2011 LABOR LAW Reviewer

7/28/2019 2011 LABOR LAW Reviewer

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LABOR LAW

A. FUNDAMENTAL PRINCIPLES AND POLICIES

1. Constitutional Provisions

a. Article II - Declaration of Principles and State Policies

The State shall promote a just and dynamic social order that will ensure theprosperity and independence of the nation and free the people from poverty throughpolicies that provide adequate social services, promote full employment, a rising standard ofliving, and an improved quality of life for all.1

The State shall promote social justice in all phases of national development.2

The State values the dignity of every human person and guarantees full respect forhuman/rights.3

The State recognizes the vital role of the youth in nation-building and shall promoteand protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcatein the youth patriotism and nationalism, and encourage their involvement in public and civicaffairs.4

The State recognizes the role of women in nation-building, and shall ensure thefundamental equality before the law of women and men.5

The State affirms labor as a primary social economic force. It shall protect the rightsof workers and promote their welfare.6

The State recognizes the indispensable role of the private sector, encourages privateenterprise, and provides incentives to needed investments.7

b. Article IIIBill of Rights

No person shall be deprived of life, liberty, or property without due process of law,nor shall any person be denied the equal protection of the laws.8

1 Sec. 92 Sec.103 Sec.114 Sec. 135 Sec. 146 Sec. 187 Sec. 208Sec. 1.


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No law shall be passed abridging the freedom of speech, of expression, or of thepress, or the right of the people peaceably to assemble and petition the government forredress of grievances.9

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 beabridged.10

c. Article XIII

The Congress shall give highest priority to the enactment of measures that protectand enhance the right of all the people to human dignity, reduce social, economic, andpolitical inequalities, and remove cultural inequities by equitably diffusing wealth andpolitical power for the common good. To this end, the State shall regulate the acquisition,ownership, use, and disposition of property and its increments.11

The promotion of social justice shall include the commitment to create economic

opportunities based on freedom of initiative and self-reliance.12

The State shall afford full protection to labor, local and overseas, organized andunorganized, and promote full employment and equality of employment opportunities forall. It shall guarantee the rights of all workers to self-organization, collective bargaining andnegotiations, and peaceful concerted activities, including the right to strike in accordancewith law. They shall be entitled to security of tenure, humane conditions of work, and aliving wage. They shall also participate in policy and decision-making processes affectingtheir rights and benefits as may be provided by law. The State shall promote the principle ofshared responsibility between workers and employers and the preferential use of voluntarymodes in settling disputes, including conciliation, and shall enforce their mutual compliance

therewith to foster industrial peace. The State shall regulate the relations between workersand employers, recognizing the right of labor to its just share in the fruits of production andthe right of enterprises to reasonable returns to investments, and to expansion and growth.13

The State shall protect working women by providing safe and healthful workingconditions, taking into account their maternal functions, and such facilities and opportunitiesthat will enhance their welfare and enable them to realize their full potential in the service ofthe nation.14

2. New Civil Code

The relations between capital and labor are not merely contractual. They are soimpressed with public interest that labor contracts must yield to the common good.

9Sec. 4.10Sec. 8.11Sec. 1.12Sec. 2.13Sec. 3.14Sec. 14.


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Therefore, such contracts are subject to the special laws on labor unions, collectivebargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor andsimilar subjects.15

3. Labor Code

The State shall afford protection to labor, promote full employment, ensure equalwork opportunities regardless of sex, race or creed and regulate the relations betweenworkers 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.16

A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining andnegotiations, including voluntary arbitration, mediation and conciliation, asmodes of settling labor or industrial disputes;(b) To promote free trade unionism as an instrument for the enhancement

of democracy and the promotion of social justice and development;(c) To foster the free and voluntary organization of a strong and united labormovement;(d) To promote the enlightenment of workers concerning their rights andobligations as union members and as employees;(e) To provide an adequate administrative machinery for the expeditioussettlement of labor or industrial disputes;(f) To ensure a stable but dynamic and just industrial peace; and(g) To ensure the participation of workers indecision and policy-makingprocesses affecting their rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between theemployers and employees by means of agreements freely entered into through collectivebargaining, no court or administrative agency or official shall have the power to set or fixwages, rates of pay, hours of work or other terms and conditions of employment, except asotherwise provided under this Code17.

Definitions.

(a) Commission means the National Labor Relations Commission or any of itsdivisions, as the case may be, as provided under this Code.

(b) Bureau means the Bureau of Labor Relations and/or the Labor RelationsDivisions in the regional offices established under Presidential Decree No. 1, in theDepartment of Labor.

15 Art. 170016 Art. 317 Art. 211


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(c) Board means the National Conciliation and Mediation Board established underExecutive Order No. 126.

(d) Council means the Tripartite Voluntary Arbitration Advisory Councilestablished under Executive Order No. 126, as amended.

(e) Employer includes any person acting in the interest of an employer, directly orindirectly. The term shall not include any labor organization or any of its officers or agentsexcept when acting as employer.

(f) Employee includes any person in the employ of an employer. The term shallnot be limited to the employees of a particular employer, unless the Code so explicitly states.It shall include any individual whose work has ceased as a result of or in connection withany current labor dispute or because of any unfair labor practice if he has not obtainedany other substantially equivalent and regular employment.

(g) Labor organization means any union or association of employees which exists

in whole or in part for the purpose of collective bargaining or of dealing with employersconcerning terms and conditions of employment.

(h) Legitimate labor organization means any labor organization duly registeredwith the Department of Labor and Employment, and includes any branch or local thereof.

(i) Company union means any labor organization whose formation, function oradministration has been assisted by any act defined as unfair labor practice by this Code.

(j) Bargaining representative means a legitimate labor organization whether or notemployed by the employer.

(k) Unfair labor practice means any unfair labor practice as expressly defined bythe Code.

(l) Labor dispute includes any controversy or matter concerning terms andconditions of employment or the association or representation of persons in negotiating,fixing, maintaining, changing or arranging the terms and conditions of employmentregardless of whether the disputants stand in the proximate relation of employer andemployee.

(m) Managerial employee is one who is vested with the powers or prerogatives to

lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,discharge, assign or discipline employees. Supervisory employees are those who, in theinterest of the employer, effectively recommend such managerial actions if the exercise ofsuch authority is not merely routinary or clerical in nature but requires the use ofindependent judgment. All employees not falling within any of the above definitions areconsidered rank-and-file employees for purposes of this Book.

(n) Voluntary Arbitrator means any person accredited by the Board as such or anyperson named or designated in the Collective Bargaining Agreement by the parties to act as


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their Voluntary Arbitrator, or one chosen with or without the assistance of the NationalConciliation and Mediation Board, pursuant to a selection procedure agreed upon in theCollective Bargaining Agreement, or any official that may be authorized by the Secretary ofLabor and Employment to act as Voluntary Arbitrator upon the written request andagreement of the parties to a labor dispute.

(o) Strike means any temporary stoppage of work by the concerted action ofemployees as a result of an industrial or labor dispute.

(p) Lockout means any temporary refusal of an employer to furnish work as aresult of an industrial or labor dispute.

(q) Internal union dispute includes all disputes or grievances arising from anyviolation of or disagreement over any provision of the constitution and by-laws of a union,including any violation of the rights and conditions of union membership provided for inthis Code.

(r) Strike-breaker means any person who obstructs, impedes, or interferes with byforce, violence, coercion, threats, or intimidation any peaceful picketing affecting wages,hours or conditions of work or in the exercise of the right of self-organization or collectivebargaining.

(s) Strike area means the establishment, warehouses, depots, plants or offices,including the sites or premises used as runaway shops, of the employer struck against, as wellas the immediate vicinity actually used by picketing strikers in moving to and fro before allpoints of entrance to and exit from said establishment18.

Exclusive bargaining representation and workers participation in policy and

decision-making.- The labor organization designated or selected by the majority of theemployees in an appropriate collective bargaining unit shall be the exclusive representative ofthe employees in such unit for the purpose of collective bargaining. However, an individualemployee or group of law to the contrary notwithstanding, workers shall have the right,subject to such rules and regulations as the Secretary of Labor and Employment maypromulgate, to participate in policy and decision-making processes of the establishmentwhere they are employed insofar as said processes will directly affect their rights, benefitsand welfare. For this purpose, workers and employers may form labor-managementcouncils: Provided, That the representatives of the workers in such labor-managementcouncils shall be elected by at least the majority of all employees in said establishment19.

18 Art. 21219 Art. 255


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B. RECRUITMENT AND PLACEMENT

1. Recruitment of Local and Migrant Workers

a. Recruitment and placement;20 defined

It refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiringor procuring workers, and includes referrals, contract services, promising or advertising foremployment, locally or abroad, whether for profit or not: Provided, That any person orentity which, in any manner, offers or promises for a fee, employment to two or morepersons shall be deemed engaged in recruitment and placement21.

b. Illegal Recruitment22

(a) License23 vs. Authority

License means a document issued by the Department of Labor authorizing a

person or entity to operate a private employment agency.

Authority means a document issued by the Department of Labor authorizing aperson or association to engage in recruitment and placement activities as a privaterecruitment entity.

(b) Essential elements of illegal recruitment

(1) the accused must be engaged in the recruitment and placement of workers,whether locally or overseas and;

(2) the accused has not complied with such guidelines, rules and regulations issuedby the Secretary of Labor and Employment, particularly with respect to the securing oflicense or authority to recruit and deploy workers either locally or overseas24.

20 Some relevant principles:

Mere impression that recruiter is capable of providing work abroad is sufficient.

"Referral" of recruits also constitutes recruitment activity.

Absence of receipt to prove payment is not essential to prove recruitment.

Only one (1) person recruited is sufficient to constitute recruitment.

Non-prosecution of another suspect is not material.

A person convicted for illegal recruitment may still be convicted for estafa21

Art. 13, Labor Code.22 Art. 38 (Local), Sec. 6, Migrant Workers Act, RA 804223 No license or authority shall be used directly or indirectly by any person other than the one in whose

favor it was issued or at any other place other than that stated in the license or authority, nor may such

license or authority be transferred, conveyed or assigned to any other person or entity.

Licensees or holders of authority or their duly authorized representatives may, as a rule, undertake

recruitment and placement activities ONLY at their authorized official addresses.

Change of ownership or relationship of single proprietorship licensed to engage in overseas employment

shall cause the automatic revocation of the license.24People vs. Mary Rose Ondo @ Baby and Simeon Ortega, G.R. No. 101361 November 8, 1993


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(c) Simple illegal recruitment25

Any recruitment activities, including the prohibited practices enumerated underArticle 34 of this Code, to be undertaken by non-licensees or non-holders of authority.

(d) Illegal recruitment in large scale

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(e) Illegal recruitment as economic sabotage

When the commission thereof is attended by the qualifying circumstances as follows:

a. By a syndicate - if carried out by a group of 3 or more persons conspiring andconfederating with one another;

b. In large scale - if committed against 3 or more persons individually or as a group.(f) Illegal Recruitment vs. Estafa27

Illegal recruitment is malumprohibitum, while estafa is malum in se.In the first, the criminal intent of the accused is not necessary for conviction. In the

second, such an intent is imperative.

(g) Liabilities

(a) local employment agency

Local Agency is solidarily liable with foreign principal

(b) foreign employer

i. Theory of imputed knowledge28

Ascribes the knowledge of the agent to the principal employer, not the other wayaround29.

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applies to both local and overseas employment.26 See (e), infra27under Art. 315, par. 2, RPC.

Estafa is committed by any person who defrauds another by using fictitious name, or falsely pretends to

possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by

means of similar deceits executed prior to or simultaneously with the commission of fraud (People v.

Comila, G.R. No. 171448, February 28, 2007, 517 SCRA 153, 167)28knowledge of the agent is knowledge of the principal.29Rovels Enterprises,Inc. v. Ocampo, G.R. No. 136821, October 17, 2002, 391 SCRA 176; videAir France

v. Court of Appeals, et al., 211 Phil. 601 (1983).


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(h) Pretermination of contract of migrant worker

Termination before the agreed termination date based not on lawful or valid ground,employer will pay employee corresponding to the unexpired portion of the employmentcontract30

However, if the illegal dismissal took place on or after July 15, 1995, the illegallydismissed overseas worker shall be entitled to the full reimbursement of his placement feewith interest at the rate of 12% per annum plus salary for the unexpired portion of hisemployment contract or for 3 mos. for every year of the unexpired term, whichever is less.31

The basis of the award of back wages is the parties employment contract stipulatingthe wages and benefits.

c. Direct hiring32

General Rule:

No foreign employer may hire a Filipino worker for overseas employment.

Exceptions:

Direct hiring by

1. Members of the diplomatic corps;2. International organizations; and3. Such other employers as may be allowed by the Dept. of Labor.

30Tierra Intl Construction Corp. vs. NLRC

31 RA 8042 , Sec. 10, par. 5

Under Section 10, RA 8042, the claim for unpaid salaries of overseas workers should be whichever is

less between salaries for unexpired portion of the contract or 3 months for every year of the remaining

unexpired portion of the contract (in case contract is one year or more)(Skippers Pacific, Inc. Vs. Mira, et

al. NOV. 21, 2002)

However, SC clarified in the case of Marsaman Manning Agency vs. NLRC (G.R.No. 127195. Aug.25,

1999) that A plain reading of section 10 clearly reveals that the choice of w hich amount to award an

illegally dismissed OCW, i.e. whether his salaries for the unexpired portion of his employment contract or

3 months salary for every year of the unexpired term whichever is less, comes into play ONLY when the

employment contract concerned has a term of at least 1 year or more. This is evident from the words for

every year of the unexpired term which follows the salaries x xx for three months.32 Employers cannot directly hire workers for overseas employment except through authorized entities duly

authorized by POEA as follows:

a. public employment offices;

b. Philippine Overseas Employment Administration (POEA);

c. private recruitment entities;

d. private employment agencies;

e. shipping or manning agents or representatives;

f. such other persons or entities as may be authorized by the Secretary of Labor and Employment; and

g. construction contractors.


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2. Regulation and Enforcement

a. Remittance of foreign exchange earnings

Mandatory remittance requirements:

Seamen or mariners: 80% of the basic salaryWorkers for Filipino Contractors and Construction Companies: 70% of the basic salaryDoctors, engineers, teachers, nurses, and other professionals whose employment contractprovide for lodging facilities: 70% of the basic salaryAll other professionals without board and lodging: 50% of the basic salaryDomestic and other service of workers: 50% 0f the basic salary

b. Prohibited activities

It shall be unlawful for any individual, entity, licensee, or holder of authority:

(a) To charge or accept, directly or indirectly, any amount greater than that specifiedin the schedule of allowable fees prescribed by the Secretary of Labor, or to make a workerpay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation torecruitment or employment;

(c) To give any false notice, testimony, information or document or commit any actof misrepresentation for the purpose of securing a license or authority under this Code;

(d) To induce or attempt to induce a worker already employed to quit his

employment in order to offer him to another unless the transfer is designed to liberate theworker from oppressive terms and conditions of employment;

(e) To influence or to attempt to influence any person or entity not to employ anyworker who has not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to publichealth or morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by hisduly authorized representatives;

(h) To fail to file reports on the status of employment, placement vacancies,remittance of foreign exchange earnings, separation from jobs, departures and such othermatters or information as may be required by the Secretary of Labor;

(i) To substitute or alter employment contracts approved and verified by theDepartment of Labor from the time of actual signing thereof by the parties up to andincluding the periods of expiration of the same without the approval of the Secretary ofLabor;


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(j) To become an officer or member of the Board of any corporation engaged intravel agency or to be engaged directly or indirectly in the management of a travel agency;and

(k) To withhold or deny travel documents from applicant workers before departurefor monetary or financial considerations other than those authorized under this Code and itsimplementing rules and regulations.33

c. Regulatory and visitorial powers of the Labor Secretary

Visitorial and enforcement power34.

(a) The Secretary of Labor or his duly authorized representatives, including laborregulation officers, shall have access to employers records and premises at any time of theday or night whenever work is being undertaken therein, and the right to copy therefrom, toquestion any employee and investigate any fact, condition or matter which may be necessary

to determine violations or which may aid in the enforcement of this Code and of any laborlaw, wage order or rules and regulations issued pursuant thereto.

(b) Notwithstanding the provisions of Articles 129 and 21735 of this Code to thecontrary, and in cases where the relationship of employer-employee exists, the Secretary ofLabor and Employment or his duly authorized representatives shall have the power to issuecompliance orders to give effect to the labor standards provisions of this Code and otherlabor legislation based on the findings of labor employment and enforcement officers orindustrial safety engineers made in the course of inspection. The Secretary or his dulyauthorized representatives shall issue writs of execution to the appropriate authority for theenforcement of their orders, except in cases where the employer contests the finding of the

labor employment and enforcement officer and raises issues supported by documentaryproofs which were not considered in the course of inspection.

33 Art. 3434 Art. 128 (as amended by R.A. No. 7730)

An order issued by the duly authorized representative of the Secretary of Labor and Employment under

this article may be appealed to the latter. In case said order involved 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 bondingcompany duly accredited by the Secretary of Labor and Employment in the amount equivalent to the

monetary award in the order appealed from.

The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code

by the phrase "(N)otwithstanding the provisions of Articles 129 and 217 of this Code to the contrary . . ."

thereby retaining and further strengthening the power of the Secretary of Labor or his duly authorized

representative to issue compliance orders to give effect to the labor standards provisions of said Code and

other labor legislation based on the findings of labor employment and enforcement officers or industrial

safety engineers made in the course of inspection.35

See Reference


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d. Penalties for illegal recruitment

(a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos(P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage asdefined herein;

(b) Any licensee or holder of authority found violating or causing another to violateany provision of this Title or its implementing rules and regulations shall, upon convictionthereof, suffer the penalty of imprisonment of not less than two years nor more than fiveyears or a fine of not less than P10,000.00nor more than P50,000.00, or both suchimprisonment and fine, at the discretion of the court;

(c) Any person who is neither a licensee nor a holder of authority under this Titlefound violating any provision thereof or its implementing rules and regulations shall, uponconviction thereof, suffer the penalty of imprisonment of not less than four years nor morethan eight years or a fine of not less thanP20,000.00 nor more than P100,000.00 or bothsuch imprisonment and fine, at the discretion of the court;

(d) If the offender is a corporation, partnership, association or entity, the penaltyshall be imposed upon the officer or officers of the corporation, partnership, association orentity responsible for violation; and if such officer is an alien, he shall, in addition to thepenalties herein prescribed, be deported without further proceedings;

(e) In every case, conviction shall cause and carry the automatic revocation of thelicense or authority and all the permits and privileges granted to such person or entity underthis Title, and the forfeiture of the cash and surety bonds in favor of the OverseasEmployment Development Board or the National Seamen Board, as the case may be, bothof which are authorized to use the same exclusively to promote their objectives.

C. LABOR STANDARDS

1. Hours of Work36

a. Coverage/Exclusions

It shall apply to employees in all establishments and undertakings, whether for profitor not, but not to

i. government employees,

ii. managerial employees,

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36 Work day" means 24 consecutive-hour period which commences from the time the employee regularly

starts to work. It does not necessarily mean the ordinary calendar day from 12:00 midnight to 12:00

midnight unless the employee starts to work at this unusual hour.

"Work week" is a week consisting of 168 consecutive hours or 7 consecutive 24-hour work days

beginning at the same hour and on the same calendar day each calendar week.

Reduction of eight-hour working day - not prohibited by law provided there is no reduction in pay of

workers.

Hours of work of part-time workers - payment of wage should be in proportion only to the hours worked.


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iii. field personnel38,iv. members of the family of the employer who are dependent onhim for support,v. domestic helpers,vi. persons in the personal service of another, and

vii. workers who are paid by results

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b. Normal Hours of Work

Eight (8) hours per day

c. Exceptions

(a) Health Personnel40

Health personnel in cities and municipalities with a population of at least onemillion (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, except where the exigencies of the service require that suchpersonnel work for six (6)days or forty-eight (48) hours, in which case, they shall be entitledto an additional compensation of at least thirty percent (30%) of their regular wage for workon the sixth day.

(b) Compressed Work Week41

Allowed provided employees voluntarily agree thereto; there is no diminution in pay;

and only on temporary duration.

d. Work interruption due to brownouts

Basic rules:

Brown-outs of short duration not exceeding twenty (20) minutes - compensablehours worked.

Brown-outs running for more than twenty (20) minutes may not be treated as hoursworked provided any of the following conditions are present:

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those whose primary duty consists of the management of the establishment in which they are employed orof a department or subdivision thereof, and to other officers or members of the managerial staff.38 non-agricultural employees who regularly perform their duties away from the principal place of business

or branch office of the employer and whose actual hours of work in the field cannot be determined with

reasonable certainty39as determined by the Secretary of Labor in appropriate regulations.40 shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory

technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic

personnel41 See shortening of work week (under 1. Hours of Work), supra


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i. The employees can leave their workplace or go elsewhere whether within orwithout the work premises; or

ii. The employees can use the time effectively for their own interest.

e. Meal Break

Every employee is entitled to not less than one (1) hour (or 60 minutes) time-off forregular meals. Being time-off, it is not compensable hours worked and employee is free todo anything he wants, except to work. If he is required to work while eating, he should becompensated therefor.

If meal time is shortened to not less than twenty (20) minutes - compensable hoursworked.

If shortened to less than 20 minutes, it is considered coffee break or rest period ofshort duration and, therefore, compensable.

f. Idle time, waiting time, commuting time, travel time, whether part of hoursof work or not

Idle time

Not working time; it is not compensable42.

Waiting time

Considered compensable if waiting is an integral part of the employee's work or he is

required or engaged by the employer to wait.

Travel time, commuting time:

i. Travel from home to work -not compensable working timeii. Travel that is all in the days work- compensable hours worked.iii. Travel away from home - compensable hours worked.

42e.g. Stiller works as a Partas Trans bus driver. His route is from Vigan to Baguio, leaving at 6am and

arriving at 12nn. He is completely relieved from all duty until 6pm, when he again goes on duty for the

return trip to Vigan. Is his idle time working time? No, because during his idle time,he is

specificallyrelieved from all duty. He is merely waiting to be engaged.


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g. Overtime work43

Work rendered after normal eight (8) hours of work44.

(a) Undertime not offset by overtime

Undertime work on any particular day shall not be offset by overtime on any otherday.

(b) Waiver of overtime pay

The right of the laborers to overtime pay cannot be waived.

h. Night Work45

Night-shift differential is equivalent to 10% of employee's regular wage for each

hour of work performed between 10:00 p.m. and 6:00 a.m. of the following day.

43 General Rule: no employee may be compelled to render overtime work against his will.

Exceptions:

a. When the country is at war or when any other national or local emergency has been declared by the

National Assembly or the Chief Executive

b. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to

public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods,typhoons, earthquake, epidemic or other disasters or calamities;

c. When there is urgent work to be performed on machines, installations or equipment, or in order to

avoid serious loss or damage to the employer or some other causes of similar nature

d. When the work is necessary to prevent loss or damage to perishable goods;

e. When the completion or continuation of work started before the 8th hour is necessary to prevent

serious obstruction or prejudice to the business or operations of the employer; and

f. When overtime work is necessary to avail of favorable weather or environmental conditions where

performance or quality of work is dependent thereon.

When an employee refuses to render emergency overtime work under any of the foregoing conditions, he

may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the

employer.44 In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without

deduction for facilities provided by the employer."Premium pay" means the additional compensation required by law for work performed within 8 hours on

non- working days, such as rest days and special days.

"Overtime pay" means the additional compensation for work performed beyond 8 hours. Every employee

entitled to premium pay is also entitled to the benefit of overtime pay.45 Night shift differential and overtime pay, distinguished

When the work of an employee falls at nighttime, the receipt of overtime pay shall not preclude the right

to receive night differential pay. The reason is, the payment of the night differential pay is for the work

done during the night; while the payment of the overtime pay is for work in excess of the regular eight (8)

working hours.


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i. CBA provision vis--vis overtime work

If the terms of a CBA are clear and have no doubt upon the intention of thecontracting parties, the literal meaning thereof shall prevail. That is settled46.

The CBA is the law between the parties, hence, they are obliged to comply with itsprovisions47

2. Wages48

a. "No work no pay" principle49

Actual work is the basis of claim for wages

b. Coverage/Exclusions

General rule:

Payment of wages shall be made directly to the employee entitled thereto and tonobody else.

Exceptions.

i. Where the employer is authorized in writing by the employee to pay his wages to amember of his family;

46 United Kimberly-Clark Employees UnionPhilippine Transport General Workers Organization

(UKCEU- PTGWO) v. KimberlyClark Philippines, Inc., G.R. No. 162957, March 6, 2006.47 TSPIC Corporation v. TSPIC Employees Union, et al., G.R. No. 163419, February 13, 2008, 545 SCRA

215, 225.48Under the Civil Code, it is mandated that the laborers wages shall be paid in legal currency. Under the

Labor Code and its implementing rules, as a general rule, wages shall be paid in legal tender and the use of

tokens, promissory notes, vouchers, coupons or any other form alleged to represent legal tender is

prohibited even when expressly requested by the employee

Exceptions :

A. Payment through automated teller machine (ATM) of banks provided the following conditions are met:

1. the ATM system of payment is with the written consent of the employees concerned;

2. The employees are given reasonable time to withdraw their wages from the bank facility which time,

if done during working hours, shall be considered compensable hours worked;

3. The system shall allow workers to receive their wages within the period or frequency and in the

amount prescribed under the Labor Code, as amended;4. There is a bank or ATM facility within a radius of one (1) kilometer to the place of work;

5. Upon request of the concerned employee/s, the employer shall issue a record of payment of

wages,benefits and deductions for a particular period;

6. There shall be an additional expenses and no diminution of benefits and privileges as a result of the

ATM system of payment;

7. The employer shall assume responsibility in case the wage protection provisions of law and

regulations are not complied with under the arrangement49applies to special days but not to unworked regular holidays where employees are always paid 100% of

their basic pay.


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ii. Where payment to another person of any part of the employees wages isauthorized by existing law, including payments for the insurance premiums of the employeeand union dues where the right to check-off has been recognized by the employer inaccordance with a collective agreement or authorized in writing bythe individual employees concerned; or

iii. In case of death of the employee, in which case, the same shall be paid to his heirswithout necessity of intestate proceedings.

c. Facilities50 vs. supplements

Facilities shall include articles or services for the benefit of the employee or hisfamily but shall not include tools of the trade or articles or services primarily for the benefitof the employer or necessary to the conduct of theemployers business.

In order that the cost of facilities furnished by the employer may be charged against

an employee, his acceptance of such facilities must be voluntary51.

Supplements means extra remuneration or special privileges or benefits given to orreceived by the laborers over and above their ordinary earnings or wages.

d. Wages vs. salaries

Wages applies to compensation for manual labor, skilled or unskilled. It indicatesinconsiderable pay for a lower or less responsible character of employment.

Salaries denotes a higher degree of employment, or a superior grade of services,

and implies a position or office. It suggests a larger and more permanent or fixedcompensation for more important services.

e. Wage distortion

A situation where an increase in prescribed wage rates results in the elimination orsevere contraction of intentional quantitative differences in wage or salary rates between andamong employee groups in an establishment as to effectively obliterate the distinctionsembodied in such wage structure based on skills, length of service, or other logical bases ofdifferentiation.

The issue of whether or not a wage distortion exists is a question of fact that iswithin the jurisdiction of the quasi- judicial tribunals.

50 Value of facilities - the fair and reasonable value of board, lodging and other facilities customarily

furnished by an employer to his employees both in agricultural and non-agricultural enterprises51Sec. 7, Rule VII, Book III, Rules to Implement the Labor Code.


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f. CBA vis--vis Wage OrdersCBA creditability

If the terms of a CBA are clear and have no doubt upon the intention of thecontracting parties, the literal meaning of its stipulation shall prevail. In order to ascertain theintention of the contracting parties, their contemporaneous and subsequent acts shall be

principally considered. The CBA must be construed liberally rather than narrowly andtechnically and the Court must place a practical and realistic construction upon it52.

To ripen into a company practice that is demandable as a matter of right, the givingof the increase should not be by reason of a strict legal or contractual obligation, but byreason of an act of liberality on the part of the employer. Hence, even if the companycontinuously grants a wage increase as mandated by a wage order or pursuant to a CBA, thesame would not automatically ripen into a company practice.

g. Non-diminution of benefits53

This principle mandates that the reduction or diminution or withdrawal by

employers of any benefits, supplements or payments as provided in existing laws, individualagreements or collective bargaining agreements between workers and employers or voluntaryemployer practice or policy, is not allowed.54.

The benefits being given to employees cannot be taken back or reduced unilaterallyby the employer because the benefits have become part of the employment contract, writtenor unwritten.

h. Workers preference in case of bankruptcy55

52United Kimberly-Clark Employees Union, et al. v. Kimberly-Clark Philippines, Inc., G.R. No. 162957,

March 6, 2006.53 The rule is applicable if it is shown that the grant of the benefits is:

Based on an express policy; or

Has ripened into practice over a long period of time,

The practice is consistent and deliberate; and

It is not due to an error in the construction/ application of a doubtful or difficult question of law.54 See Art. 10055 Art. 110, see Reference

It does not purport to create a lien in favor of workers or employees for unpaid wages either upon all of

the properties or upon any particular property owned by their employer. Claims for unpaid wages do not,

therefore, fall at all within the category of specially preferred claims established under Articles 2241 and2242 of the Civil Code, except to the extent that such claims for unpaid wages are already covered by

Article 2241, number 6: claims for laborers wages, on the goods manufactured or the work done; or by

Article 2242, number 3: claims of laborers and other workers engaged in the construction, reconstruction or

repair of buildings, canals and other works, upon said buildings, canals or other works. To the extent that

claims for unpaid wages fall outside the scope of Article 2241, number 6 and 2242, number 3, they would

come within the ambit of the category of ordinary preferred credits under Article 2244.

Workers preference is an ordinary preferred credit.


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1. The right to preference given to workers under Article 110 cannot exist in anyeffective way prior to the time of its presentation in distribution proceedings. Article 110applies only in case of bankruptcy or judicial liquidation of the employer.

2. Judicial proceedings in remis required for creditors claims against debtors to

become operative.

3. To contend that Article 110 of the Labor Code is applicable also to extrajudicialproceedings would be putting the worker in a better position than the State which could onlyassert its own prior preference in case of a judicial proceeding.

4. The right of preference as regards unpaid wages recognized by Article 110 of theLabor Code does not constitute a lien on the property of the insolvent debtor in favor of theworkers but a right to a first preference in the discharge of the funds of the judgmentdebtor.

i. Labor Code provisions for wage protection

1. Non-interference in disposal of wages.Employers are not allowed to interfere in the disposal of wages of employees56.

2. Wage deduction.

Deductions from the wages of the employees may be made by the employer in anyof the following cases:

i. When the deductions are authorized by law57, including deductions for the

insurance premiums advanced by the employer in behalf of the employee as well as uniondues where the right to check-off has been recognized by the employer or authorized inwriting by the individual employee himself;

ii. When the deductions are with the written authorization of the employees forpayment to a third person and the employer agrees to do so, provided that the latter doesnot receive any pecuniary benefit, directly or indirectly, from the transaction;

iii. Withholding tax mandated under the National Internal Revenue Code;

iv. Withholding of wages because of employees debt to the employer which is

already due;

v. Deductions made pursuant to a judgment against the worker under circumstanceswhere the wages maybe the subject of attachment or execution but only for debts incurredfor food, clothing, shelter and medical attendance.

56 Art. 11257 e.g., SSS, Pag-IBIG


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vi. When deductions from wages are ordered by the court58.

vii. Deductions made for agency fee from non-union members who accept thebenefits under the CBA negotiated by the bargaining union. This form of deduction doesnot require the written authorization of the

non-union member.

3. Deposits for loss or damage.

No employer shall require his worker to make deposits from which deductions shallbe made for the reimbursement of loss of or damage to tools, materials, or equipmentsupplied by the employer, EXCEPT when the employer is engaged in such trades,occupations or business where the practice of making deductions or requiring deposits is arecognized one, or is necessary or desirable as determined by the Secretary of Labor andEmployment in appropriate rules and regulations59.

Limitations.

No deduction from the deposits of an employee for the actual amount of the loss ordamage shall be made unless the employee has been heard thereon, and his responsibility hasbeen clearly shown60.

4. Withholding of wages and kickbacks prohibited.

It shall be unlawful for any person, directly or indirectly, to withhold any amountfrom the wages of a worker or induce him to give up any part of his wages by force, stealth,intimidation, threat or byany other means whatsoever without the workers consent61.

5. Deduction to ensure employment.

It shall be unlawful to make any deduction from the wages of any employee for thebenefit of the employer or his representative or intermediary as consideration of a promiseof employment or retention in employment62.

6. Retaliatory measures.

It shall be unlawful for an employer to refuse to pay or reduce the wages andbenefits, discharge or in any manner discriminate against any employee who has filedany complaint or instituted any proceeding under this Title or has testified or is about to

testify in such proceedings

63

.

58see also Art. 11359 Art. 11460 Art. 11561 Art. 11662 Art. 11763 Art. 118


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j. Allowable deductions without employees consent64

k. Attorneys fees and union service fee in labor cases

i. In cases of unlawful withholding of wages, the employer maybe assessed attorneys

fees equivalent to ten percent of the amount of wages recovered.

ii. It shall be unlawful for any person to demand or accept, in any judicial oradministrative proceedings for the recovery of wages, attorneys fees which exceed tenpercent (10%) of the amount of wages recovered65.

iii. The attorneys fees may be awarded only when the withholding of wages isdeclared unlawful.

iv. The basis of the 10% attorneys fees is the amount of wages recovered. Shouldthere be any other monetary awards given in the proceedings, the same may not be assessedor subjected to the 10% attorneys fees.

l. Criteria/Factors for Wage Setting

1) The demand for living wages;2) Wage adjustment vis--vis the consumer price index;3) The cost of living and changes or increases therein;4) The needs of workers and their families;5) The need to induce industries to invest in the countryside;6) Improvements in standards of living;7) The prevailing wage levels;8) Fair return of the capital invested and capacity to pay of employers;

9) Effects on employment generation and family income; and10) The equitable distribution of income and wealth along the imperatives of

economic and social development66

3. Rest Day

a. Right to weekly rest day

i. It shall be the duty of every employer, whether operating for profit or not, toprovide each of his employees a rest period of not less than twenty-four (24) consecutivehours after every six (6) consecutive normal work days.

ii. The employer shall determine and schedule the weekly rest day of his employeessubject to collective bargaining agreement and to such rules and regulations as the Secretaryof Labor and Employment may provide. However, the employer shall respect the

64see exceptions in Art. 114, supra65 Art. 11166 See Art. 124


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preference of employees as to their weekly rest day when such preference is based onreligious grounds.

b. Preference of the employee67

c. When work on rest day authorized

The employer may require his employees to work on any day:

i. In case of actual or impending emergencies caused by serious accident, fire, flood,typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life andproperty, or imminent danger to public safety;

ii. In cases of urgent work to be performed on the machinery, equipment, orinstallation, to avoid serious loss which the employer would otherwise suffer;

iii. In the event of abnormal pressure of work due to special circumstances, where

the employer cannot ordinarily be expected to resort to other measures;

iv. To prevent loss or damage to perishable goods;

v. Where the nature of the work requires continuous operations and the stoppage ofwork may result in irreparable injury or loss to the employer; and

vi. Under other circumstances analogous or similar to the foregoing as determined bythe Secretary of Labor and Employment68.

4. Holidays

a. Right to holiday pay69

(1) In case of absences70

i. Employees on leave of absence with pay - entitled to regular holiday pay

ii. Employees on leave of absence without pay on the day immediately preceding aregular holidaymay not be paid the required holiday pay if he has not worked on suchregular holiday.

67 See a. Right to Weekly Rest Day, supra68 Art. 9269 Art. 94

Every worker shall be paid his regular daily wage during regular holidays.

The employer may require an employee to work on any holiday but such employee shall be paid a

compensation equivalent to twice his regular rate;70 If worker did not work on a regular holiday, he is entitled to 0ne hundred percent (100%) of his basic

pay; if he worked, he is entitled to 200% thereof


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iii. Employees on leave while on SSS or employee's compensation benefits-Employers shall grant the same percentage of the holiday pay as the benefit granted bycompetent authority in the form of employees compensation or social security payment,whichever is higher, if they are not reporting for work while on such benefits.

iv. When the day preceding regular holiday is a non-working day or scheduled restday - Employee shall not be deemed to be on leave of absence on that day, in which case, heshall be entitled to the regular holiday pay if he worked on the day immediately preceding thenon-working day or rest day.

In case of absence during successive regular holidays, an employee may not be paidfor both holidays if he absents himself from work on the day immediately preceding the firstholiday, unless he works on the first holiday, in which case, he is entitled to his holiday payon the second holiday.

(2) In case of temporary cessation of work

A worker is entitled to holiday pay for the regular holidays falling within the period.

(3) Of teachers, piece workers, seafarers, seasonal workers, etc.

Faculty members of private colleges and universities may not be paid for the regularholidays during semestral vacations but shall be paid for such holidays during Christmasvacations71

However, hourly-paid faculty members of such schools are held not entitled to payon regular holidays-whether during semestral or vacation breaks-because these are known toboth the school and faculty members concerned as no class days, and the latter do not

expect payment for such unwanted days. But such faculty members must be paid (theirregular rate) when a special day is proclaimed or when classes are called off or shortened dueto typhoons, rallies, etc.

Piece-rate workers are entitled to the minimum wage and 13 th month pay, but not toholiday pay.72

Seasonal employees who do not work during off season are not entitled to pay forthe regular holidays occurring during their off-season. Workers assigned to skeleton crewsthat work during the off-season have the right to paid on regular holidays falling in thatduration.

b. Exclusions from coverage

In retail and service establishments regularly employing less than ten (10) workers.

71 Book III, Rule 4, Sec. 8-a.72SamahangManggagawasaBandolino vs. NLRC, 275 SCRA 633.


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5. Leaves

a. Service Incentive Leave Pay

(1) Right to service incentive leave

Every employee who has rendered at least one year of service shall be entitled to ayearly service incentive leave of five days with pay.

(2) Exclusions from coverage73

i. those who are already enjoying the benefit herein provided,ii. those enjoying vacation leave with pay of at least five days andiii. those employed in establishments regularly employing less than ten employees or

in establishments exempted from granting this benefit by the Secretary of Labor andEmployment after considering the viability or financial condition of such establishment

(3) Commutable nature of benefit

It is commutable to cash if unused at the end of the year.

b. Maternity Leave74

(1) Coverage

A covered female employee who has paid at least three monthly maternitycontributions in the twelve-month period preceding the semester of her childbirth, abortionor miscarriage and who is currently employed shall be paid a daily maternity benefit

equivalent to one hundred percent (100%) of her present basic salary, allowances and otherbenefits or the cash equivalent of such benefits for sixty (60) days.

(2) Conditions to entitlement

a. The employee shall have notified her employer of her pregnancy and the probabledate of her childbirth which notice shall be transmitted to the SSS in accordance withthe rules and regulations it may provide;

b. Payment shall be advanced by the employer in two equal installments within thirty(30) days from the filing of the maternity leave application;

73 ibid.74 Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages and,

therefore, may not be included in computing the employees 13th-month pay for the calendar year.

Voluntary or self-employed members are not entitled to the maternity benefit because to be entitled thereto,

corresponding maternity contributions should be paid by employers. Voluntary or self-employed members

have no employers so they do not have maternity contributions.


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c. In case of caesarian delivery, the employee shall be paid the daily maternity benefitfor 78 days;

d. Payment of daily maternity benefits shall be a bar to the recovery of sicknessbenefits provided by this Act for the same compensable period of sixty (60) days for thesame childbirth, abortion or miscarriage;

e. The maternity benefits shall be paid only for the first four deliveries after March13, 1973;

f. The SSS shall immediately reimburse the employer of one hundred percent (100%)of the amount of maternity benefits advanced to the employee by the employer upon receiptof satisfactory proof of such payment and legality thereof

g. If an employee should give birth or suffer abortion or miscarriage without therequired contributions having been remitted for her by her employer to the SSS, or withoutthe latter having been previously notified by the employer of the time of the pregnancy, theemployer shall pay to the SSS damages equivalent to the benefits which said employee would

otherwise have been entitled to, and the SSS shall in turn pay such amount to the employeeconcerned75.

(3) Availment

Every pregnant woman in the private sector, whether married or unmarried, isentitled to the maternity leave benefits.

c. Paternity Leave76

(1) Coverage

Benefit granted to a married male employee allowing him not to report for work forseven (7) days (for each delivery77 for the first 4 deliveries) but continues to earn thecompensation therefor.


His spouse78 has delivered a child or suffered miscarriage for purposes of enablinghim to effectively lend support to his wife in her period of recovery and/or in the nursing ofthe newly-born child.

(3) Availment

79

75R. A. 7322, March 3, 1992.76 It is not convertible to cash if not availed of.77include childbirth or any miscarriage78refers to the lawful wife. For this purpose, lawful wife refers to a woman who is legally married to the

male employee concerned.79 see (1) Coverage, supra


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The paternity benefits may be enjoyed by the qualified employee before, during orafter the delivery by his wife.

However, the total number of days shall not exceed seven (7) working days for eachdelivery.

Provided further, this benefit shall be availed of not later than sixty (60) days afterthe date of said delivery.

d. Parental Leave80

(1) Coverage

Leave benefits of seven (7) days granted to a solo parent to enable him/her toperform parental duties and responsibilities where physical presence is required.


Granted to any solo parent employee who has rendered service of at least one (1)year.

(3) Availment81

e. Leaves for victims of violence against women82

(1) Coverage(2) Conditions to entitlement(3) Availment

Victims under this Act shall be entitled to take a paid leave of absence up to ten (10)days in addition to other paid leaves under the Labor Code and Civil Service Rules andRegulations, extendible when the necessity arises as specified in the protection order.83

6. Service Charges

a. Coverage

All service charges collected by hotels, restaurants and similar establishments shall bedistributed at the rate of eighty-five percent (85%) for all covered employees and fifteen

percent (15%) for management. The share of the employees shall be equally distributed

80 Republic Act No. 8972 (An Act Providing for Benefits and Privileges to Solo Parents and Their

Children, Appropriating Funds Therefor and for Other Purposes), otherwise known as The Solo Parents

Welfare Act of 2000. This leave privilege is an additional leave benefit which is separate and distinct from

any other leave benefits provided under existing laws or agreements81 see (1) Coverage, supra82 Under R.A. 926283 Sec. 43, 1st par., ibid


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among them. In case the service charge is abolished, the share of the covered employeesshall be considered integrated in their wages.

b. Exclusion84

c. Distribution

85

d. Integration86

7. Thirteenth (13th) Month Pay and other bonuses

a) Coverage

All rank-and-file employees are entitled to a 13th-month pay87 regardless of theamount of basic salary that they receive in a month and regardless of their designation oremployment status, and irrespective of the method by which their wages are paid, providedthat they have worked for at least one (1) month during a calendar year.

b) Exclusion/Exemptions from coverage

i. The government and any of its political subdivisions, including government-ownedand controlled corporations, except those corporations operating essentially as privatesubsidiaries of the government.

ii. Employers already paying their employees 13th-month pay or more in a calendaryear or its equivalent;

iii.. Employers of household helpers and persons in the personal service of another

in relation to such workers

iv. Employers of those who are paid on purely commission, boundary, or task basis,and those who are paid a fixed amount for performing a specific work, irrespective of thetime consumed in the performance thereof, except where the workers are paid on piece-ratebasis in which case, the employer shall be covered by the 13th month pay law insofar as suchworkers are concerned.

c) Nature of 13th month pay

It is in the nature of wages. This is a year-end pay established by P.D. 851 which is

equivalent to 1/12 of the total basic salary earned by an employee within the calendar year,84 See A. Coverage85 ibid86 ibid87 Forms:

Christmas bonus;

Midyear bonus;

Profit sharing payments; and

Other cash bonuses amounting to not less than1/12 of its basic salary


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which is demandable as a legal obligation. It may be given anytime but not later thanDecember 24.

d) Commissions vis--vis 13th month pay

Commissions are given for extra efforts exerted in consummating sales or otherrelated transactions. As such, they are additional pay which do not form part of the basicsalary.

The computation of the 13th month pay should be confined to the concept providedin P.D. 851, and should be stripped of other payments properly considered as fringe benefitsor additional pay, which do not form part of the basic salary.88

e) CBA vis--vis 13th month pay

The presence of such stipulation in the CBA, particularly after the effectivity of P.D.851-creates the presumption that it was meant to be in addition to the legal requirement89

8. Women Workers

a. Discrimination

It shall be unlawful for any employer to discriminate against any woman employeewith respect to terms and conditions of employment solely on account of her sex.The following are acts of discrimination:

i. Payment of a lesser compensation, including wage, salary or other form ofremuneration and fringe benefits, to a female employees as against a male employee, forwork of equal value; and

ii. Favoring a male employee over a female employee with respect to promotion,training opportunities, study and scholarship grants solely on account of their sexes.90

b. Stipulation against marriage

It shall be unlawful for an employer to require as a condition of employment orcontinuation of employment that a woman employee shall not get married, or to stipulateexpressly or tacitly that upon getting married, a woman employee shall be deemed resignedor separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a womanemployee merely by reason of her marriage91.

88Boie-Takeda Chemical vs. dela Serna; Phil. Fuji Xerox Corp. vs. Trajano, et al., 228 SCRA 32989Universal Corn Products vs. NLRC.90 Art. 135, 1st par.91 Art. 136


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c. Prohibited Acts

It shall be unlawful for any employer:

1. To deny any woman employee the benefits provided for in this Chapter or to

discharge any woman employed by him for the purpose of preventing her from enjoying anyof the benefits provided under this Code.

2. To discharge such woman on account of her pregnancy, or while on leave or inconfinement due to her pregnancy;

3. To discharge or refuse the admission of such woman upon returning to her workfor fear that she may again be pregnant92.

d. Classification of certain women workers

Any woman who is permitted or suffered to work, with or without compensation, in

any nightclub, cocktail lounge, massage clinic, bar or similar establishments under theeffective control or supervision of the employer for a substantial period of time asdetermined by the Secretary of Labor and Employment, shall be considered as an employeeof such establishment for purposes of labor and social legislation93.

e. Anti-Sexual Harassment Act94

The Act punishes sexual harassment if the same is:

1. work-related;or2. Education-related;or

3. training-related.95

Work, education or training-related sexual harassment is committed by anyemployer, employee, manager, supervisor, agent of the employer, teacher, instructor,professor, coach, trainor, or any other person who, having authority, influence or moralascendancy over another in a work or training or education environment, demands, requestsor otherwise requires any sexual favor from another, regardless of whether the demand,request or requirement for submission is accepted by the object of said act.

Any person who directs or induces another to commit any act of sexual harassmentas defined in the law, or who cooperates in the commission thereof by another without

which it would not have been committed, shall also be held liable under the law.

96

92 Art. 13793 Art. 13894 RA 7877

- declares sexual harassment unlawful in the employment, education or training environment.95Sec. 3, Ibid.96 ibid


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9. Minor Workers97

a. Regulation of working hours of a child98

i. A child below fifteen (15) years of age99 may be allowed to work for not more than

twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours atany given day;

ii. A child fifteen (15) years of age but below eighteen (18) shall not be allowed towork for more than eight (8) hours a day, and in no case beyond forty (40) hours a week;

iii. No child below fifteen (15) years of age shall be allowed to work between eighto'clock in the evening and six o'clock in the morning of the following day and no childfifteen (15) years of age but below eighteen (18) shall be allowed to work between teno'clock in the evening and six o'clock in the morning of the following day100.

b. Employment of the child in public entertainment101

c. Prohibition of employing minors in certain undertakings and in certainadvertisements

No child shall be employed as a model in any advertisement directly or indirectlypromoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling orany form of violence or pornography102.

97 RA 7678, RA 923198 The term "child" shall apply to all persons under eighteen (18) years of age .

99Children below fifteen (15) years of age shall not be employed except:(1) When a child works directly under the sole responsibility of his/her parents or legal guardian and

where only members of his/her family are employed: Provided, however, That his/her employment neither

endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided,

further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or

secondary education; or

(2) Where a child's employment or participation in public entertainment or information through cinema,

theater, radio, television or other forms of media is essential: Provided, That the employment contract is

concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if

possible, and the approval of the Department of Labor and Employment: Provided, further, That the

following requirements in all instances are strictly complied with:

(a) The employer shall ensure the protection, health, safety, morals and normal development of the child;

(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into

account the system and level of remuneration, and the duration and arrangement of working time; and(c) The employer shall formulate and implement, subject to the approval and supervision of competent

authorities, a continuing program for training and skills acquisition of the child.

In the above exceptional cases where any such child may be employed, the employer shall first secure,

before engaging such child, a work permit from the Department of Labor and Employment which shall

ensure observance of the above requirements. (Section 12, R.A. No. 7610, as amended by R. A. No. 9231,

December 19, 2003).100Sec. 12-A, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.101see footnote 98, no. 2.102Sec. 14, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.


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10. Employment of Househelpers

a. Definition

Domestic or household serviceshall mean service in the employers home which is

usually necessary or desirable for the maintenance and enjoyment thereof and includesministering to the personal comfort and convenience of the members ofthe employershousehold, including services of family drivers103.

b. Benefits accorded househelpers

i. If the househelper is under the age of eighteen (18) years, the employer shall givehim or her an opportunity for at least elementary education. The cost of education shall bepart of the househelpers compensation, unless there is a stipulation to the contrary104.

ii. The employer shall furnish the househelper, free of charge, suitable and sanitaryliving quarters as well as adequate food and medical attendance.

c. Termination

If the duration of the household service is not determined either in stipulation or bythe nature of the service, the employer or the househelper may give notice to put an end tothe relationship five (5) days before the intended termination of the service105.

d. Reliefs for unjust termination

If the period of household service is fixed, neither the employer nor the househelpermay terminate the contract before the expiration of the term, except for a just cause. If thehousehelper is unjustly dismissed, he or she shall be paid the compensation already earned

plus that for fifteen (15)days by way of indemnity. If the househelper leaves withoutjustifiable reason, he or she shall forfeit any unpaid salary due him or her not exceedingfifteen (15) days106.

11. Employment of Homeworkers

a. Definition

Homeworkers refer to workers who perform in or about their homes any processingof goods or materials in whole or in part which have been furnished directly or indirectly byan employer or contractor, and thereafter to be returned to the latter. The term does not

include those situated within the premises or compound of an employer or contractor,where work performed therein is under the active or personal supervision by or for thelatter.

103 Art. 141, 2nd par.104 Art. 146105 Art. 150106 Art. 149


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b. Rights and benefits accorded homeworkers

i. The employer is required to pay the homeworker or the contractor or sub-contractor for the work performed immediately upon receipt of the finished goods orarticles. When payment is made to a contractor or sub-contractor, the homeworker shall be

paid within one week after the contractor or subcontractor has collected the goods orarticles from the homeworker107.

ii. Whenever an employer contracts with a contractor in this regard, the employershould provide in such contract that the employees or homeworkers of the contractor andthe latters subcontractor shall be paid in accordance with these regulations. In the event thatsuch contractor or subcontractor fails to pay the wages or earnings of his employees orhomeworkers, such employee shall be jointly and severally liable with the contractor orsubcontractor to the workers of the latter, to the extent that the work is performed undersuch contract, in the same manner as if the employees or homeworkers were directlyengaged by the employer108

c. Conditions for deduction from homewokers earnings

No deductions shall me made from the homeworkers earnings for the value ofmaterials lost, destroyed, soiled or otherwise damaged unless the following conditions aremet: a) the homeworker concerned is clearly shown to be responsible for the loss or damage:b) the employee is given reasonable opportunity to show cause why deductions should notbe made: c) the amount of such deductions is fair and reasonable, and shall not exceed theactual loss or damage; and d) the deduction is made at such rate that the amount deducteddoes not exceed 20 percent of the homeworkers earnings in a week109

12. Apprentices and Learners110

a. Distinctions between Learnership and Apprenticeship

An apprentice is a worker who is covered by a written apprenticeship agreement withan employer while a learner is a person hired as a trainee in industrial occupations which arenon-apprenticeable and which may be learned through practical training on the job for aperiod not exceeding three (3) months, whether or not such practical training issupplemented by theoretical instructions.

107 Rule XIII, Book III, Secs. 3 & 4, OR108 ibid, Sec. 8, OR.109Rule XIII, Sec. 5, OR. This is to ensure the homeworkers right to due process. 110Under RA 7277. Wage rate is 75% of the statutory minimum wage rate.


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13. Handicapped Workers111

a. Definition of "handicapped workers"

Onewhose earning capacity is impaired: by age, physical or mental deficiency; or

injury.

b. Rights of disabled workers

Handicapped workers may be hired as apprentices or learners if their handicap is notsuch as to effectively impede the performance of job operations in the particular occupationsfor which they are hired.

No disabled person shall be denied access to opportunities for suitable employment.Qualified disabled employees shall be subject to the same terms and conditions ofemployment and the same compensation, privileges, benefits, fringe benefits, incentives orallowances as a qualified able-bodied person. Even a handicapped worker can acquire the

status of a regular employee if the factors that make for a regular employment are present,especially if his appointment was repeatedly renewed112.

c. Prohibitions on discrimination against disable persons

The Magna Carta strictly prohibits discrimination against a qualified disabled person,even as the law gives incentives to employers of disabled persons.

d. Incentives for employers

(a) To encourage the active participation of the private sector in promoting the

welfare of disabled persons and to ensure gainful employment for qualified disabled persons,adequate incentives shall be provided to private entities which employ disabled persons.

(b) Private entities that employ disabled persons who meet the required skills orqualifications, either as regular employee, apprentice or learner, shall be entitled to anadditional deduction, from their gross income, equivalent to twenty-five percent (25%) ofthe total amount paid as salaries and wages to disabled persons: Provided, however, Thatsuch entities present proof as certified by the Department of Labor and Employment thatdisabled persons are under their employ: Provided, further, That the disabled employee isaccredited with the Department of Labor and Employment and the Department of Healthas to his disability, skills and qualifications.

(c) Private entities that improve or modify their physical facilities in order to providereasonable accommodation for disabled persons shall also be entitled to an additional

111 Ibid

If disability is not related to the work for which he was hired, he should not be so considered as

handicapped worker. He may have a disability but since the same is not related to his work, he cannot be

considered a handicapped worker insofar as that particular work is concerned.112

Bernardo vs. NLRC, July 12, 1999GR No. 122917


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deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costsof the improvements or modifications. This Section, however, does not apply toimprovements or modifications of facilities required under Batas PambansaBilang 344.113

D. TERMINATION OF EMPLOYMENT

1. Employer-Employee Relationship

a. Four-fold Test

a. Selection and engagement of employee;b. Payment of wages;c. Power of dismissal; andd. Power of control114

b. Probationary Employment

General rule.

Probationary period should not exceed six (6) months from the date the employeestarted working. One becomes a regular employee upon completion of his six-month periodof/probation.

Exceptions. -

1. when the employer and the employee mutually agree on a shorter or longer period;2. when the nature of work to be performed by the employee requires a longer period;3. when a longer period is required and established by company policy.

c. Kinds of Employment

(1) Regular employment

Where, notwithstanding any written or oral agreement between the employer and theemployee to the contrary:

i. the employee has been engaged to perform activities which are usually necessaryor desirable in the usual business or trade of the employer.

ii. the employee has rendered at least one year of service, whether such service iscontinuous or broken, with respect to the activity in which he is employed and hisemployment shall continue while such activity exists.

iii. the employee is allowed to work after a probationary period.

113 Sec. 8, R.A. 7277114 the most important test


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(a) Reasonable connection rule

The primary standard is the reasonable connection between the particular activityperformed by the employee in relation to the usual business or trade of the employer. If theemployee has been performing the job for at least one year, even if the performance is not

continuous or only intermittent, the law deems the repeated and continuing need for itsperformance as sufficient evidence of the necessity, if not indispensability, of the activity ofthe business115

The primary standard of determining regular employment is the reasonableconnection between the particular activity performed by the employee in relation to theusual trade or business of the employer. Additionally, "an employee is regular because of thenature of work and the length of service, not because of the mode or even the reason forhiring them.116

(2) Project employment117

(a) Indicators of project employment

i. The duration of the specific/identified undertaking for which the worker isengaged is reasonably determinable.

ii. Such duration, as well as the specific work/service to be performed, is defined inan employment agreement and is made clear to the employee at the time of hiring.

iii. The work/service performed by the employee is in connection with the particularproject/undertaking for which he is engaged.

iv. The employee, while not employed and awaiting engagement, is free to offer hisservices to any other employer.

v. The termination of his employment in the particular project/undertaking isreported to the Department of Labor and Employment (DOLE) Regional Office havingjurisdiction over the workplace within 30 days following the date of his separation fromwork, using the prescribed form on employees' terminations dismissals suspensions.

vi. An undertaking in the employment contract by the employer to pay completionbonus to the project employee as practiced by most construction companies

(3) Seasonal employment

Where the work or service to be performed by the employee is seasonal in natureand the employment is for the duration of the season.

115International Pharmaceuticals, Inc. vs. NLRC, et al., March 9, 1998, 287 SCRA 213).116Matling Industrial and Commercial Corp. et al., v. Ricardo Coros, G.R. No. 157802, October 13, 2010)117Where the employment has been fixed for a specific project or undertaking the completion or termination

of which has been determined at the time of the engagement of the employee.


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(4) Casual employment

Where an employee is engaged to perform a job, work or service which is merelyincidental to the business of the employer, and such job, work or service is for a definiteperiod made known to the employee at the time of engagement

(5) Fixed term employment118

(a) Requisites for validity

i. The fixed period was knowingly and voluntarily agreed upon by the parties.

ii. The employer and the employee dealt with each other on more or less equal termswith no moral dominance being exercised by the employee119

iii. It is not valid if it is apparent that periods have been imposed to precludeacquisition of tenurial security by the employee.

d. Job contracting and Labor-only contracting

(1) When is there "job contracting"?

It refers to an arrangement whereby a principal agrees to put out or farm out with acontractor or subcontractor the performance or completion of a specific job, work or servicewithin a definite or predetermined period, regardless of whether such job, work or service isto be performed or completed within or outside the premises of the principal.

(2) When is there "labor-only contracting"?

It refers to an arrangement where the contractor or subcontractor merely recruits,supplies or places workers to perform a job, work or service for a principal

(3) Conditions that must concur in legitimate job contracting

i. the contractor or subcontractor does not have substantial capital or investmentwhich relates to the job, work or service to be performed and the employees recruited,supplied or placed by such contractor or subcontractor are performing activities which aredirectly related to the main business of the principal; or

ii. the contractor does not exercise the right to control over the performance of thework of the contractual employee120.

118 Not limited to those by nature, seasonal or for specific projects with pre-determined dates of completion

provided under the Labor Code. They also include contracts to which the parties by free choice, have

assigned a specific date of termination119

Brent School Ruling.120Art. 106


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(4) Effects of finding that there is labor-only contracting

i. The subcontractor will be treated as the agent or intermediary of the principal.Since the act of an agent is the act of the principal, representations made by thesubcontractor to the employees will bind the principal.

ii. The principal will become the employer as if it directly employed the workersengaged to undertake the subcontracted job or service. It will be responsible to them for alltheir entitlements and benefits under the labor laws.

iii. The principal and the subcontractor will be solidarily treated as the employer.

iv. The employees will become employees of the principal, subject to theclassifications of employees under Article 28 of the Labor Code.121

If the labor-only contracting activity is undertaken by a legitimate labor organization,a petition for cancellation of union registration may be filed against it, pursuant to Article

239(e) of the Labor Code122.

2. Termination of Employment

a. Substantive Due Process

(a) Just Causes

(a) Serious misconduct123 or willful disobedience124

i. Requisites

a. it must be serious;b. it must relate to the performance of the employees duties; andc. it must show that the employee has become unfit to continue working for theemployer.

121 No. 13, DOLE Primer on Contracting and Subcontracting, Effects of Department Order No. 3, Series of

2001.122ibid123 Transgression of some established and definite rule of action, a forbidden act, a dereliction of duty,

willful in character, and implies wrongful intent and not mere error in judgment.Grave and aggravated character and not merely trivial or unimportant; Must be in connection with the work

of the employee.124 Elements:

Assailed conduct must have been willful or intentional, willfulness characterized by a wrongful, perverse

mental attitude

It must be established that the said orders, regulations or instructions are

Reasonable and lawful

Sufficiently known to the employee

In connection with his duties


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(b) Gross and habitual neglect of duties

i. Requisites

a. Element of habituality may be disregarded where loss is substantial.

b. Element of habituality may be disregarded if totality of evidence justifies dismissal.c. Element of actual loss or damage, not an essential requisite

(c) Fraud125 or willful breach of trust126 (loss of trust andconfidence)

i. Requisites

a. The loss of confidence must not be simulated;b. It should not be used as a subterfuge for causes which are illegal, improper orunjustified;c. It may not be arbitrarily asserted in the face of overwhelming evidence to the

contrary;dIt must be genuine, not a mere afterthought, to justify earlier action taken in badfaith; ande. The employee involved holds a position of trust and confidence

(d) Abandonment of employment; Elements that mustconcur

1. the failure to report for work or absence without valid or justifiable reason; and2. a clear intention to sever the employer-employee relationship. This is the more

determinative factor being manifested by some overt acts.

(e) Termination of employment pursuant to a Union SecurityClause127

To validly dismiss an employee based on violation of union security clause, employershould still afford due process to the expelled unionists. Although the Supreme Court has

125Commission of fraud by an employee against the employer will necessarily result in the latter's loss of

trust and confidence in the former. Proof of loss is not required under this ground.

In order to constitute a just cause for dismissal, the act complained of should be work-related and

must show that the employee concerned is unfit to continue to work for the employer126 loss of trust and confidence

In order to constitute a just cause for dismissal, the act complained of should be work-related andmust show that the employee concerned is unfit to continue to work for the employer.127 In the case of Alabang Country Club, Inc. vs. NLRC, [G.R. No. 170287, Feb. 14, 2008], the Supreme

Court declared that in terminating the employment of an employee by enforcing the union security clause,

the employer needs only to determine and prove that:

(1) the union security clause is applicable;

(2) the union is requesting for the enforcement of the union security provision in the CBA; and

(3) there is sufficient evidence to support the unions decision to expel the employee from the union.

The foregoing requisites constitute just cause for terminating an employee based on the CBAs union

security provision.


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ruled that union security clauses embodied in the CBA may be validly enforced and thatdismissals pursuant thereto may likewise be valid, this does not erode the fundamentalrequirement of due process. The reason behind the enforcement of union security clauseswhich is the sanctity and inviolability of contracts, cannot override ones right to dueprocess.

(f) Totality of infractions doctrine128

Dismissal due to repetition of related offenses, even if already punished with lesspunitive sanctions.

Culpability of employer's remarks were to be evaluated not only on the basis of theirimplicit implications, but were

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