.
181154; August 22, 2018, Caguioa Case).
Conditions of Employment
Who are covered by the Labor Code provisions on Working Conditions and Rest Periods?
The Labor Code provisions on Working Conditions and Rest Periods apply to employees in all establishments and
undertaking whether for profit or not, but not to: (GM-FMD-PW)
1. Government employees;
2. Managerial employees including members of the managerial staff;
3. Field personnel
4. Members of the family of the employer who are dependent on him for support
5. Domestic helpers
6. Persons in the personal service of another; and
7. Workers paid by result (LABOR CODE, Art. 82).
What is the normal hours of work?

Article 83 of the Labor Code provides that the normal hours of work of any employee shall not exceed eight (8)
hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or
in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8)
hours a day, for five (5) days a week, exclusive of time for meals (LABOR CODE, Art. 83).
O was employed as a bank teller in K Bank. She was required to work daily for a period of eight straight
hours.
1. Is this schedule allowed by law?
As a general rule, the schedule is not allowed. Article 85 of the Labor Code provides that it shall be the duty of
every employer to give his employees not less than sixty (60) minutes time-off for their regular meals (LABOR
CODE, Art. 85).
2. In case O was only given a meal break of 15 minutes, can he claim compensation for the shorter meal
period?
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Yes, he can claim compensation. A meal period of less than twenty (20) minutes may be given by the employer
provided that such shorter meal period is credited as compensable hours worked of the employee in the
following cases (NEEN):
a. Where the work is Non-manual work in nature or does not involve strenuous physical exertion;
b. Where the Establishment regularly operates not less than sixteen (16) hours a day;
c. 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; and
d. Where the work is Necessary to prevent serious loss of perishable goods (IRR of the Labor Code, Sec. 7,
Rule I).
X works in a call center which operates twenty-four (24) hours a day. His shift starts at 4:00 P.M. until
1:00 A.M. of the following day. Is he entitled to any additional compensation for work performed
during this shift?
Yes, X is entitled to a night differential pay. Under Article 86 of the Labor Code, every employee shall be paid a
night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten (10:00) o’clock in the evening to six (06:00) o’clock in the morning. In the case of X, he is entitled to
night shift differential for work performed from 10:00 pm until 1:00 am of the day following (LABOR CODE,
Art. 86).
DEF Foundation is a non-profit organization dependent for its existence on contributions and donations
from well-wishers. B, an office clerk therein, renders work from 7:00 A.M to 8: 00 P.M. from Monday to
Friday. While admitting that it does not fall under the exceptions, DEF Foundation argued that it had
not given overtime pay because it should be exempt as a charitable institution. Is B entitled to overtime
pay?
Yes, B is entitled to overtime pay. Article 82 of the Labor Code that the provisions on Working Conditions and
Rest Periods shall apply to employees in all establishments and undertakings whether for profit or not, subject
only to certain exceptions mentioned therein. Thus, the provisions are equally applicable to non-profit institutions
(LABOR CODE, Art. 82).
What is the rate of additional compensation for overtime pay?

Article 87 of the Labor Code provides that 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. 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 (LABOR CODE, Art. 87).
Note: Undertime work on any particular day shall not be offset by overtime work on any other day (LABOR
CODE, Art. 88).
U, an employee of KKD Corporation, works from 8:00 A.M. to 5:00 P.M. on Monday to Friday. On
June 12, she worked from 8:00 A.M. to 8:00 P.M. What are the additional compensations she is entitled
to? Discuss each entitlement and the respective rates applicable.
U is entitled to holiday pay and overtime pay. For holiday pay, the rule is that work performed on a regular holiday
merits at least twice (200%) the wage rate of the employee. Meanwhile, with respect to the overtime pay, work in
excess of eight (8) hours performed on a regular holiday shall be paid an additional compensation equivalent to
the rate of the first eight hours on a holiday plus at least 30% thereof. Thus, the following formula is applicable:
Compensation = [(Hourly rate of basic daily wage x 200% x 130% x number of hours work) + (Basic wage rate x
200%)] (LABOR CODE, Art. 87; Art. 94(b)).
What is a Compressed Work Week (CWW)?

The CWW scheme is an alternative arrangement whereby the normal workweek is reduced to less than 6 days
but the total number of normal hours per week remains at 48 hours. The normal workday is increased to more
than 8 hours but not to exceed 12 hours, without corresponding overtime premium. The concept can be adjusted
accordingly depending on the normal workweek of the company (DOLE Advisory No. 04-2010, Part III. par. 1).
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What are the conditions of a valid CWW scheme?

The conditions of a valid CWW scheme are the following (ECN):
1. The scheme is Expressly and voluntarily supported by majority of the employees affected;
2. In firms using substances, or operating in conditions that are hazardous to health, a Certification is needed
from an accredited safety organization or the firm’s safety committee that work beyond 8 hours is within
the limits or levels of exposure set by DOLE’s occupational safety and health standards; and
3. The DOLE-RO is duly Notified (DOLE Advisory No. 02-04, Part IV, par. 1).
What are the effects of CWW?

A CWW scheme, which complies with the foregoing conditions, shall have the following effects: (CMD)
1. Work beyond 8 hours will not be Compensable by overtime premium provided the total number of hours
worked per day shall not exceed 12 hours;
Exception: Where there is a more favorable practice existing in the firm;
2. Employees under a CWW scheme are entitled to Meal periods of not less than 60 minutes, consistent with
Art. 85 of the Labor Code; and
3. Adoption of the CWW scheme shall in no case result in Diminution of existing benefits (DOLE Advisory
No. 02-04, Part IV, par. 2).
What is Telecommuting?
Telecommuting refers to a work from an alternative workplace with the use of telecommunications and/or
computer technologies. An employer in private sector may offer a telecommuting program to its employees on
a voluntary bases, and upon such terms and conditions as they may mutually agree upon: Provided, That such
terms and conditions shall not be less than the minimum labor standards set by law, and shall include compensable
work hours, minimum number of work hours, overtime, rest days, and entitlement to leave benefits (RA 11165,
otherwise known as “Telecommuting Act”, Sec. 4).
How does a Telecommuting Agreement terminated or changed?

Termination or change may be done in accordance with the telecommuting policy or agreement, without prejudice
to the employment relationship and working conditions of employee, at no cost to the latter (IRR of RA 11165,
Sec. 3).
What are the rights of employees in a telecommuting agreement? (FND)

The following are the rights of an employee in a telecommuting agreement:
1. Fair treatment;
2. Non-Isolation; and
3. Data protection (IRR of RA 11165, Sec. 5).
X and Y decided to put up an IT firm. They agreed to hire 20 employees for various positions such as
software developers and engineers, marketing officers and administrative assistants. Being optimistic on
the growth of the company, X and Y wanted to operate daily. In the proposed employment contract, the
employees are required to report for work from Mondays to Sundays. X and Y sought your advice on the
legality of the employment contract. What advice will you give them?
I will advise X and Y to include in the employment contract a weekly rest period for the employees. Article 91 of
the Labor Code provides that it shall be the duty of every employer, whether operating for profit or not, to provide
each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive
normal work days. The employer shall determine and schedule the weekly rest day of his employees, subject to
collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may
provide. As an exception, the employer shall respect the preference of employees as to weekly rest day when such
preference is based on religious grounds (LABOR CODE, Art. 91).
Mr. X is engaged in the business of selling various household and food products. He has a medium-
sized grocery store located in the town center mainly catering to the residents of the town. The store is
open daily from 8AM to 9PM, including weekends and holidays. Due to high volume of sales, he had
to employ ten (10) persons to assist in the daily store operations. All 10 employees are given a fixed and
regular schedule with a rest day per week. One of his employees, Y, acts as cashier. During her years of
employment, Y had worked as scheduled, without objection, including on holidays. The dispute arose
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when Y demanded holiday pay from Mr. X. In his defense, Mr. X claimed that he is exempted from
paying holiday pay because he is regularly employing 10 workers only. Is the contention correct?
No, the contention of Mr. X is not correct. As general rule, holiday pay benefit applies to all employees. However,
one of the exceptions therein are retail and service establishments regularly employing less than ten workers. In
other words, exemptions from holiday pay apply only to establishments employing “less than ten” employees or
workers, meaning one to nine. Otherwise, if the number of employees equal to ten or more, such employer is no
longer covered by the exception. Accordingly, Mr. X is obliged to pay holiday pay to his employees, including Y
(IRR of the Labor Code, Sec. 1, Rule IV, Book III).
C, a worker at XYZ Center, was on leave without pay on April 17, 2019. He did not report for work on
April 18 and 19, Maundy Thursday and Good Friday, respectively. Is C entitled to holiday pay for the
two successive holidays? Explain.
No, C is not entitled to holiday pay for the two successive holidays. Where there are two (2) successive regular
holidays, like Maundy Thursday and Good Friday, an employee may not be paid for both holidays if he/she absents
himself/herself from work on the day immediately preceding the first holiday, unless he/she works on the first
holiday, in which case he/she is entitled to his/her holiday pay on the second holiday (IRR of the Labor Code, Sec.
10, Rule IV, Book III).
What establishments are required by Labor Code to distribute service charges to their employees?
This shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night
clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those
entities operating primarily as private subsidiaries of the Government (IRR of the LABOR CODE, Book III, Rule
VI, Sec. 1).
Who are the covered employees?

Covered employees refer to all employees, except managerial employees, under the direct employ of the covered
establishment, regardless of their positions, designations or employment status, and irrespective of the method by
which their wages are paid (IRR of RA 11360, Sec. 2 (a)).
How are service charges distributed?

Under RA 11360 which took effect on September 3, 2019 and superseded Art. 96 of the Labor Code, all service
charges actually collected by covered establishment shall be distributed completely and equally, based on actual
hours or days of work or service rendered, among the covered employees, including those already receiving the
benefit of sharing in the service charges (IRR of RA 11360, Sec. 3).
W is real estate agent engaged in selling condominium units. In her employment contract with XYZ
Builders, she is paid on a purely commission basis at the rate of 10% of the total purchase price of the
condominium units she sold. After two years with the company, W claimed 13th month pay from XYZ
Builders. Is XYZ Builders required to pay 13th month pay to W?
No, XYZ Builders is not required to pay 13th month pay because it falls within the exception as an employer of
those who are paid on a purely commission basis. The following are not covered by PD 851, or the 13th Month Pay
Law:
1. The government and any of its political subdivisions, including government-owned and controlled
corporations, except those corporations operating essentially as private subsidiaries of the government;
2. Employers who are already paying their employees thirteenth- month pay or more in a calendar year or its
equivalent at the time of the issuance of PD 851;
3. Persons in the personal service of another in relation to such workers; and
4. 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
thirteenth-month pay) (2018 Handbook on Workers’ Statutory Monetary Benefits, p. 40).
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Wages
Distinguish wage from salary.

Wage applies to the compensation for skilled or unskilled manual labor while salary denotes compensation for a
higher grade or supervisor level of employment (Equitable Banking Corp. v. Sadac, G.R. No. 164772, June 8, 2006
citing Gaa v. CA, G.R. No. L-44169, December 3, 1985).
What is the required form of payment of wages?

As a general rule, wages shall be paid in legal tender; use of promissory notes and other forms is prohibited even
when expressly requested by employee (IRR of the Labor Code, Book III, Rule VIII, Sec. 1). The only exceptions in
which the law allows payment by check are when:
1. Such manner is customary upon effectivity of the Labor Code, or
2. Stipulated in a CBA, or
3. The following conditions are met:
a. There is a bank or facility for encashment within a radius of 1 km
b. Employer does not receive any pecuniary benefit from the arrangement
c. Employees are given reasonable time during banking hours to withdraw, such time shall be considered
as working hours
d. Written consent of employees concerned if there is no CBA (IRR of the Labor Code, Book III, Rule
VIII, Sec. 2).
When is payment to a person other than the employee himself authorized under the law?
Wages shall be paid directly to the employee, except when: (FAD)
Payment to a member of the Family is authorized in writing by the employee
Payment to Another is authorized by law (such as payment for insurance premiums and union dues
In case of Death, payment to heirs of the deceased employees without need of intestate proceedings (IRR of the
Labor Code, Book III, Rule VIII, Sec. 5).
What are the prohibitions regarding wages? (IWDL-WERF)

The following are the prohibitions regarding wages:
1. Non-Interference in disposal of wages – No employer shall interfere with the employee’s freedom to
dispose of his wages nor shall force, compel, or oblige employees to purchase merchandise, commodities or
other property from the employer or from any other person, or otherwise make use of any store or services
of such employer or any other person (LABOR CODE, Art. 112);
2. No Wage deduction – No employer shall make any deductions from the employee’s wages except when
authorized to do so (LABOR CODE, Art. 113);
3. No Deposits for loss or damage – No employer shall require the worker to make deposits from which
deductions shall be made for reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer except when the employer is engaged in such business requiring such deposits as
determined by the Secretary of Labor (LABOR CODE, Art. 114);
4. Limitations on deductions from deposits for loss or damage – No employer shall make any deduction from
the employee’s deposits for the actual amount of the loss or damage unless the employee has been heard
thereon and his responsibility has been clearly shown (LABOR CODE, Art. 115);
5. Withholding of wages and kickbacks prohibited – No employer shall withhold any amount from the
wages unless authorized to do so or induce the employee to give up any part of his wages by force, stealth,
intimidation, threat or dismissal or by any other means without his consent (LABOR CODE, Art. 116);
6. No deduction to Ensure employment – No employer shall make deductions as consideration of a promise
of employment or retention of employment (LABOR CODE, Art. 117);
7. No Retaliatory measures – No employer shall refuse to pay or reduce the wages and benefits or otherwise
discharge the employee who has filed any complaint under this Title, or has testified or is about to testify
in such proceedings (LABOR CODE, Art. 118); and
8. No False reporting – No employer shall make any statement, report or record knowing such statement,
report or record to be false in any material respect (LABOR CODE, Art. 119).
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Distinguish facilities from supplements.

Facilities are items of expense necessary for the laborer’s and his family’s existence and subsistence so that by express
provision of law. On the other hand, supplements constitute extra remuneration or special privileges, or benefits
given to or received by the laborers over and above their ordinary earnings or wages. Facilities form part of the wage
and are deductible therefrom when furnished by the employer, whereas supplements do not form part of the wage
and are therefore not deductible (SLL International Cables Specialist et. al. v. NLRC, G.R. No. 172161, March 2,
2011).
D Manufacturing is engaged in the business of manufacture and sale of household appliances. The
supervisors and foremen of the company were then receiving a daily wage of Php320 and Php300,
respectively. Sometime in 2005, a new law was passed increasing the statutory minimum wage and salary
rates in the private sector by Php25 per day but only for those receiving the minimum wage and up to
Php300. Did the wage increase result in wage distortion? Explain.
Yes, the wage increase resulted in wage distortion. Wage distortion means a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage
or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. In other
words, wage distortion means the disappearance or virtual disappearance of pay differentials between lower and
higher positions in an enterprise because of compliance with a wage order. In the case at bar, only the daily wages
of foremen were increased from Php300 to Php325, resulting in a situation where the foremen would receive
more than that of the supervisors. Thus, this resulted in wage distortion (PI Manufacturing v. PI Manufacturing
Supervisors and Foreman Association, G.R. No. 167217, February 4, 2008).
X Bank classifies its employees according to five (5) levels. Sometime in 2010, the Board of Directors
approved a new salary scale wherein the hiring rates of new employees were increased by Php1,000 for
those falling under Levels 1-3, and by Php2,000 for those classified under Levels 4-5. Only the salaries
of those who fell below the new minimum rates were adjusted. The union demanded for an across-the-
board increase for old employees. X Bank refused and maintained that it was not obliged to do so. In
its complaint, the union contended that the adjusted salary scale resulted in a wage distortion using the
classification based on new and old employees and thus necessitated a correction or adjustment. Did the
said change in salary scale result in wage distortion?
No, the change did not result in wage distortion. Jurisprudence laid down the four elements of wage distortion,
to wit: (1) an existing hierarchy of positions with corresponding salary rates; (2) a significant change in the salary
rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) the elimination of the
distinction between the two levels; and (4) the existence of the distortion in the same region of the country. In the
case at bar, the first element is wanting. While seniority may be a factor in determining wages, it cannot be the sole
basis when the nature of their work differs. Moreover, for purposes of determining the existence of wage distortion,
employees cannot create their own independent classification as this is a matter of management judgment and
discretion (Bankard Employees Union-Workers Alliance Trade Unions v. NLRC, G.R. No. 140689, February 17,
2004).
How should a wage distortion be settled? (2006, 1997, 2009 Bar)

Where the application of any prescribed wage increases by virtue of a law or wage order issued by any Regional Board
results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to
correct the distortions. Any dispute arising from wage distortion shall be resolved through the grievance procedure
as provided in the applicable collective bargaining agreement and, if the dispute remains unresolved, then through
voluntary arbitration. In cases where there are no collective bargaining agreements or recognized labor unions,
the employers and workers shall endeavor to correct such wage distortions. Any dispute arising therefrom shall
be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10)
calendar days of conciliation, the issue of wage distortion shall be referred to the appropriate branch of the NLRC
(LABOR CODE, Art. 124, par. 5).
W Company is engaged in a business involving integrated circuits to serve communications and data
processing industries. Through negotiations by the union, the company agreed to increase the salaries/
wages of its employees within a four-year period. After a year of implementing the agreement, the
company discovered an error in the automated payroll which caused overpayment of salaries/wages to
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employees. Accordingly, the company notified the employees that the overpayment will be deducted on a
staggered basis. The union opposed the deduction and thereafter filed a complaint against the company
for violation of Article 100 of the Labor Code on non-diminution of benefits. Will the action prosper?
No, the action will not prosper. Diminution of benefits is the unilateral withdrawal by the employer of benefits
already enjoyed by the employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is
founded on a policy or has ripened into a practice over a long period; (2) the practice is consistent and deliberate;
(3) the practice is not due to error in the construction or application of a doubtful or difficult question of law; and
(4) the diminution or discontinuance is done unilaterally by the employer. In this case, the third requisite is absent.
An erroneously granted benefit may be withdrawn without violating the prohibition against non-diminution of
benefits because no vested right may be said to have arisen nor any diminution of benefit may have resulted (TSPIC
Corp v. TSPIC Employees Union, G.R. No. 163419, February 13, 2008).
Leaves
As a general rule, every employee who has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five (5) days with pay. Who are excluded from the benefit? (GMPFEV-10)
The following are not entitled to service incentive leave:
1. Government employees
2. Managerial employees and officers or members of the managerial staff
3. Persons in the Personal service of another
4. Field personnel and those whose time and performance is unsupervised by the employer
5. Those already Enjoying the benefit
6. Those enjoying Vacation leave with pay of at least five (5) days
7. Those employed in establishments regularly employing less than 10 employees (2018 Handbook on
Workers’ Statutory Monetary Benefits, p. 26).
X worked as a bus driver for AB Trans. His daily route is from Lipa City, Batangas to Cubao, Quezon
City. For every trip, he is required to report on time to ensure prompt departure and arrival. Bus
inspectors also board the bus for general inspection while on the way from the point of origin to
destination. During his five (5) years of employment, he did not use his service incentive leave. When he
was dismissed, he sued his employer for non-payment of commutable service incentive. AB Trans argued
that X was not entitled to service incentive leave because he is considered as a field personnel paid on a
commission basis and thus excluded from the benefit. Will the action of X prosper? Explain.
Yes, the action of X will prosper. Section 1(D), Rule V, Book III of the Implementing Rules and Regulations of
the Labor Code excludes field personnel and other employees whose performance is unsupervised by the employer
including those who are engaged on purely commission basis. However, the phrase “other employees whose
performance is unsupervised by the employer” must not be understood as a separate classification but must be
taken as an amplification of the definition of field personnel. Here, while X is paid on a commission basis, his work
is supervised by his employer. Not being considered as field personnel, X is entitled to service incentive leave (Auto
Bus v. Bautista, G.R. No. 156367, May 16, 2005).
Note: DO 118-12 expressly provides that public utility bus drivers and conductors are now entitled to be paid
service incentive leave of five (5) days for every year of service.
A, a female employee, who is living-in with B, is pregnant with her fifth child. Prior to her due date,
she filed for maternity leave, but the employer refused the application because she is not married. The
employer also argued that A is no entitled because maternity leave shall be paid for the first four (4)
deliveries. Is the refusal of the employer justified? What are the conditions for entitlement to the
maternity benefit leave?
No, the refusal of the employer is not justified. The law does not discriminate based on the civil status of a female
employee. Accordingly, this benefit applies to all female employees, whether married or unmarried. As long as
the female employee has paid at least three (3) monthly contributions in the twelve-month period immediately
preceding the semester of her childbirth, she can avail of the maternity benefits by complying with the requirements
on notification. Hence, even if A is not married, she is still entitled to the maternal leave, regardless of civil status or
the legitimacy of her child (2018 Handbook on Workers’ Statutory Monetary Benefits, p. 28).
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A is still entitled maternity leave even if it is her fifth (5th) child. As provided in RA 11210 otherwise known as
105-Day Expanded Maternity Leave Law, maternity leave shall be granted to female workers in every instance of
pregnancy, miscarriage or emergency termination of pregnancy, regardless of frequency. (RA 11210, Sec. 3)
Further, to be entitled to the maternity leave benefit, a female employee should be an SSS member employed
at the time of her delivery or miscarriage; she must have given the required notification to the SSS through her
employer; and her employer must have paid at least three monthly contributions to the SSS within the twelve-
month period immediately before the date of the contingency (i.e., childbirth or miscarriage) (2018 Handbook on
What are the conditions for entitlement of paternity leave benefit? (ECA-BM)
A legally married male employee in the private and public sector shall be entitled to a seven-day paternity leave
benefit provided that he has met the following conditions:
1. He is an Employee at the time of the delivery of his child;
2. He is Cohabiting with his spouse at the time that she gives birth or suffers a miscarriage;
3. He has Applied for paternity leave with his employer 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 collective bargaining agreement; and
4. His wife, to whom he is legally married, has given Birth or suffered a Miscarriage (2018 Handbook on
A is married to B and they have three minor children. Later on, B was convicted for the crime of theft
and meted the penalty of imprisonment for two years. B was then arrested and jailed to serve the
sentence. Is A considered as a solo parent?
Yes, A is considered as a solo parent because she was left with the responsibility of parenthood due to the criminal
conviction resulting to the imprisonment of her spouse for at least a year. Section 3 (a) of RA 8972 provides that
a solo parent is:
1. A woman who gives birth as a result of rape and other crimes against chastity provided she keeps and raises
the child
2. Parent left solo or alone with the responsibility of parenthood due to:
3. Death of the spouse
4. Spouse is detained of serving sentence for criminal conviction for at least a year
5. Due to physical or mental incapacity of spouse
6. Due to legal separation or de facto separation from spouse for at least 1 year so long as entrusted with
custody of the child
7. Due to declaration of nullity or annulment of marriage as long as in custody of the children
8. Due to abandonment of spouse for at least 1 year.
9. Unmarried mother or father who preferred to keep and rear his or her children
10. Any other person who solely provides parental care and support to a child.
11. Any family member who assumes the responsibility of head of family as a result of death, abandonment,
disappearance or prolonged absence of the parent (RA 8972, Sec. 3).
A was employed by BKY Company on June 10, 2010. Sometime in 2018, she suffered from intraductal
papilloma. Her doctor advised her that she needs to undergo the procedure of excision of the lactiferous
duct fistula. As a result, she filed a leave under the special leave benefits for women. Is A entitled to such
benefit?
Yes, A is entitled to the special leave benefit for women. Section 18 of RA 9710 provides that a woman employee
having rendered continuous aggregate employment service of at least six (6) months for the last twelve (12) months
shall be entitled to a special leave benefit of two (2) months with full pay based on her gross monthly compensation
following surgery caused by gynecological disorders (RA 9710, Sec. 18).
B, a female employee, filed charges against her live-in partner under RA 9262 or Anti-Violence Against
Women and Their Children Act. After suffering trauma, she filed for a leave. However, her employer did
not approve the same claiming that she already used up all her sick leave. Is B entitled to file for a leave?
Yes, B is entitled to a leave under RA 9262. Under Section 43 of RA 9262, victims of violence against women and
their children shall be entitled to take a paid leave of absence up to 10 days in addition to other paid leaves under
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the Labor Code extendible when the necessity arises as specified in the protection order. Hence, even if B already
used up all her sick leaves, she is still entitled to take a leave under RA 9262 (RA 9262, Sec. 43).
Special Groups of Employees
What are the acts of discrimination against women that are prohibited under the Labor Code?
Article 133 of the Labor Code provides that 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. Specifically,
the following are acts of discrimination:
1. Payment of lesser compensation, including wage, salary or other form of remuneration and fringe benefits,
to a female employee as against a male employee for work of equal value; and
2. Favoring a male employee over a female employee with respect to promotion, training opportunities, study
and scholarship grants solely on account of their sexes (LABOR CODE, Art. 133).
What is the stipulation against marriage with regard to female employees?

It shall be unlawful for the employer to do any of the following:
1. Require as a condition of employment that a female employee shall not get married;
2. Require a female employee to resign or be deemed resigned upon getting married; and
3. Dismiss or discriminate against a female employee because of her marriage (LABOR CODE, Art. 136).
What is the exception to the prohibition on stipulation against marriage?

Dismissal based on this stipulation in the employment contract is a valid exercise of management prerogative. The
prohibition against personal or marital relationships with employees of competitor companies upon its employees
was held reasonable because relationships of that nature might compromise the interests of the company. In laying
down the assailed company policy, the employer only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures (Duncan Association v. Glaxo Wellcome, G.R.
No. 162994, September 17, 2004).
Is the policy of the employer banning spouses from working in the same company violates the rights of
the employee under the Constitution and the Labor Code?
It depends. Unless the employer can prove that the reasonable demands of the business require a distinction based
on marital status and there is no better available or acceptable policy which would better accomplish the business
purpose, an employer may not discriminate against an employee based on the identity of the employee’s spouse.
This is known as the bona fide occupational qualification exception.
There must be a compelling business necessity for which no alternative exists other than the discriminatory practice.
To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis
for believing that all or substantially all persons meeting the qualification would be unable to properly perform
the duties of the job. Jurisprudence instruct us that the requirement of reasonableness must be clearly established
to uphold the questioned employment policy. The employer has the burden to prove the existence of a reasonable
business necessity. (Star Paper Corp. v. Simbol, G.R. No. 164774, April 12, 2006)
P Airlines is an airline company catering domestic flights in the country. Z was hired as a stewardess
in May 2000. Sometime in March 2015, P Airlines fired Z on the ground that she had gotten married.
The dismissal was pursuant to a company policy requiring that a female employee must be single and
shall not marry during her employment. P Airlines justified its company policy based on Art. 130 of
the Labor Code which states that an employer can determine appropriate standards for retirement or
termination in special occupations such as those of flight attendants and the like. Did P Airlines violate
the Labor Code?
Yes, P Airlines violated Article 134 of the Labor Code which specifically provides that it shall be unlawful for an
employer to require as a condition of employment or continuation of employment that a woman employee shall
not get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage. In the case at bar, the stipulation requiring a female employee to be single violates
the prohibition on stipulations against marriage. Article 134 provides protection for women that is broader
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and more powerful than the regulation provided under Article 130 (Zialcita v. PAL, Case No. RO4-3-3398-76,
February 20, 1977).
GG Airlines hired and recruited A, B and C as flight attendants. They continued their employment
until they were separated from service on various dates. Later, A, B and C brought an action for illegal
dismissal against GG Airlines. According to them, the termination of their employment was illegal
because the same was made solely on the ground that they became pregnant. In its defense, GG Airlines
invoked the Employment Contract which provides that the employment of a flight attendant who
becomes pregnant at any time during the term of the contract shall render such contract void and shall
be cause for termination for lack of medical fitness. Decide the case.
A, B and C were illegally dismissed. It is illegal and unlawful to terminate the employment of any woman by reason
of pregnancy. Section 135 of the Labor Code provides that it shall be unlawful for any employer to discharge a
woman on account of her pregnancy. While pregnancy does present physical limitations that may render difficult
the performance of functions associated with being a flight attendant, it would nevertheless be the height of
iniquity to view pregnancy as a disability so permanent and immutable that, it must entail the termination of
one’s employment. It is clear that any individual, regardless of gender, may be subject to exigencies that limit
the performance of functions, but pregnancy could not be such an impairing occurrence that it leaves no other
recourse but the complete termination of the means through which a woman earns a living (LABOR CODE, Art.
135; Saudi Arabian Airlines v. Rebesencio et al., G.R. No. 198587, January 14, 2015).
What is child labor?

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 (IRR of
RA 9231, Chapter 1, Sec. 3(b)).
Who is a working child?

Working child refers to any child engaged as follows:
1. When the child is below 18 years of age, in work or economic activity that is not child labor; and
2. When the child is below 15 years of age:
3. 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
4. In public entertainment or information (IRR of RA 9231, Chapter 1, Sec. 3(c)).
What are the working hours of a working child?

The following are the hours of work of a working child:
1. For a child below 15 years of age, the hours of work shall not be more than 20 hours a week, provided that
the work shall not be more than 4 hours at any given day;
2. For a child 15 years of age, but below 18, the hours of work shall not be more than 8 hours a day, and in no
case beyond 40 hours a week; and
3. No child below 15 years of age shall be allowed to work between eight o’clock in the evening (8:00 p.m.)
and six o’clock in the morning (6:00 a.m.) of the following day and no child 15 years of age but below 18
shall be allowed to work between ten o’clock in the evening (10:00 p.m.) and six o’clock in the morning
(6:00 a.m.) of the following day (IRR of RA 9231, Chapter 5, Sec. 15, par 1).
Note: Sleeping time as well as travel time of a child engaged in public entertainment or information from his/
her residence to his/her workplace shall not be included as hours worked without prejudice to the application of
existing rules on employees compensation (IRR of RA 9231, Chapter 5, Sec. 15, par. 2).
R, a 17-year-old girl, signed a contract with MG Company to work as a model promoting the new
flavors of Crazy Vodka, its premier alcoholic product. It was stipulated in the contract that since R is
a minor, she will only work for eight (8) hours per day during the shooting and will not work beyond
10:00 P.M. until 6:00 A.M. the next morning. Did MG Company violate any law?
Yes, MG Company violated RA 9231. Under DO 65-04, the rules and regulations implementing RA 9231, as
amended, no child below 18 years of age shall be employed as a model in any advertisement directly or indirectly
promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence
or pornography. Thus, MG Company clearly violated the prohibition when it engaged R in advertising an alcoholic
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beverage. (DO 65-04, Sec. 6).
D is employed by A Company to perform laundry services at its staff house. One morning, while D was
performing her assigned task and hanging her laundry, she accidentally slipped and hit her back on
a stone. The accident prevented her from working. She was permitted to go on leave for medication.
After a month, A Company offered her PhP5,000 to persuade her to quit her job instead. D refused
and informed A Company that she preferred to return to work. A was not permitted to work again and
was thereafter dismissed. Hence, D filed a case for illegal dismissal before the Labor Arbiter. The Labor
Arbiter awarded salary differential, 13th month pay differential and separation pay. NLRC affirmed and
held that D was a regular employee and thus entitled to such benefits. In its defense, A Company insisted
that D is a mere domestic helper and not a regular employee. Is D a kasambahay? Explain.
No, D is not a kasambahay. Under Section 4(d) of RA 10361, a domestic worker or kasambahay refers to any
person engaged in domestic work within an employment relationship. Domestic or household service shall mean
service in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof
and includes ministering to the personal comfort and convenience of the members of the employer’s household.
The criterion is the personal comfort and enjoyment of the family of the employer in the home of said employer.
The definition cannot be interpreted to include househelper or laundrywomen working in staff houses of a
company. Hence, D cannot be considered as a kasambahay (Apex Mining v. NLRC, G.R. No. 94951, April 22,
1991).
What are the rights and benefits of a kasambahay granted under RA 10361 or Batas Kasambahay?
The following are the rights of a kasambahay: (MRS-13-FCS-BPCEOC-CTR)
1. Minimum wage;
2. Other mandatory benefits, such as the daily and weekly Rest periods;
3. Service Incentive Leave;
4. 13th month pay;
5. Freedom from employers’ interference in the disposal of wages;
6. Coverage under the SSS, PhilHealth and Pag-IBIG laws;
7. Standard of treatment;
8. Board, lodging and medical attendance;
9. Right to Privacy;
10. Access to outside Communication;
11. Access to Education and training;
12. Right to form, join, or assist labor Organization;
13. Right to be provided a copy of the employment Contract;
14. Right to Certificate of employment;
15. Right to Terminate the employment; and
16. Right to exercise their own Religious beliefs and cultural practices.
Who is an industrial homeworker?

An industrial homeworker can be defined as any person engaged in industrial homework. Industrial homework
means a system of production where work for an employer or contractor is carried out by a homeworker in or
about his/her home. In such case, the materials may or may not be furnished by the employer or contractor. (IRR
of the Labor Code, Sec. 2).
When is homework not allowed?

No homework shall be performed on the following: (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 (IRR of the Labor
Code, Sec. 13).
M is a construction worker whose work day is from 10:00 P.M. to 6:00 A.M. the following day. While at
work, he suddenly experienced back pain. Due to the incident, he requested his employer to allow him
to undergo health assessment and get advice on how to reduce his back pain during work. The employer
refused and claimed that M is not covered by the law governing nightworkers as the same only applies
to women. Is the contention correct?
No, the contention is not correct. Under Section 2 of DO 119-12, the implementing rules and regulations of RA
10151, a night worker is any employed person whose work covers the period from 10 in the evening to 6 o’clock the
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next morning provided that the worker performs no less than 7 consecutive hours of work. The law has effectively
repealed Articles 130 and 131 of the Labor Code and does not distinguish as to what sex the employee should be.
Accordingly, all workers whose schedule falls within the said schedule are deemed night workers and may avail of
the right to request health assessment without charge (DO 119-12, Sec. 2).
P is a software engineer in an advertising firm. Sometime in 2015, she figured into an accident which
resulted to the loss of her ability to use her legs. Nevertheless, the performance and productivity of P
remained the same. When the advertising firm had a change of management, P noticed that her wage
became 25% lower than the minimum wage. When P asked management as to the sudden diminution
of her wage, the management said that handicapped workers may be paid not less than 75% of the
minimum wage. Is the employer correct?
No, the employer is not correct. Under Section 5 of RA 7277, as amended by RA 10524, a qualified disabled
employee shall be subject to the same terms and conditions and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able-bodied person. A qualified disabled person is an employee who
can perform, with or without reasonable accommodations, the essential functions of her employment. In this
case, P is a qualified disabled person. There was no allegation that P cannot perform the essential functions of her
employment. The employer should not have had her wage cut below minimum wage and should have provided
the same compensation received by able-bodied software engineers in the firm, since the Magna Carta for Persons
with Disability effectively amended Article 80 of the Labor Code with regard to minimum age of such workers.
(RA 10524, Sec. 5).
X, the owner of JM Foods Corporation, informed you about his plan to expand his business and put up
a new brand of food chain in the Philippines. He told you that he intends to hire at least 200 crews for
his initial opening. How will you convince X to hire persons with disabilities?
I will advise X to hire persons with disabilities and emphasize to him the incentives provided under the Magna
Carta for Persons with Disability. Section 8(b) of RA 7277, as amended by RA 10524, provides that private
entities that employ disabled persons who meet the required skills or qualifications, either as a regular employee,
apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to 25% of
the total amount paid as salaries and wages to disabled persons: Provided, however, that such entities present proof
as certified by the DOLE that disabled persons are under their employ. Provided further, that the disabled employee
is accredited with DOLE and DOH as to his disability, skills and qualifications. Additionally, private entities that
improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons
shall also be entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of
the direct costs of the improvements or modifications. This section, however, does not apply to improvements or
modifications of facilities under Batas Pambansa Bilang 344 (RA 7277, Sec. 8).
Sexual Harassment in the Work Environment
A is a female employee working as an office clerk under the supervision of B, the office manager. On
several occasions, B called A asking her to come to his office. At one time, while inside the office, B
touched her shoulder and part of her neck. He also tickled her ears. A filed a complaint for sexual
harassment. B argued that his acts do not constitute sexual harassment because A did not allege in her
complaint that there was a demand, request, or requirement of a sexual favor as a condition for her
continued employment or for her promotion to a higher position. Is B guilty of sexual harassment?
Explain.
Yes, B is guilty of sexual harassment. It is true that sexual harassment under RA 7877 calls for a “demand, request
or requirements of a sexual favor”. However, it is not essential that the demand, request or requirement be made as
a condition for continued employment or for promotion to a higher position. It is enough that the respondent’s
acts result in creating an intimidating, hostile or offensive environment for the employee. In the case at bar, the acts
committed by B generated an intimidating and hostile environment for A (Domingo v. Rayala, G.R. No. 155831,
February 18, 2008).
What is the definition of a “workplace” under RA 11313?

Workplace includes all sites, locations, spaces, where work is being undertaken by an employee within or outside
the premises of the usual place of business of the employer (IRR of RA 11313, Rule VI, Sec. 18).
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What are the acts covered in gender-based sexual harassment in the workplace? (USH)
It includes the following:
1. An act or series of acts involving any Unwelcome sexual advances, requests or demand for sexual favors or
any act of sexual nature, whether done verbally, physically or through the use of technology such as text
messaging or electronic mail or through any other forms of information and communication systems, that
has or could have a detrimental effect on the conditions of an individual’s employment or education, job
performance or opportunities;
2. A conduct of Sexual nature and other conduct based on sex affecting the dignity of a person, which is
unwelcome, unreasonable, and offensive to the receipts, whether done verbally, physically or through the
use of technology such as text messaging or electronic mail or through any other forms of information and
communication systems; and
3. A conduct that is unwelcome and pervasive and creates an intimidating, Hostile, or humiliating
environment for the recipient (RA 11313, Article IV, Sec. 16).
What are the duties of employers if there is an incident of gender-based sexual harassment in the
workplace?
Employers or other persons of authority, influence, or moral ascendancy in the workplace shall have the duty to
prevent, deter, or punish the performance of acts of gender-based sexual harassment in the workplace. They shall:
(DPCP)
1. Disseminate or post in a conspicuous place a copy of this act to all persons in the workplace;
2. Provide measures to prevent gender-based sexual harassment in the workplace, such as the conduct of anti-
sexual harassment seminars;
3. Create an independent internal mechanism or a committee on decorum and investigation to investigate
and address complaints of gender-based sexual harassment which shall: (RWR-10-OPG)
a. Adequately Represent the management, the employees from the supervisory rank, the rank-and-file
employees, and the union, if any;
b. Designate a Woman as its head and not less than half of its members should be women;
c. Be composed of members who should be impartial and not connected or Related to the alleged
perpetrator;
d. Investigate and decide on the complaints within ten (10) days or less upon receipt thereof;
e. Observe due process;
f. Protect the complainant from retaliation; and
g. Guarantee confidentiality to the greatest extent possible.
4. Provide and disseminate, in consultation with all persons in the workplace, a code of conduct or workplace
Policy which shall: (EPA)
a. Expressly reiterate the prohibition on gender-based sexual harassment;
b. Describe the Procedures of the internal mechanism created under Section 17 (c) of this Act; and
c. Set Administrative penalties (RA 11313, Article IV, Sec. 17).
What are the duties of employees and co-workers with regard to gender-based sexual harassment in the
workplace? (RDPR)
Employees and co-workers shall have the duty to:
1. Refrain from committing acts of gender-based sexual harassment;
2. Discourage the conduct of gender-based sexual harassment in the workplace;
3. Provide emotional or social support to fellow employees, co-workers, colleagues or peers who are victims
of gender-based sexual harassment; and
4. Report acts of gender-based sexual harassment witnessed in the workplace (RA 11313, Article IV, Sec. 18).
Social Welfare Legislation
SSS Law (RA 8282 as amended by RA 11199)
Note: The 2022 Labor Law Syllabus still prescribed RA 8282 as the reference for the discussion of the SSS Law.
However, on February 7, 2019, President Duterte approved RA 11199, otherwise known as the “Social Security
Act of 2018” which expressly repealed RA 8282.
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This topic will therefore be discussed in accordance with RA 11199.
Who are compulsorily covered by the Social Security System? (ESOF2)

The following are compulsorily covered by the SSS Law:
1. Employees and their employers - all employees including kasambahays or domestic workers not over 60
years of age and their employers (RA 11199, Sec. 9);
2. Self-employed – includes, but not limited to the following:
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” in Sec. 8(d) of RA 11199;
d. Professional athletes, coaches, trainers, and jockey; and
e. Individual farmers and fishermen (RA 11199, Secs. 9-A);
3. Overseas Filipino Workers (OFWs) – all sea-based and land-based OFW as defined under R.A. No.
8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995 as amended, provided
that they are not over 60 years of age (RA 11199, Sec. 9-B); and
4. A Farmer, Fisherman, or a worker in the informal sector (IS) - an IS member being defined as one
whose income is irregular or seasonal and who may be registered as a self-employed member under the SSS
AlkanSSSya Program (SSS Membership Primer, August 2019, p 1-2).
Who are voluntarily covered by the SSS Law? (SOF-CS)

The following may be covered by the SSS on a voluntary basis:
1. Non-working spouses who devote full-time to managing the household and family affairs unless they are
also engaged in other vocation or employment which is subject to mandatory coverage (RA 11199, Sec.
9(b));
2. OFW upon the termination of their employment overseas (RA 11199, Sec. 9-B(f));
3. Filipino permanent migrants, including Filipino immigrants, permanent residents, and naturalized citizens
of their host countries (RA 11199, Sec. 9-B (g));
4. An employee under compulsory coverage who has been separated from employment who continues to pay
contribution (RA 11199, Sec. 11); and
5. A self-employed member who realizes no income in any given month who continues to pay contribution
(RA 11199, Sec. 11-A).
Who are excluded from SSS coverage? (NP-FT)

The following are the services that are exempted from the compulsory coverage under RA 11199:
1. Services where there is No employee-employer relationship in accordance with existing labor laws, rules,
regulations, and jurisprudence;
2. Services performed in the employ of the Philippine Government or instrumentality or agency thereof;
3. Services performed in the employ of the Foreign government or international organization or their wholly-
owned instrumentality unless there is an agreement with the Philippine Government for the inclusion of
such employees in the SSS; and
4. Such other services performed by Temporary and other employees which may be excluded by regulation
of the Commission (RA 11199, Sec. 8(j)).
X is an employee of Falcon Shop earning Php4,000.00/month. Due to his struggle to make ends meet,
he requested his employer to stop deducting from his salary his SSS monthly contribution saying that
he’s already waiving his social security coverage. If you were the employer, would you grant X’s request?
No, X’s request should not be granted. As X’s employer, I am duty bound to promptly remit SSS contributions.
Sections 8 and 9 of RA 11199 or the Social Security Act of 2018 requires the compulsory coverage of employers,
who carries on in the Philippines any trade, business, industry, and uses the services of another, and employees,
who are not over 60 years old. Non-remittance of contribution is a violation of the law on the part of the employer.
(RA 11199, Sec. 22). If I will grant X’s request, I can be held liable under the SSS law. Therefore, I should not grant
X’s request to stop deducting his SSS contributions.
On the basis of the provision of package of welfare benefits far superior than those provided by the
SSS, Golden Corporation filed a petition with the SSS for exemption from coverage. The welfare plan
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is funded solely by the company without contributions from its employees, and is admittedly, the best
welfare plan in the Philippines. Will the petition for exemption prosper?
No, the petition for exemption will not prosper. The provision of private benefit plans, as provided in Section 9
(a) of the S, shall not operate to exempt any employer from its compulsory coverage. If the private plan is superior
to that of RA 11199, the plan may be integrated with the SSS plan. Here, the private benefit plan of Golden
Corporation is not exempt from the coverage of the SSS although it may be integrated with the SSS plan. Therefore,
the petition for exemption will not prosper (RA 11199, Sec. 9)
Who are the dependents under the SSS Law? (SCP)

The following considered as dependents under the SSS Law:
1. Legal Spouse entitled for support;
2. Child, whether legitimate, legitimated, legally adopted or illegitimate; and
3. Parents dependent for support (RA 11199, Sec. 8 par.(e))
What are the conditions for children to be considered as dependents? (UN21)

1. Unmarried;
2. Not gainfully employed; and
3. Has not reached 21 years of age or if 21 years of age, he is congenitally or while still a minor has been
permanently incapacitated and incapable of self-support, physically or mentally (RA 11199, Sec. 8 par.(e)).
Who are the primary and secondary beneficiaries under the SSS Law?
The following are the beneficiaries under the SSS Law:
1. Primary beneficiaries: (SSC)
a. The dependent Spouse until he or she remarries; (RA 11199, Sec. 8 (k))
b. The dependent Spouse who has not cohabited or entered in a “live-in” relationship before or after the
death of the member (IRR of RA 11199, Rule 12, Sec.12); and
c. Dependent legitimate/ legitimated or legally adopted and illegitimate Children. (RA 11199, Sec. 8 (k))
Note: Where there are legitimate or illegitimate children, the former shall be preferred. The dependent
illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated, or legally
adopted children. In the absence of the dependent legitimate, legitimated, or legally adopted children
of the member, his/her dependent illegitimate children shall be entitled to 100% of the benefits (IRR
of R.A. No. 11199, Rule 12, Sec. 12(ii)).
2. Secondary beneficiaries (in the absence of primary beneficiaries): (PD)

a. The dependent Parents; or
b. In the absence of all the foregoing, any other person Designated by the covered employee (RA 11199,
Sec. 8 (k)).
Note: The person designated by the member shall be one who has a right to claim for support from the deceased
member under the Family Code, including dependent children who have reached the age of majority (IRR of R.A.
No. 11199, Rule 11, Sec.13).
X and Y were married in 1992. Y, member of SSS, designated his wife, X, and their children as his
beneficiaries. In 2005, Y died. Thereafter, X filed a claim for death benefits with the SSS as the wife of
the deceased-member. It appeared, however, that Y submitted a different set of beneficiaries and that he
was previously married to another woman. Consequently, X’s claim was denied. She insisted that she
was the legitimate wife of Y and filed a petition with the Social Security Commission (SSC). The SSC
dismissed the petition for lack of merit on the ground that X failed to prove that her marriage with Y
was valid. On appeal, CA reversed the SSC’s decision. It held that SSC could not make a determination
of the validity or invalidity of X and Y’s marriage. Does SSC have the authority to determine the validity
of X and Y’s marriage?
Yes, SSC has the authority to determine the validity of the marriage in this case. Although the SSC is not intrinsically
empowered to determine the validity of marriages, it is required by Sec. 4 (b) (7) of RA 8282 (Now RA 11199)
to examine available statistical and economic data to ensure that the benefits fall into the rightful beneficiaries.
The investigations conducted by SSS are appropriate to ensure that the benefits provided under the SS law are
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received by the rightful beneficiaries. It is not hard to see that such measure is necessary for the system’s proper
administration, otherwise, it will be swamped with bogus claims that will pointlessly deplete its funds. Such
scenario will certainly frustrate the purpose of the law which is to provide covered employees and their families
protection against the hazards of disability, sickness, old age and death, with a view to promoting their well-being
in the spirit of social justice (Social Security Commission v. Azote, G.R. No. 209741, April 15, 2015).
Monthly
Benefit Remarks/Other Conditions required to avail the benefits
Contribution Paid
Retirement At least 120 monthly 1. Has reached sixty (60) years old and is separated from employment
Benefits contributions prior or has ceased to be self-employed, except:
to the semester of
retirement a. In the case of an underground mineworker [RA 8558], at least
55 years old effective 13 March 1998; and
b. In the case of an underground or a surface mineworker [RA

10757], at least fifty (50) years old effective 27 April 2016;
2. Is at least sixty-five (65) years old, except:
a. In the case of an underground mineworker effective 13 March

1998 [RA 8558] or a surface mineworker effective 27 April
2016 [RA 10757], at least sixty (60) years old, and
b. In the case of a racehorse jockey [RA 10789], at least 55 years

old effective 24 May 2016. (IRR of RA 11199, Rule 21, Sec.
2)
Death At least 36 monthly For the beneficiary of an employee to be entitled to death benefits
Benefits contribution before under the SSS, the cause of death of the employee must be a sickness
the semester of death listed as an occupational disease by ECC; or any other illness caused by
employment, subject to proof that the risk of contracting the same is
increased by the working conditions (RA 11199, Sec. 13).
Disability At least 36 monthly None

Benefits contributions prior
to the semester of
disability
Funeral 1 monthly 1. Member must have been reported for coverage by his employer
Benefits contribution even if no contribution paid;
2. Self-employed member/ OFW/ non-working spouse/ voluntary

member who had at least 1 monthly contribution payment (RA
11199, Sec. 13B).
Sickness At least 3 monthly 1. Unable to work due to sickness or injury and confined for at least
Benefits contribution within four (4) days either in a hospital or elsewhere as defines by the SSS;
the twelve-month 2. Has notified the employer, if employed, or the SSS, if unemployed
(12) period imme- or SE/VM; and
diately before the 3. Has used up all current company sick leaves with pay for the
semester of sickness current year, if employed, except sea based OFWs. (IRR of RA
or injury 11199, Rule 25, Sec. 2).
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Monthly
Contribution Paid
Maternity At least 3 monthly 1. Notify the SSS thru her employer of pregnancy and probable date
Leave contribution of her childbirth;
Benefits immediately 2. Full payment shall be advanced by the employer within 30 days
preceding the from the filing of the maternity leave application;
semester of childbirth a. Payment of daily maternity benefits shall be a bar to the
or miscarriage recovery of sickness benefits under the SSS law for the same
period for which daily maternity benefits have been received;
b. SSS shall immediately reimburse the employer of the amount
of maternity benefits advanced to the employee by the
employer upon receipt of satisfactory proof of such payment
and legality thereof;
3. Maternity benefits shall be paid only for the first 4 deliveries or
miscarriages; and
4. In case an employee member should give birth or suffer miscarriage
without the required contributions having been remitted for her
by her employer, or without the latter having previously notified
the SSS, the employer shall pay to the SSS damages equivalent to
the benefits which said employee member would otherwise have
been entitled to (RA 11199, Sec. 14-A).
Note: If the female member is self-employed including those in the

informal economy, voluntary member, or an OFW, notice shall be given
directly to SSS. (SSS Circular No. 2019-009, effective March 11, 2019,
Sec. 8)
In the advent of the Expanded Maternity Leave Law, maternity leave shall
be granted to qualified female workers in every instance of pregnancy,
miscarriage, or emergency termination of pregnancy, regardless of
frequency (IRR of R.A. No. 11210, Rule IV, Sec. 4).
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Monthly
Contribution Paid
Unem- At least thirty-six (36) 1. Not over sixty (60) years old at the time of involuntary separation,
ployment months contributions except;
Insurance/ twelve (12) months a. In the case of underground mineworker or surface mineworker
Involuntary of which should be in [R.A. No. 10757], not over fifty (50) years old; or
Separation the eighteen-month b. In the case of racehorse jockey [R.A. No. 10789], not over
Benefits period immediately 55 years old.
preceding the 2. Involuntarily separated from employment provided that such
involuntary separation did not arise from fault or negligence of the employee
unemployment or and which may be attributed to any of, but not limited to, the
separation. (RA following:
11199, Sec. 14-B) a. Installation of labor-saving devices;
b. Redundancy;
c. Retrenchment to prevent loss;
d. Closure or cessation of operation; or
e. Disease/illness. (IRR of RA 11199, Rule 27, Sec.2)
Note: Can only be claimed once every three (3) years starting from the
date of involuntary separation or unemployment.
In case of concurrence of two (2) or more contingencies within the

same compensable period, only the highest benefit shall be paid. (RA
11199, Sec. 14-B)
A claim for unemployment insurance or involuntary separation ben-

efits shall be filed within one (1) year from the date of separation or
unemployment. (IRR of RA 11199, Rule 27, Sec. 5)
A, single, has been an active member of the SSS for the past 20 months. She became pregnant out of
wedlock and on her 7th month of pregnancy, she was informed that she would have to deliver the baby
through caesarean section because of some complications. Can A claim maternity benefits? If yes, how
many days can she go on maternity leave? (2010 Bar)
Yes, A can claim maternity benefits. Section 14-A of RA 11199 in relation to the Expanded Maternity Leave Law
does not provide any qualification as to the civil status of the claimant for maternity benefits so long as the said
female employee has paid at least 3 months contributions within the 12-month period immediately preceding the
semester of her childbirth or miscarriage. In this case, A is entitled to maternity benefits because she has paid her
contributions for the past 20 months. Therefore, A shall be paid a daily maternity benefit equivalent to 100% of
her average daily salary credit for 105 days in case of caesarian delivery. (RA 11199, Sec. 14-A).
Several employees of ABC corporation, an employer registered with the SSS, filed separate complaints
against ABC for non-remittance of their SSS contributions. Upon investigation, it was discovered that
ABC corporation indeed failed to remit the SSS contributions of its employees from 1997-2000. Is ABC
corporation liable for the non-remittance of the SSS contributions of its employees?
Yes, ABC Corporation is liable. Prompt remittance of SSS contributions under Section 22 (a) of RA 11199 is
mandatory. Any divergence from this rule subjects the employer not only to monetary sanctions, i.e., the payment
of penalty of two percent (2%) per month, but also to criminal prosecution if the employer fails to: (a) register its
employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its employees; or (c) remit
to the SSS its employees’ SSS contributions and/or loan payments after deducting the same from their respective
salaries/wages. Here, ABC failed to remit the contribution from 1997-2000. Therefore, ABC is liable for the
non-remittance of the SSS contribution of its employees (Jorge B. Navarra vs. People of the Philippines, G.R. No.
224943, March 20, 2017).
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Government Service Insurance System Law (RA 8291)
Who are covered by the GSIS Law? (GBC)

The following are covered by the GSIS Law:
1. All Government personnel, whether elective or appointive, irrespective of the status of appointment,
provided they are receiving fixed monthly compensation and have not reached the mandatory retirement
age of 65 years (IRR of RA 8291, otherwise known as “The Government Service Insurance System Act of
1997”, Rule II, Sec. 2.1);
2. An employee who is already Beyond the mandatory retirement age of 65 shall be compulsorily covered and
be required to pay both the life and retirement premiums under the following situations:
a. An elective official who at the time of election to public office is below 65 years of age and will be 65
years or more at the end of his term of office, including the period/s of his re-election to public office
thereafter without interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to a government
position by the President of the Republic of the Philippines and shall remain in government service
at an age beyond 65 (IRR of RA 8291, Rule II, Sec. 2.2); and
3. Contractual employees including casuals and other employees with an employee-government agency
relationship, provided they are receiving fixed monthly compensation and rendering required number of
working hours for the month (IRR of RA 8291, Rule II, Sec. 2.3).
Who are excluded from GSIS Law? (U4O-CF)

The following are excluded from the compulsory coverage:
1. Uniformed personnel of the Armed Forces of the Philippines (AFP);
2. Uniformed personnel of the Philippine National Police (PNP);
3. Uniformed personnel of the Bureau of Fire Protection (BFP);
4. Uniformed personnel of the Bureau of Jail Management and Penology (BJMP);
5. Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
6. Contractual employees who are not receiving fixed monthly compensation; and
7. Employees who do not have monthly regular hours of work and are not receiving Fixed monthly
compensation (IRR of RA 8291, Rule II, Sec. 3).
J, a former director of DOLE, was hired to work on a DOLE-International Labor Organization (ILO)
project on work safety. She was hired as a consultant and is required to deliver outputs for such project,
report on a regular basis, and present for DOLE during ILO workshops and consultations. For this,
J demanded that she be reported by DOLE again as an employee and that her GSIS membership be
renewed. Rule on J’s contention.
J’s contention is wrong. Under Section 3 of the IRR of RA 8291, contractuals who have no employer-employee
relationship with the government agency they serve are excluded from the coverage of the GSIS. In this case,
J’s engagement as a consultant is contractual in nature because she was hired for a specific project only. As a
contractual with no employer-employee relationship with the government, J’s GSIS membership cannot be
renewed. Therefore, DOLE is not required to report J as an employee for purposes of GSIS coverage.
Who are the dependents under GSIS Law? (SCP)

The following are the dependents under the GSIS Law:
1. Legitimate Spouse dependent for support upon the member or pensioner;
2. Legitimate, legitimated, legally adopted Child including an illegitimate child who is unmarried, not
gainfully employed, not over the age of majority, or is over the age of majority but incapacitated and
incapable of self-support employment due to mental or physical defect acquired prior to the age of
majority; and
3. Parents who are dependent upon the member for support (RA 8291, Sec. 2(f)).
Who are the dependents under the GSIS Law?

The following are the primary beneficiaries under the GSIS Law: (SC)
1. Legal dependent Spouse until he/she remarries; and
2. Dependent Children (RA 8291, Sec. 1(g)).
3. The following are the secondary beneficiaries under the GSIS Law: (PD)
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4. Dependent Parents; and

5. Legitimate Descendants subject to the restrictions on dependent children (RA 8291, Sec. 1(h)).
What is the basic monthly pension under the GSIS Law?

The basic monthly pension is equal to thirty-seven and one-half percent (37.5%) of the revalued average monthly
compensation; plus two and one-half percent (2.5%) of said revalued average monthly compensation for each
year of service in excess of 15 years, provided that the basic monthly pension shall not exceed 90% of the average
monthly compensation (RA 8291, Sec. 9(a)).
What are the minimum amounts required for the basic monthly pension?
The basic monthly pension shall not be less than ₱1,300.00, and it shall not be less than ₱2,400.00 for those who
have rendered at least 20 years of service (RA 8291, Sec. 9(b)).
What constitutes separation benefits under the GSIS Law?

The separation benefits shall consist of the following:
1. Cash payment equivalent to 100% of his average monthly compensation for each year of service he paid
contributions, but not less than ₱12,000.00 payable upon reaching 60 years of age or upon separation,
whichever comes later: Provided, that the member resigns or separates from the service after he has rendered
at least 3 years of service but less than 15 years; or
2. A cash payment equivalent to 18 times his basic monthly pension payable at the time of resignation or
separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life
upon reaching the age of 60: Provided, that the member resigns or separates from the service after he has
rendered at least 15 years of service and is below 60 years of age at the time of resignation or separation (RA
8291,Sec.11).
What constitutes unemployment or involuntary separation benefits under the GSIS Law?
Unemployment benefits in the form of monthly cash payments equivalent to 50% of the average monthly
compensation shall be paid to a permanent employee who is involuntarily separated from the service due to
the abolition of his office or position usually resulting from reorganization: Provided, that he has been paying
integrated contributions for at least 1 year prior to separation (RA 8291, Sec.12).
What are the retirement benefit options under the GSIS Law?
A retiring member has the following options:
1. Five (5) year lump sum equivalent to 60 months of the Basic Monthly Pension (BMP), subject to
qualification requirements, less all outstanding obligations of the member in accordance with the Claims
and Loans Interdependence Policy (CLIP), plus an old-age pension benefit equal to the BMP payable for
life, starting on the first day of the month following the expiration of the 5 year guaranteed period (IRR of
RA 8291, Rule IV, Sec. 20.2.1); or
2. Cash payment benefit equivalent to 18 times of the BMP, subject to qualification requirements, less all
outstanding obligations of the member in accordance with the CLIP, plus a monthly pension for life
payable on the first month following the date of retirement (IRR of RA 8291, Rule IV, Sec. 20.2.2).
Note: Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee of
65 years of age with at least 15 years of service provided that if he has less than 15 years of service, he may be allowed
to continue in the service in accordance with existing civil service rules and regulations (RA 8291, Sec.13(b)).
What are disability benefits under GSIS Law?

Disability benefits are the benefits that are granted to a member due to the loss or reduction in earning capacity
caused by a loss or impairment of the normal functions of his/her physical and/or mental faculties as a result of an
injury or disease (IRR of RA 8291, Rule IV, Sec. 23.1).
Note: The loss in earning capacity disability benefits shall be determined and granted not only on the basis of the
member’s actual loss of income from his/her usual occupation but also on his/her incapacity to continue engaging
in any other gainful occupation because of the impairment (IRR of RA 8291, Rule IV, Sec. 23.1).
What are the kinds of disability under GSIS Law?

A disability may either be permanent total, permanent partial, or temporary total, as determined by the GSIS based
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on established medical standards (IRR of RA 8291, Rule IV, Sec. 23.1).

1. Permanent Total Disability (PTD) - due to injury or disease causing complete, irreversible, and
permanent incapacity that will permanently disable a member to work or to engage in any gainful
occupation resulting to loss of income (IRR of RA 8291, Rule IV, Sec. 23.2.1).
2. Permanent Partial Disability (PPD) – accrues or arises upon irreversible complete and permanent loss
or impairment of certain physical faculties, despite which the member is able to pursue a gainful occupation
resulting to the disability to work for a limited period of time (IRR of RA 8291, Rule IV, Sec. 23.3.2).
3. Temporary Total Disability (TTD) – accrues or arises when the impaired physical and/or mental
faculties can be rehabilitated and/or restored to their normal functions, but such disability shall result in
temporary incapacity to work or to engage in any gainful occupation (IRR of R.A. No. 8291, Rule IV, Sec.
23.24.3).
Does the GSIS Law require death to be work-related to be compensable with survivorship pension?
No. The law only requires the following:
That the deceased was in the service at the time of his death; or
If separated from the service, has at least 3 years of service at the time of his death and has paid 36 monthly
contributions within the five-year period immediately preceding his death; or has paid a total of at least 180
monthly contributions prior to his death (RA 8291, Sec. 21 par. 1).
Who are compulsorily covered by the GSIS life insurance benefit?

Life insurance shall be compulsory for all employees, including the members of the Judiciary and the Constitutional
Commissioners, but excluding the uniformed members of the AFP, PNP, BFP, and BJMP (IRR of RA 8291, Rule
XI, Sec. 11.1).
May an employee, by himself, apply for optional life insurance?

Yes. A member may, at any time, apply for optional life insurance and pre-need coverage for himself and/or his
dependents (R.A. No. 8291, Sec. 26).
What is the prescriptive period for claims under the GSIS Law?
Claims for benefits under the GSIS Law except for life and retirement shall prescribe after 4 years from the date of
contingency (R.A. No. 8291, Sec. 28).
Benefits Conditions to avail the benefits

Separation Benefits 1. If the member resigns or separates from service, he has rendered at least 3 years
of service but less than 15 years; or
2. If the member resigns or separates from service, he has rendered at least 15 years
of service and is below 60 years of age (R.A. No. 8291, Sec. 11).
Retirement Benefits 1. Has rendered at least 15 years of service;
2. At least 60 years of age at the time of retirement; and
3. Not receiving a monthly pension benefit from permanent total disability (R.A.
No. 8291, Sec. 13-A).
Note: Retirement is compulsory upon reaching 65 years of age with at least 15 years
of service. But if he has rendered less than 15 years of service, he may be allowed to
complete the said period (R.A. No. 8291, Sec. 13).
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Benefits Conditions to avail the benefits

Permanent Total 1. In service at the time of disability;
Disability Benefits 2. If he is separated from service, has paid at least 36 monthly contributions within
5 years immediately before the disability, or has paid a total of at least 180
monthly contributions prior to the disability;
3. Member cannot enjoy monthly income benefit and the old-age retirement
simultaneously (R. A. No. 8291, Sec. 16 (a)); and
4. Not due to his grave misconduct, notorious negligence, habitual intoxication,
or willful intention to kill himself or another (R.A. No. 8291, Sec. 15).
Note: If member does not satisfy the conditions above, but has rendered at least 3
years of service at the time of disability, he is still entitled to cash payment equivalent
his average monthly compensation for each year of service but not less than P12,000
(R.A. No. 8291, Sec. 16 (b)).
Temporary Total 1. Not exceed 120 days in one calendar year;
Disability Benefits 2. Exhausted all his sick leave benefits;
3. In service at the time of his disability;
4. If separated, rendered at least 3 years of service and paid 6 monthly contributions
in the 12-month period immediately preceding the disability;
5. Cannot enjoy temporary total disability benefit and sick leave pay simultaneously;
6. If disability requires treatment that lasts beyond 120 days, the payment of the
temporary total disability benefit may not exceed 240 days;
7. Such benefit shall not be less than P70 a day (R. A. No. 8291, Sec. 18); and
8. Not due to his grave misconduct, notorious negligence, habitual intoxication,
or willful intention to kill himself or another (R.A. No. 8291, Sec. 15).
Survivorship Benefits 1. Deceased was in the service at the time of his death; or
2. If separated from service, has at least 3 years of service at the time of his death and
has paid 36 monthly contributions within 5-year period immediately preceding
his death, or has paid at least 180 monthly contribution prior to death (R.A.
No. 8291, Sec. 21 (a)).
Funeral Benefits Covered deaths:
1. Active member;
2. Member who has been separated from service;
3. Pensioner; and
4. Retiree, who at the time of his retirement was of pensionable age but opted to
retire under RA 16161 (RA 8291, Sec. 23).
During his one-month leave, H, a policeman, was shot to death while trying to pacify two of his neighbors
who are fighting. W, her surviving spouse whom he had abandoned years back, filed a claim for death
benefits but was denied by the GSIS contending that H is not entitled to benefits since he was on-leave
when he died. Is the GSIS correct?
No, GSIS is incorrect. Under the 24-hour duty doctrine, members of the police by the nature of their functions
are technically 24 hours a day, except when they are on vacation leave. The exception is not applicable where a
policeman responds to a situation on which his services is necessary in maintaining peace and order. Here, H’s act
of responding to his neighbor’s situation may be considered an extension of a police’s function. Therefore, H’s
death is compensable (ECC v. CA, G.R. No. 115858, June 28, 1996).
After 44 years, X retired as Chief State Prosecutor of DOJ in 1992. He applied for retirement benefit
under R.A. 910. The application was approved by GSIS. Thereafter, and for more than nine years, X
continuously received his retirement benefits, until 2001, when he failed to receive his monthly pension.
X learned that GSIS cancelled the payment of his pension because the DBM informed GSIS that X was
not qualified to retire under R.A. 910 which provides for the retirement of justices of the Supreme
Court and the Court of Appeals and its enforcement by the GSIS. Thus, GSIS stopped the payment
of X’s monthly pension. Does X’s disqualification under R.A. 910 preclude him from receiving any
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retirement benefit under any other existing retirement law?

No, X’s disqualification from receiving retirement benefits under R.A. 910 does not preclude him from receiving
any retirement benefits under any other existing retirement law. Since X has been declared ineligible to retire under
R.A. 910, GSIS should simply apply the proper retirement law to X’s claim. In this way, GSIS would be faithful to
its mandate to administer retirement laws in the spirit in which they have been enacted, i.e., to provide retirees the
wherewithal to live a life of relative comfort and security after years of service to the government (GSIS v. De Leon,
G.R. No. 186560, November 17, 2010).
Limited Portability Law (RA 7699)
Who are covered by the Limited Portability Law?

The rules and regulations shall apply to all worker‐members of the Government Service Insurance System (GSIS)
and/or Social Security System (SSS) who transfer from one sector to another, and who wish to retain their
membership in both Systems (IRR of RA 7699, Rule 1, Sec. 1).
When does totalization apply under Limited Portability Law? (BGS)

Totalization shall apply in the following instances:
1. If a worker is not qualified for any benefits from Both Systems;
2. If a worker in the public sector is not qualified for any benefits in the GSIS; or
3. If a worker in the private sector is not qualified for any benefits from the SSS (IRR of RA 7699, Rule V,
Sec. 3, par. 1).
Note: If a worker qualifies for benefits in both Systems, totalization shall not apply. Further, overlapping periods
of creditable services or contributions in both Systems shall be credited only once for purposes of totalization. For
the purpose of computation of benefits, totalization shall apply in all cases so that the contributions made by the
worker-member in both Systems shall provide maximum benefits which otherwise will not be available. In no case
shall the contribution be lost or forfeited (IRR of RA 7699, Rule V, Sec. 3, par. 2, Secs. 5 and 7).
X has been working with Lima Land for 20 years. Wanting to work in the public sector, X applied with
and was offered a job at Livecor. Before accepting the offer, he wanted to consult with you whether the
payments that he and Lima Land had made to the SSS can be transferred or credited to the GSIS. What
would you advise? (2014 Bar)
I will inform X that his contributions under SSS may be transferred or credited to GSIS for purposes of claiming
benefits. Under Section 3 of RA 7699 or the Limited Portability Law, a covered worker who transfers employment
from one sector to another shall have his contributions in both systems credited and shall be totalized for the
purpose of old-age, disability, survivorship, and other benefits in case he does not qualify for such benefits. Here,
X is planning to transfer employment from private to public sector. If upon his retirement he did not qualify for
the benefits, X can avail of the totalization under the limited portability law.
Disability and Death Benefits
What are the disability benefits under the Labor Code? (TPP)
The following are the disability benefits under the Labor Code:
4. Temporary Total Disability (Art.197);
5. Permanent Total Disability (Art.198); and
6. Permanent Partial Disability (Art.199).
What happens if the seafarer knowingly conceals a pre-existing illness or condition?

A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical Examination
shall be liable for misrepresentation and shall be disqualified from any compensation or benefit. This is likewise a just
cause for termination of employment and imposition of proper administrative sanctions (POEA Memorandum
Circular No. 10, Series of 2010, Sec. 20, par. E).
X was employed by ABC Company as a bosun on board M/V DEF. X allegedly slipped while cleaning the
cargo hold under bad weather condition. Upon his return to the Philippines, X went to the company-
designated physician who certified that his final suggested disability grading is Grade 8. Unsatisfied,
LABOR LAW
X consulted an independent physician, Dr. Y; who stated that X is unfit for further strenuous duties.
Thus, X filed a claim. Disputing the claim, ABC Company countered that the illness suffered by X is not
work related; rather, it is caused by a combination of genetic predisposition, diet and water intake. Is X
entitled to permanent total disability benefits?
No. The failure to consult a third doctor, which is part of the conflict-resolution procedure, ties the hands of
the Court and therefore the certification of the company-designated physician must be upheld. The findings of
the company-designated physician that petitioner has a Grade 8 disability rating should prevail over that of the
seafarer’s doctor. (Efren J. Julleza v. Orient Line Philippines, Inc.,G.R. No. 225190; July 29, 2019, Caguioa Case).
E was hired by EMS Inc. after undergoing a Pre-Employment Medical Examination wherein he was
declared fit to work albeit with the recommendation, “Hypertension Controlled with medication.” E
alleged that while onboard the vessel, he felt uncomfortable and experienced severe chest pains, dizziness,
and others. He returned to the Philippines after his contract expired. After repatriation, he reported
to EMS Inc. for his post-employment medical examination but was merely informed to take a rest and
to wait for their call. Due to his deteriorating condition, E sought medical examination and treatment
from an independent physician, Dr. R. He was then diagnosed with Coronary Heart Disease with a
recommendation to undergo further test. Subsequently, he was issued a Medical Certificate declaring
him unfit to work. Is E entitled for payment of disability benefits?
No. For disability to be compensable under Section 20-B of the POEA-SEC, two (2) elements must concur: (1)
the injury or illness must be work-related; and (2) the work-related injury or illness must have existed during the
term of the seafarer’s employment contract. Hence, given E’s utter lack of evidence to support his claim that he was
already suffering his illness when he was onboard respondents’ vessel and that his illness was work-related as against
the undisputed documentary evidence of respondents belying such claims coupled with the established fact that
he was not medically repatriated, he cannot be compensated for his illness (Esposo v. Epsilon Maritime Services,
Inc.,G.R. No. 218167, November 07, 2018, Caguioa Case)
SJ was engaged by Rickmers as a wiper. While on board in MV Maersk Edinburg, he reported losing or
having trouble seeing out of his left eye. S was repatriated and underwent retinal surgery in March 2011
and spent three days in the hospital. His next operation was performed on September 18, 2011. On Nov.
21, 2011, Dr. A, the company physician, rated him as “fit to work.” Even after multiple eye surgeries, SJ’s
left eye’s vision is still blurry thus he filed the claim for permanent total disability benefits. Does the
lapse of 240 days entitle him to total permanent disability benefits?
Yes, It is mandatory for the company-designated physician to issue his assessment within the 120/240-day
periods. Otherwise, the seafarer’s illness shall be deemed total and permanent disability. In the instant case,
SJ was repatriated on March 3, 2011. He underwent the first eye operation on March 16, 2011 (13 days from
repatriation). His next operation was performed on September 18, 2011 (or 199 days from repatriation). However,
the company-designated physician’s assessment of fitness to work was issued only on November 21, 2011, which
was 263 days from repatriation. Thus, the medical assessment of San Jose was made beyond the maximum 240-day
period prescribed under the POEA-SEC. As such, the disability of SJ is deemed total and permanent. Hence, he
was entitled to total permanent disability benefit (Rickmers Marine Agency Philippines, Inc. v. San Jose, G.R. No.
220949; July 23, 2018, Caguioa Case)
Labor Relations
Right to Self-organization
What is the employee’s right to self-organization?

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. Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers
may form labor organizations for their mutual aid and protection (LABOR CODE, Art. 253).
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Who are eligible to join, form, or assist labor organizations or workers’ associations?
Those eligible to join, form, or assist a labor organization for purposes of collective bargaining are the following:
Private sector: (C3RASH-LG)
1. All persons employed in Commercial, industrial, and agricultural enterprises (LABOR CODE, Art. 253);
2. Employees of GOCCs without original charters established under the Corporation Code (LABOR
CODE, Art. 254);
3. Employees of Religious, charitable, medical or educational institutions, whether operating for profit or
not (LABOR CODE, Art. 253);
4. Supervisory employees (LABOR CODE, Art. 255);
5. Alien employees (ILO Convention No. 98, Art. 2);
6. Working Children (PD 603, Art. 111);
7. Homeworkers (DO 5, Sec. 3, February 4, 1992);
8. Employees of Cooperatives (Central Negros Electric Corporation v. Secretary of Labor, G.R. No. 94045,
September 13, 1991); and
9. Employees of Legitimate contractors (DO 174-17, Sec.10(e)); and
10. Public Sector - All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of
government, including GOCCs with original charters, can form, join, or assist labor organizations called
employees’ organizations of their own choosing (EO 180, Secs. 1 and 2).
Who are not eligible to join, form, or assist a labor organization? (MIA-CHANGES)
The following are those not eligible to join, form, or assist a labor organization of purposes of collective bargaining:
1. Managerial employees;
2. Employees of International Organizations with Immunities (International Catholic Immigration
Commission v. Calleja, G.R. No. 85750, September 28, 1990);
3. Members of the Armed Forces of the Philippines, including police officers, policemen, firemen and jail
guards (EO 180 (1987), Sec. 4);
4. Confidential employees (Metrolab Industries v. Roldan-Confesor, G.R No. 108855, February 28, 1996);
5. High-level or managerial government employees (EO 180, Sec. 3);
6. Aliens without valid working permits or aliens with valid working permits but are nationals of a country
which do not allow Filipinos to exercise the right of self-organization and to join or assist labor organizations
(LABOR CODE, Art. 284);
7. Non-employees (Rosario Bros., Inc. v. Ople, G.R. No. L-53590, July 31, 1984);
8. Government employees, including GOCC with original charter (Arizala v. CA, G.R. Nos. 43633-34,
September 14, 1990);
9. Employees of cooperatives who are at the same time its members (Benguet Electric Cooperative Inc., v.
Ferrer-Calleja, G.R. No. 79025, December 29, 1989); and
10. Subversives or those directly or indirectly engaged in subversive activities (LABOR CODE, Art. 250(e)).
AA Faculty Union filed a petition for certification election seeking to represent a bargaining unit in AA
School consisting of forty (40) faculty members. AA School opposed the petition, claiming that AA
Faculty Union’s members are neither rank-and-file nor supervisory, but rather managerial employees.
AA School then filed a petition for cancellation of AA Faculty Union’s certificate of registration on the
grounds of misrepresentation in registration and that AA Faculty Union is composed of managerial
employees who are prohibited from organizing as a union. The Med-Arbiter issued an Order denying
the petition for certification election on the ground that AA School’s faculty members are managerial
employees. Was AA School correct in filing a petition for cancellation of AA Faculty Union’s certificate
of registration?
Yes, AA School is correct in filing a petition for cancellation of AA Faculty Union’s certificate of registration. In
case of alleged inclusion of disqualified employees in a union, the proper procedure for an employer like AA School
is to directly file a petition for cancellation of the union’s certificate of registration due to misrepresentation, false
statement, or fraud under the circumstances enumerated in Art. 247 of the Labor Code, as amended. AA School’s
sole ground for seeking cancellation of AA Faculty Union’s certificate of registration that its members are in reality
managerial employees which is in violation of Art. 255 of the Labor Code, is, in a sense, an accusation that AA
Faculty Union is guilty of misrepresentation for registering under the claim that its members are not managerial
employees. Therefore, AA School was correct in filing a petition for the cancellation of the union’s registration
(Asian Institute Management v AIM Faculty Association, G.R. No. 207971, January 23, 2017).
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Union A filed a petition for certification election seeking to represent the bargaining unit consisting
of rank and file professional and technical employees including the sales logistics coordinator and
maintenance foreman, and financial analysts and quality assurance specialists of Company XYZ.
Company XYZ contends that the latter positions cannot be members of the bargaining unit of the
rank and file employees because they are supervisory employees and confidential employees respectively
who are exposed to the internal business operations of the company. Can the sales logistics coordinator
and maintenance foreman, and financial analysts and quality assurance specialists be members of the
bargaining unit of rank and file employees?
Yes, the sales logistics coordinator and maintenance foreman, and financial analysts and quality assurance specialists
can be members of the bargaining unit of rank and file employees. Exposure to internal business operations of the
company is not per se a ground for the exclusion in the bargaining unit. Employees who encounter or handle
trade secrets and financial information are not automatically classified as confidential employees. The information
they handle is not the kind of information that is relevant to collective bargaining negotiations and settlement
of grievances as would classify them as confidential employees. Even if they have access to information which are
confidential from the business standpoint, the exercise of their right to self-organization could not be defeated
because their common functions do not show that there exists a confidential relationship within the realm of
labor relations. Thus, the sales logistics coordinator and maintenance foreman, and financial analysts and quality
assurance specialists can be members of the bargaining unit of rank and file employees (Coca-Cola Bottlers PHL v.
Ilocos Professional & Technical Employees Union, G.R. No. 193798, September 8, 2015).
What are the tests in determining the appropriate composition of a bargaining unit? (CHEG)
The tests which may be used in determining the appropriate composition of a bargaining unit are the following:
1. Community or Mutuality of Interest Doctrine - the employees sought to be represented must have
community of mutuality of interest in terms of employment and working conditions as evinced by
the type of work they perform. It is characterized by similarity of employment status, same duties and
responsibilities, and substantially similar compensation and working conditions (San Miguel Corporation
Employees Union-PTGWO v. Confesor, G.R. No. 111262, September 19, 1996);
2. Collective Bargaining History Doctrine - puts premium to the prior collective bargaining history
and affinity of the employees; neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit (San Miguel Corporation v. Laguesma, G.R. No. 100485, September 21, 1994);
3. Employment Status Doctrine - an acceptable mode of determination of appropriate bargaining unit
based on employment status of the employees, such as temporary, seasonal, and probationary (Sta. Lucia
East Commercial Corporation v. Secretary of Labor and Employment, G.R. No. 162355, August 14, 2009);
and
4. Globe Doctrine - based on express will or desire of the employees. The desires of all the employees are
relevant to the determination of the appropriate bargaining unit. The relevance of the wishes of the
employees concerning their inclusion or exclusion from a proposed bargaining unit is inherent in the basic
right to self-organization (International School Alliance of Educators v. Quisumbing, G.R. No. 128845, June
1, 2000).
Union A filed a petition for certification election seeking to represent rank and file employees. ABC
Company filed a petition seeking to cancel the registration of Union A on the ground that it has
members who are foremen in the company. Will the union membership of the foremen warrant the
cancellation of registration of Union A?
No, the union membership of the foremen will not warrant the cancellation of registration of Union A. The
inclusion as union members of employees outside the bargaining unit shall not be a ground for cancellation of the
registration of the union. However, said employees are automatically deemed removed from the list of membership
of said union. Foremen are considered to be supervising and instructing the employees under them, assessing and
evaluating their performance, and making reports and recommending new systems in the company. Since foremen
are not rank and file employees but are rather considered extensions of the management, they are deemed removed
from the list of membership of Union A and the petition shall fail (Lepanto Consolidated Mining Company v. The
Lepanto Capataz Union, G.R. No. 157086, February 18, 2013, Art. 256, Labor Code).
What is the principle of non-interference with workers’ rights to self-organization?

The right of the people, including those employed in the public and private sectors, to form unions, associations,
or societies for purposes not contrary to law shall not be abridged (CONST. Art. III, Sec. 8).
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Legitimate Labor Organizations
What are the requirements for the issuance of the Certificate of Registration of Labor Organizations?
(FNI-E4)
The requirements for the issuance of the Certificate of Registration of Labor Organizations are the following:
1. Fifty pesos (Php50.00) registration Fee;
2. Names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
3. In case the applicant is an Independent union, the names of all its members compromising at least 20% of
all the employees in the bargaining unit where it seeks to operate;
4. If the applicant union has been in Existence for one (1) or more years, copies of its annual financial reports;
and
5. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification, and a list of members who participated in it (LABOR CODE, Art. 240).
What are the grounds for the cancellation of union registration? (CoDE)
The following are the grounds for the cancellation of union registration
1. Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
Constitution and by-laws or amendments thereto, the minutes of ratification and the list of members who
took part in the ratification;
2. Voluntary Dissolution by the members; and
3. Misrepresentation, false statements or fraud in connection with the Election of officers, minutes of the
election of officers, and the list of voters (LABOR CODE, Art. 247).
What is the relationship between an affiliate or chartered local and the national union?
The relationship between an affiliate or chartered local and the national union is agency. The national union, or
“mother union”, acting for and in behalf of its affiliate, has the status of an agent while the affiliate or local chapter
remains the principal – the basic unit of the association free to serve the common interest of all its members,
subject only to the constraints imposed by the constitution and bylaws of the association (Progressive Development
Corporation v. Secretary of Labor and Employment, G.R. No. 96425, February 4, 1992).
What are the rights of labor organizations? (USER-FOE)

1. To Undertake activities for the benefit of the organization and its members;
2. To Sue and be sued;
3. To be the Exclusive representative of all employees;
4. To Represent union members;
5. To be Furnished by employers of audited financial statements;
6. To Own properties; and
7. Exemption from taxes (LABOR CODE, Art. 251).
What are the rights of members in a labor organization? (DIMP)

1. Deliberative and decision-making right - the right to participate in the deliberations on major policy
questions and decide by secret ballot (LABOR CODE, Art. 250(d));
2. Right to Information - the right to be informed about:
a. The organization’s constitution and by-laws; and
b. The collective bargaining agreement and labor laws (LABOR CODE, Art. 250(p));
3. Rights over Money matters - the rights of the members:
a. Against imposition of arbitrary or excessive initiation fees (LABOR CODE, Art. 250(a));
b. Against unauthorized collection of contributions or unauthorized disbursements (LABOR CODE,
Art. 250(g));
c. To require adequate records of income and expenses, which shall form part of the financial records of
the organization (LABOR CODE, Art. 250(j));
d. To access financial records (LABOR CODE, Art. 250(m));
e. To vote on officer’s compensation (LABOR CODE, Art. 250(k));
f. To vote on special assessment (LABOR CODE, Art. 250(n)); and
g. To be deducted a special assessment only with the member’s written authorization (LABOR CODE,
LABOR LAW
Art. 150(o)); and

4. Political right – the right to vote and be voted for, subject to lawful provisions on qualifications and
disqualifications (LABOR CODE, Art. 250).
What is a check-off?
A check-off is a method of deducting by the employer from the employee’s pay at prescribed periods the amounts
due to the union for fees, fines, or assessments (A. L. Ammen Transportation v. Bicol Transportation Employees
Mutual Association, G.R. No. L-4941, July 25, 1952). It assures continuous funding for the labor organization
(Gabriel v. Secretary of Labor, G.R. No. 115949, March 16, 2000).
What are the requirements for levy of special assessments or extraordinary fees? (RAGS)
The following are the requirements for levy of special assessments or extraordinary fees:
1. There must be a written Resolution
2. The resolution must have been Approved by a majority of all the members;
3. The approval must be at a General membership meeting duly called for that purpose; and
4. The Secretary of the organization shall record the minutes of the meeting, which shall be attested to by the
President. The minutes include:
5. The list of all members present;
6. The vote cast; and
7. The purpose of the assessment or fees (LABOR CODE, Art. 250(n)).
What are union dues?

Union dues are the regular monthly contributions paid by the members to the union in exchange for the benefits
given to them by the CBA and to finance the activities of the union in representing them (2 AZUCENA, supra at
237).
What are agency fees?

Agency fees are those reasonable fees assessed to employees of an appropriate bargaining unit who are not members
of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective
bargaining agreement (LABOR CODE, Art. 259(e)).
What is a Union Security Clause?

It is a stipulation in the CBA requiring membership in the contracting union as a condition for employment or
retention of employment in the company (2 AZUCENA, supra at 345).
What are the different kinds of union security arrangements? (CUP-A-BEM2)

1. Closed-Shop Agreement – an agreement whereby an employer binds himself to hire only members of
the contracting union, who must continue to remain members in good standing to keep their jobs (2
AZUCENA, supra at 347);
2. Union Shop Agreement – provides that 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 (2
AZUCENA, supra at 346);
3. Preferential Shop Agreement – an agreement whereby the employer merely agrees to give preference
to the members of the bargaining union in hiring, promotion or filing vacancies and retention in case
of lay- off. The employer has the right to hire from the open market if union members are not available
(ALCANTARA, Reviewer in Labor and Social Legislation, (2012), p. 472 [hereinafter ALCANTARA]);
4. Agency Shop Agreement or Maintenance of Treasury Shop – an agreement whereby employees must
either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the
members (2 AZUCENA, supra at 346);
5. Bargaining for Members Only – provides that the union is recognized as the bargaining agent only for
its own members (2 AZUCENA, supra at 346);
6. Exclusive Bargaining Shop – provides that the union is recognized as the exclusive bargaining agent for
all employees in the bargaining unit, whether union members or not (2 AZUCENA, supra at 346);
7. Maintenance of Membership Shop Agreement – provides that no employee is compelled to join the
union, but all present or future members must, as a condition of employment remain in good standing in
the union (2 AZUCENA, supra at 346);
LABOR LAW
8. Modified Union Shop – provides that the employees who are not union members at the time of signing
the contract need not join the union, but all the workers hired thereafter must join (2 AZUCENA, supra
at 346)
Bargaining Representative
What are the methods to determine the bargaining representative: (SCC)

The methods to determine the bargaining representative are the following:
1. Request for SEBA Certification (DO 40-03, Rule VII);
2. Certification election (DO 40-03, Rule I, Sec. 1(h)); and
3. Consent election (DO 9, as amended by DO 40-03, Rule I).
Note: Run-off election (DO 40-03, Rule I, Sec. 1(ss)) and Re-run election (DO 40-I-15, Rule I, Sec. 1(tt)) may occur
during Certification or Consent election.
What is SEBA Certification?

It is the process whereby the DOLE recognizes a labor organization as the Sole and Exclusive Bargaining Agent
(SEBA) of the employees in the appropriate bargaining unit. It has replaced Voluntary Recognition wherein it is
the employer who recognizes the labor organization as the SEBA of the employees (DO 40-I-15).
What is certification election?

It refers to 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 (DO 40-03, Rule I, Sec. 1(h)).
It is the most democratic method of determining the employee’s choice of the bargaining representative whenever
there is doubt whether a particular union represents the majority of the rank-and-file employees (Philippine
Airlines Employee’s Association v. Calleja, G.R. No. 76673, June 22, 1988).
What is consent election?

An election voluntarily agreed upon by the parties with or without the intervention of the DOLE, to determine
the issue of majority representation of all the workers in the appropriate collective bargaining unit (DO 9, Rule I as
amended by DO 40- 03; Algire v. De Mesa, G.R. No. 97622, October 19, 1994).
What are the different rules which prevent the holding of a certification election? (YCDN)
1. Certification Year Bar Rule - no petition for certification election may be filed within one (1) year from
the date of a valid certification, consent, or run-off election or from the date of voluntary recognition. The
same ban applies if “no union” won in the previous election (2 AZUCENA, supra at 487).
2. Contract-Bar Rule - while a valid and registered CBA of a fixed duration is subsisting, the BLR is not
allowed to hold an election contesting the majority status of the incumbent union during its five (5) year
term of representation except during the 60-day period immediately prior to the expiration of the five (5)
year term. The five (5) years shall be reckoned from the date of effectivity of the CBA (IRR of the LABOR
CODE, Book V, Rule XVII, Sec. 7, as amended by DO 40-03).
3. Deadlock Bar Rule - a petition for certification election can only be entertained if there is no pending
bargaining deadlock submitted to conciliation or arbitration or had become the subject of a valid notice
of strike or lockout. The principal purpose is to ensure stability in the relationship of the workers and the
management (NACUSIP-TUCP v. Dir. Trajano, G.R. No. 67485, April 10, 1992).
4. Negotiation Bar Rule - a petition for certification election cannot be entertained if, before the filing of
the petition for certification election, the duly recognized or certified union has commenced negotiations
with the employer in accordance with Art. 261 of the Labor Code within the one (1) year period referred
to in Sec. 14(d) of DO 40-03, Rule VIII (certification year rule) (2 AZUCENA, supra at 486- 489).
When is there a failure of election?

There is failure of election where the number of votes cast in a certification or consent election is less than the
majority of the number of eligible votes and there are no material challenged votes, declared by the Election Officer
in the minutes of the election proceedings order (DO 40-03, Rule IX, Sec. 16).
LABOR LAW
Note: Failure of election shall not bar the filing of a Motion for the immediate of another certification or consent
election within 6 months from the date of declaration of failure of election (DO 40-03, Rule IX, Sec. 17).
What is run-off election?

It refers to an election between the labor unions receiving the two (2) highest number of votes in a certification or
consent election with three (3) or more choices, where such a certified or consent results in none of the three (3)
choices receiving the majority of the valid votes cast; provided that the total number of votes for all contending
unions is at least 50% of the number of votes cast (IRR of the LABOR CODE, Book V, Rule I, Sec. 1(ss), as amended
by DO 40-03).
What is a re-run election?

It refers to an election conducted to break a tie between the contending unions, including between “No Union”
and one of the unions. It shall likewise refer to an election conducted after a failure of election has been declared by
the election officer and/or affirmed by the mediator-arbiter (DO 40-I-15, Rule I, Sec. 1(tt)).
What is the employer as bystander rule?

In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization,
the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification
election. The employer’s participation in such proceedings shall be limited to:
Being notified or informed of petitions of such nature; and
Submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the
petition (LABOR CODE, Art. 271).
On June 10, 2015, a petition for certification election was filed by Union A seeking to represent a
bargaining unit consisting of rank-and-file employees. It was granted on July 15, 2015. Previously, 20
employees were hired on April 15, 2017. During the election, these 20 employees were questioned on
the ground that they are not eligible voters. Union A contends that they are eligible voters because they
were already employees three months prior to the decision granting the petition. Decide.
The 20 employees are ineligible to vote during the certification election. Only employees who are members of the
appropriate bargaining unit sought to be represented 3 months prior to the filing of the petition shall be eligible to
vote. Since they have been employees only for a period of less than two months prior to the filing of the petition,
they are not qualified to vote (DO 40-I-15, Sec. 6).
There are 600 eligible voters in the bargaining unit sought to be represented. A certification election was
conducted and yielded the following results. What are the legal effects?
Union Vote
Union A 140
Union B 105
Union C 120
No Union 75
Spoiled Ballots 30
Abstain 30
Total Votes 500
A valid certification election was conducted. The double majority rule was observed. To have a valid election, at
least a majority of ALL THE ELIGIBLE VOTERS (FIRST MAJORITY) in the unit must have cast their vote.
Since there are 600 eligible voters, majority of which (301) should have casted their vote. 500 employees casted
their vote; thus, the election is valid.
The labor union receiving the majority of the VALID VOTES CAST (SECOND MAJORITY) shall be
certified as the exclusive bargaining agent of all the workers in the unit. The total number of the valid votes cast
is 470. Spoiled ballots are not valid votes cast because they are torn, defaced or left unfilled in such a manner as to
LABOR LAW
create doubt or confusion or to identify the voter. Thus, the majority is 236.
There is no winner in the certification election. A run-off election between the labor unions receiving the 2 highest
number of votes shall be conducted when an election which provides for three or more CHOICES results in no
choice receiving majority of the valid votes cast provided that the total number of votes for ALL CONTENDING
UNIONS is at least 50% of the TOTAL OF VOTES CAST. Since there are four (4) choices and the total
number of votes of the contending unions exceeds 50% of the votes cast, a run-off election shall be conducted.
Unions A, B, and C agreed to hold an election without the DOLE intervention to determine the
exclusive bargaining agent. During the elections, Union A got majority of the valid votes cast; thus, it
was recognized as the bargaining agent. What is the effect of DOLE’s non-intervention in the election?
The consent election is valid; however, the results thereof shall not constitute a bar to the holding of a certification
election for 1 year from the holding of such consent election (IRR of LABOR CODE, Book V Rule VIII, Sec. 24).
Collective Bargaining
What is the duty to bargain collectively?

1. When there is no CBA, the duty to bargain collectively means the performance of a mutual obligation
between employer and the employees’ majority union to meet and convene for the purpose of:
2. 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
3. Executing a contract incorporating such agreements if requested by either party (LABOR CODE, Art.
263).
When there is a CBA, it is the obligation of the parties not to terminate or modify the CBA during its lifetime.
However, either party can serve a written notice to terminate or modify the agreement at least 60 days prior to its
expiration date. 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 (LABOR CODE, Art. 264).
BCD Union is a registered union which had a 5-year CBA with XYZ Corp. The 60-day freedom period
of the CBA passed without a challenge to BCD Union’s status as bargaining agent. Three of its members
wrote to the DOLE informing it that majority of its members intends to disaffiliate from their mother
federation to form another union. BCD Union questioned the disaffiliation. Pending the dispute, XYZ
Corp. stopped the remittance to BCD Union of the union dues that had been checked off from the
worker’s salaries and recognized the new union. Does the failure to remit union dues amount to ULP?
Yes, the failure to remit union dues amounted to ULP. Since no petition for certification election challenging the
majority status of BCD Union was filed during the freedom period, it remained the exclusive bargaining agent of
the employees and XYZ Corporation’s refusal to bargain collectively constitutes ULP. The failure to remit union
dues and the voluntary recognition of the new union were indications of interference with the employee’s right to
self-organization which constitutes ULP (Ren Transport Corp. v. NLRC, G.R. No. 188020, June 27, 2016).
What is a Collective Bargaining Agreement (CBA)?

A Collective Bargaining Agreement (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, including mandatory provisions for grievances and arbitration machineries (Omnibus Rules
Implementing the Labor Code, Book V, Rule I, Sec. 1(jj)).
What are the mandatory Provisions of the CBA? (W2H2B-PS2T-LR2G-ACD)

The following are the mandatory provisions of the CBA:
1. Wages;
2. Hours of work;
3. Vacations and Holidays;
4. Bonuses;
5. Pensions and retirement plans;
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6. Seniority;
7. Transfer;
8. Lay-offs;
9. Employee Workloads;
10. Work Rules and regulations;
11. Rent of company houses (2 AZUCENA, supra at 398-399);
12. Grievance machinery;
13. Voluntary Arbitration;
14. No Strike-no lockout clause;
15. Labor management Council (CHAN REVIEWER, supra at 471); and
16. Provision against Drug Use in Workplace (RA 9165, Sec. 49).
Note: Employer’s duty to bargain is limited to mandatory bargaining subjects; as to other matters, he is free to
bargain or not to bargain (2 AZUCENA, supra at 397).
What is the procedure for the registration of CBA?

The steps to follow for the registration of CBA are the following:
1. Submission of copies of the CBA to the BLR or the regional offices of DOLE within 30 days from
execution, accompanied by the following:
a. Verified proof of posting in 2 conspicuous places in the place of work; and
b. Verified proof of ratification by the majority of all the workers in the bargaining unit;
2. Action upon the application for registration within 5 calendar days from receipt thereof;
3. The regional office shall furnish the BLR with a copy of the CBA within 5 days from its submission;
4. The BLR or regional office shall assess the employer for every CBA, a registration fee of not less than
₱1,000.00 or any amount deemed appropriate by the Secretary of Labor;
5. Issuance of Certificate of Registration (IRR of the LABOR CODE, Book V, Rule XVII, Sec. 1-4, as amended
by DO 40-03).
What is the duration of a CBA?

Any CBA that the parties may enter into shall insofar as the representation aspect is concerned, be for a term of 5
years. All other provisions of the CBA (economic and non-economic, except representation) shall be renegotiated
not later than 3 years after its execution (LABOR CODE, Art. 265).
What is freedom period?

Freedom period is the 60-day period immediately prior to the expiration of the CBA (2 AZUCENA, supra at 479).
A petition questioning the majority status of the incumbent bargaining agent or a petition for certification election
may be entertained and a certification election may be conducted within the freedom period (LABOR CODE, Art.
265).
Union A is the recognized bargaining agent of X Corporation. On April 15, 2010, they agreed upon a
CBA with a term of 5 years or until April 2015. On the third year of the agreement, the parties decided
to extend the CBA for two more years or until April 2017. On March 15, 2017, Union B filed a petition
for certification election. Should the petition be granted?
No, the petition should not be granted. Art. 265 provides that any CBA that the parties may enter into shall,
insofar as the representation aspect is concerned, be for a term of 5 years. 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 60-day period immediately before the date of expiry of such 5-year term of the CBA.
Here, the freedom period was on the year 2015 because the representation aspect has a term of 5 years regardless of
the extension of the CBA itself. Since the petition was filed outside the freedom period, the same must be denied.
A, B, C, and 10 other rank and file employees of X Corp. were members of Y Union, the recognized
bargaining agent. X Corp. and Y Union had a CBA which would expire on June 22, 2017. The president
of Y Union advised X Corp. to terminate A, B, C, and the other 10 employees for acts of disloyalty
especially for signing a petition for certification election of Union B. It appears that the petition for
certification elections was filed on June 12, 2017. Y Union alleges that Article 264 of the Labor Code
applies which provides that it shall be the duty of both parties to keep the status quo and continue in
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full force and effect the terms and conditions of the existing agreement during the 60-day period prior
to its expiration date and/or until a new agreement is reached by the parties. They claim that A, B, C,
and 10 other employees violated this provision when they campaigned for, supported, and signed Union
B’s petition for certification election. If you were the legal counsel of the said employees, how would
you counter the assertions of Y Union?
The employees cannot be dismissed. Under Art. 268 of the Labor Code, while it is incumbent for the employer
to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the
freedom period, they could only do so when no petition for certification election was filed. The provision for status
quo is conditioned on the fact that no certification election was filed during the freedom period. The petition
for certification election was filed on June 12, 2017. Therefore, under Art. 268, at the expiration of the freedom
period, X Corp. no longer has the obligation to recognize Y Union as the incumbent bargaining agent when a
petition for certification election was filed, as in this case. Moreover, the last sentence of Art. 264, which provides
for automatic renewal pertains only to the economic provisions of the CBA and does not include representational
aspect of the CBA. An existing CBA cannot constitute a bar to a filing of a petition for certification election during
the freedom period. 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 (Picop Resources v. Dequilla, G.R. No. 172666, December 7, 2011).
Union A has a 5-year CBA with X Corp. On the second year of the CBA, Union A submitted its proposal
to increase the salaries of the workers, but X Corp. did not reply. Is there a violation of the duty to
bargain collectively?
There is no violation of the duty to bargain collectively. Art. 265 provides that all other provisions of the CBA
shall be renegotiated not later than 3 years after its execution. The mandatory period of renegotiation has not yet
arrived. Therefore, X Corp.’s failure to reply does not constitution a violation of the duty to bargain collectively.
Will your answer be the same if X Corporation refused to reply on the proposal if the same was given
on the third year of the CBA?
No, the answer will not be the same if X Corporation refused to reply on the proposal when given on the third
year of the CBA. Since X Corp. refused to reply on the mandatory period of renegotiation, the same constitutes
a violation of the duty to bargain collectively which is a ground for ULP. The CBA proposed by the union may
be imposed lock, stock, and barrel on employer who refused to negotiate a CBA. The employer which violates the
duty to bargain collectively, loses its statutory right to negotiate or renegotiate the terms and conditions of the draft
CBA proposed by the union. Hence, the proposals of the union may be adopted as the CBA and consequently,
imposed on the employer, lock, stock, and barrel (Kiok Loy vs. NLRC, G.R. No. L- 54334, January 22, 1986).
Unfair Labor Practices
What is unfair labor practice (ULP)?

Unfair labor practice (ULP) refers to acts that violate workers’ right to organize. The prohibited acts are related to
workers’ right to self-organization and to the observance of a CBA (Tunay na Pagkakaisa ng Manggagawa sa Asia
Brewery v. Asia Brewery, Inc., G.R. No. 162025, August 3, 2010).
What is the nature of ULP? (I2C3U)

The nature of ULP are as follows:
1. Are 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. Criminal offenses against the State;
4. Violation of Civil rights of both labor and management;
5. Violate the Constitutional right of workers and employees to self-organization; and
6. Creates Unstable labor-management relations (LABOR CODE, Art. 258).
What are the acts considered as ULP by employers?

Under Article 259 of the Labor Code, the unfair labor practices of employers are the following:
1. To interfere with, restrain or coerce employees in the exercise of their Right to self-organization;
2. To pay negotiation or Attorney’s fees to the union or its officers or agents as part of the settlement of any
issue in collective bargaining or any other dispute;
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3. To initiate, dominate, assist or otherwise interfere with the Formation or administration of any labor
organization, including the giving of financial or other support to it or its organizers or supporters;
4. To require as a Condition of employment that a person or an employee shall not join a labor organization
or shall withdraw from one to which he belongs (Yellow-Dog Contract);
5. To Contract out services or functions being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization;
6. To grossly violate a Collective bargaining agreement;
7. To Discriminate in regard to wages, hours of work and other terms and conditions of employment in
order to encourage or discourage membership in any labor organization. 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. Employees of an appropriate 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 bargaining agreement: Provided, that the individual
authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members
of the recognized collective bargaining agent;
8. To Dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being
about to give testimony under this Code; or
9. To violate the Duty to bargain collectively as prescribed by the Labor Code (LABOR CODE, Art. 259).
What are the ULPs of labor organizations? (GRADE-V)

Under Art. 260 of the Labor Code, the unfair labor practices of labor organizations are the following:
1. To (Grossly) violate a collective bargaining agreement;
2. To Restrain or coerce employees in the exercise of their right to self-organization. However, a labor
organization shall have the right to prescribe its own rules with respect to the acquisition or retention of
membership;
3. To Ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in
collective bargaining or any other dispute;
4. To cause or attempt to cause an employer to Discriminate against an employee, including discrimination
against an employee with respect to whom membership in such organization has been denied or to
terminate an employee on any ground other than the usual terms and conditions under which membership
or continuation of membership is made available to other members;
5. To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an Exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations; or
6. To Violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of
the employees (LABOR CODE, Art. 260).
Union A informed X, its member, that the union was not able to fully deduct the union dues from his
salary and that his failure to pay the same would result to sanctions upon him. For failure to pay union
dues, X was suspended. X appealed but it was not acted upon. For two (2) more occasions, X failed to
pay union dues causing his further suspension and finally, his expulsion. His appeals were unheeded
prompting him to file a complaint against Union A for unfair labor practice (ULP). Is the suspension an
act of ULP?
Yes, the suspension is an act of ULP. All the prohibited acts constituting ULP in essence relate to the worker’s right
to self-organization. Because Union A did not act on X’s appeals, X was unceremoniously suspended, disqualified
and deprived of his right to run for a position in the union, as well as expelled and forced to join another union, For
these, Union A is guilty of unfair labor practices under Article 260 (a) and (b) – that is, violation of petitioner’s
right to self-organization, unlawful discrimination, and illegal termination of his union membership (Mendoza v.
MWEU, G.R. No. 201595, January 25, 2016).
SUE-KMU is the sole and exclusive bargaining agent of the rank-and-file employees of respondent
Milkyway Corp. As the existing CBA between Milkyway Corp. and SUE-KMU was about to end, the
President of SUE-KMU informed Milkyway Corp. of their intent to open new negotiation for the
year 2015-2018. In response thereto, Milkyway Corp., through a letter, stated that “unilateral grants
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are by their very nature not proper subjects of CBA negotiations and therefore shall be excluded
therefrom.” SUE-KMU contends that Milkyway Corp. is guilty of unfair labor practice due its refusal
to bargain on an economic provision, and that Milkyway Corp. set as a precondition for the holding of
collective bargaining negotiations the non-inclusion of the issue of Retirement Plan. Did Milkyway
Corp. commit unfair labor practice when it considered some economic benefits as unilateral grants and
therefore excluded them from CBA negotiations?
No, Milkyway Corp. is not guilty of unfair labor practice. For a charge of unfair labor practice to prosper, it must
be shown that Milkyway Corp. was motivated by ill will, bad faith, or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or public policy, and that social humiliation, wounded feelings, or grave
anxiety resulted in disclaiming unilateral grants as proper subjects in their collective bargaining negotiations. 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. Herein,
the union merely bases its claim of refusal to bargain on a letter written by Milkyway Corp. However, in the said
letter, Milkyway Corp. never refused to bargain collectively with SUE-KMU. The corporation simply wanted to
exclude the Retirement Plan from the issues to be taken up during CBA negotiations, on the postulation that such
was in the nature of a unilaterally granted benefit (Union of Filipro Employees-DFA-KMU v. Nestlé Philippines,
Inc., G.R. Nos. 158930-31 & 158944-45, March 3, 2008).
SBC Bank and SBC-Employees Union signed a five-year collective bargaining agreement (CBA) with a
provision to renegotiate the terms thereof on the third year. Before the commencement of the negotiation,
the union suggested to the bank, that the bank lawyers should be excluded from the negotiating team.
The bank acceded. Meanwhile, the bank’s head negotiator suggested to the union, that the President
of the federation to which the union was affiliated, be excluded from the union’s negotiating panel.
The union and the bank failed to agree on the remaining economic provisions of the CBA. The union
declared a deadlock and filed a Notice of Strike before the National Conciliation and Mediation Board
(NCMB). The union alleged that the bank committed unfair labor practice when it interfered with the
union’s choice of negotiator. Is the interference in the choice of the union’s bargaining panel by the
bank, tantamount to unfair labor practice?
No, the interference in the choice of the union’s bargaining panel by the bank is not tantamount to unfair labor
practice. Article 259(a) of the Labor Code, considers it an unfair labor practice when an employer interferes,
restrains or coerces employees in the exercise of their right to self-organization or the right to form association.
The right to self-organization necessarily includes the right to collective bargaining. Parenthetically, if an employer
interferes in the selection of its negotiators or coerces the union to exclude from its panel of negotiators a
representative of the union, and if it can be inferred that the employer adopted the said act to yield adverse effects
on the exercise to right to self-organization or on the right to collective bargaining, ULP under Article 259(a) in
connection with Article 253 of the Labor Code is committed. However, the suggestion made by the bank’s head
negotiator should be construed as part of the normal relations and innocent communications, which are all part of
the friendly relations between the union and bank (Standard Chartered Bank Employees Union v. Confesor, G.R.
No. 114974, June 16, 2004).
On 2002, Union A, then the exclusive bargaining representative of UR Co.’s rank-and-file employees,
entered into a CBA effective until December 31, 2006. Days after the CBA was signed, a certification
election was conducted. Union B won and replaced Union A as the exclusive bargaining representative.
UR Co. consistently refused to negotiate a new collective bargaining agreement with Union B, despite
several demands from union, allegedly due to the existing CBA, which it signed with Union A. Did UR
Co. commit unfair labor practice?
Yes, UR Co. is guilty of unfair labor practice. Under Article 259(g) of the Labor Code, an employer is guilty of
unfair labor practice when it fails in its duty to bargain in good faith. An employer who refuses to bargain with
the union and tries to restrict its bargaining power is guilty of unfair labor practice. In determining whether an
employer has not bargained in good faith, the totality of all the acts of the employer at the time of negotiations
must be taken into account. The 2002 CBA was done only days before the certification election. When Union A
and UR Co. entered into the CBA, they had been aware that a certification election was going to be conducted in a
few days. In pushing through with negotiations instead of waiting for the outcome of the election, UR Co. risked
needing to renegotiate with a new union if Union A loses. It cannot, thus, invoke the hastily concluded CBA as
an excuse not to bargain with petitioners. If respondent had truly intended to bargain in good faith, it could have
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easily waited a few more days to know the result of the certification election (SONEDCO Workers Free Labor
Union v. Universal Robina Corp., G.R. No. 220383, October 5, 2016).
Tipsy Beer suffered an economic crisis. To curve this, it implemented an early retirement program. A
number of employees of the Paranaque Tipsy Beer Plant availed of such program which resulted in
several vacancies being created. This prompted the Paranaque Tipsy Beer Worker’s Union to negotiate
with the company for the filling up of vacancies. No resolution was reached on the matter. Paranaque
Tipsy Beer thereafter, engaged the services of JLN Co. to provide manpower services. The Union filed
a Notice of Strike based on the ground of ULP for contracting out services regularly performed by
members. Was the ground valid?
No, the ground for the notice of strike is not valid. JLN Co. was engaged by Paranaque Tipsy Beer to meet business
exigencies created by the economic crisis which resulted in several vacancies being created. The company’s action
to contract-out services and functions performed by the Union members did not constitute unfair labor practice
as this was not directed at the member’s right to self-organization. Hence, there was no ULP and the ground cited
by the Union is invalid (General Santos Coca-Cola Plant Free Worker’s Union v. Coca-Cola Bottlers PHL Inc., G.R.
No. 178647, February 13, 2009).
Peaceful Concerted Activities
What is a strike?
It is the temporary stoppage of work by the concerted action of the employees as a result of a labor or industrial
dispute (IRR of LABOR CODE Book V, Rule I, Sec. 1(vv)).
What are the grounds for strike? (DU)

The grounds for strikes may be any of the following:
1. A collective bargaining Deadlock; or
2. A ULP act of the employer or the labor organization (LABOR CODE, Art. 278).
What are the mandatory procedural requirements for a strike? (GF-SARC-7)

1. A strike must be based on a valid and factual Ground; a strike or lockout must be based on either:
a. Collective Bargaining Deadlock (economic); or
b. Unfair Labor Practice (political).
2. A notice of strike or lockout must be Filed with NCMB-DOLE:
a. At least 30 days from the intended date thereof, if the issues involved arose from a collective bargaining
deadlock; or
b. At least 15 days from the intended date, if the issues raised are in the nature of unfair labor practices; or
c. Immediately, in case of dismissal from employment of their officers duly elected in accordance with the
union’s constitution and by-laws, which may constitute union busting, where the existence of the union
is threatened.
d. A notice must be Served to the NCMB-DOLE at least 24 hours prior to the taking of strike or lockout
vote by secret balloting, informing said office of the decision to conduct a strike or lockout vote, and the
date, place and time thereof (IRR of the LABOR CODE, Book V, Rule XXII, Sec. 10, as amended by DO
40-03);
3. The decision to strike must be Approved by a majority of the total union membership in the bargaining unit
concerned obtained by secret ballot; and the decision to declare a lockout must be approved by a majority of
the board of directors of the employer corporation or association or of the partners in a partnership obtained
by secret ballot in a meeting called for the purpose. A report of the strike or lockout vote must be filed with
the NCMB at least 7 days before the intended strike or lockout;
4. A strike or lockout vote Report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of strike or lockout; subject to the cooling-off period;
5. Except in cases of union busting, the Cooling off period prescribed by law should be fully observed; and
6. The seven (7) day waiting period or strike ban after submission of strike or lockout vote to the NCMB-DOLE
should be fully observed in ALL cases, including union busting (NCMB Primer on Strike, Picketing, and
Lockout).
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What are the differences between a legal strike and an illegal strike?
Legal Strike Illegal Strike
As to Nature
One called for a valid purpose and conducted One staged for a purpose not recognized by law or if
through means authorized by law. for a valid purpose, it is conducted through means
not sanctioned by law.
As to its Effects on the Union Officers
Officers are not liable for resulting damages. They Officers are liable for resulting damages. Those who
will not lose employment by reason thereof. knowingly participates in an illegal strike may lose
employment by reason thereof.
As to its Effects to the Members of the Union
They are not civilly liable for participating in a valid They are civilly liable for personally participating in
strike. unlawful acts during the strike and they may lose
employment by reason thereof.
What are the prohibited activities during strike? (FAOB-PuV)

The following are the prohibited acts during strike:
1. No labor organization or employer shall declare a strike or lockout without first having bargained
collectively or without First having filed the notice required or without the necessary strike or lockout vote
first having been obtained and reported to the DOLE (LABOR CODE, Art. 279(a));
2. No strike or lockout shall be declared after Assumption of jurisdiction by the President or the Secretary of
Labor 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 (LABOR CODE, Art. 279(a));
3. 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 (LABOR CODE,
Art. 279(b));
4. No employer shall use or employ any strike- Breaker, nor shall any person be employed as a strike-breaker
(LABOR CODE, Art. 279(c));
5. No Public official or employee, including officers and personnel of the New Armed Forces of the
Philippines or the Integrated National Police (now the Philippine 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 officers from taking any measure necessary to:
6. Maintain peace and order;
7. Protect life and property; and/or
8. Enforce the law and legal order (LABOR CODE, Art. 279(d));
9. 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
(LABOR CODE, Art. 279(e)).
What is the liability of union officers and members for illegal strike and illegal acts committed during
strike?
A strike staged without compliance with the requirements of Art. 278 of the Labor Code is illegal and may cause
the termination of the employment of the participating union officers and members. However, the liability for
the illegal strike is individual, not collective. To warrant the termination of an officer of the labor organization on
that basis, the employer must show that the officer knowingly participated in the illegal strike. An ordinary striking
employee cannot be terminated based solely on his participation in the illegal strike, for the employer must further
show that the employee committed illegal acts during the strike (The Hong Kong and Shanghai Banking Corp.
Employees Union v. NLRC, G.R. No. 156635, January 11, 2016).
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B Company alleges that around 50 union members staged an illegal “sit-down strike” (first strike) in B
restaurant. The union did not comply with the requirements of sending Notice of Strike to the NCMB,
and neither did it obtain “strike vote” from its members. Allegedly, the union belatedly filed a Notice of
Strike with the NCMB on the same day to conceal the illegality of the sit-down strike. When mediation
reached an impasse, the union conducted the second strike. B alleges that during the second strike, the
union members were disruptive and violent. Were the two strikes invalid for non-compliance with the
procedural requirements of a valid strike and for committing prohibited acts?
Yes, the two strikes were invalid. The first strike was invalid as the union did not file the requisite Notice of Strike
and failed to observe the cooling-off period. In an effort to legitimize the first strike, the union filed a Notice of
Strike on the same day, but this cannot be considered as compliance with the requirement, as the cooling-off period
is mandatory. The cooling-off period is not merely a period during which the union and the employer must simply
wait. The purpose of the cooling-off period is to allow the parties to negotiate and seek a peaceful settlement of
their dispute to prevent the actual conduct of the strike. On the other hand, the second strike was invalid. While
the second strike complied with the mandatory requirements, it is nevertheless illegal as it was tainted with the
acts of violence, aggression, vandalism, and blockage of the free passage of the employer’s premises (Bigg’s Inc. v
Boncacas, G.R. Nos. 200487 & 200636, March 6, 2019, Caguioa Case).
X Union was the recognized bargaining agent of rank-and-file employees of A Corp. The latter
announced the implementation of a job evaluation program. X Union demanded the suspension of
the said program contending that it constitutes ULP. It also informed A Corp. that it will exercise its
right to concerted action. X Union members picketed during their break time. The union members
also conducted a strike by blocking the entry and exit points of the company premises preventing other
employees from entering and leaving the same. A Corp. filed a complaint questioning the validity of the
strike. It issues a return-to-work order to the striking employees but only 10 complied prompting the
corporation to dismiss the employees who continued the concerted action.
Is the strike illegal?

Yes, the strike is illegal. The strike staged by the union did not comply with Art. 278. They did not (a) file a notice
of strike with the DOLE, (b) observe the cooling-off period, and (c) submit the result of the strike vote. Moreover,
they obstructed the ingress to and egress from its offices. Thus, the strike commenced by the union is illegally
conducted (LABOR CODE, Art. 278).
Assuming that the strike is illegal, was the dismissal of everyone who participated therein justified?
No, the dismissal of those who participated is not justified. There is a need to distinguish between the officers and
the members of the union who participated in an illegal strike. The officers may be deemed dismissed from their
employment upon a finding that they have knowingly participated in the illegal strike, but the members of the
union shall suffer the same fate only if they are shown to have knowingly participated in the commission of illegal
acts during the strike. Since it was not proven that all those who were dismissed committed illegal acts during the
strike, the termination of their employment was unjustified and illegal (HSBC Employees Union v. NLRC, G. R.
No. 156635, January 11, 2016).
Union A and X Corp. entered into a CBA with a “no strike, no lockout” rule. When they started
renegotiations of the CBA, they were not able to arrive at an agreement thus resulting into a bargaining
deadlock. This prompted Union A to file a notice of strike and to undergo all the procedures for
conducting a valid strike. X Corp. questioned the strike on the ground that it violated the “no strike,
no lockout” rule. Is the strike valid?
No, the strike is not valid. A strike may be regarded as invalid although the labor union complied with the strict
requirements for staging one as provided in Art. 278 when the same is held contrary to an existing agreement,
such as the no strike clause or conclusive arbitration clause. No law or public policy prohibits the Union and
the Company form mutually waiving the strike and lockout option available to them to give way to voluntary
arbitration. Since the strike was committed in violation of the no strike, no lockout rule, the same is illegal (C.
Alcantara & Sons, Inc. v. CA, G.R. No. 155109, March 14, 2012).
X Union filed a notice of strike against A Corp. for illegal dismissal and suspension. Subsequently,
A Corp. informed the SOLE of its plan to retrench one hundred seventy-one employees. On account
of this action of A Corp, X union immediately filed a notice of strike and subsequently conducted a
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strike with all the requirements provided by law on the ground that they believed in good faith that
their employer was performing acts which constitutes unfair labor practice. A Corp. filed an action
questioning the validity of the strike. It was later found that no ULP was being committed rendering
the strike illegal for not having a valid cause. Are the union officers considered dismissed?
No, the union officers are not considered dismissed. Good faith is a valid defense for staging a strike on the basis
of a ULP of an employer, even if it subsequently turns out that there was no ULP. In this case, A Corp. enforced
its retrenchment program at a time when there was an ongoing dispute between it and the union regarding the
dismissal and suspension of employees. This engendered an honest belief on the part of the union that A Corp.
was indeed committing ULP which impelled them to stage a strike to protect their basic rights. Their strike was
justified by belief in good faith that the employer was committing ULP. Good faith saves the strike from being
declared illegal and the strikers from being declared to have lost their employment status.
Note: A union’s claim of good faith, while a valid defense for the conduct of a strike on the ground of a ULP
by the employer, is not a valid excuse to dispense with the procedural steps for a lawful strike. People’s Industrial
and Commercial Employees & Workers Organization v. PICC did not rule that procedural requirements can be
dispensed with, even if the Union believed in good faith that ULP was being committed. The good faith defense
invoked in Philippine Metal Foundries v. CIR had been decided in 1979. With the enactment of RA 6715,
compliance with the procedural requirements for the validity of a strike is now mandatory (Grand Boulevard
Hotel v. Genuine Labor Organizations in Hotel Restaurant & Allied Industries, G.R. No. 153664, July 18, 2003).
A “Welga ng Bayan” was staged to protest the accelerating price of rice. Union A led by its officers staged
a work stoppage which lasted for several days which prompted the company they are working for to file
a petition to declare the stoppage illegal. Was the stoppage of work illegal?
Yes, the stoppage of work is illegal. Stoppage of work due to welga ng bayan is in the nature of a general strike, an
extended sympathy strike. It affects numerous employers including those who do not have a dispute with their
employees regarding their terms and conditions of employment. Employees who have no labor dispute with their
employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit
an illegal work stoppage. Even if petitioners’ joining the welga ng bayan were considered merely as an exercise of
their freedom of expression, freedom of assembly or freedom to petition the government for redress of grievances,
the exercise of such rights is not absolute. For the protection of other significant state interests such as the “right of
enterprises to reasonable returns on investments, and to expansion and growth” must also be considered, otherwise,
oppression or self-destruction of capital in order to promote the interests of labor would be sanctioned (PHL, Inc.
Labor Union (NAFLU) v. FILFLEX Industrial & Manufacturing Corp, G.R. No. 155679, December 19, 2006)
What is picketing?
It is a device used by the union to bolster their strike. It refers to outside patrolling or marching to and fro of the
strikers at the company’s premises usually accompanied by the display of placards and other signs making known
the facts involved in a labor dispute (IBM v. NLRC, G.R. No. 91980, June 27, 1991).
Malou Wang Garments Inc. temporarily stopped its operations because of adverse effects of the economic
crisis in the country. The union in the factory immediately protested the temporary shutdown. Because
its CBA with Malou Wang was expiring during the period of shutdown, the union claimed the Malou
Wang halted its operations to avoid its duty to bargain collectively. The union went on strike and
picketed the main gates and deliberately prevented persons and vehicles from going into and out of the
compound of Malou Wang Garments. The latter filed a petition for injunction with a prayer for TRO in
the NLRC. The NLRC directed the union to refrain from preventing access to Malou Wang’s property.
The union violated such order. The officers and members were then dismissed. Upon complaint of the
union, the LA found Malou Wang guilty of illegal dismissal because it did not file a petition to declare
the strike illegal. Was the Labor Arbiter correct?
No, the Labor Arbiter is not correct. Article 279(e) of the Labor Code prohibits any person engaged in picketing
from obstructing the free ingress to and egress from the employer’s premises. The principle of conclusiveness
of judgment, embodied in Section 47 (c), Rule 39 of the Rules of Court, 24 holds that the parties to a case are
bound by the findings in a previous judgment with respect to matters actually raised and adjudged therein. Since
the union was already found by the NLRC to have prevented the free entry into and exit of vehicles from Malou
Wang’s compound, the union’s officers and employees clearly committed illegal acts in the course of the strike. The
use of unlawful means in the course of a strike renders such strike illegal. Therefore, the strike was ipso facto illegal.
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The filing of a petition to declare the strike illegal was thus unnecessary. Hence, the LA was wrong in finding that
it was necessary for Malou Wang Garments to first file a petition to declare the strike illegal before terminating the
union’s officers and members (Jackbilt Industries Inc. v. Jackbilt Employees Workers Union, G.R. Nos. 171618-19,
March 20, 2009).

What is a lockout?
Lockout means the temporary refusal of an employer to furnish work as a result of and industrial or labor dispute
(LABOR CODE, Art. 212(p), as amended by RA 6715, Sec. 4). It is a term commonly used to express an employer’s
act of excluding from his plant union members hitherto employed by him. The act may affect all or less than all of
the employee-union members. In the sense in which it is universally used, is an act directed at the union itself rather
than at the individual employer-members of the union (Sta. Mesa Slipways & Engineering Company, Inc., v. CIR,
G.R. No. L-4521, August 18, 1952).
What are the grounds for lockouts? (DU)

The following are the grounds for lockouts:
1. A collective bargaining Deadlock (LABOR CODE, Art. 278 (b)); and
2. A ULP of the labor organization (LABOR CODE, Art. 278 (c)).
What are the procedural and substantive requirements of a lockout? (GN2AR)

For a lockout be considered valid, the following must be complied with:
1. A lockout must be based on a valid and factual Ground, based on either:
a. ULP of the labor organization or
b. Collective Bargaining Deadlock;
2. Lockout Notice filed with NCMB:
a. At least 15 days before intended day of the strike if the issues raised are ULPs; or
b. At least 30 days before the intended date if the issue involves bargaining deadlock;
3. A lockout must be Approved by a majority vote of the members of the Board of Directors of the
Corporation or Association or of the partners in a partnership, obtained by secret ballot in a meeting
called for that purpose;
4. The lockout vote shall be Reported to the NCMB-DOLE Regional Branch at least 7 days before the
intended strike subject to cooling-off period; and
5. The dispute must Not be the subject of an assumption of jurisdiction by the President or the Secretary
of Labor and Employment, a certification for compulsory arbitration, or submission to compulsory or
voluntary arbitration nor a subject of a pending case involving the same grounds for the strike or lockout
(NCMB Primer on Strikes, Picketing and Lockouts, Part II, Question 6, A.5).
What is the power of the Secretary of Labor to assume jurisdiction in cases of strikes and lockouts?
When in the opinion of the DOLE Secretary, the labor dispute causes or will likely to cause a strike or lockout in
an industry indispensable to the national interest, he is empowered to either:
Assume jurisdiction over the labor dispute and decide it himself; or
Certify it to NLRC for compulsory arbitration, in which case, the NLRC shall hear and decide it (LABOR CODE,
Art. 278(g)).
TT, a public transportation company, retrenched 21 of its employees due to serious losses. Consequently,
the company union, ABC Union filed a Notice of Strike with DOLE, claiming that TT engaged in
Unfair Labor Practices (ULP). Unable to settle their differences at the scheduled preliminary conference
held before Conciliator–Mediator of the NCMB, the case was thereafter referred to the Office of the
Secretary of the DOLE. Acting DOLE Secretary issued a Decision ordering the reinstatement of the
union officers to their former positions, without loss of seniority rights, preservation of the status quo,
continuous implementation of the existing CBA, and remittance of the withheld union dues to ABC
union without unnecessary delay. TT filed a Motion for Reconsideration, while ABC union submitted
a “Partial Appeal.” The Secretary of Labor declined to rule on TTs Motion for Reconsideration and
TTs “Partial Appeal”, citing a DOLE regulation which provided that voluntary arbitrators’ decisions,
orders, resolutions or awards shall not be the subject of motions for reconsideration. Decide on the case.
The Secretary of Labor and Employment (SOLE) may assume jurisdiction in an impending strike concerning a
public transportation company. By referring the case to the SOLE, the Conciliator–Mediator conceded that the
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case fell within the coverage of Art. 278 of the Labor Code; the impending strike in TT, a public transportation
company whose business is imbued with public interest, required that the SOLE assume jurisdiction over the
case, which he in fact did. When the Secretary of Labor assumes jurisdiction over a labor case in an industry
indispensable to national interest, “he exercises great breadth of discretion” in finding a solution to the parties’
dispute. “The authority of the SOLE to assume jurisdiction over a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to national interest includes and extends to all questions and controversies
arising therefrom (Philtranco service enterprises, Inc. Vs. Philtranco Workers Union–Association of Genuine Labor
Organizations (PWU–AGLO), G.R. NO. 180962, February 26, 2014).
A Union staged a strike due to the illegal dismissal of its members. The Secretary of Labor assumed
jurisdiction and settled the issue with regard to the validity of the termination of the said members.
Was the act of the Secretary valid?

Yes, the act of the Secretary is valid, provided that it is one of the issues submitted to be resolved by him. Under Art.
263 of the Labor Code, the Labor Secretary’s authority to resolve a labor dispute within 30 days from the date of
assumption of jurisdiction encompasses only the issues in the dispute (Philippine Airlines Inc. v Secretary of Labor,
G.R. No. 88210, January 23, 1991).
What are the issues that the Secretary of Labor can resolve when he assumes jurisdiction?
The issues that the Secretary of Labor can resolve are:
1. Issues submitted to the Secretary to be resolved by him (Philippine Airlines Inc. v Secretary of Labor, G.R.
No. 88210, January 23, 1991);
2. Issues submitted to the Secretary for resolution and such issues involved in the labor dispute itself (St.
Scholastica’s College v. Torres, G.R. No. 100158, June 2, 1992);
3. It may subsume pending labor cases before the LA which are involved in the dispute and decide even issues
falling under the exclusive and original jurisdiction of LA such as the declaration of legality or illegality of
strike (International Pharmaceuticals, Inc. v Secretary of Labor, G.R. No. 92981-83, January 9,1992)
Makabagong Pagkakaisa ng Manggagawa ng Coco Factory (Union) and Coco Factory (Company) had
a CBA that expired. Union seasonably submitted proposals to the company for its renegotiation. The
negotiations reached a deadlock, leading to a Notice of Strike. The NCMB exerted efforts but failed
to resolve the deadlock. The company filed a Notice of Lock-out for unfair labor practice due to the
unions alleged work slowdown. The union went on strike 3 days later. The DOLE Secretary assumed
jurisdiction over the labor dispute. What is the effect of such assumption?
The Labor Secretary’s assumption of jurisdiction over the dispute or its certification to the NLRC for compulsory
arbitration shall have the effect of automatically enjoining the intended or impending strike or lockout and all
striking or locked out employees shall immediately return to work and the employer shall immediately resume
operations and readmit all workers under the same terms and conditions before the strike or lockout (Bagong
Pagkakaisa ng Manggagawa ng Triumph International v. Secretary of Labor & Employment, G.R. No. 167401,
July 5, 2010).
When may the NLRC grant a preliminary or permanent injunction in strikes or lockouts? (TIGNU)
The NLRC may only grant an injunction after hearing the testimony of witnesses and with opportunity for cross
examination in support of the allegations of the complaint or petition made under oath, and testimony by way of
opposition; and, only after a finding of fact by the NLRC:
1. That prohibited or unlawful acts have been Threatened and will be committed and will be continued
unless restrained;
2. That substantial and irreparable Injury to petitioner’s property will follow;
3. That as to each item of relief to be granted, Greater injury will be inflicted upon the petitioner by the denial
of relief than will be inflicted upon respondents by the granting of relief;
4. That petitioner has No adequate remedy at law; and
5. That the public officers charged with the duty to protect petitioner’s property are Unable or unwilling to
furnish adequate protection (2011 NLRC RULES OF PROCEDURE, Rule X, Sec. 2).
Note: No injunction or temporary restraining order shall be issued on account of any threat, prohibited or
unlawful act, except against the person or persons, association or organization making the threat or committing
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the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof (2011
NLRC RULES OF PROCEDURE, Rule X, Sec. 2).
Union A is conducting a valid strike against Company X. In the conduct thereof, the members of the
union picketed around the company premised holding posters containing their demands from the
employer. They also placed barb wires outside the gates of the company premises which prevented the
trucks delivering the company products from entering and exiting the company premises. It likewise
prevented the other employees from entering or leaving the place. Company X filed a petition for the
issuance of a writ of injunction against Union A before the NLRC. Union A contends that the same
cannot be issued. Decide.
The NLRC can issue an injunction only against Union A’s prohibited acts. The injunction power of the NLRC
shall be limited to the prohibited activities conducted during the strike and not against the strike itself. The law
prohibits the obstruction of the free ingress to or egress from the employer’s premises for lawful purposes or
obstruct public thoroughfares. Since the members of the union obstructed the gates of the company premises, the
NLRC can issue an injunction against their prohibited acts but not on the strike itself (IRR of LABOR CODE,
Book V, Rule XXII, Sec. 14).
Termination of Employment
Security of Tenure
What is security of tenure?

In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause
or when authorized by this Title (Termination of Employment) (LABOR CODE, Art. 294).
What are the kinds of employees? (RCP2-SF)

The following are the kinds of employment:
1. Regular employees: employees who have been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer (LABOR CODE, Art. 295);
2. Casual employees: employees who are not regular, project, or seasonal employees (LABOR CODE, Art.
295), and as a general rule, those performing activities not usually necessary or desirable in the employer’s
usual business or trade are casual employees (GMA Network v. Pabriga, G.R. No. 176419, November 27,
2013);
3. Probationary employees: employees whose employment does not exceed six (6) months from the date
the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer
period (LABOR CODE, Art. 296);
4. Project employees: employees whose 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
(Gapayao v. Fulo, G.R. No. 193493, July 13, 2013);
5. Seasonal employees: employees who work or perform services which are seasonal in nature, and the
employment is for the duration of the season (LABOR CODE, Art. 295);
6. Fixed-term employees: employees whose employment contract specifies that the same will last only for a
definite period (Brent School v. Zamora, G.R. No. L-48494, February 5, 1990);
What is the Work Pool principle?

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 of any phase thereof will not
mean severance of employer-employee relationship. However, if the workers in the work pool are free to leave
anytime and offer their services to other employers, then they are project employees employed by a construction
company in a particular project or in a phase thereof (Raycor Aircontrol Systems, Inc., v. NLRC, G.R. No. 114290,
September 9, 1996).
D works as part of the creative manpower of A Corp. with a Talent Contract renewed every year.
Sometime in 2002, A Corp. adopted a system known as the Internal Job Market (IJM) System which
led to the creation of a work pool of accredited technical or creative manpower. Under this system, the
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workers were regarded as independent contractors, not regular employees. Upon the implementation
of the IJM System, each of the workers was given an hourly rate. D started demanding recognition
as a regular employee. A Corp. purportedly coerced D to sign a contract and waive his claims for
regularization. Because D refused to comply, A Corp. dismissed D. Is D a regular employee of A Corp.?
Yes, D is a regular employee of A Corp. Following the four-fold test, the Court ruled that cameramen/editors,
reporters or members of creative manpower are considered employees although engaged under Talent Contracts,
which were regularly renewed over the years. Furthermore, A Corp. wielded the power to control the means
and methods in the performance of the D’ work such that D was subject to the constant watch and scrutiny
of A Corp., through its production supervisors who strictly monitored their work and ensured that their end
results are acceptable and in accordance with the standards set by the company. The fact that D signed a “Talent
Contract and/or Project Assignment Form” does not ipso facto make him a talent. It is settled that a talent contract
does not necessarily prevent an employee from acquiring a regular employment status (Del Rosario v. ABS-CBN
Broadcasting Corp., G.R. Nos. 202481,et. al., September 8, 2020).
B was hired by XYZ Company in connection with a telecommunication project the company was
contracted to provide for a foreign telecommunications firm. B contends that the provision in his
contract which provides that his position is “project-based and as such is co-terminus to the project”
neither determined nor made known him, at the time of hiring, when the said project would end, be
terminated, or be completed. He argues that since his contract failed to provide the duration and scope
of the project which should have been specified at the time they were engaged for the same, he has now
become a regular employee. Is his contention correct?
No, B’s contention is not correct. For an employee to be considered project-based, the employer must show
compliance with two (2) requisites, namely that: (a) the employee was assigned to carry out a specific project or
undertaking; and (b) the duration and scope of which were specified at the time they were engaged for such project.
As regards the second requisite, the law and jurisprudence dictate that ‘the duration of the undertaking begins
and ends at determined or determinable times. The phrase ‘determinable times’ simply means capable of being
determined or fixed.” In this case, XYZ Company substantially complied with this requisite when it expressly
indicated in petitioners’ employment contracts that their positions were “co-terminus with the project.” To the
mind of the Court, this caveat sufficiently apprised petitioners that their security of tenure with XYZ Company
would only last as long as the project was subsisting (Gadia v. Sykes Asia, G.R. No. 209499, January 28, 2015).
Min was hired by NCB Co., a corporation engaged in the construction business, as a laborer for the
structural phase and as a mason for the architectural phase of Avi Condominium. Later, upon reviewing
Min’s employment record, NCB Co. found that Min was lacking in appointment papers and thus did
not rehire him again. Min filed a complaint for illegal dismissal, he alleged that his work as a laborer
and mason was necessary and desirable to the business of the employer and that his rehiring which
resulted to his working for more than one year makes him a regular employee. On the other hand, NCB
Co. averred that Min was hired as a project employee for the two different phases and that his tasks were
completely different from each project. Is Min a regular employee?
No, Min is not a regular employee. The repeated rehiring of Min did not make him a regular employee of NCB
Co. It is not uncommon for a construction firm to hire project employees to perform work necessary and vital
for its business. The Supreme Court has acknowledged the unique characteristic of the construction industry
and emphasized that the laborer’s performance of work that is necessary and vital to the employer’s construction
business, and the former’s repeated rehiring, do not automatically lead to regularization. Additionally, the
employee’s tenure “is not permanent but coterminous with the work to which he is assigned.” Consequently,
it would be extremely burdensome for the employer, who depends on the availability of projects, to carry the
employee on a permanent status and pay him wages even if there are no projects for him to work on. An employer
cannot be forced to maintain the employees in the payroll, even after the completion of the project. Accordingly,
it is all too apparent that the employee’s length of service and repeated re-hiring constitutes an unfair yardstick for
determining regular employment in the construction industry (Reyman Minsola v. New City Builders Inc. and
Engr. Ernel Fajardo, G.R. No. 207613, January 31, 2018).
AC Tech, a company based in the US, hired IKSI to review various litigation documents. Due to the
nature of the job, AC Tech required IKSI to hire lawyers, or at least, law graduates, to review various
litigation documents. For this purpose, IKSI engaged the services of X and Y, as senior and junior
reviewers with a contract duration of five (5) years. Two years thereafter, X and Y received a Notice of
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Forced Leave from IKSI informing them that they shall be placed on indefinite forced leave effective
that same day due to changes in business conditions and eventually, their contracts would have to be
terminated. X and Y thus filed a complaint for illegal dismissal. IKSI countered that the X and Y are
project employees and the duration of the project was reasonably determinable at the time X and Y were
hired. Is the contention of IKSI correct?
No, the contention of IKSI is not correct. Project employment and fixed-term employment are not the same.
While the former requires a particular 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 (Innodata Knowledge Services, Inc. v. Socorro Inting, et al., G.R. No. 211892, December
6, 2017).
What are the differences between subcontracting and labor-only contracting?

Subcontracting or Job Contracting Labor-Only Contracting
As to nature of employer or principal
The employer or principal is merely an indirect The employer or principal is treated as the direct
employer, by operation of law, of his contractor’s employer of the contractor’s employees in all
employees (PCI Automation Center, Inc., v. NLRC, instances (contractor is deemed agent of the
G.R. No. 115920 January 29, 1996) employer) (Manila Water Company v. Peña G.R.
No. 158255, July 8, 2004)
As to existence of Er-Ee relationship with employer or principal

The law creates an Er-Ee relationship for a limited The statute creates an Er-Ee relationship for
purpose, (i.e. to ensure that the employees are paid a comprehensive purpose, (i.e. to prevent a
their wages) (SMC v. MAERC Integrated Services, circumvention of labor laws) (SMC v. MAERC
Inc., G.R. No. 144672, July 10, 2003) Integrated Services, Inc., G.R. No. 144672, July 10,
2003)
As to liability of the principal
The principal becomes solidarily liable with the The principal becomes solidarily liable with the
contractor in the event the latter fails to pay the contractor not only for unpaid wages but also for
employees’ wages and for violation of labor standard all the rightful claims of the employees under the
laws. But the liability does not extend to the payment Labor Code and ancillary laws (SMC v. MAERC
of backwages or separation pay of employees who are Integrated Services, Inc., G.R. No. 144672, July 10,
illegally dismissed (Rosewood Processing v. NLRC, 2003)
G.R. No. 116476-84, May 21, 1998)
As to validity
Permissible Prohibited by law
As to presence of substantial capital or investment
There is a presence of substantial capital or There is an absence of substantial capital or
investment. investment.
What are the elements of a legitimate contracting or subcontracting? (DC-FR)

The contracting or subcontracting shall only be allowed if all of the following circumstances concur:
1. The contractor or subcontractor is engaged in a Distinct and independent business and undertakes to
perform the job or work on its own responsibility according to its own method;
2. The contractor or subcontractor has substantial Capital to carry out the job farmed out by the principal on
his account, manner and method, investment in the form of tools, equipment, machinery and supervision;
3. In performing the work farmed out, the contractor or subcontractor is Free from control and/or discretion
of the principal in all matters connected with the performance of the work except as to the result thereto;
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and
4. The service agreement ensures compliance with all the Rights and benefits for all the employees of the
contractor or subcontractor under the labor laws (DO 174-17, Sec. 8).
What are the elements of a labor-only contracting?

Labor-only contracting refers to an arrangement where the contractor or subcontractor recruits, supplies, or places
workers to perform a job or work for a principal, any of the two elements hereunder is present:
1. The contractor or subcontractor:
a. Does not have either substantial capital OR investments in the form of tools, equipment, machineries,
supervision, work premises, among others; AND
b. The employees recruited and placed are performing activities which are directly related to the main
business operation of the principal; or
2. The contractor or subcontractor does not exercise the right to control over the performance of the work of
the employee (DO 174, Secs. 3.5 & 5).
Note: There is labor-only contracting even if only one of the two elements above is present (Coca-Cola Bottlers
Phils., Inc., v. Agito, G.R. No. 179546, February 13, 2009). Labor-only contracting is legally wrong and prohibited
because it is an attempt to evade the obligations of an employer (1 Azucena, p. 307).
Legarda Place Dormitory (LPD) entered into a Contract of Services with Ward Janitorial Services
(Ward). Under the contract, WJS, as an independent contractor, will assign workers, X, Y, and Z, to
perform services at LPD. They worked 6 days a week for 8 hours daily. X, Y, and Z filed a Complaint for
Regularization, and illegal dismissal, underpayment of 13th month pay, and payment of attorney’s fees
and CBA benefits against LPD and Ward. They alleged that they asked LPD to consider them as regular
workers within the appropriate bargaining unit established in the collective bargaining agreement by
LPD and its union, the LPD Workers Union (LPD Union). LPD refused the request since they were
employed by Ward. X, Y, and Z later joined the LPD Union and came to you for advice. May they, as
employees of a labor-only contractor, become regular employees of the principal?
Yes, they may become regular employees of the principal. They are regular employees of LPD because Ward is a
labor-only contractor. Failure to register as a contractor, a presumption arises that one is engaged in labor-only
contracting unless the contractor overcomes the burden of proving that it has substantial capital, investment,
tools, and the like. In this case, however, LPD failed to adduce evidence to prove that Ward had substantial
capital, investment, or assets to perform the work contracted for. Thus, the presumption that Ward is a labor-only
contractor stands. Consequently, LPD is deemed the employer of respondents. Hence, as regular employees of
LPD, respondents are entitled to their claims for wages and other benefits (Manila Memorial Park Cemetery, Inc.
v. Lluz, G.R. No. 208451, February 3, 2016).
What is the concept of “Trilateral Relationship”?

It refers to the relationship in a contracting or subcontracting arrangement where there is a contract for a specific
job, work, or service between the principal and the contractor, and a contract of employment between the
contractor and its workers (DO 18-A, Sec. 3(m)).
What is the rule regarding the liability of the parties in legitimate subcontracting and labor-only
contracting?
As to legitimate contracting, there exists a solidary liability on the part of the principal and the contractor for
purposes of enforcing the provisions of the Labor Code and other social legislations, to the extent of the work
performed in the employment contract in the event of (a) a violation of any provision of the Labor Code; or (b)
failure to pay wages (DO 174-17, Sec. 9). On the other hand, in labor-only contracting, the principal becomes
solidarily liable with the contractor not only for unpaid wages but also for all rightful claims of the employees
under the Labor Code and ancillary laws (SMC v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10,
2003).
A, B, C, and D were security guards hired by XYZ Security Services to work for SB Colleges, Inc. They
filed a complaint against the latter for non-compliance with the current minimum wage order. XYZ
Security Services alleged that SB Colleges, Inc. should exclusively be liable for the payment of wage
increases. Is SB Colleges, Inc. solidarily liable? If yes, can it seek any reimbursement?
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Yes, SB Colleges is solidarily liable and can seek reimbursement from XYZ Security Services. The principal is
solidarily liable with the contractor for any violation of any provision of the Labor Code, including the failure to
pay wages, and in case the principal pays the unpaid wages, it may validly claim reimbursement from the contractor
(Alpha Investigation and Security Agency, Inc. v. NLRC, G.R. No. 111722, May 27, 1997).
Termination by Employer
What are the just causes for the termination of employment and its requisites? (SeW-NA-FAC)
The following are the just causes for termination of employment as provided by DO 147-15, Sec. 5.2:
Serious Misconduct (MGU)
1. There must be Misconduct;
2. The misconduct must be of such Grave and aggravated character; and
3. There must be showing that the employee becomes Unfit to continue working for the employer.
Willful Disobedience or Insubordination (D2WR)

1. There must be Disobedience or insubordination;
2. The disobedience or insubordination must be Willful or intentional characterized by a wrongful and
perverse attitude;
3. The order violated must be Reasonable, lawful, and made known to the employee; and
4. The order must pertain to the Duties which he has been engaged to discharge.
Gross and Habitual Neglect of Duties (NG)

1. There must be Neglect of duty; and
2. The negligence must be both Gross and habitual in character.
Fraud or Willful Breach of Trust (ABEW)

1. There must be an Act, omission, or concealment;
2. The act, omission or concealment involves a Breach of legal duty, trust, or confidence justly reposed;
3. It must be committed against the Employer or his/her representative; and
4. It must be in connection with the employee’s Work.
Loss of Confidence; Requisites (AJH-S2G)

1. There must be an Act, omission or concealment;
2. The act, omission or concealment Justifies the loss of trust and confidence;
3. The employee concerned must be Holding a position of trust and confidence;
4. The loss of trust and confidence should not be Simulated;
5. It should not be used as a Subterfuge for causes which are improper, illegal or unjustified; and
6. It must be Genuine and not a mere afterthought to justify an earlier action taken in bad faith.
Commission of a Crime or Offense; Requisites (AC)

1. There must be an Act or omission punishable/prohibited by law; and
2. The act or omission was Committed by the employee against the person of employer, any immediate
member of his/her family, or his/her duly authorized representative.
Analogous Cases; Requisites (SV)

1. There must be act or omission Similar to those specified just causes; and
2. The act or omission must be Voluntary and/or willful on the part of the employees.
During the Christmas Party of XYZ Company, A, an employee and a union officer, berated and maligned
the company’s managing director by throwing foul and offensive words at him, such as “putang ina
mo ka, gago ka!” A’s tirade included the company and its officers. Moreover, the incident happened
in front of the company’s employees, their families, as well as company clients and guests. A was later
dismissed on the ground of serious misconduct. A claimed that his acts do not warrant dismissal since
misconduct, however serious, must nevertheless be in connection with the employee’s work to constitute
just cause for his separation. Is his contention correct?
No, A’s contention is erroneous. A’s display of insolent and disrespectful behavior, in utter disregard of the time
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and place of its occurrence, had very much to do with his work. He set a bad example as a union officer. His
actuations during the company’s Christmas Party could have had negative repercussions for his employer had he
been allowed to stay on the job. His standing before those clients who witnessed the incident and those who would
hear of it would surely be diminished, to the detriment of the company (Benitez v. Santa Fe, G.R. No. 208163,
April 20, 2015).
Note: The case is to be distinguished from Samson v. NLRC, G.R. No. 121035, April 12, 2000, wherein the
offensive utterances of the employee against the general manager were not considered as serious misconduct since
the utterances were made in a mere casual get-together of employees, and in the absence of the general manager.
A was employed in XYZ School, a catholic and sectarian educational institution, as an assistant to the
XYZ’s Director. Without having any legal impediments to marry one another, A and her boyfriend B
conceived a child out of wedlock. XYZ learned of A’s pregnancy, and advised A to resign in view of
a provision in the school’s handbook following the 1992 Manual of Regulations for Private Schools
(MRPS) on the causes for termination of employments; that Section 94(e) of the 1992 MRPS cites
“disgraceful or immoral conduct” as a ground for dismissal in addition to the just causes for termination
of employment provided under Article 282 of the Labor Code. XYZ maintains that pre-marital sexual
relations, even if between two consenting adults without legal impediment to marry, is considered
a disgraceful and immoral conduct or a serious misconduct, which are grounds for the termination
of employment under the 1992 MRPS and the Labor Code. That XYZ, as a Catholic institution of
learning, has the right to uphold the teaching of the Catholic Church and expect its employees to abide
by the same. May A be dismissed on the ground of disgraceful or immoral conduct?
No, A may not be dismissed on the ground of disgraceful or immoral conduct. The morality referred to in the law
is public and necessarily secular, not religious. The determination of whether a conduct is disgraceful or immoral
involves a two-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and
second, an assessment of the said circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society
generally considers moral and respectable. The fact of the petitioner’s pregnancy out of wedlock, without more, is
not enough to characterize the petitioner’s conduct as disgraceful or immoral. That the petitioner was employed
by a Catholic educational institution per se does not absolutely determine whether her pregnancy out of wedlock
is disgraceful or immoral. There is still a necessity to determine whether the petitioner’s pregnancy out of wedlock
is considered disgraceful or immoral in accordance with the prevailing norms of conduct. Furthermore, there was
no substantial evidence to prove that a pregnancy out of wedlock will cause grave scandal to the school and its
students. It is the burden of the employer to show such damage (Leus v. St. Scholastica, G.R. No. 187226, January
28, 2015).
P was hired as midwife of E&R Hospital owned by Dr. B. She was promoted and eventually became the
Business Office Manager and held such a position until her employment was terminated by Dr. B. Dr. B
alleged that P’s termination was brought about by several infractions she committed and her habitual
tardiness. Dr. B avers that E&R Hospital suffered losses due to the negligence of P in failing to process
and send the records of certain patients to PhilHealth for refund of their paid claims; reporting very
late for work; and commanding a subordinate to punch her timecard in the bundy clock in her behalf.
Due to the alleged incessant breach of trust exhibited by P, Dr. B issued the memorandum terminating
the employment of P. P filed a Complaint for Illegal Dismissal with the LA. Was there just cause in
dismissing P?
No. In determining the legality of an employee’s dismissal, the Court must determine the legality of the act of
dismissal which pertains to substantive due process, and the manner of dismissal which constitutes procedural due
process. Article 297(c) allows an employer to terminate the services of an employee on the ground of loss of trust
and confidence. There are two requisites for this ground; first, the employee must be holding a position of trust and
confidence; and second, there must be a willful act that would justify the loss of trust and confidence which is based
on clearly established facts. The pivotal issue thus before the Court is the existence of the second requisite. In this
case Dr. B failed to prove with substantial evidence Pardillo’s alleged acts which led to loss of trust and confidence
(Pardillo v. Bandojo, G.R. No. 224854; March 27, 2019, Caguioa Case).
GRRI hired V as a part-time employee. V was charged with violating company policies when she rejected
walk-in guests without management approval and threatened the assistant resort manager with physical
harm. After an administrative investigation, GRRI found V guilty of both charges and was penalized
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with suspension. Thereafter, GRRI implemented a reorganization which included the transfer of V to a
new department. V however refused to sign the Notice to Transfer and instead remained at the reception
area for two days before reporting to her new station, and sent an e-mail addressed to the management
asking questions regarding her transfer. GRRI issued to V a Notice of Preventive Suspension in view
of the pending resolution of the charge against her. V however failed to report back to work after
the lapse of the period of her preventive suspension. Upon reporting, V was handed the Termination
Notice advising her that the management found her guilty of “inhuman and unbearable treatment to
person in authority; abuse of authority; serious misconduct — insubordination by not accepting her
memorandum of re-assignment by the Executive Committee; and gross and habitual neglect of duties
— AWOL” and had decided to terminate her from employment effective immediately.
1. Was V validly dismissed from employment on the ground of insubordination for her mere failure to
sign the Notice to Transfer?
No, she was invalidly dismissed. Insubordination or willful disobedience requires the concurrence of the
following requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness
being 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. As stated by V in her handwritten explanation, she withheld her signature on the Notice to
Transfer because she was awaiting answers to the questions she raised to the management via e-mail. She
cannot be forced to affix her signature thereon if she does not really fully understand the reasons behind and
the consequences of her transfer. While her action is willful and intentional, it is nonetheless far from being
“wrongful and perverse”.
2. Was V validly dismissed from employment due to habitual neglect for her absences without leave for
five days, as shown by the two memoranda served on her?
No, she was invalidly dismissed. In order to constitute a valid cause for dismissal, the neglect of duties must
be both gross and habitual. Gross negligence has been defined as “the want or absence of or failure to exercise
slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them.” On the other hand, habitual neglect “imparts repeated failure to perform
one’s duties for a period of time, depending on the circumstances.” A single or isolated act of negligence does
not constitute a just cause for the dismissal of the employee. V’s four-day absence without leave is not gross
nor habitual (Villanueva v. Ganco Resort and Recreation, Inc., G.R. No. 227175, January 8, 2020, Caguioa
Case).
Sterling Co. hired Esa as machine operator. Years later, Sterling’s supervisor found Esa and his co-
employees about to take a nap on the sheeter machine. She called their attention and prohibited them
from taking a nap thereon for safety reasons. Esa then uttered disrespectful and provocative words
and raised his middle finger against his superior. A notice to explain was served on Esa but the latter
neither responded nor attended the administrative hearings for the same. Sterling then terminated Esa’s
employment. Sterling argues that Esa’s utterance of foul and abusive language against his supervisor,
demonstrating a dirty finger, and defiance to perform his duties undeniably constitute serious
misconduct. Was Esa validly dismissed?
Yes, Esa was validly dismissed. For misconduct or improper behavior to be a just cause for dismissal, the following
elements must concur: (a) the misconduct must be serious; (b) it must relate to the performance of the employee’s
duties showing that the employee has become unfit to continue working for the employer; and (c) it must have
been performed with wrongful intent. The utterance of obscene, insulting or offensive words against a superior
is not only destructive of the morale of his co-employees and a violation of the company rules and regulations,
but also constitutes gross misconduct. The accusatory and inflammatory language used by an employee towards
his employer or superior can be a ground for dismissal or termination. Further, Esa’s assailed conduct was related
to his work. The supervisor did not prohibit him from taking a nap. She merely reminded him that he could not
do so on the sheeter machine for safety reasons. Esa’s acts reflect an unwillingness to comply with reasonable
management directives (Sterling Paper Products Enterprises, Inc. v. KMM-Katipunan and Raymond Z. Esponga,
G.R. No. 221493, August 2, 2017).
A, a security guard of KLP, while doing his usual inspection around the company’s premises heard a
sound of a running industrial fan. With the intention of turning it off, he followed the sound only to
find X and Y having sexual intercourse beside the big bamboo organ. A immediately went back to the
guard house and relayed what he saw to B, another security guard on duty. Due to such event, X and Y
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were dismissed due to serious misconduct.

1. Was the termination valid?
Yes, the termination is valid. Sexual acts and intimacies between two consenting adults belong, as a principled
ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by sincere affection, sexual
acts should be carried out at such place, time and circumstance that, by the generally accepted norms of
conduct, will not offend public decency nor disturb the generally held or accepted social morals. Under these
parameters, sexual acts between two consenting adults do not have a place in the work environment (Imasen
Philippine Manufacturing Corporation v. Alcon, G.R. No. 194884, October 22, 2014).
2. Will they be entitled to separation pay?
No, X and Y are not entitled to separation pay. The payment of separation pay is only due when a dismissal
is on account of an authorized cause and the amount of separation pay depends on the ground for the
termination of employment. In this case, the dismissal of X and Y was on account of gross misconduct which
is considered a just cause for dismissal (Belarde v. Fuentes, G.R. Nos. 205685-86, June 22, 2015).
A, the company’s secretary, was offered a promotion. However, despite the offer and a huge increase in
her salary, she refused. The company then dismissed A based on willful disobedience which prompted
A to file an illegal dismissal case. Will the case prosper? Explain.
Yes, the illegal dismissal case will prosper. Promotion is the advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary. An
employee is not bound to accept a promotion, which is in the nature of a gift or reward. Refusal to be promoted is
a valid exercise of a right. Such exercise cannot be considered in law as insubordination or willful disobedience of a
lawful order of the employer hence, it cannot be the basis of an employee’s dismissal from service (PHARMACIA
and UPJOHN, INC. v. Albayda, Jr., G.R. No. 172724, August 23, 2010).
What are the authorized causes for the termination of employment and its requisites? (IRR-CD)
The following are the authorized causes for the termination of employment:
1. Installation of Labor-saving Devices
2. There must be introduction of machinery, equipment or other devices;
3. The introduction must be done in good faith;
4. The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other
justifiable economic reasons;
5. There is no other option available to the employer than the introduction of machinery, equipment or
device and the consequent termination of employment of those affected thereby; and
6. There must be fair and reasonable criteria in selecting employees to be dismissed.
Redundancy
1. There must be superfluous positions or services of employees;
2. The positions or services are in excess of what is reasonably demanded by the actual requirements of the
enterprise to operate in an economical and efficient manner;
3. There must be good faith in abolishing redundant positions;
4. There must be fair and reasonable criteria in selecting the employees to be dismissed; and
5. There must be an adequate proof of redundancy such as but not limited to the new staffing pattern,
feasibility studies/proposal, on the viability of the newly created positions, job description and the approval
by the management of the restructuring.
Retrenchment or Downsizing
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only
expected, are reasonably imminent;
3. The expected or actual losses must be proved by sufficient and convincing evidence;
4. The retrenchment must be in good faith for the advancement of its 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.
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Closure or Cessation of Operation

1. There must be a decision to close or cease operation of the enterprise by the management;
2. The decision was made in good faith; and
3. There is no other option available to the employer except to close or cease operations.
Disease
1. The employee must be suffering from any disease;
2. The continued employment of the employee is prohibited by law or prejudicial to his/her health as well as
to the health of his/her co-employees; and
3. There must be certification by a competent public health authority that the disease is incurable within a
period of six (6) months even with proper medical treatment.
Other Causes of Termination

1. Reasonable and lawful grounds specified under company policies;
2. An employee found positive for use of dangerous drugs shall be dealt with administratively;
3. Sexual harassment (serious misconduct); and
4. Those provided for under the CBA (DO 147-15, Sec. 6).
Arlene was hired as a news correspondent by Fiji Inc. for a period of one year. The employment contact
was successively renewed on a yearly basis with salary adjustments upon every renewal. Years passed, and
Arlene was diagnosed with lung cancer. She informed Fiji Inc. about her condition, which prompted
Fiji Inc to deny the renewal of her contract considering her condition. Arlene filed a complaint for
illegal dismissal alleging that she was forced to sign the non-renewal contract upon knowledge of her
condition reached Fiji Inc. Will the case prosper?
Yes, Arlene was illegally dismissed. For termination due to disease to be valid, two requirements must be complied
with: (1) the employee’s disease cannot be cured within six (6) months and his “continued employment is prohibited
by law or prejudicial to his health as well as to the health of his co-employees”; and (2) certification issued by a
competent public health authority that even with proper medical treatment, the disease cannot be cured within six
(6) months. The burden of proving compliance with these requisites is on the employer. Noncompliance leads to
the conclusion that the dismissal was illegal.
There is no evidence showing that Arlene was accorded due process. After informing her employer of her lung
cancer, she was not given the chance to present medical certificates. Fiji immediately concluded that Arlene could
no longer perform her duties because of chemotherapy. It did not ask her how her condition would affect her work.
Neither did it suggest for her to take a leave, even though she was entitled to sick leaves. Worse, it did not present
any certificate from a competent public health authority. What Fiji did was to inform her that her contract would
no longer be renewed (Fuji Television Network, Inc. v. Espiritu, G.R. Nos. 204944-45, December 3, 2014).
X and Y were employed by AB Laboratories in the Pedia Division. However, the positions of the
respondents were declared redundant when the Pedia Division and its Medical Nutrition Division were
merged into one. This resulted in the termination of X and Y, who were subsequently offered them the
position of district sales manager. They denied the offer. A complaint for illegal dismissal was filed by X
and Y arguing that no fair criteria was utilized in determining who among the employees are redundant.
AB Laboratories argued that respondents were dismissed for an authorized cause. Is the contention of
AB Laboratories correct?
No, there was no valid implementation of the redundancy program. For there to be a valid implementation of
a redundancy program, the following should be present: (1) written notice served on both the employees and
the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (2)
payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service,
whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in
ascertaining what positions are to be declared redundant and accordingly abolished. AB Laboratories failed to
establish compliance with the fourth requirement since it did not gauge the redundant employees against the
preference criteria of status, efficiency, and proficiency. Furthermore, the offer for job openings for the position
of district sales manager puts a cloud on the wisdom and validity of the redundancy program as the essence
of redundancy is that the existing manpower exceeds more than what is necessary in their operation (Abbott
Laboratories (Philippines), Inc. v. Manuel F. Torralba, G.R. No. 229746, October 11, 2017).
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What are the aspects of the two-fold due process requirement in the termination of an employee?
The two-fold aspects of due process requirement in the termination by an employer of an employee are:
1. Substantive aspect, by which the dismissal must be for any of the:
a. Just causes; or
b. Authorized causes; and
3. Procedural aspect, rudimentary requirements of due process, notice and hearing must be observed
(Bughaw, Jr. Treasure Island Industrial Corp., G.R. No. 173151, March 28, 2008).
What is the Two-Notice Rule under Procedural Due Process in labor cases?
The Two-Notice Rule provides that in dismissing an employee, the employer has the burden of proving that the
former worker has been served two notices:
One to apprise him of the particular acts or omissions for which his dismissal is sought; and
The other to inform him of his employer’s decision to dismiss him (Tan v. NLRC, G.R. No. 128290, November
24, 1998).
Note: The first notice must inform outright the employee that an investigation will be conducted on the charges
particularized therein which, if proven, will result in his dismissal. Such notice must not only contain a plain
statement of the charges of malfeasance or misfeasance but must categorically state the effect on his employment
if the charges are proven to be true (Maquiling v. Philippine Tuberculosis Society, Inc., G.R. No. 143484, February
4, 2005).
What happens if the termination was done without observing substantive due process?
The employer shall not terminate the services of an employee except for a just cause or cause authorized by law.
Where there is no showing of clear, valid and legal cause of termination, the law considers it a case of illegal dismissal
(General Baptist College v. NLRC, G.R. No. 85534, March 5, 1993).
J was the booking salesman of HGP Inc. He claims that D directed him to report to her office and was
asked to resign for his poor performance and for being of no help to the company. The following day,
he claims to have been confronted by HR for his resignation letter as ordered by D. He was presented
with the computation of his final pay. He opposed the decision but it proved futile and he was ordered
to surrender all documents and properties the following day. HGP Inc., on the other hand, claim that J
was not illegally dismissed. D talked to J about the latter’s shortages and poor performance expounding
that the shortages are considered as theft, which is a valid ground for his immediate termination. But
considering his prior good sales performance and the stigma of being terminated from employment, D
offered the option for J to just resign and the management would not file a criminal charge against him
for the unremitted amounts. After this conversation, D claim that J never returned to work. Does HGP
Inc.’s offer for J to resign amounts to illegal dismissal?
No. A decision to give a graceful exit to an employee rather than to file an action for redress is perfectly within
the discretion of an employer. It is not uncommon that an employee is permitted to resign to save face after the
exposure of her malfeasance. In this case, J’s resignation does not amount to illegal dismissal. (Jarabelo v. Household
Goods Patrons, Inc., G.R. No. 223163, December 2, 2020, Caguioa Case)
What are the reliefs available to an employee upon finding that he was illegally dismissed?
An illegally dismissed employee is entitled to the following reliefs:
Reinstatement without loss of seniority rights and other privileges or separation pay if no longer viable; and
Full backwages, inclusive of allowances and other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to his actual reinstatement (LABOR CODE, Art. 279).
What is reinstatement?
Reinstatement is a restoration to a state from which one has been removed or separated (Reyes v. RP Guardians
Security Agency, Inc., G.R. No. 193756, April 10, 2013). Reinstatement may be:
1. Actual reinstatement - The employee shall be admitted back to work; or
2. Payroll reinstatement - The employee is merely reinstated in the payroll (University of Immaculate
Concepcion v. Secretary of Labor, G.R. No. 151379, January 14, 2005).
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R was hired by SS Inc. as Sales Coordinator. She attended training in the USA without any condition
imposed upon her attendance. However, when she returned for work, SS Inc. asked her to sign a training
agreement which required her to remain with SS Inc. for three years, otherwise, she was to pay a penalty.
She refused to sign the agreement, arguing that she should have been informed of the same prior to her
departure for the training. Thereafter, SS Inc.’s President humiliated R and shouted at her. R then went
on absences and filed a complaint for constructive illegal dismissal. R alleged that she was forced to go
on absences. Should R be entitled to either separation pay or reinstatement?
No, R should not be entitled to separation pay but shall be reinstated under a different concept. In cases where the
parties failed to prove the presence of either dismissal of the employee or abandonment of his work, the remedy is
to reinstate such employee without payment of backwages. There is, however, a need to clarify the import of the
term “reinstate” or “reinstatement” in the context of cases where neither dismissal nor abandonment exists. The
SC has clarified that “reinstatement,” as used in such cases, is merely an affirmation that the employee may return
to work as he was not dismissed in the first place. Reinstatement under the Article 294(279) restores the employee
who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal.
In the present case, considering that there has been no dismissal at all, there can be no reinstatement as one cannot
be reinstated to a position he is still holding. Instead, the Court merely declares that the employee may go back to
his work and the employer must then accept him because the employment relationship between them was never
actually severed (Rodriguez v. Sintron Systems, Inc., G.R. No. 240254; July 24, 2019, Caguioa Case).
What are backwages?

Backwages, in general, are those granted on grounds of equity for earnings which a worker or employee has lost due
to his illegal dismissal (PAL v. NLRC, G.R. No. 55159, December 22, 1989).
A is working as bank collector. It was later discovered that several funds she was handling were
misappropriated. The bank then dismissed A and filed a series of criminal cases against her. A, on
the other hand, filed an illegal dismissal case against the bank. The court held that there was illegal
dismissal and ordered the reinstatement of A. However, instead of reinstatement, separation pay was
given to A due strained relations.
Was such act by the bank correct?

Yes, the act of the bank of giving separation pay instead of reinstating A is correct. In instances where reinstatement
is no longer feasible because of strained relations between the employee and the employer, separation pay should be
granted. In effect, an illegally dismissed employee should be entitled to either reinstatement – if viable, or separation
pay if reinstatement is no longer be viable, plus backwages in either instance (Wenphil Corporation vs Abing, G.R.
No. 207983, April 7, 2014).
If there is no reinstatement, what will happen to A’s backwages?

Employees who are illegally dismissed are entitled to full backwages, inclusive of allowances and other benefits or
their monetary equivalent, computed from the time their actual compensation was withheld from them up to the
time of their actual reinstatement. But if reinstatement is no longer possible, the backwages shall be computed
from the time of their illegal termination up to the finality of the decision (Bank of Lubao, Inc. v Manabat, G.R.
No. 188722, February 1, 2012).
ALECO is an electric cooperative while ALECO Labor Employees Organization (ALEO) is the collective
bargaining agent of ALECO’s employees. ALECO reported that it was suffering financial distress.
ALECO was pushing for Private Sector Participation (PSP) as its appropriate rehabilitation strategy.
Under the PSP, the current employees of ALECO shall be required to tender their courtesy resignation
to give flexibility to the incoming private sector concessionaire, but they shall receive separation pay
based on the existing CBA with ALEO and shall have priority in rehiring based on the standards set
by the concessionaire. ALEO sought preventive mediation before the NCMB for unfair labor practices.
The parties, however, failed to settle their differences which constrained ALEO to file a notice of strike.
Subsequently, the PSP was eventually chosen. Still, ALEO went on strike. ALECO, formally requested
the Secretary of Labor to assume jurisdiction over the controversy which ordered ALECO to pay
backwages from the date of the issuance of the Assumption Order until the finality of its resolution.
ALECO argues that the computation of backwages should only be limited to the period when the
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striking employees actually reported back to work. ALEO counters that the award of backwages is
consistent with Section 278 [263] (g) of the Labor Code which prescribes backwages, among others, as
disciplinary action for noncompliance with any of the Secretary of Labor’s orders. Was the award for
backwages a penalty for non-compliance with the Assumption Order?
No, the award for backwages is not a penalty for non-compliance with the Assumption Order but as satisfaction
of ALECO’s obligation towards the employees covered by the Assumption Order. Backwages correspond to
the amount ought to have been received by the affected employees if only they had been reinstated following the
Assumption Order. The award of backwages is proper, not as a penalty for non-compliance with the Assumption
Order as argued by ALEO, but as satisfaction of ALECO’s obligation towards the employees covered by the
Assumption Order. On said date, the obligation of the employer to re-admit the striking employees and/or pay
them their respective salaries and benefits arose. However, there is no proof that the affected employees were in fact
paid by ALECO their corresponding salaries and benefits. Because of ALECO’s failure to re-admit the striking
employees and/or pay them their respective salaries and benefits, and to give the affected employees what has
become due to them, backwages should be awarded (Albay Electric Cooperative, Inc. v. ALECO Labor Employees
Organization, G.R. No. 241437, September 14, 2020, Caguioa Case)

R filed a case of illegal dismissal against CD Inc. The Court ruled in favor of R ordering CD Inc. to
reinstate him and pay his backwages. CD Inc. opposed the motion and argued that its execution of the
Asset Purchase Agreement with ED Inc. was a supervening event that made it impossible to reinstate
R to his former position. CD Inc. argues that it should only be liable for backwages and separation pay
until the year 2007. It claims that the execution of the Asset Purchase Agreement and the termination
of the subsequent Service Agreement with ED Inc. was the reason for its failure to reinstate R. Should
CD Inc. be liable for both backwages and separation pay despite a supervening event?
Yes, when there is a supervening event that renders reinstatement impossible, backwages is computed from the
time of dismissal until the finality of the decision ordering separation pay. The reason for this is that, “when there
is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently
ordered in light of a supervening event making the award of reinstatement no longer possible), the employment
relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the
decision cuts off the employment relationship and represents the final settlement of the rights and obligations of
the parties against each other.” Here, the award of separation pay in lieu of reinstatement, which CD Inc. does
not question, was made subsequent to the finality of the Decision in the Illegal Dismissal Case. CD Inc. cannot
therefore evade its liability to R for backwages and separation pay computed until the finality of this Decision
which affirms the order granting separation pay (Consolidated Distillers of the Far East, Inc. v. Zaragoza, G.R. No.
229302, June 20, 2018, Caguioa Case).
Who are entitled to separation pay? (IRR-CD)

Separation pay shall be paid by the employer to an employee terminated due to:
1. Installation of labor-saving devices;
2. Redundancy;
3. Retrenchment;
4. Closure or cessation of operations not due to serious business losses or financial reverses; and
5. Disease (DO 147-15, Sec. 5.5).
The DBP Board approved DBP’s Position Classification System and Compensation Plan. In line with
this, the DBP Board granted retirement benefits to qualified officials and employees through ERIP
IV-2003. In 2007, the Commission on Audit (COA) issued an Audit Observation Memorandum
(AOM) which stated that DBP’s ERIP IV-2003 was implemented contrary to the provision of RA
8523. Pursuant to the AOM, COA issued a Notice of Disallowance which disallowed the payment of
retirement benefits granted to DBP’s officials and employees under ERIP IV for lack of approval from
the Secretary of Finance and the President. DBP avers that the incentives granted under the ERIP IV
are akin to the separation pay and that such benefit in addition to retirement benefits does not amount
to double compensation prohibited by the Constitution. Does the receipt of retirement benefits bar the
retiree from receiving separation pay?
No. There have already been cases decided by the Court wherein it was held that those who avail of early retirement
incentive plans may still avail of benefits under existing retirement laws. Said cases have also recognized the benefits
under an early retirement incentive plan as a form of separation pay. As applied to the instant case, the ERIP IV
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partakes the form of a separation pay in that it is given to employees who are affected by the reorganization and
streamlining of DBP. Separation pay is given to an employee in cases under Articles 298 and 299 of the Labor
Code. Specifically, these involve the installation of labor-saving devices, redundancy, retrenchment to prevent
losses, closing or cessation of operation of establishment, or in case the employee suffers from a disease such that
his continued employment is prohibited by law. By analogy, the objective of ERIP IV is similar to those grounds
for termination under Article 298 of the Labor Code on Closure of Establishment and Reduction of Personnel.
Thus, considering that the ERIP IV is analogous to separation pay, then the grant of benefits under it along with
the grant of benefits under other retirement laws should not be considered as a form of double compensation
(Abanto v. Board of Directors of the Development Bank of the Philippines, G.R. Nos. 207281 & 210922; March 05,
2019, Caguioa Case).
What is the Doctrine of Strained Relations?

Where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the
tension and strained relations between the parties or where the relationship between the employer and employee
has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed
employee held a managerial or key position in the company, it would be more prudent to order payment of
separation pay instead of reinstatement. (Quijano v. Mercury Drug Corp., G.R. No. 126561, July 8, 1998)
When is an employee entitled to moral damages?

The employee is entitled to moral damages when the employer acted:
In bad faith or fraud;
In a manner oppressive to labor; or in a manner contrary to morals, good customs, or public policy (Montinola v.
PAL, G.R. No. 198656, September 8, 2014).
What are the two concepts of attorney’s fees?

In some labor cases, attorney’s fees are awarded to employees. There are two commonly accepted concepts of
attorney’s fees:
1. Ordinary Concept - an attorney’s fee is the reasonable compensation paid by the client to his lawyer in
exchange for the legal services rendered by the latter. The compensation is paid for the cost and/or results
of the legal services, as agreed upon by the parties or as may be assessed by the courts; and
2. Extraordinary Concept - attorney’s fee is deemed an indemnity for damages ordered by the court to
be paid by the losing party to the winning party. In labor cases, attorney’s fees partake of the nature of
an extraordinary award granted to the victorious party as an indemnity for damages. As a general rule, it
is payable to the client, not to his counsel, unless the former agreed to give the amount to the latter as an
addition to, or part of the counsel’s compensation (Alva v. High Capacity Security Force, Inc., G.R. No.
203328, November 8, 2017).
What is the rule with regards to the liability of corporate officers in illegal dismissal cases?
As a general rule, corporations are treated as separate and distinct legal entities from the natural persons composing
them. In the absence of gross negligence, bad faith, or a specific provision of law making a corporate officer liable,
such corporate officer cannot be made personally liable for corporate liabilities.
To hold a director or officer personally liable for corporate obligation is the exception and it only occurs when the
following requisites are present:
1. The complaint must allege that the director or officer assented to the patently unlawful acts of the corporation,
or that the director or officer was guilty of gross negligence or bad faith; and
2. There must be proof that the director or officer acted in bad faith (Lozada v. Mendoza, G. R. No. 196134,
October 12, 2016).
Who has the burden of proof in cases of illegal dismissal?

In illegal dismissal cases, the burden of proof is on the employer in proving the validity of dismissal. However, the
fact of dismissal, if disputed, must be duly proven by the complainant. The rule is that the one who alleges a fact
has the burden of proving it (Italkarat 18, Inc., v. Gerasmio, G.R. No. 221411, September 28, 2020).
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Termination by Employee
How may an employee terminate his employment?

An employee may terminate his employment by:
1. Serving notice on the employer at least 1 month in advance (without just cause); or
2. Put to end to his employment without serving any notice on the employer for any of the following just
causes (with just cause), to wit: (SICO)
a. Serious insult by the employer or his representative on the honor and person of the employee;
b. Inhuman and unbearable treatment accorded the employee by the employer or his representative;
c. Commission of a crime or offense by the employer or his representative against the person of the
employee or any of the immediate members of his family; and
d. Other causes analogous to any of the foregoing (LABOR CODE, Art. 300).
What are the distinctions between voluntary resignation and constructive dismissal?
Voluntary Resignation Constructive Dismissal
As to Nature
Voluntary resignation is the act of an employee, who Constructive dismissal is an act of clear discrimination,
finds himself in a situation in which he believes that insensibility, or disdain by an Employer that becomes
personal reasons cannot be sacrificed in favor of the so unbearable on the part of the employee that it could
exigencyof the service thus, he has no choice but to foreclose any choice by him except to forego his contin-
dissociate himself from his employment (Intertrod ued employment (Hyatt Taxi Services v. Catinoy, G.R.
Maritime, Inc., v. NLRC, G.R. No.81087, June 19, No. 143204, June 26, 2001).
1991).
As to Test of Validity
Important for voluntary resignation to be valid is that The test of constructive dismissal is whether a reason-
the employee’s intent to relinquish must concur with able person in the employee’s position would have com-
the overt act of relinquishment (Doble v. ABB, Inc., pelled to give up his position under the circumstances
G.R. No. 215627, June 5, 2017). (McMer Corp. Inc., v. NLRC, G.R. No. 193421, June
4, 2014).
As to Entitlement to Relief
An employee who voluntarily resigns is not entitled Entitled to reinstatement without loss of seniority
to separation pay unless stipulated in an employment and payment of backwages (Pido v. NLRC, G.R. No.
contract or CBA or sanctioned by established em- 169812, February 23, 2007).
ployer practice or policy (Travelaire & Tours Corp.v.
NLRC, G.R. No. 131523, August 20, 1998).
A was initially employed by BB as a Supervisor for their restaurant. Thereafter, when the restaurant
closed, she was transferred to do office work and became an Administrative and Finance assistant to
CC. When BB ventured into other businesses, A’s duties extended, performing various functions to
each of the B’s business. Subsequently, A filed a resignation letter due to the not so favorable treatment
of CC towards her. However, BB did not accept her resignation and convinced her to stay and work.
Nevertheless, her experience became worse. A’s resignation was finally accepted when she filed the same
due to an incident when CC called her on the phone, scolded and berated her and told her that if she
did not want to continue to work, the company could manage without her. She then filed for illegal
dismissal. Was A constructively dismissed?
No, this is a case of resignation and not dismissal. There is constructive dismissal when an employer’s act of clear
discrimination, insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any
choice on his part except to resign from such employment. It exists where there is involuntary resignation because
of the harsh, hostile and unfavorable conditions set by the employer. Strong words may sometimes be exchanged
as the employer describes her expectations or as the employee narrates the conditions of her work environment and
the obstacles she encounters as she accomplishes her assigned tasks. As in every human relationship, there are bound
to be disagreements. However, when these strong words from the employer happen without palpable reason or are
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expressed only for the purpose of degrading the dignity of the employee, then a hostile work environment will be
created. This is not the situation in this case. A was not pressured into resigning. A was not comfortable anymore
with the fact that she was always at the beck and call of BB (Lourdes C. Rodriguez v. Park N Ride, Inc. G.R. No.
222980, March 20, 2017).
R was hired as a security guard by SF. R alleged that he was treated with hostility after he filed a
complaint for underpayment of wages and other money claims against SF claiming that he was then
relieved from his post. Later, he was suspended for 10 days. After the lapse of his 10-day suspension, he
allegedly reported for duty but he was told that he was on “floating status” and was advised to wait for
a call from SF. Months later, he received a letter, directing him to report within 48 hours from receipt.
He went to SF the following week but he was not allowed to enter and was made to wait outside. Before
leaving the premises, he handed a letter to the security guard informing SF that he was ready to report
for duty. SF then wrote a second letter saying that R failed to report for work despite the return to work
order. In a letter, he inquired with SF on the status of his employment stressing that he was refused to
return to work even though he obeyed the return to work order. R filed a complaint for constructive
dismissal before the Labor Arbiter on July 28, 2014. Was R constructively dismissed?
Yes. The placement of an employee on “floating status” must not exceed six months. Otherwise, the employee
may be considered constructively dismissed. The burden of proving that there are no posts available to which the
security guard can be assigned rests on the employer. However, the mere lapse of six months in “floating status”
should not automatically result to constructive dismissal. The peculiar circumstances of the employee’s failure to
assume another post must still be inquired upon. In this case, it is undisputed that R was placed on floating status
beginning on the lapse of his 10-day suspension. Thus, at the time he filed the complaint for constructive dismissal
and money claims, he has been on “floating status” for six months and 21 days (Seventh Fleet Security Services, Inc.
v. Loque G.R. No. 230005; January 22, 2020 Caguioa Case).
E was hired by TRCI as a team leader. Sometime later, he received an email from TRCI informing him
of infractions allegedly committed by R, one of the agents under his supervision. TRCI’s Operations
Manager decided to give R a final written warning. However, E, together with TRCI’s program
managers, recommended that R only be subjected to coaching. Later, E was handed a notice stating
that he was grossly negligent in the performance of an assigned task and that he willfully disobeyed
an order of a superior for failing to give R a Notice to Explain and final warning. The same notice
placed him under preventive suspension. E explained that all program managers recommended that R
be provided only with coaching and that he had fulfilled his duty to issue her a Notice to Explain. After
administrative proceedings, E was admonished with a warning that a similar violation of TRCI’s Code
of Discipline might lead to his dismissal. E was also placed on temporary lay-off subjecting him to re-
profiling until he was ready for reassignment to another account. During the lay-off, E did not receive
any compensation. Was E constructively dismissed?
Yes, constructive dismissal exists where there is cessation of work because “continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay” and other
benefits. Aptly called a dismissal in disguise or an act amounting to dismissal but made to appear as if it were not,
constructive dismissal may, likewise, exist if an act of clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his
continued employment.
Using TRCI’s term, E was temporarily laid-off, and was treated like a new applicant where he would be assessed
for other accounts to see if he was qualified. TRCI failed to prove any valid and legitimate ground to re-profile
E as its drastic action was not commensurate to E’s transgressions. This action prejudiced E as his salaries and
benefits were stopped and he was treated like a new applicant. TRCI just made it appear on paper that E was still
its employee but in reality he received none of the benefits of one and was placed in such a situation without any
legitimate ground. This is clearly a dismissal in disguise and is tantamount to constructive dismissal (Ebus v. The
Results Co., Inc., G.R. No. 244388; March 03, 2021, Caguioa Case).
AMAS Inc., a company engaged in providing manpower services, hired E as a janitor. He was assigned
at the Balintawak Branch of Meralco. Almost twenty years thereafter, the contract between AMAS Inc.
and Meralco-Balintawak Branch expired and a new contract was awarded to L Corp., and the latter
absorbed all employees of AMAS Inc. except E, who allegedly had a heart ailment. E consulted another
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doctor and based on the medical result, he was declared in good health and fit to work. He showed
the duly issued medical certificate to AMAS Inc. but the same was disregarded. E also reported for
work but was just ignored by AMAS Inc. and was told that there was no work available for him. Was E
constructively dismissed?
Yes. The suspension of employment under Article 301 of the Labor Code is only temporary and should not exceed
six months. In implementing this measure, jurisprudence has set that the employer should notify the Department
of Labor and Employment (DOLE) and the affected employee, at least one month prior to the intended date of
suspension of business operations. An employer must also prove the existence of a clear and compelling economic
reason for the temporary shutdown of its business or undertaking and that there were no available posts to which
the affected employee could be assigned. In this case, AMAS Inc. failed to show compliance with the notice
requirement to the DOLE and E. It also failed to prove that it faced with clear and compelling economic reason to
temporarily shut down its operations or a particular undertaking. It also failed to show that there were no available
posts to which E could be assigned. The totality of the foregoing circumstances shows that AMAS’ acts were
done to make it appear as if E had not been dismissed. These acts, however, clearly amounted to a dismissal, for
which AMAS is liable. (Airborne Maintenance and Allied Services, Inc. v. Egos, G.R. No. 222748; April 04, 2019,
Caguioa Case)
What constitutes abandonment of work?

Abandonment of work is a form of neglect of duty. To constitute abandonment, two (2) elements must concur,
namely:
1. The employee must have failed to report for work or must have been absent without valid or justifiable
reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-employee
relationship manifested by some overt act (CRC Agricultural Trading v. NLRC, G.R. No. 177664,
December 23, 2009).
Y and R had been employed by S Company as security guards. Y and R filed a complaint against S
Company before the LA for nonpayment of holiday pay, premium for rest day, 13th month pay, illegal
deductions and damages. The Manager of S Company told R and Y that they would be relieved from
the post because the company reduced the number of guards on duty and to go back after a few days for
their reassignment. Upon their return, they were told that they would not be given a duty assignment
unless they withdrew the complaint they filed before the LA. Y and R were made to choose between
resignation or forcible leave. Y and R both refused to obey, thus, they were dismissed. Y and R amended
their complaint to include illegal dismissal. In its defense, S Company maintained that it did not illegally
dismiss R and Y arguing that respondents are still included in S Company’s roll of security guards. In
addition, S Company claims that it is Y and R who refused to accept available postings and that they
were guilty of abandonment. Are Y and R guilty of abandonment?
No, Y and R are not guilty of abandonment. Abandonment is the deliberate and unjustified refusal of an employee
to resume his employment. To constitute abandonment, there must be a clear and deliberate intent to discontinue
one’s employment without any intention of returning. Two elements must concur: (1) failure to report for work
or absence without valid or justifiable reason, and (2) 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. In this case,
the Y and R’s act of filing a complaint for illegal dismissal with prayer for reinstatement belies any intention to
abandon employment. The immediate filing of a complaint for illegal dismissal, more so when it includes a prayer
for reinstatement, has been held to be totally inconsistent with a charge of abandonment (Symex Security Services,
Inc. v. Rivera, Jr., G.R. No. 202613; November 8, 2017 Caguioa Case)
Preventive Suspension
What is preventive suspension?

Preventive suspension is a disciplinary measure for the protection of the company’s property pending investigation
of any alleged malfeasance or misfeasance committed by the employee. The employer may place the worker
concerned under preventive suspension if his continued employment poses a serious and imminent threat to the
life or property of the employer or of his co-workers (Gatbonton v. NLRC, G.R. No. 146779, January 23, 2006).
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When is it proper to impose preventive suspension?

An employee may be placed under preventive suspension, when:
1. The evidence of guilt is strong, and the employer or head of establishment is convinced that the continued
stay of the employee during the period of investigation constitutes a distraction to the normal operations
of the company; and
2. His continued employment poses a serious and imminent threat to life or property of the employer or his
co-workers (Gatbonton v. NLRC, G.R. No. 146779, January 23, 2006).
It shall be for a maximum period of 30 days, during which period the employee placed under preventive suspension
is not entitled to any wages.
S was charged with violating “various company policies by misrepresenting and using his position and
influence in his plot to defraud S Company. Pending administrative investigation, S was placed under
preventive suspension without pay for a period of 30 days. Continued audit investigation, however,
revealed that S approved/noted several CEs covering activities for which payments were made but not
actually carried out. Unaccredited third parties were also engaged in the implementation of the projects.
S was again preventively suspended for another 10 days. May a subsequent preventive suspension be
imposed for a separate or distinct offense upon an employee?
Yes, a subsequent preventive suspension may be imposed for a separate or distinct offense upon an employee.
While the Omnibus Rules limits the period of preventive suspension to 30 days, such time frame pertains only to
one offense by the employee. For an offense, it cannot go beyond 30 days. However, if the employee is charged with
another offense, then the employer is entitled to impose a preventive suspension not to exceed 30 days specifically
for the new infraction. Indeed, a fresh preventive suspension can be imposed for a separate or distinct offense.
Thus, an employer is well within its rights to preventively suspend an employee for other wrongdoings that may be
later discovered while the first investigation is ongoing (Smart Communications, Inc. v. Solidum, G.R. No. 19776;
December 7, 2015).
Floating Status
When does the floating status rule apply? (SO)

Floating status rule is applicable in the following instances:
1. Traditionally, to Security guards who are temporarily sidelined from duty while waiting to be transferred
or assigned to a new post or client (Nippon Housing Phil., Inc., v. Leynes, G.R. No. 177816, August 3, 2011);
and
2. To Other industries when, as a consequence of the bona fide suspension of the operation of a business or
undertaking, an employer is constrained to put employees on a “floating status” for a period not exceeding
6 months (JPL Marketing Promotions v. CA, G.R. No. 151966, July 8, 2005).
Note: The bona fide suspension of operation of a business or undertaking where floating status is permissible is for
a period not exceeding 6 months; the employer shall reinstate the employee to his former position within 1 month
from the resumption of operations (LABOR CODE, Art. 301).
Retirement
What is retirement?
Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the
employees whereby the latter, after reaching a certain age, agrees and/or consents to sever his employment with the
former (Brion v. South PH Union Mission of the Seventh Day Adventist Church, G.R. No. 135136, May 19, 1999).
B worked as a part-time professional lecturer at XYZ School in 1974. He took a leave of absence from
1975 to 1977. Upon returning in 1977, he resumed teaching in the school until 2003, the year his
employment was terminated by the school because he was already 75 years old. Thereafter, B claimed his
retirement pay from XYZ School, which the latter denied on the ground that he was merely a part-time
teacher who was not entitled to such benefit. B filed a complaint against XYZ School for non-payment
of retirement benefits. Will the action prosper?
Yes, the action will prosper. B is entitled to retirement benefits pursuant to RA 7641. To avail the retirement
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benefits under Art. 302 of the Labor Code, as amended by RA. 7641, the following requisites must concur:
1. The employee has reached the age of 60 years for optional retirement or 65 years for compulsory retirement;
2. The employee has served at least five years in the establishment; and
3. There is no retirement plan or other applicable agreement providing for retirement benefits of employees
in the establishment.
Retirement Pay Law shall apply to all employees in the private sector, regardless of their position, designation
or status and irrespective of the method by which their wages are paid. They shall include part-time employees,
employees of service and other job contractors and domestic helpers or persons in the personal service of another
(De La Salle-Araneta University v. Juanito C. Bernardo G.R. No. 190809, February 13, 2017).
Jona was hired in June 1955 as an elementary teacher in SP Colleges. In 1970 she applied for a one (1)
year leave of absence due to her mother’s illness. However, after the expiration of said leave in 1971, Jona
had not been heard by the school. In 1982, Jona applied anew with the school. In 1997, during an event
in exercises of the school, Jona was awarded a plaque of appreciation for her 30 years of service. Upon
reaching the compulsory retirement age of 65, the school computed Joanna’s retirement benefits on
account of 15 years of service (1982-1997), considering she abandoned her work during her employment
of 1955-1970. Jona, insists that she did not abandon her work, and as such her retirement benefits must
be computed for her service of 30 years (1955-1997). Should Jona’s Services for the school during the
period from 1955 to 1970 be factored in the computation of her retirement benefits?
No, Jona cannot be credited for her services in 1955-1970 in the determination of her retirement benefits. For, after
her one year leave of absence expired in 1971 without her requesting for extension thereof as in fact she had not been
heard from until she resurfaced in 1982 when she reapplied with petitioner school, she abandoned her teaching
position as in fact she was employed elsewhere in the interim and effectively relinquished the retirement benefits
accumulated during the said period. For a valid finding of abandonment, two factors must be present: (1) the
failure to report for work, or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship, with the second element as the more determinative factor, being manifested by some overt
acts. To prove abandonment, the employer must show that the employee deliberately and unjustifiably refused
to resume his employment without any intention of returning. There must be a concurrence of the intention
to abandon and some overt acts from which an employee may be deduced as having no more intention to work.
The approved one-year leave of absence without pay of Jona expired in 1971 without her requesting for extension
thereof or notifying the school if and when she would resume teaching. She was rehired only in 1982 after filing
anew an application, without her proffering any explanation for her more than a decade of absence. Under the
circumstances, abandonment of work at petitioner school in 1971 is indubitably manifest (Sta. Catalina College v.
National Labor Relations Commission, G.R. No. 144483, November 19, 2003).
N was an employee of XYZ Company for 20 years. To facilitate the grant of his SSS retirement benefits,
N entered into an agreement with XYZ Company whereby the latter would issue a certification of his
separation from employment notwithstanding the fact of his continued employment as a laborer. Upon
reaching the compulsory retirement age, N was actually deemed retired and was paid his last salary,
but not retirement benefits. N filed a claim for the payment of his retirement benefits. In its defense,
XYZ Company claims that N was no longer its employee because Q employed him after it issued N’s
certification of separation from employment. Is N entitled to retirement benefits under the Labor Code?
Yes, N is entitled to retirement benefits under the Labor Code. In Oro Enterprises v. NLRC (G.R. No. 110861,
November 14, 1994), the Supreme Court held that the beneficent provisions of Art. 287 of the Labor Code
providing for retirement benefits is apart from the retirement benefits that can be claimed by a qualified employee
under the social security law. Under Art. 287, an employee upon reaching the age of 60 years or more, but not
beyond the compulsory retirement age, who has served at least 5 years in the said establishment, may retire and
shall be entitled to retirement pay. Here, N should be entitled to retirement pay as a necessary consequence of the
finding that he was an employee of XYZ Company (Masing and Sons Development Corporation v Rogelio, G.R. No.
161787, April 27, 2011).
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Management Prerogative
What is the doctrine of management prerogative?

Under the doctrine of management prerogative, every employer has the inherent right to regulate, according to his
own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods,
the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline,
dismissal, and recall of employees (Peckson v. Robinsons Supermarket, G.R. No. 198534, July 3, 2013).
It must be upheld so long as they are exercised in good faith for the advancement of its interest and not for the
purpose of defeating or circumventing the rights of the employees under special laws or valid agreements (Coca-
Cola Bottlers, PHL, Inc., v. Kapisanan ng Malayang Manggagawa sa Coca-Cola-FFW, G.R. No. 148205, February
28, 2005).
Discipline
What is the employer’s right to discipline?

The employer’s right to discipline, in general, is the prerogative of the employer to discipline its employees and to
impose appropriate penalties on erring workers pursuant to company rules and regulations (Deles, Jr. v. NLRC,
G.R. No. 121348, March 9, 2000).
What is the reasonable proportionality rule?

It means that infractions committed by an employee should merit only the corresponding sanction demanded
by the circumstances. The penalty must be commensurate with the gravity of the offense, the act, conduct or
omission imputed to the employee and imposed in connection with the employer’s disciplinary authority (Manila
Memorial Park Cemetery, Inc. v. Panado, G.R. No. 167118, June 15, 2006).
H Hotel employed L as a Service Agent. She was last assigned at the hotel’s restaurant. Two incidents
happened leading to L’s suspension. The first subject incident happened when L impolitely responded to
a guest. The second subject incident occurred when another H Hotel client, together with a companion,
ordered a clubhouse sandwich from L. After some time, they canceled the order. L then approached
them and, in a strong voice, remarked, “Ikaw na magexplain sa kanya at baka maghanap pa siya.”
H Hotel issued a memorandum and a Report suspending her for two weeks. Was L validly suspended?
Yes. It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition. What
should not be overlooked is the prerogative of an employer company to prescribe reasonable rules and regulations
necessary for the proper conduct of its business and to provide certain disciplinary measures in order to implement
said rules to assure that the same would be complied with. An employer has a free reign and enjoys wide latitude
of discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees
and to impose penalties, including dismissal, upon erring employees. The penalties of suspension imposed upon
L were not without valid bases and were reasonably proportionate to the infractions committed. The improper
remarks hurled against valued guests and an employee of a valued client, in the present case, pose a greater threat to
the interest of an employer and all the more merits a similar, if not graver, penalty (The Heritage Hotel, Manila v.
Sio, G.R. No. 217896; June 26, 2019, Caguioa Case).
X, an employee of ABC Company, lent his ID Card to N for N to get a clearance for the release of goods
from the warehouse to facilitate the loading of goods and distribution of ABC Company’s products.
The management of ABC Company discovered the misrepresentation, and dismissed X in accordance
with its rules and regulations. X filed a complaint for illegal dismissal against ABC Company. ABC
Company argues that the strict implementation of company rules and regulations is a valid exercise of
its management prerogative. Is ABC Company correct?
No, ABC Company is not correct. As a rule, an employer is given a wide latitude of discretion in managing its own
affairs, including the implementation of company rules and regulations and imposition of disciplinary measures on
its employees. However, the exercise of management prerogative is not limitless, but hemmed in by good faith and
a due consideration of the rights of the worker. Here, X’s motive in lending his company I.D. Card was to benefit
ABC Company. The penalty of dismissal for X’s misrepresentation is unwarranted (Dongon v. Rapid Movers &
Forwarders Co, Inc., G.R. 163431, August 28, 2013).
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N was employed by ZZZ Inc. as a security coordinator. He was dismissed from employment after
discovery of serious breaches of company rules, including introduction of alcoholic beverages into the
premises and having sexual intercourse in the office premises. The Company Code of Conduct provides
that violations of the code shall be penalized with suspension of not more than 30 days. N claims
that the penalty imposed upon him was harsh and that he should have been meted with a penalty of
suspension only. ZZZ Inc, on the other hand, claims that the dismissal is a valid exercise of management
prerogative. Is ZZZ Inc. correct?
Yes, the dismissal is a valid exercise of management prerogative. The formulation and promulgation by an employer
of rules of conduct and discipline for its employees, inclusive of those deemed to constitute serious misconduct,
cannot and should not operate to altogether negate his prerogative and responsibility to determine and declare
whether or not facts not explicitly set out in the rules may and do constitute such serious misconduct as to
justify the dismissal of the employee or the imposition of sanctions heavier than those specifically and expressly
prescribed. Here, the severity of the violations committed by N warrants a heavier penalty than that provided in
the Code of Conduct. No employer may rationally be expected to continue in employment a person whose lack
of morals, respect and loyalty to his employer, regard for his employer’s rules, and appreciation of the dignity and
responsibility of his office, has so plainly and completely been barred. Therefore, the penalty of dismissal was a
proper exercise of management prerogative (Stanford-Microsystems v. NLRC, G.R. No. 74187, January 28, 1988).
Transfer of Employees
What is transfer of employee?

A transfer of employee means a movement:
From one position to another of equivalent rank, level, or salary, without break in the service (Coca-Cola Bottlers
Philippines, Inc., v. Del Villar, G.R. No. 163091, October 6, 2010); or
From one office to another within the same business establishment (Blue Dairy Corporation v. NLRC, G.R. No.
129843, September 14, 1999).
What are the limitations on the transfer of employees? (FUCIL)

The following are the limitations on transfer of employees:
1. The transfer must not be motivated by discrimination or bad Faith;
2. The managerial prerogative to transfer personnel cannot be used by the employer to rid himself of an
Undesirable employee;
3. Transfer, even if due to promotion, cannot be done without employee’s Consent (PT&T v. CA, G.R. No.
152057, September 29, 2003);
4. The mere fact that it would be Inconvenient does not, by itself, make the transfer Illegal (OSS Security v.
NLRC, G.R. No. 112752, February 9, 2000); and
5. The transfer of an employee should be considered as within the bounds allowed by Law, unless there
are circumstances which directly point to interference by the company with the employees’ right to self-
organization (Rubberworld PHL. v. NLRC, G.R. No. 75704, July 19, 1989).
Productivity Standards
May an employer impose productivity standards?

Yes. An employer is entitled to impose productivity standards as management prerogative. This management
prerogative of requiring standards may be availed of so long as they are exercised in good faith for the advancement
of the employer’s interest (Aliling v. Feliciano, G.R. No. 185829, April 25, 2012).
What is the effect of failure to observe productivity or work standards of the employer?
Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work
quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory
results (Realda v. New Age Graphics, Inc., G.R. No. 192190, April 25, 2012).
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Bonus
When is bonus demandable and enforceable? (SPA)

Bonus is demandable and enforceable when:
1. It is Stipulated in an employment contract or CBA;
2. The grant of bonus is a company Policy or practice (Manila Electric Company v. Secretary of Labor, G.R.
No. 127598, January 27, 1999); or
3. When it is granted as an Additional compensation which the employer agreed to give without any condition
and, thus, must be deemed part of wage or salary (Atok Big Wedge Mining Co., Inc., v. Atok Big Wedge
Mutual Benefit Association, G.R. No. L-5276, March 3, 1953).
Note: To be considered a “regular practice,” the giving of the bonus should have been done over a long period of
time, and must be shown to have been consistent and deliberate (American Wire and Cable Daily Rated Employees
Union v. American Wire and Cable Co. Inc., G.R. No. 155059, April 29, 2005).
Change of Working Hours
What is the employer’s right to change working hours?

The employer’s right to change working hours is within their freedom and prerogative, according to their discretion
and best judgment, to regulate and control the time when workers should report for work and perform their
respective functions (Philippine Airlines, Inc., v. NLRC, G.R. No. 115785, August 4, 2000). It is the prerogative,
whenever exigencies of the service so require, to change the hours of its employees (Sime Darby Pilipinas, Inc., v.
NLRC, G.R. No. 199205, April 15, 1998).
SD Inc. had its factory workers working from 7:45 am to 3:45 pm with a 30-minute paid “on call” lunch
break. Later, SD Inc. issued a memorandum to its employees, changing the work schedule from 7:45 am
to 4:45 pm from Mondays to Fridays. A and B felt that they are adversely affected by the change in work
schedule and discontinuance of the 30-minute paid “on call” lunch break, prompting them to file a case
for unfair labor practice, discrimination and evasion of liability against SD Inc. Does the change in work
schedule constitute unfair labor practice?
No, the change in work schedule does not constitute unfair labor practice. Management retains the prerogative,
whenever exigencies of the service so require, to change the working hours of its employees so long the same is
exercised in good faith. In the instant case SD Inc., as the employer, cites as reason for the adjustment the efficient
conduct of its business operations and its improved production. It rationalizes that while the old work schedule
included a 30-minute paid lunch break, the employees could be called upon to do jobs during that period as they
were “on call.” Even if denominated as lunch break, this period could very well be considered as working time
because the factory employees were required to work if necessary and were paid accordingly for working. With
the new work schedule, the employees are now given a one-hour lunch break without any interruption from their
employer (Sime Darby Pilipinas, Inc. v. NLRC, G.R. No. 119205, April 15, 1998).
Bona Fide Occupational Qualifications
What is the Bona Fide Occupational Qualifications (BFOQ) rule?

The Bona Fide Occupational Qualifications (BFOQ) rule provides that employment may not be limited to persons
of a particular sex, religion, or national origin unless the employer can show that such is an actual qualification for
performing the job (Yrasuegui v. PAL, G.R. No. 168081, October 17, 2008).
What must be proven by the employer to justify a BFOQ? (CBN)

To justify a BFOQ, the following must be proven:
1. That the employer adopted the standard for a purpose rationally Connected to the performance of the job;
2. That the employer adopted the particular standard in an honest and good faith Belief that it was necessary
to the fulfilment of that legitimate work-related purpose; and
3. That the standard is reasonably Necessary in order to accomplish the legitimate work-related purpose
(Yrasuegui v. PAL, G.R. No. 168081, October 17, 2008).
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Yrasuegui is an international flight steward of Philippine Airlines (PAL). The proper weight for a man
of his height and body structure is from 147 to 166 pounds. Yrasuegui developed a weight problem
which prompted PAL to advise him to go on an extended vacation to address his weight concerns. After
meeting the right weight, he was allowed to return to work. Not long after, his weight problem recurred.
He was removed from flight duty and was formally requested to trim down weight. Upon checking, it
was discovered that he gained, instead of losing weight. Yrasuegui made a commitment to lose weight
in 90 days however, he failed to do so. He was dismissed from employment for failure to comply with
company standards. Is the weight requirement a valid condition of employment?
Yes, the weight requirement is a valid condition of employment. Employment in particular jobs may not be
limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or
national origin is an actual qualification for performing the job. The qualification is called a bona fide occupational
qualification (BFOQ). BFOQ is valid “provided it reflects an inherent quality reasonably necessary for satisfactory
job performance”. The primary objective of PAL in the imposition of the weight standards for cabin crew is flight
safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger
confidence on their ability to care for the passengers when something goes wrong. Aircrafts have constricted
cabin space, and narrow aisles and exit doors. The body weight and size of a cabin attendant are important factors
to consider in case of emergency (Yrasuegui v. Philippine Airlines, Inc., G.R. No. 168081, October 17, 2008).
Post-Employment Restrictions
What is post-employment restriction?

A post-employment restriction is the right of the employer, in the exercise of its prerogative, to insist on an
agreement with the employee for certain prohibitions to take effect after the termination of their employer-
employee relationship (CHAN REVIEWER, supra at 822).
What must be proven by the employer to justify a post-employment restriction?

The employer is burdened to establish that a restrictive covenant barring an employee from a competitive
employment after retirement or resignation is not unreasonable restraint of trade thus, unenforceable for being
repugnant to public policy (Rivera v. Solidbank Corporation, G.R. No. 163269, April 19, 2006). There must be
limitation as to time, place and trade. A contract embodying such prohibition that is limited as to time and trade
is considered reasonable, and therefore, valid and enforceable (Tiu v. Platinum Plans, G.R. No. 163512, February
28, 2007).
Contracts involving restraint of trade are to be judged according to their circumstances or two principal grounds,
as follows:
1. Injury to the public by being deprived of restricted party’s industry; and
2. Injury to the party himself by being precluded from pursuing his occupation, and thus being prevented
from supporting himself and his family (Ferrazzini v. Gsell, G.R. No. L-10172, August 10, 1916).
Clearance Procedures
Is an employer required to obtain a clearance from the Secretary of Labor in order to shut down his
establishment or to dismiss or terminate the employment of employees with at least one year?
No. BP 130, approved on August 21, 1981, abolished the clearance requirement (2 AZUCENA, supra at 949).
Limitations on Management Prerogative
What are the limitations on the exercise of management prerogative? (LCE3-GePo-WiG)

The following are the limitations on the exercise of management prerogative:
1. Limitations imposed by:
2. Law;
3. CBA;
4. Employment contract;
5. Employer policy;
6. Employer practice; and
7. General principles of fair play and justice (The Philippine American Life and General Insurance Co. v.
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Gramaje, G.R. No. 156963, November 11, 2004); and

8. It is subject to Police power;
9. Its exercise should be Without abuse of discretion;
10. It should be done in Good faith and with due regard to the rights of labor (CHAN REVIEWER, supra
at 797).
Why is the exercise of police power by the state a limitation on the exercise of management prerogative?
The preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of profits
(MERALCO v. NLRC, G.R. No. 78763, July 12, 1989).
Jurisdiction and Reliefs
Mandatory conciliation-mediation, SENA
What is the Single Entry Approach (SEnA)?

It refers to the administrative approach to provide an accessible, speedy, impartial, and inexpensive settlement
procedure of all issues arising from labor and employment through a 30-day mandatory conciliation-mediation
(Single Entry Approach Implementing Rules and Regulations, DO 151-16, series of 2016, RULE 1, Sec. 4(k)
[hereinafter SENA IRR]).
What are the cases covered by the SEnA?

As a general rule, all issues arising from labor and employment shall be subject to the 30-day mandatory conciliation-
mediation EXCEPT: (NCEV2O)
1. Notices of strike/ lockout or preventive mediation cases with the NCMB;
2. Issues arising from the interpretation and implementation of the CBA, and those arising from the
interpretation and enforcement of company personnel policies which should be processed through the
grievance machinery;
3. Applications for Exemption from wage orders with the National Wages and Productivity Commission
(NWPC);
4. Issues involving Violations of: (AEP-PEA- CRP-TO)
a. Alien Employment Permit (AEP);
b. Private Employment Agency (PEA) authority or license;
c. Working Child Permit (WCP) and violations of RA 9231 (Anti-Child Labor Law);
d. Registration under DO 18-A, series of 2011;
e. Professional License issued by the PRC and violation of the Professional Code of Conduct;
f. TESDA Accreditations; and
g. Other Similar Permits, licenses or registrations issued by the DOLE or its attached agencies;
5. Violations of POEA Rules and Regulations involving: (SDIR-Not)
a. Serious offenses and offenses penalized with cancellation of license;
b. Disciplinary actions against overseas workers/seafarers which are considered serious offenses, or which
carry the penalty of delisting from the POEA registry at first offense;
c. Complaints Initiated by the POEA;
d. Complaints against an agency whose license is Revoked, cancelled, expired or otherwise delisted; and
e. Complaints categorized under the POEA Rules and Regulations as Not subject to SEnA; and
6. Issues on Occupational Safety and Health Standards involving imminent danger situation, dangerous
occurrences/ disabling injury, and absence of personal protective equipment (RA 10396, Sec. 1; LABOR
CODE Art. 234; SENA IRR, RULE I, Sec. 3).
A filed an illegal dismissal case against ABC company for allegedly terminating his services as a company
lawyer without any legal grounds. The parties underwent Mandatory Conciliation and Mediation of
SENA in accordance with the law. ABC company assailed the position of A for being a party of the
conciliation proceedings, him being a lawyer, which was allegedly against SENA IRR, Rule IV which
discourages lawyers from participating in the proceedings. Is ABC Company correct? Explain.
No. Although it is true that lawyers are discouraged from participating in the conference in the aforementioned
provision, the same provision provides an exception, to wit: except when they are the requesting party or employer.
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Hence, A, being the requesting party in this case, is allowed to participate in the proceedings (SENA IRR, Rule
IV, Sec. 1).
Labor Arbiter
What are the cases falling under the exclusive and original jurisdiction of the Labor Arbiter? (TURDOS-
5000-CLAD)
The Labor Arbiters (LA) shall have original and exclusive jurisdiction to hear and decide the following cases
involving all workers, whether agricultural or non-agricultural:
1. Termination disputes;
2. ULP cases;
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 employer-employee relations;
5. Monetary claims of Overseas contract workers arising from employer- employee relationship or by virtue
of any law or contract, including claims for death and disability benefits and for actual, moral, exemplary
and other forms of damages as provided by Section 10 of RA 8042 amended by RA 10022;
Note: In order for the LA to assume jurisdiction over the money claim, the OFW must have a certification
from POEA (PNB v. Cabansag, G.R. No. 157010, June 21, 2005).
6. Cases arising from any violation of Article 279 of the Labor Code, including questions involving the
legality of Strikes and lockouts;
7. Except claims for Employment Compensation, Social Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding Php5,000 regardless of whether accompanied with a claim for
reinstatement;
8. Contested cases under the exception clause in Article 128(b) of the Labor Code;
Note: The jurisdiction of the LA is found in the exception clause of Article 128 (b) where the employer
contests the findings of the labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection (EO 111 (1986)).
9. Other cases as may be provided by Law (2011 NLRC PROCEDURE OF PROCEDURE, Rule V, Sec. 1);
10. Enforcement of compromise Agreements when there is non-compliance by any of the parties pursuant to
Article 233 (non-compliance, or if settlement is obtained through fraud, misrepresentation, or coercion)
of the Labor Code, as amended; and
11. Wage Distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to
RA 6727;
Note: Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court (Halagueña v. PAL, G.R. No. 172013, October 2, 2009).
A, B, and C are employees of XYZ School. They were dismissed from employment for participating
in protest actions which was considered a breach of trust and confidence reposed in them. They filed
an illegal dismissal case against XYZ School. The LA ruled that their dismissal was valid. On appeal,
NLRC reversed the same and ordered their reinstatement. Is the order of reinstatement immediately
executory?
No, the order of reinstatement is not immediately executory. Art. 229 of the Labor Code which provides that
reinstatement is immediately executory even pending appeal applies only when it is the LA himself who ordered
the reinstatement. If the reinstatement order is issued by the NLRC on appeal, there is a need to secure a writ
of execution from the Labor Arbiter a quo to enforce the reinstatement of the employee (Mt. Carmel College v.
Resuena, G.R. No. 173076, October 10, 2007).
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X filed a complaint before the NLRC against Y for illegal dismissal, non-execution of a contract of
employment, violation of the minimum wage law, and non-payment of overtime pay. Thereafter, X
filed an action for damages against Y before the MeTC of Quezon City. Y moved for the dismissal
of the complaint on the grounds of lack of jurisdiction and forum-shopping or splitting causes of
action arguing that the NLRC has jurisdiction over the action for damages because the alleged injury
is work-related and that X should not be allowed to split her causes of action by filing the action
for damages separately from the labor case. Does the regular court exercise jurisdiction over the case
involving damages against the employer?
No, the regular court does not have jurisdiction over this case. Article 217(a) of the Labor Code, as amended, clearly
bestows upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from employer-
employee relations —in other words, the Labor Arbiter has jurisdiction to award not only the reliefs provided
by labor laws, but also damages governed by the Civil Code. Under the “reasonable causal connection rule,” if
there is a reasonable causal connection between the claim asserted and the employer-employee relations, then the
case is within the jurisdiction of our labor courts. In the absence of such nexus, it is the regular courts that have
jurisdiction. The Supreme Court held that the employees’ claim for damages was intertwined with them having
been separated from their employment without just cause and, consequently, had a reasonable causal connection
with their employer-employee relations with petitioner (Kawachi v. Del Quero, G.R. No. 163768, March 27, 2007).
ALPAP staged a strike. A return-to-work order was issued, but ALPAP defied the same. Consequently,
SOLE declared their strike illegal. Sometime after, PAL filed a complaint for damages against ALPAP
before the LA. The LA and NLRC dismissed the complaint for damages for lack of jurisdiction. Was it
proper for labor tribunals to assume jurisdiction over the complaint for damages?
Yes, the assumption of jurisdiction by the labor tribunals was proper. Under Article 224 of the Labor Code, the LA
and NLRC have jurisdiction to resolve cases involving claims for damages from employer-employee relationship.
A money claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the LA only
if there is a “reasonable connection” between the claim asserted and employer-employee relationship. Here, PAL’s
claim for damages has reasonable connection with its employer-employee relationship with ALPAP as such arose
from the illegal strike which were closely related with the latter’s allegation of ULP against PAL (PH Airlines, Inc.
v. Airline Pilots Association of the PHL, G.R. No. 200088, February 26, 2018).
P, an employee of the M Grocery, was criminally charged by the latter for theft. The complaint was
dismissed. Meantime, allegedly after an administrative investigation, P was dismissed by M. As a result,
P lodged a complaint for illegal dismissal with the NLRC and demanded reinstatement with damages.
In addition, she also a instituted separate civil complaint against the M with the RTC for malicious
prosecution. M moved to dismiss the civil complaint on the ground that RTC had no jurisdiction over
the case because it involved employee-employer relations. Should the civil case be dismissed?
No, the civil case should not be dismissed. Not every controversy involving workers and their employers can be
resolved only by the LAs. This will be so only if there is a “reasonable causal connection” between the claim asserted
and employee-employer relations, then the case is under the jurisdiction of the labor courts (PH Airlines, Inc. v.
Airline Pilots Association of the PHL, G.R. No. 200088, February 26, 2018). Absent such a link, the complaint will
be cognizable by the regular courts of justice in the exercise of their civil and criminal jurisdiction (San Miguel
Corp. v. Etcuban, G.R. No. 127639, December 3, 1999). Here, the civil case involves a complaint for damages for
malicious prosecution. It does not appear that there is a “reasonable causal connection” between the complaint
and the relations of the parties as employer and employees. The complaint did not arise from such relations and in
fact could have arisen independently of an employment relationship between the parties. Therefore, jurisdiction
over the case is properly with the civil courts.
On the basis of a complaint filed by the employees, DOLE-NCR conducted a complaint inspection of
Makabayan Company where several violations were noted. After hearing with respect to the violations,
the Regional Director ordered Makabayan Company to pay Php 763,927.85 to the affected employees.
Makabayan Company filed a motion for reconsideration contending that the RD has no jurisdiction
over money claims exceeding Php5,000 and the same is properly covered by the jurisdiction of the Labor
Arbiter. Is Makabayan Company correct?
No, Makabayan’s contention is incorrect. While it is true that under Arts. 129 and 224 of the Labor Code, the LA
has jurisdiction to hear and decide cases where the aggregate money claims of each employees exceed ₽5,000, said
provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or
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his duly authorized representatives. Rather, said powers are defined and set forth in Art. 128 of the Labor Code.
Notwithstanding the provisions of Arts. 129 and 224 and in cases where the relationship of employer-employee
still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to
issue compliance orders to give effect to the Labor standard provisions of the Code (Ex-Bataan Veterans Security
Agency v. Laguesma, G.R. No. 152396, November 20, 2007).
Q was one of the incorporators of ABC Corp. and the internal auditor and personnel manager of the
same. Upon retirement, Q filed a claim for unpaid salaries and separation pay due him amounting to
Php845,000 and Php250,000 respectively, but was denied. Q filed a complaint before the NLRC for
nonpayment of separation and retirement benefits. The LA dismissed the case for lack of jurisdiction
because of absence of employer-employee relationship. Q filed his complaint before the RTC. Does RTC
have jurisdiction over money claims involving an amount exceeding Php5,000 arising from an employer-
employee relationship?
No, the RTC has no jurisdiction over this case. Art. 224 of the Labor Code provides that the LA shall have original
and exclusive jurisdiction on claims arising from employer-employee relations involving an amount exceeding
Php5,000.00. Here, the claim for unpaid salaries and separation pay involves one which arose from the employer-
employee relationship of Q and ABC Corp., the jurisdiction over which belongs to the LA. Therefore, the RTC
may not take cognizance of Q’s complaint (World’s Best Gas, Inc. v. Vital, G.R. No. 211588, September 9, 2015).
A, B, and C were employed as female flight attendants of PAL. They are members of the FASAP, the
exclusive bargaining representative of the flight attendants. PAL-FASAP CBA, provides, inter alia, that:
“Subject to the grooming standards provisions of this Agreement, compulsory retirement shall be 55 for
females and 60 for males.” A, B, and C manifested that the provision is discriminatory and demanded
for an equal treatment with their male counterparts. The FASAP submitted its CBA proposals and
manifested its willingness to commence the collective bargaining negotiations. A, B, and C filed a case
before the RTC questioning the validity of the provision in the CBA. PAL filed a motion to dismiss
the case contending that the RTC had no jurisdiction over the case. The 3 employees went to you to ask
for your legal opinion if indeed, the RTC has no jurisdiction over their petition. What will you advise
them?
The RTC has jurisdiction over the case. The subject of litigation is incapable of pecuniary estimation, exclusively
cognizable by the RTC, pursuant to Sec. 19 (1) of BP 29, as amended. Being an ordinary civil action, the same is
beyond the jurisdiction of labor tribunals. Where the principal relief sought is to be resolved not by reference to
the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC.
Here, the issue cannot be resolved by the Labor Code only but it requires the application of the Constitution,
labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination against
Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial
courts, a court of general jurisdiction. Therefore, RTC has jurisdiction over the case (Halguena v. PH Airlines,
G.R. No. 172013, October 2, 2009).
X initiated an illegal dismissal case against employer, ADB. Two summonses were served, one to the
ADB and the other through the DFA. Forthwith, the ADB and the DFA notified respondent Labor
Arbiter that the ADB, as well as its president and office, were covered by an immunity from legal process
except for borrowings, guaranties or the sale of securities pursuant to Article 50(1) and Article 55 of
the Agreement Establishing the Asian Development Bank in relation to Section 5 and Section 44 of
the Agreement Between The Bank And The Government Of The Philippines Regarding The Bank’s
Headquarters. The LA took cognizance of the complaint on the impression that the ADB had waived
its diplomatic immunity from suit and rendered judgment against ADB. Does the LA have jurisdiction
over the case?
No, the LA does not have jurisdiction. The stipulations of both the Charter and Headquarters Agreement
states that, except in the specified cases of borrowing and guarantee operations, as well as the purchase, sale and
underwriting of securities, the ADB enjoys immunity from legal process of every form. The Bank’s officers, on
their part, enjoy immunity in respect of all acts performed by them in their official capacity. The Charter and
the Headquarters Agreement granting these immunities and privileges are treaty covenants and commitments
voluntarily assumed by the Philippines government which must be respected. In World Health Organization vs.
Aquino, the Court ruled that diplomatic immunity is essentially a political question and courts should refuse
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to look beyond a determination by the executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the government, it is then the duty of the courts
to accept the claim of immunity. Hence, the LA does not have jurisdiction over the case for illegal dismissal
(Department of Foreign Affairs vs. NLRC, G.R. No. 113191, September 18, 1996).
National Labor Relations Commission
What are the grounds for appeal? (FAQE)

The following are the grounds for appeal:
1. If the decision, award or order was secured through Fraud or coercion, including graft and corruption;
2. If there is prima facie evidence of Abuse of discretion on the part of the Labor Arbiter or Regional Director;
3. If made purely on Questions of law; and/or
4. If serious Errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable
damage or injury to the appellant (NLRC RULES, Rule VI, Sec. 2).
M instituted a complaint before the LA against KG Inc. for non-payment of 14th month pay and refund
of his car’s maintenance expenditures, damages and attorney’s fees. KG Inc. contested the M allegations,
contending that the 14th month bonus being claimed by the latter is discretionary in nature and that
there is no document that would show that such gratuity is part of the regular compensation of the
employees. Prior to the issuance of the LA’s decision, three creditors of KG Inc. instituted a Petition
for Involuntary Insolvency before the RTC. Can the Court relax the requirement for an appeal bond?
Yes. The existence of the insolvency proceedings as an exceptional circumstance to warrant the liberal application
of the rules requiring an appeal bond. The failure to file an appeal bond did not contradict the need to ensure that
M, if his claim is deemed valid, will receive the money judgment (Karj Global Marketing Network, Inc. v. Mara,
G.R. No. 190654, July 28, 2020, Caguioa Case).
A and B worked for QFI corp. Both were among those retrenched due to the drastic drop in the net
income of QFI. However, it was discovered that their final pay and other benefits were not released
due to the alleged discovery of unauthorized deduction which they purportedly failed to explain.
Aggrieved, both filed complaints for illegal dismissal against QFI. LA found A and B to have been illegally
dismissed. Dissatisfied, QFI filed a notice of appeal accompanied by a motion to reduce bond and a
cash bond. NLRC gave due course to QFI’s appeal holding that there was substantial compliance with
the bond requirement. CA reversed NLRC’s ruling and ruled that QFI’s failure to post the required
bond impeded the perfection of its appeal and rendered the LA decision final and executory. Did QFI
substantially complied with the bond requirement?
Yes, QFI substantially complied with the bond requirement. In case of a judgment involving a monetary award,
an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the
judgment appealed from. The Court has relaxed this stringent requirement whenever justified. Thus, the Rules
— specifically Section 6, Rule VI — thereof, allow the reduction of the appeal bond upon a showing of: (a) the
existence of a meritorious ground for reduction, and (b) the posting of a bond in a reasonable amount in relation
to the monetary award. A mere notice of appeal without posting bond shall not stop the running of the period for
perfecting an appeal.
Here, the posting of a cash bond equivalent to more than 20% of the monetary judgment, together with the Motion
to Reduce Bond within the reglementary period was sufficient to suspend the period to perfect the appeal. The
posting of the said partial bond coupled with the subsequent posting of a surety bond in an amount equivalent to
the monetary judgment also signified QFI’s good faith and willingness to recognize the final outcome of its appeal.
In determining the reasonable amount of appeal bonds, however, the Court primarily considers the merits of the
motions and the appeals (Quantum Foods, Inc. v. Marcelino Esloyo, G.R. No. 213696, December 9, 2015).
Mr. Q was employed as a Claims Staff of Oroport. He was charged for mishandling and misappropriation
of five trays of eggs even when he had no information about who was responsible for it and without
approval of the Senior Finance Officer of Oroport in violation of the standard procedure in handling
claims. Oroport dismissed Mr. Q from service for serious misconduct. The LA declared that the dismissal
of MR. Q was illegal and awarded him a total of P 162,000. Oroport appealed to the NLRC but
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submitted a Bank Certification in lieu of posting a cash or security bond. Did Oroport’s failure to post
a bond result to the non-perfection of his appeal of the LA’s decision to NLRC?
Yes, Oroport’s failure to post bond results to the non-perfection of his appeal. Oroport’s submission before the
NLRC of a Bank Certification, in lieu of posting a cash or surety bond, cannot be considered as substantial
compliance with Art. 229 of the Labor Code. The filing of the appeal bond is a jurisdictional requirement and the
rules thereon mandate no less than a strict construction. Hence, Ororport’s appeal was not perfected (Quirante v.
Oroport Cargo Handling Services Inc., G.R. No. 209689, December 2, 2015).
Judicial Review of Labor Rulings
D was hired as a Hotel Personnel Planner for PTC Inc. Later, PTC revised its Code of Discipline, in
which it indicated more clearly its prohibition against accepting gifts with dismissal as penalty for its
violation. D was caught accepting a brown bag from another and was served with a memorandum to
explain and a 30-day Suspension Notice. Then he received a written resolution from PTC notifying him
of the termination of his employment. D filed a case for illegal dismissal with the LA which dismissed
the case for lack of merit. D thus filed an appeal with the NLRC which was partially granted. PTC filed
a motion for reconsideration with the NLRC. NLRC issued a Resolution reversing its earlier Decision.
A copy of which was received on December 3, 2014. On February 2, 2015, D then filed a Petition for
Certiorari under Rule 65 with the CA. CA dismissed D’s Petition for Certiorari primarily for allegedly
being filed out of time. Did D timely file the Petition for Certiorari?
Yes. The period or manner of appeal from the NLRC to the CA is governed by Rule 65. Pursuant to the ruling
of this Court in St. Martin Funeral Home v. National Labor Relations Commission, Section 4 of Rule 65, as
amended, states that the petition may be filed not later than sixty (60) days from notice of the judgment, or
resolution sought to be assailed. In this case, the sixty (60) day period has not yet lapsed. Hence, D therefore timely
filed the Petition for Certiorari.
D received a copy of the NLRC Resolution on December 3, 2014. Consequently, he had 60 days, or until February
1, 2015, to file the Petition for Certiorari. However, February 1, 2015, fell on a Sunday, hence the deadline for
filing the Petition for Certiorari was until the next business day, or on February 2, 2015. D therefore timely filed
the Petition for Certiorari when he filed the same on the next business day, or on February 2, 2015 (De Leon v.
Philippine Transmarine Carriers, Inc., G.R. No. 232194, June 19, 2019, Caguioa Case).
A was hired as a driver for DLTB Co. He drove the BBC bus and arrived at Matnog Port, Sorsogon, en
route to Southern Leyte. The bus was arranged to be ferried at 3:00am but BBC’s facilitator gathered all
the passengers so they could ride the 9:00am trip instead. After the passengers got angry and confused,
they were forced to take the 3:00am trip of another ferry company. When he got back from the trip,
he was summoned to explain why the passengers were not able to immediately board the ferry. After he
submitted his written explanation, he was suspended for 15 days and after such period, he was told that
he was already dismissed from his employment. The foregoing prompted A to file a complaint praying
that he be declared as illegally dismissed and be reinstated with payment of full back wages and other
benefits, moral and exemplary damages, and attorney’s fees. The LA rendered judgment in favor of A.
This was affirmed by the NLRC. Without moving for reconsideration, A filed a petition for certiorari
under Rule 65 before the CA. Was the failure of A to file a motion for reconsideration before the NLRC
fatal to his petition for certiorari under Rule 65?
Yes. It is settled that a motion for reconsideration, when allowed to be filed, is an indispensable condition to the
filing of a petition for certiorari. Under Rule 65, the remedy of filing a special civil action for certiorari is available
only when there is no appeal; or any plain, speedy, and adequate remedy in the ordinary course of law. A “plain”
and “adequate remedy” is a motion for reconsideration of the assailed order or resolution, the filing of which
is an indispensable condition to the filing of a special civil action for certiorari. This is to give the lower court
the opportunity to correct itself. In this case, A failed to provide any reason in his petition for certiorari for his
failure to file a motion for reconsideration. A’s failure to file a motion for reconsideration meant that when he filed
his petition for certiorari, it was not the only plain, speedy, and adequate remedy available. The CA should have
dismissed the petition for certiorari outright. There is nothing on record to justify a relaxation of the rules. (Del
Monte Land Transport Bus Co. v. Abergos, G.R. No. 245344, December 02, 2020 Caguioa Case).
LABOR LAW
E was hired as a technician in Saudi Arabia, through its agent, SBM. After his contract, E filed a complaint
for non-payment of salaries. LA ruled in favor of E but was reversed by NLRC for not substantiating
his claims. However, he filed an MR where NLRC reinstated the LA’s Decision. SBM filed a petition
for certiorari but the same was dismissed by the CA on the ground of failure to file an MR against the
NLRC Resolution. SBM moved for reconsideration but was denied. May the CA give due course to a
petition for certiorari absent any motion for reconsideration filed against the NLRC’s resolution?
Yes, the CA may give due course to the petition for certiorari. As a general rule, an MR is an indispensable condition
before a losing party can resort to the special civil action for certiorari under Rule 65 of the Rules of Court.
However, jurisprudence allows exceptions to the rule, among others, where the questions raised in the certiorari
proceedings have been duly raised and passed upon by the lower court or are the same as those raised and passed
upon in the lower court. Since NLRC has been given an opportunity to review its ruling and correct itself when E
filed a MR, requiring SBM to file another MR would be futile because the very issues raised in the MR had already
been evaluated by NLRC (Rapid Manpower Consultants v. De Guzman, G.R. No. 187418, September 28, 2015).
A filed an illegal dismissal case against B Corp. The LA ruled against B Corp hence an appeal was made
to the NLRC which affirmed the LA’s decision. From NLRC it elevated the case to CA via petition for
certiorari. CA evaluated the materiality and significance of the pieces of evidence presented to it which
according to A were capriciously, whimsically, or arbitrarily disregarded by the NLRC. Was the act of
CA proper?
Yes, the act of CA is proper. In a special civil action for certiorari under Rule 65, the issues are limited to errors
of jurisdiction or grave abuse of discretion. However, in labor cases elevated to the CA via petition for certiorari,
the CA is empowered to evaluate the materiality and significance of the evidence alleged to have been capriciously,
whimsically, or arbitrarily disregarded by the NLRC in relation to all other evidence on record (Paredes v. Feed the
Children PHL Inc., G.R. No. 184397, September 9, 2015)
A and B filed a complaint for illegal dismissal against CDE Corp. LA ruled in favor of A and B. NLRC
modified the ruling thereby increasing the monetary awards due to A and B. Dissatisfied, CDE corp.
directly filed a petition for certiorari before the CA. CA denied the petition due to CDE’s failure to file
an MR before the NLRC prior to the filing of the petition for certiorari before the CA. Was CA correct
in dismissing the petition for certiorari?
No, the CA erred in dismissing the petition for certiorari. The direct recourse to the CA was justified. While it
is apparent from the computation of monetary awards that it is just an oversight on the part of the NLRC, it is
not without any implications as such oversight resulted in an unwarranted increase in the monetary awards due
to respondents. Clearly, such an increase is a patent nullity as it is bereft of any factual and/or legal basis. In labor
cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions are not supported
by substantial evidence, which refers to that amount of relevant evidence that a reasonable mind might accept as
adequate to justify a conclusion. Thus, if the NLRC’s ruling has basis in the evidence and the applicable law and
jurisprudence, then no grave abuse of discretion exists and the CA should so declare and, accordingly, dismiss the
petition (Jolo’s Kiddie Carts v. Evelyn A. Caballa and Anthony M. Bautista, G.R. No. 230682, November 29, 2017)
Bureau of Labor Relations (BLR)
Discuss the exclusive and original jurisdiction of the BLR. (IIO)

The BLR may act on its own initiative or upon the request of either or both parties in the following cases involving
federations, national unions, industry unions, its officers or member organizations:
1. Intra-union conflicts;
2. Inter-union conflicts; and
3. Other related labor relations disputes (DO 40-03, RULE XI, Sec. 5).
X, a legal assistant of FFW Legal Center, joined the union of rank-and-file employees and eventually
became the employees’ union president. During the 21st National Convention and Election of National
Officers of FFW, X was nominated for the position of National Vice President. However, FFW
COMELEC informed him that he is not qualified for the position as his candidacy violates the 1998
FFW Constitution and By-Laws. Despite the same, the convention delegates allowed X’s candidacy.
He emerged victorious and was proclaimed as the National Vice President. Y filed before the BLR a
petition for the nullification of the election of X as FFW National Vice President alleging that X is not
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qualified to run for the position because Section 76 of Article XIX of the FFW Constitution and By-
Laws prohibits federation employees from sitting in its Governing Board. X filed a Motion to Dismiss
on the ground that it is the Regional Director of the DOLE and not the BLR who has jurisdiction over
the case involving the provisions of the constitution and by-laws. Is X correct?
No, BLR has jurisdiction over this case. The BLR has jurisdiction over intra-union disputes involving a federation.
Section 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have concurrent
jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of
election of union and workers association officers. There is no doubt as to the BLRs jurisdiction over the instant
dispute involving member-unions of a federation arising from disagreement over the provisions of the federation’s
constitution and by-laws. Hence, BLR has jurisdiction over the case at bar (Montano v. Verceles, G.R. No. 168583,
July 26, 2010).
A Union, the existing exclusive bargaining agent of B Inc., alleged that B Inc. is guilty of ULP due
to organizing a company union, gross violation of the CBA and violation of their duty to bargain
because of its refusal to remit the collected union dues to A union despite several demands. It filed a
complaint for ULP with the NLRC, but the assigned Labor Arbiter dismissed the complaint for lack of
jurisdiction. Was the action of the Labor Arbiter proper?
No, the action of LA was improper. An intra-union dispute refers to any conflict between and among union
members, including grievances arising from any violation of the rights and conditions of membership, violation
of or disagreement over any provision of the union’s constitution and by-laws, or disputes arising from chartering
or disaffiliation of the union. The issue raised in this case pertained only to the validity of the acts of management
in light of the fact that it still has an existing CBA. Thus, as to B Inc, the question was whether they were liable
for unfair labor practice, which issue was within the jurisdiction of the NLRC. Therefore, the dismissal of ULP
complaint was erroneous (Employees Union of Bayer PHL v. Bayer PHL, Inc., G.R. No. 162943, December 6, 2010).
National Conciliation and Mediation Board
What is the National Conciliation and Mediation Board (NCMB)?

The NCMB is an agency attached to the Department of Labor and Employment principally in-charge of the
settlement of labor disputes through conciliation, mediation and of the promotion of voluntary approaches
to labor dispute prevention and settlement (2017 Revised NCMB Manual of Procedures For Conciliation and
Preventive Mediation Cases, Rule III, Sec. 1 [23] [hereinafter 2017 Revised NCMB Manual of Procedure]).
NCMB is not a quasi-judicial agency exercising quasi-judicial functions but merely a conciliatory body for the
purpose of facilitating settlement of disputes between parties. Hence, its decision cannot be elevated to the CA via
Rule 43 petition. Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of
or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions (Tabigue v. International
Copra Export Corp., G.R. No. 183335, December 23, 2009).
Philippine Overseas Employment Administration
Note: The 2022 Labor Law Syllabus still includes POEA under Jurisdictions and Reliefs. However, on December
30, 2021, President Duterte approved RA 11641, otherwise known as the “Department of Migrant Workers Act”,
where the POEA, the Office of the Undersecretary of Migrant Workers’ Affairs (OUMWA), all Philippine Overseas
Labor Offices (POLO), the International Labor Affairs Bureau (ILAB), National Reintegration Center for OFWs
(NRCO), the National Maritime Polytechnic (NMP), and the Office of the Social Welfare Attaché (OSWA) are
consolidated and merged, and thereby constituted as the Department of Migrant Workers.
RA 11641, which was approved beyond the 2022 Bar examination coverage period, was not discussed in this
chapter.
What are the cases under the original and exclusive jurisdiction of POEA? (AD)
Adjudicatory Functions (Jurisdiction Retained with POEA):
1. Administrative cases involving violations of licensing rules and regulations and registration of recruitment
and employment agencies or entities; and
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2. Disciplinary action cases and other special cases which are administrative in character, involving employers,
principals, contracting partners and Filipino migrant workers (IRR of RA 8042, Rule X, Sec. 6).
Note: Jurisdiction over claims arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms
of damages has been transferred to the Labor Arbiters of the NLRC (RA 8042, Sec. 10).
Who has appellate jurisdiction over POEA decisions?

POEA decisions on cases within its jurisdiction are appealable to the Secretary of Labor. As specifically provided in
the POEA Rules and Regulations of 2003: “The Secretary shall have the exclusive and original jurisdiction to act on
appeals or petition for review of disciplinary action cases decided by the Administration [POEA].” The Secretary’s
appellate jurisdiction is part of its power of supervision and control recognized in the Revised Administrative Code
of 1987 (Eastern Mediterranean Maritime v. Surio, et al., G.R. No. 154213, August 23, 2012).
DOLE Regional Director
When may the DOLE Regional Director be divested of his jurisdiction under Article 128(b)? (CEN)
Under the exception clause in Article 128 (b) of the Labor Code, the Regional Director may not be divested of his
jurisdiction over these claims, unless 3 elements concur, namely:
That the employer Contests the findings of the labor regulation officer and raises issues thereon;
That in order to resolve such issues, there is a need to examine Evidentiary matters; and
That such matters are Not verifiable in the normal course of inspection (SSK Parts Corporation v. Camas, G.R. No.
85934, January 30, 1990).
Distinguish jurisdiction over money claims of Labor Arbiter and Regional Director.
Labor Arbiter Regional Director
Labor Arbiters have no jurisdiction over small mon- DOLE Regional Directors have jurisdiction over
ey claims lodged under Article 129, except when the claims amounting to ₽5,000 or below, provided the
claim includes a prayer for reinstatement (Art. 224, following requisites concur: (1) The claim must arise
Labor Code). from ER-EE relationship; (2) The claimant does not
seek reinstatement; and (3) The aggregate money
claim of each employee does not exceed Php5,000
(Art. 129, Labor Code).
The total amount of money claims must involve an In inspection of establishment cases, DOLE Regional
amount exceeding Php5,000 (Art. 224, Labor Code). Directors have jurisdiction regardless of whether or
not the total amount of claims per employees exceeds
Php5,000 (Art. 128, Labor Code).
For the valid exercise by the DOLE Secretary or

any of his duly authorized representatives (DOLE
Regional Directors) of the visitorial and enforcement
powers provided under Article 128(b), the following
requisites should concur: (1) The employer-employee
relationship should still exist; (2) The findings in
question were made in the course of inspection by
labor inspectors; and (3) The employees have not
yet initiated any claim or complaint with the DOLE
Regional Director under Art. 129, or the Labor
Arbiter under Art. 224.
AAI is engaged in the business of providing janitorial services. Its employees instituted a complaint
for underpayment of wages against AAI before the Regional Office of DOLE. The Regional Office
conducted a complaint inspection and found a couple of violations including non-payment of labor
standard benefits. The Regional Director issued an order for the agency to pay the deficiencies. AAI
LABOR LAW
alleged that the Regional Director does not have jurisdiction over the subject matter because the money
claim of each private respondent exceeded Php5,000. It pointed out that the Regional Director should
have endorsed the case to the Labor Arbiter. Was AAI’s contention correct?
No, AAI’s contention is incorrect. Art. 224 in relation to Art. 129 of the Labor Code provides that the Labor
Arbiter has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P
5,000; however, it does not contemplate the visitorial and enforcement powers of the Secretary of Labor or his
duly authorized representatives. Here, the Regional Director validly assumed jurisdiction over the money claims
of AAI’s employees even if the claims exceeded P 5,000 because such jurisdiction was exercised in accordance
with Article 128 (b) of the Labor Code and the case does not fall under the exception clause (Ex-Bataan Veterans
Security Agency v. Laguesma, G.R. No. 152396, November 20, 2007).
DOLE Secretary
What are the requisites for a valid exercise of the visitorial and enforcement powers? (EFN)
For a valid exercise by the DOLE Secretary or any of his duly authorized representatives of the visitorial and
enforcement powers, the following requisites must concur:
1. The Employer-employee relationship should still exist;
2. The Findings in question were made in the course of the inspection by the labor inspectors; and
3. The employee has Not yet initiated any claim or complaint with the DOLE Regional Director under Art.
129, or the LA under Art. 224.
A disciplinary action based on breach of discipline and reimbursement of wage increases was filed by
crew members of XYZ Maritime against XYZ Maritime in the POEA. During the pendency of the
action, RA 8042 took effect vesting in the Labor Arbiters jurisdiction over all money claims arising
out of employer-employee relationship involving OFWs. On the basis thereof, POEA dismissed the
complaint. On appeal, the NLRC dismissed the case claiming to have no jurisdiction over the same. Is
the action of the NLRC proper?
Yes, the action of the NLRC is proper. The NLRC does not have jurisdiction to review on appeal disciplinary
action cases decided by the POEA. RA 8042 did not remove from the POEA the original and exclusive jurisdiction
to hear and decide all disciplinary action cases and other special cases administrative in character involving such
workers. When RA 8042 withheld the appellate jurisdiction of the NLRC in respect of cases decided by the
POEA, the appellate jurisdiction was vested in the Secretary of Labor in accordance with his power of supervision
and control under the Revised Administrative Code of 1987. Therefore, it was proper for the NLRC to dismiss
the case because appellate jurisdiction over disciplinary cases decided by the POEA belong to the Secretary of
Labor (Eastern Mediterranean Maritime LTD v. Surio, G.R. No. 154213, August 23, 2012).
Grievance Machinery
What is a grievance?
A grievance is any question raised by either the employer or the union regarding any of the following issues or
controversies: (CPV)
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company Personnel policies; or
3. Any claim by either party that the other party is Violating any provisions of the CBA or company personnel
policies (Sec. 1, Rule I, Book V, Rules to Implement the Labor Code).
Note: To be grievable, the violations of the CBA should be simple or ordinary, and not gross in character, otherwise
they shall be considered Unfair Labor Practice which is under the original and exclusive jurisdiction or the Labor
Arbiter (CHAN REVIEWER, supra at 978).
Voluntary Arbitrator
What are the powers of a voluntary arbitrator? (RSTE)

The voluntary arbitrator shall have the following powers:
1. Require any person to attend hearing(s);
2. Subpoena witnesses and receive documents when the relevancy of the testimony; and the materiality
LABOR LAW
thereof has been demonstrated to the arbitrators:

3. Take whatever action is necessary to resolve the issue/s subject of the dispute; and
4. Issue a writ of Execution to enforce final decisions, and, in connection therewith, it shall be his duty to:
(DICE)
a. Determine every question of fact and law which may be involved in the execution;
b. Inquire into the correctness of the execution of the decision;
c. Consider any supervening event during such execution; and
d. Ensure satisfaction of decision (NCMB GUIDELINES, Rule V, Sec. 3).
What are the cases that must be referred to the grievance machinery and voluntary arbitration?
The following are cases which must be disposed of by the Labor Arbiter by referral to the grievance machinery and
voluntary arbitration:
1. Disputes on the interpretation or implementation of CBA; and
2. Disputes on the interpretation or enforcement of company personnel policies (2011 NLRC RULES OF
PROCEDURE, Rule V, Sec. 1).
Prescription of Actions
Cause Period of Prescription

Money Claims 3 years from accrual of the cause of action (LABOR
CODE, Art. 306)
Illegal Dismissal 4 years from accrual of the cause of action (CIVIL
CODE, Art. 1146)
ULP 1 year from accrual of the cause of action (LABOR
CODE, Art. 305)
Offenses under the Labor Code 3 years (LABOR CODE, Art. 305)
Simple Illegal Recruitment 5 years (MIGRANT WORKERS AND OVERSEAS
FILIPINOS ACT OF 1995, Sec. 12)
Syndicated/Large Scale Illegal Recruitment 20 years (MIGRANT WORKERS AND OVERSEAS
FILIPINOS ACT OF 1995, Sec. 12)
IBM staged a strike against N and after having a series of conciliation meetings IBM and N entered
into a compromise agreement which the NLRC approved. After 11 years, IBM later filed with NLRC a
motion for writ of execution claiming that they have not been paid the amounts they were entitled to
because Nestlé deliberately caused delay in paying their claims. N argued that IBM’s remedy was already
barred by prescription because under the 2005 Revised Rules of the NLRC, a decision or order may
be executed on motion within 5 years from the date it becomes final and executory and that the same
decision or order may only be enforced by independent action within a period of 10 years from the date
of its finality. May an NLRC-approved compromise agreement be executed by filing a motion for writ of
execution after a lapse of 10 years from its finality?
No, the approved compromise agreement may not be executed after the lapse of 10 years. The IBM is already
barred by prescription. Under the law, a decision or order may be executed on motion within five years from the
date it becomes final and executory. After the lapse of such period, the judgment shall become dormant, and may
only be enforced by an independent action within a period of 10 years from date of its finality. IBM’s right to have
the NLRC judgment executed thru a motion and the right of action to enforce the same had prescribed by the
time it filed their Motion for Writ of Execution (Ilaw Buklod ng Manggagawa (IBM) Nestlé PHL Chapter v. Nestlé
PHL, G.R. No. 198675, September 23, 2015).
X was employed by PLDT as a maintenance technician. On April 13, 1999, he was admitted to a
hospital due to paranoid personality disorder caused by financial and marital problems. He was later
on discharged but from September to December, he absented himself from work without official leave
due to his poor mental condition. PLDT terminated his service on January 1, 2000. Between 2001 and
LABOR LAW
2003, X made follow-ups with PLDT regarding his benefits. On March 29, 2004, four years later, X filed
a complaint for constructive dismissal and monetary claims against PLDT, but the latter moved for the
dismissal of the complaint for being filed beyond the prescriptive period of three years. Did the action
prescribe?
Yes, the action has already prescribed. The Labor Code has no specific provision on when a claim for illegal dismissal
or a monetary claim accrues. Thus, the general law on prescription applies. Article 1150 of the Civil Code states
that the time for prescription for all kinds of actions, when there is no special provision which ordains otherwise,
shall be counted from the day they may be brought. The day the action may be brought is the day a claim starts as
a legal possibility. In the present case, January 1, 2000, the date X was not allowed to perform his as a maintenance
technician, is the date when the claim accrues. Furthermore, the prescription is interrupted by (a) the filing of an
action; (b) a written extrajudicial demand by the creditor; and (c) a written acknowledgement of the debt by the
debtor. Hence, X’s act of following up his benefits is not considered interrupting the prescription (PLDT v. Pingol,
G.R. No. 182622, September 8, 2010).
Y was the vice-president, manager, and director of ABC Corp. Y was forced to resign by the owner
of ABC Corp. on October 17, 1977 because the latter suffered losses due to lack of market and has
incurred debts caused by a slam in the market. At the time of his resignation, he had unpaid salaries for
18 months and was not paid his separation pay. Upon Y’s demand for payment, ABC Corp. informed
him it would first settle the money claims of the rank-and-file employees before paying his claims. Y
patiently waited but remained unpaid until his demise. X, in behalf of her deceased husband Y, filed a
complaint against ABC Corp. on September 27, 2002, for non-payment of salaries, separation pay, and
13th month pay. ABC Corp. claims that the action has prescribed for being filed almost five (5) years
from the alleged dismissal of Y. Did the action prescribe?
No, the action has not yet prescribed. Promissory estoppel is a recognized exception to the three-year prescription
enunciated in Art. 291 of the Labor Code. In order to make out a claim of promissory estoppel, a party bears
the burden of establishing the following elements: (1) a promise was reasonably expected to induce action or
forbearance; (2) such promise did, in fact, induce such action or forbearance; and (3) the party suffered detriment
as a result. The elements are present in this case. Y relied on the promise of ABC Corp. that he would be paid as
soon as the claims of all the rank-and-file employees had been paid. If not for this promise that he had held on
to until the time of his death, there is no reason why he would delay filing the complaint before the LA. Thus,
this is an ample justification not to follow the prescriptive period imposed under Article 291 of the Labor Code
(Accessories Specialist v. Albanza, G.R. No. 168985, July 23, 2008).
LABOR LAW
LIST OF ABBREVIATIONS
CA Court of Appeals
CBA Collective Bargaining Agreement
DENR Department of Environment and National Resources
DO Department Order
DOJ Department of Justice
DOLE Department of Labor and Employment
GSIS Government Service Insurance System
LA Labor Arbiter
NCMB National Conciliation and Mediation Board
NLRC National Labor Relations Commission
POEA Philippine Overseas Employment Administration
POEA-SEC Philippine Overseas Employment Administration – Standard Employment Con-
tract
RA Republic Act
RTC Regional Trial Court
SC Supreme Court
SSC Social Security Commission
SSS Social Security System

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SAN BEDA UNIVERSITY

Janyn Mariella Montealegre

Ana Maria Beatrice G. Dimailig

Micah Marie F. Naadat

Jenica Anne S. Tavares

Academics Core Members

Gabrielle Anne S. Endona

Electronic Data Processing

II. RECRUITMENT AND PLACEMENT OF WORKERS

III. LABOR STANDARDS

IV. SOCIAL WELFARE LEGISLATION

VI. TERMINATION OF EMPLOYMENT

VII. MANAGEMENT PREROGATIVE

Basic Policy on Labor

What is the basic policy on labor?

Construction in Favor of Labor

Burden of Proof and Quantum of Evidence in Labor Cases

What is the quantum of evidence required in Labor cases?

What provisions in the 1987 Constitution are relevant to Labor Law?

3. Social Justice (CONST., Art. XIII, Sections 2, 3, 13, and 14)

What Civil Code provisions are relevant to Labor Law?

Who are not covered by the Labor Code? (CELFIG)

Recruitment and Placement of Workers

Recruitment and Placement (Labor Code and RA 8042, as amended by RA 10022)

Differentiate illegal recruitment and estafa.

What are the differences between a license and an authority?

Who may suspend and/or cancel a license or authority?

What is the rule on direct hiring of migrant workers?

Employment of Non-Resident Aliens

What are the tests to determine employer-employee relationship?

What is the four-fold test? (SPDC)

What is the two-tiered test?

What is the difference between employees and independent contractors?

Is a labor organization an employer of its members?

What is the normal hours of work?

What is the rate of additional compensation for overtime pay?

What is a Compressed Work Week (CWW)?

What are the conditions of a valid CWW scheme?

What are the effects of CWW?

How does a Telecommuting Agreement terminated or changed?

What are the rights of employees in a telecommuting agreement? (FND)

Who are the covered employees?

How are service charges distributed?

Distinguish wage from salary.

What is the required form of payment of wages?

What are the prohibitions regarding wages? (IWDL-WERF)

Distinguish facilities from supplements.

How should a wage distortion be settled? (2006, 1997, 2009 Bar)

Special Groups of Employees

What is the stipulation against marriage with regard to female employees?

What is the exception to the prohibition on stipulation against marriage?

What is child labor?

Who is a working child?

What are the working hours of a working child?

beverage. (DO 65-04, Sec. 6).

Who is an industrial homeworker?

When is homework not allowed?

Sexual Harassment in the Work Environment

What is the definition of a “workplace” under RA 11313?

Social Welfare Legislation

SSS Law (RA 8282 as amended by RA 11199)

This topic will therefore be discussed in accordance with RA 11199.