Bar Reviewer in Labor Law

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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 shallinculcate in the youth patriotism and nationalism, and encourage their involvement inpublic and civic affairs.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 III– Bill 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

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

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

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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 economicopportunities 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 principleof shared responsibility between workers and employers and the preferential use ofvoluntary modes in settling disputes, including conciliation, and shall enforce their mutualcompliance therewith to foster industrial peace. The State shall regulate the relationsbetween workers and employers, recognizing the right of labor to its just share in the fruitsof production and the right of enterprises to reasonable returns to investments, and toexpansion and growth.13

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

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

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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.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, as modes ofsettling labor or industrial disputes;

(b) To promote free trade unionism as an instrument for the enhancementof 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 collective

15 Art. 170016 Art. 3

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bargaining, 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 Code.17

Definitions.

Commission The National Labor Relations Commission or any of itsdivisions, as the case may be.

Bureau The Bureau of Labor Relations and/or the Labor RelationsDivisions in the regional offices established underPresidential Decree No. 1, in the Department of Labor.

Board The National Conciliation and Mediation Board establishedunder Executive Order No. 126.

Council The Tripartite Voluntary Arbitration Advisory Councilestablished under Executive Order No. 126, as amended.

Employer Includes any person acting in the interest of an employer,directly or indirectly. The term shall not include any labororganization or any of its officers or agents except whenacting as employer.

Employee Includes any person in the employ of an employer. Theterm shall not be limited to the employees of a particularemployer, unless the Code so explicitly states. It shallinclude any individual whose work has ceased as a result ofor in connection with any current labor dispute or becauseof any unfair labor practice if he has not obtained any othersubstantially equivalent and regular employment.

Labor organization Any union or association of employees which exists inwhole or in part for the purpose of collective bargaining orof dealing with employers concerning terms and conditionsof employment.

17 Art. 211

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Legitimate labor organization Any labor organization duly registered with the Departmentof Labor and Employment, and includes any branch orlocal thereof.

Company union Any labor organization whose formation, function oradministration has been assisted by any act defined asunfair labor practice by this Code.

Bargaining representative A legitimate labor organization whether or not employedby the employer.

Unfair labor practice Any unfair labor practice as expressly defined by the Code.

Labor dispute Includes any controversy or matter concerning terms andconditions of employment or the association orrepresentation of persons in negotiating, fixing,maintaining, changing or arranging the terms andconditions of employment regardless of whether thedisputants stand in the proximate relation of employer andemployee.

Managerial employee

Supervisory employees

Rank-and-file employees

One who is vested with the powers or prerogatives to laydown and execute management policies and/or to hire,transfer, suspend, lay-off, recall, discharge, assign ordiscipline employees

Those who, in the interest of the employer, effectivelyrecommend such managerial actions if the exercise of suchauthority is not merely routinary or clerical in nature butrequires the use of independent judgment.

All employees not falling within any of the abovedefinitions.

Voluntary Arbitrator Any person accredited by the Board as such or any personnamed or designated in the Collective BargainingAgreement by the parties to act as their VoluntaryArbitrator, or one chosen with or without the assistance ofthe National Conciliation and Mediation Board, pursuant toa selection procedure agreed upon in the Collective

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Bargaining Agreement, or any official that may beauthorized by the Secretary of Labor and Employment toact as Voluntary Arbitrator upon the written request andagreement of the parties to a labor dispute.

Strike Any temporary stoppage of work by the concerted actionof employees as a result of an industrial or labor dispute.

Lockout Any temporary refusal of an employer to furnish work as aresult of an industrial or labor dispute.

Internal union dispute Includes all disputes or grievances arising from anyviolation of or disagreement over any provision of theconstitution and by-laws of a union, including any violationof the rights and conditions of union membership providedfor in this Code

Strike-breaker Any person who obstructs, impedes, or interferes with byforce, violence, coercion, threats, or intimidationany peaceful picketing affecting wages, hours or conditionsof work or in the exercise of the right of self-organizationor collective bargaining.

Strike area The establishment, warehouses, depots, plants or offices,including the sites or premises used as runaway shops, ofthe employer struck against, as well as the immediatevicinity actually used by picketing strikers in moving to andfro before all points of entrance to and exit from saidestablishment.18

The labor organization designated or selected by the majority of the employees in anappropriate collective bargaining unit shall be the exclusive representative of the employeesin such unit for the purpose of collective bargaining.

However, an individual employee or group of law to the contrary notwithstanding,workers shall have the right, subject to such rules and regulations as the Secretary of Laborand Employment may promulgate, to participate in policy and decision-making processes ofthe establishment where they are employed insofar as said processes will directly affect theirrights, benefits and welfare.

18 Art. 212

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For this purpose, workers and employers may form labor-management councils:Provided, That the representatives of the workers in such labor-management councils shallbe elected by at least the majority of all employees in said establishment.19

19 Art. 255

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B. RECRUITMENT AND PLACEMENT

1. Recruitment of Local and Migrant Workers

a. Recruitment and placement;20 defined

1. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiringor procuring workers; and

2. Includes referrals, contact services, promising or advertising for employment,locally or abroad, whether for profit or not.21

Any person or entity which, in any manner, offers or promises for a feeemployment to 2 or more persons22 is deemed engaged in recruitment and placement

b. Illegal Recruitment23

Under the Labor Code:

Any recruitment activities, including the prohibited practices enumerated underArticle 3424 of this Code, to be undertaken by non-licensees or non-holders of authority.

Illegal recruitment when committed by a syndicate or in large scale shall beconsidered an offense involving economic sabotage.

Illegal recruitment is deemed committed by a syndicate if carried out by a group ofthree (3) or more persons conspiring and/or confederating with one another in carrying outany unlawful or illegal transaction, enterprise or scheme.

Illegal recruitment is deemed committed in large scale if committed against three (3)or more persons individually or as a group.25

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 estafa

21 Art. 13 [b]22 Ibid.23 Art. 38 (Local), Sec. 6, Migrant Workers Act, R.A. 804224 See Reference25 Art. 38

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Under R.A. 804226

Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, orprocuring workers and includes referring, contract services, promising or advertising foremployment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority.27 Any such non-licensee or non-holder28 who, in any manner, offers orpromises for a fee employment abroad to two or more persons shall be deemed so engaged.

It shall likewise include the following acts, whether committed by any person,whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that specified inthe schedule of allowable fees prescribed by the Secretary of Labor and Employment, or tomake a worker pay or acknowledge any amount greater than that actually received by him asa 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 the LaborCode, or for the purpose of documenting hired workers with the POEA, which include theact of reprocessing workers through a job order that pertains to nonexistent work, workdifferent from the actual overseas work, or work with a different employer whetherregistered or not with the POEA;

(d) To include or attempt to induce a worker already employed to quit hisemployment in order to offer him another unless the transfer is designed to liberate a workerfrom oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ anyworker who has not applied for employment through his agency or who has formed, joinedor supported, or has contacted or is supported by any union or workers' organization;

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

(h) To fail to submit 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 and Employment;

26 as amended by R.A. 1002227 under Art. 13 (f)28 Any person, corporation or entity:

1. Which has not been issued a valid license or authority to engage in recruitment and placementby the Secretary of Labor and Employment (SLE) or

2. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SLE

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(i) To substitute or alter to the prejudice of the worker, employment contractsapproved and verified by the Department of Labor and Employment from the time of actualsigning thereof by the parties up to and including the period of the expiration of the samewithout the approval of the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an officeror member of the Board of any corporation engaged in travel agency or to be engageddirectly or indirectly in the management of travel agency;

(k) To withhold or deny travel documents from applicant workers before departurefor monetary or financial considerations, or for any other reasons, other than thoseauthorized under the Labor Code and its implementing rules and regulations;

(l) Failure to actually deploy a contracted worker without valid reason as determinedby the Department of Labor and Employment;

(m) Failure to reimburse expenses incurred by the worker in connection with hisdocumentation and processing for purposes of deployment, in cases where the deploymentdoes not actually take place without the worker's fault. Illegal recruitment when committedby a syndicate or in large scale shall be considered an offense involving economic sabotage;and

(n) To allow a non-Filipino citizen to head or manage a licensedrecruitment/manning agency.

Illegal recruitment is deemed committed by a syndicate if carried out by a group ofthree (3) or more persons conspiring or confederating with one another. It is deemedcommitted in large scale if committed against three (3) or more persons individually or as agroup.

(a) License29 vs. Authority

License Authority

A document issued by the Department ofLabor authorizing a person or entity tooperate a private employment agency.

A document issued by the Department ofLabor authorizing a person or association toengage in recruitment and placementactivities as a private recruitment entity.

29 No license or authority shall be used directly or indirectly by any person other than the one in whosefavor it was issued or at any other place other than that stated in the license or authority, nor may suchlicense 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, undertakerecruitment and placement activities only at their authorized official addresses.

Change of ownership or relationship of single proprietorship licensed to engage in overseas employmentshall cause the automatic revocation of the license.

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(b) Essential elements of illegal recruitment

1. Offender is a non‐licensee or non‐holder of authority to lawfully engage in therecruitment/placement of workers

2. Offender undertakes:

a. Any act of canvassing, enlisting, contracting, transporting, utilizing,hiring or procuring workers, and includes referrals, contact services, promising oradvertising for employment, locally or abroad, whether for profit or not;30 or

b. Any of the prohibited practices under Art. 34.31

(c) Simple illegal recruitment

When it involves less than three (3) victims or recruiters.

(d) Illegal recruitment in large scale32

(e) Illegal recruitment as economic sabotage

When it is committed::

By a syndicate In large scale

If carried out by a group of 3 or morepersons conspiring and confederating withone another;

If committed against 3 or more personsindividually or as a group

30 Art. 13[b]31 supra32 infra

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(f) Illegal Recruitment vs. Estafa33

Illegal recruitment Estafa

Malum prohibitum, thus:

1. Criminal intent is not necessary

2. A crime which involves moral turpitude

Malum in se,thus:

1. Criminal intent is necessary

2. A crime which involves moral turpitude

It is not required that it be shown that therecruiter wrongfully representedhimself as a licensed recruiter.34

Accused defrauded another by abuse ofconfidence, or by means of deceit.35

Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing ofcharges for illegal recruitment does not bar the filing of estafa, and vice versa.

Double jeopardy will not set in

(g) Liabilities

(a) Local employment agency(b) Foreign employer

They are jointly and severally liable for any violation of the recruitmentagreement and the contracts of employment.36

33 under Art. 315, par. 2, RPC.Estafa is committed by any person who defrauds another by using fictitious name, or falsely pretends topossess power, influence, qualifications, property, credit, agency, business or imaginary transactions, orby 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)34 It is enough that the victims were deceived as they relied on the misrepresentation and schemethat caused them to entrust their money in exchange of what they later discovered was a vain hopeof obtaining employment abroad.35 It is essential that the false statement or fraudulent representation constitutes the very cause orthe only motive which induces the complainant to part with the thing of value.36This joint and solidary liability imposed by law against recruitment agencies and foreign employersis meant to assure the aggrieved worker of immediate and sufficient payment of what is due him.If the recruitment/placement agency is a juridical being, the corporate officers and directors andpartners as the case may be, shall themselves be jointly and solidarily liable with the corporationor partnership for the claims and damages. (Becmen Service Exporter and Promotion v. Cuaresma,G.R. Nos. 182978‐79, April 7, 2009)

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i. Theory of imputed knowledge37

A rule in insurance law that any information material to the transaction, eitherpossessed by the agent at the time of the transaction or acquired by him before itscompletion, is deemed to be the knowledge of the principal, at least so far as thetransaction is concerned, even though in fact the knowledge is not communicated tothe principal at all.38

Ascribes the knowledge of the agent to the principal employer, not the other wayaround.39

(h) Pretermination of contract of migrant worker

Rules on Repatriation of Overseas Workers:

Without fault of the worker His repatriation shall be borne by the localagency and/or principal over the

1. worker and his personal belongings;2. remains of the deceased worker and

his personal belongings.40

Fault of the migrant worker Shall be borne by the migrant worker41

In cases of war, epidemic, disasters,calamities, or other similar events

Shall be borne by OWWA, without prejudiceto reimbursement by the principal or localagency.42

Underage migrant worker Shall be mandatory upon discovery, done bythe responsible officers of the foreign servicewhere the underage migrant worker isfound.43

Seafarer POPEA Memo Circular No. 55-96 provides

37 knowledge of the agent is knowledge of the principal.38 Leonor v. Filipinas Compania, 48 OG 24339 Rovels Enterprises, Inc. v. Ocampo, G.R. No. 136821, October 17, 2002, 391 SCRA 176; vide Air France v.Court of Appeals, et al., 211 Phil. 601 (1983).40 Sec. 15, par. 1, R.A. 804241 Ibid.42 id. Par. 243 Sec. 16, id.

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that a seaman can be repatriated withoutcause if the vessel arrives at a convenientport within three (3) months before theexpiration of his contract, but only uponpayment of

a. all his earned wages;

b. leave pay for the entire contract;

c. termination pay of one (1) monthbasic salary, if seaman has at least ten(10) months original contract.44

c. Direct hiring45

General Rule:

An employer may only hire Filipino worker for overseas employment throughPOEA or entities authorized by DOLE.

Exceptions:

Direct hiring by

1. International organizations

2. Members of the diplomatic corps;

3. Name hires; and

4. Such other employers as may be allowed by the Dept. of Labor.

44 PCL Shipping Pils. vs.NLRC, 511 SCRA 44 (2006)45 It is when an employer hires a Filipino worker for overseas employment without going throughthe POEA or entities authorized by the Secretary of Labor.

Employers cannot directly hire workers for overseas employment except through authorized entitiesduly 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; andg. construction contractors.

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2. Regulation and Enforcement

a. Remittance of foreign exchange earnings

General Rule:

It shall be mandatory for all OFWs to remit a portion of their foreignexchange earnings to their families, dependents, and/or beneficiaries ranging from 50%‐ 80% depending on the worker’s kind of job.46

Exceptions:

1. The worker’s immediate family members, beneficiaries and dependents areresiding with him abroad

2. Immigrants and Filipino professionals and employees working with the UNagencies or specialized bodies

3. Filipino servicemen working in U.S. military installations.47

b. Prohibited activities48

1. Furnishing or publishing any false notice/information/document related torecruitment/employment

2. Failure to file reports required by SLE

3. Inducing or attempting to induce a worker already employed to quit hisemployment in order to offer him another unless the transfer is designed to liberate aworker from oppressive terms and conditions

4.Recruitment/placement of workers in/jobs harmful to public health or morality orto the dignity of the country

5. Engaging directly or indirectly in the management of a travel agency

6. Substituting or altering employment contracts without approval of DOLE

7.Charging or accepting any amount greater than that specified by DOLE ormake a worker pay any amount greater than actually received by him

8. Committing any act of misrepresentation to secure a license or authority

46 Rule VIII, Book III, POEA Rules47 Resolution No. 1‐83, Inter‐Agency Committee for Implementation of E.O. 85748 Art. 34

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9.Influencing or attempting to influence any person/entity not to employ anyworker who has not applied of employment through his agency

10.Obstructing or attempting to obstruct inspection by SLE or by his representatives

11.Withholding or denying travel documents from applicant workers beforedeparture for monetary considerations other than authorized by law

12.Granting a loan to an OFW which will be used for payment of legal andallowable placement fees

13.Refusing to condone or renegotiate a loan incurred by an OFW after hisemployment contract has been prematurely terminated through no fault of his or herOwn.

14. For a suspended recruitment/manning agency to engage in any kind ofrecruitment activity including the processing of pending workers' applications; and

15.For a recruitment/manning agency or a foreign principal/employer to passon the OFW or deduct from his or her salary the payment of the cost of insurancefee, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage

16.Imposing a compulsory and exclusive arrangement whereby an OFW isrequired to:

a. Avail a loan only from specifically designated institutions, entities orpersons

b.To undergo health examinations only from specifically designated medical,entities or persons, except seafarers whose medical examination cost is shoulderedby the shipowner

c. To undergo training of any kind only from designated institutions,entities or persons, except for recommendatory trainings mandated by principals/shipowners.49

49 Sec. 6, R.A. 10022

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c. Regulatory and visitorial powers of the Labor Secretary

Regulatory powers Visitorial powers

1.Restrict and regulate the recruitment andplacement activities of all agencies

2. Issue orders and promulgate rules andregulations

1. Access to employer’s records andpremises at any time of the day or night,whenever work is being undertaken

2. To copy from said records

3.Question any employee and investigateany fact, condition or matter which maybe necessary to determine violations orwhich may aid in the enforcement of theLabor Code and of any labor law, wageorder, or rules and regulation issuedpursuant thereto.

d. Penalties for illegal recruitment50

Offender / Offense Penalty Penalty

IR as economicsabotage

Provided:

1. If person illegally recruited is below18 years of age or

2. Illegal recruitment is committed by a non‐licensee/non‐holder

Life imprisonment +fine of P2M‐P5M

Maximum penalty shall be imposed

Any person found guilty of illegalrecruitment

Any person found guilty of the prohibitedacts

12 yrs. and 1 day ‐ 20 yrs. imprisonment; or

Fine: P1M‐P2M

6 yrs. and 1 day ‐ 12 yrs.imprisonment; or

Fine of P500K ‐ P1M

50 under R.A. 10022

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Licensee/holder of authority violatesprovisions

Alien

2‐5 yrs imprisonment; or

Fine: P10K ‐ P50K;

Non‐licensee/non‐holder of authorityviolates provisions

4‐8 yrs imprisonment; or

Fine: P20K ‐ P100K

Corporation, partnership, association, or entity Penalty imposed upon officer/sresponsible for violation

Alien Penalties prescribed under R.A. 10022,+

Deportation without further proceedings

In every case Automatic revocation of license orauthority and all permits and privileges ofthe recruitment or manning agency, lendinginstitutions, training school or medicalclinic.

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C. LABOR STANDARDS

1. Hours of Work51

a. Coverage/Exclusions

Coverage Exclusions

Employees in all establishments andundertakings, whether for profit or not.

1. Government employees,

2. Managerial employees,52

3. Field personnel,53

4. Members of the family of the employerwho are dependent on him for support,domestic helpers,

5. Persons in the personal service of another,and

6. Workers who are paid by results

51 Work day" means 24 consecutive-hour period which commences from the time the employee regularlystarts to work. It does not necessarily mean the ordinary calendar day from 12:00 midnight to 12:00midnight 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 daysbeginning 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 ofworkers.

Hours of work of part-time workers - payment of wage should be in proportion only to the hoursworked.52 Those whose primary duty consists of the management of the establishment in which they areemployed or a department or subdivision thereof, and other officers or members of themanagerial staff.

They must meet all of the ff. conditions, namely:1.Primary duty: management of the establishment in which they are employed or of a

department or sub‐division thereof;2. Customarily or regularly direct the work of 2 or more employees3.Has the authority to hire or fire other employees

of lower rank; or their suggestions and recommendations as to the hiring and firing and as to thepromotion or any change of status of other employees are given particular weight.

4.Execute under general supervision work along specialized or technical lines requiring specialtraining, experience, or knowledge

5. Execute under general supervision special assignment and tasks; and6. Do not devote more than 20% of their hours worked to activities which are not directly and

closely related to performance of the work described. (Art. 82[2])53 Non-agricultural employees who regularly perform their duties away from the principal place ofbusiness or branch office of the employer and whose actual hours of work in the field cannot bedetermined with reasonable certainty

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b. Normal Hours of Work

Eight (8) hours per day in a general working day.

1. Exceptions

Health Personnel54 Compressed Work Week55

1. Health personnel in cities andmunicipalities with a population of atleast 1 million; or

2.Hospitals and clinics with a bed capacityof at least 100

General Rule:

8 hours/5 days,56 exclusive of time formeals.

Exceptions

Where the exigencies of the servicerequire that such personnel work for 6days or 48 hours, they shall be entitledto an additional compensation of at least30% of their regular wage for work on the6th day.

The normal workweek is reduced to lessthan 6 days but the total number ofWork hours of 48 hours per week shallremain. The normal workday is increased tomore than 8 hours but not to exceed12 hours, without corresponding overtimepremium. The concept can be adjustedaccordingly depending on the normalworkweek of the company.57

54 Include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratorytechnicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinicpersonnel55 See shortening of work week (under 1. Hours of Work), supra56 40‐hour work week

Does not apply if there is a training agreement between the resident physician and the hospitaland the training program is duly accredited or approved by appropriate government agency.57 Department Advisory Order No. 2, Series of 2009

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2. Work interruption due to brownouts

a. Brown-outs of short duration not exceeding twenty (20) minutes - compensablehours worked whether used productively by the employees or not.

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

1. The employees can leave their workplace or go elsewhere whether withinor without the work premises; or

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

c. In each case, the employer may extend the working hours of his employeesoutside the regular schedules to compensate for the loss of productive man‐hours without being liable for OT pay.

d. Industrial enterprises with 1 or 2 work shifts may adopt any of thework shift prescribed for enterprises with 3 work shifts to prevent serious loss ordamage to materials, machineries, or equipment that may result case of powerinterruptions.58

3. 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 - considered coffee break or rest period of shortduration and, therefore, compensable.

58 Policy Instruction No. 36

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4. Idle time, waiting time, commuting time, travel time, whether partof hours of work or not

Idle time Waiting time Travel time, commutingtime

Not working time; it is notcompensable.59

Except:

When the employee is idleor inactive by reason ofinterruptions beyond hiscontrol -consideredworking time.

Considered compensable ifwaiting is an integral part ofthe employee's work or he isrequired or engaged by theemployer to wait.

a. Travel from home towork - not compensableworking time

b. Travel that is all in theday’s work - compensablehours worked.

c. Travel away from home -compensable hours worked.

59 e.g. Stiller works as a Partas Trans bus driver. His route is from Vigan to Baguio, leaving at 6am andarriving at 12nn. He is completely relieved from all duty until 6pm, when he again goes on duty for thereturn 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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5. Overtime work60

Work beyond eight(8) hours of work within the worker’s 24 hour workday.61

Undertime not offset by overtime Waiver of overtime pay

Undertime work on any particular day shallnot be offset by overtime on any other day.62

Where a worker incurs undertime hoursduring his regular daily work, saidundertime hours should not be offsetagainst the overtime hours on the same dayor on any other day. It is both prohibited bythe statute and by jurisprudence.

The right of the laborers to overtime paycannot be waived.63

60 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 Executiveb. 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 toavoid 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; andf. 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, hemay be dismissed on the ground of insubordination or willful disobedience of the lawful order of theemployer.61 In computing overtime work, "regular wage" or "basic salary" means "cash" wage only withoutdeduction for facilities provided by the employer.

"Premium pay" means the additional compensation required by law for work performed within 8 hourson non- working days, such as rest days and special days.

"Overtime pay" means the additional compensation for work performed beyond 8 hours. Everyemployee entitled to premium pay is also entitled to the benefit of overtime pay.62 Sec. 8863 It is governed by law and not merely by the agreement of the parties.

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c. Night Work

Any and all work rendered between 6:00 pm and 6:00 am.64

d. CBA provision vis-à-vis overtime work

Generally, the premium for work performed on the employee’s rest days oron special days or regular holidays are included as part of the regular rate of theemployee in the computation of overtime pay for any overtime work rendered onsaid days especially if the employer pays only the minimum overtime rates prescribedby law. The employees and employer, however, may stipulate in their collectiveagreement the payment of overtime rates higher than those provided by law andexclude the premium rates in the computation of overtime pay. Such agreement maybe considered valid only if the stipulated overtime pay rates will yield to theemployees not less than the minimum prescribed by law.

64 National Rice & Corn Corp. v. NARIC, 105 Phil 891

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2. Wages65

a. "No work no pay" principle66

Actual work is the basis of claim for wages.

General Rule:

If there is no work performed by the employee, without the fault of the employer, there can be no wage or pay.

Exceptions:

The laborer was able, willing and ready to work but was:

1. Prevented by management;

2. Illegally locked out;

3. Illegally suspended;

4. Illegally dismissed

5. Otherwise illegally prevented from working.67

65 Under the Civil Code, it is mandated that the laborer’s wages shall be paid in legal currency. Under theLabor Code and its implementing rules, as a general rule, wages shall be paid in legal tender and the useof tokens, promissory notes, vouchers, coupons or any other form alleged to represent legal tender isprohibited 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 arrangement66 applies to special days but not to unworked regular holidays where employees are always paid “100%”of their basic pay.67 Aklan Electric Coop. v. NLRC, G.R. No. 129246, Jan. 25, 2000

26

b. Coverage/Exclusions

Coverage Exclusions

It applies to all employees 1. Farm tenancy or leasehold;

2.Household or domestic helpers, includingfamily drivers and persons working in thepersonal service of another;

3.Home workers engaged in needlework orin any cottage industry duly registered inaccordance with law;

4. Workers in duly registered cooperativeswhen so recommended by the Bureau ofCooperative Development and uponapproval of the Secretary of Labor andEmployment.

5. Workers of a barangay micro businessEnterprise.68

c. Facilities69 vs. supplements

Facilities Supplements

Items of expenses necessary for thelaborer’s and his family’s existence andsubsistence but does not include tools of thetrade or articles or services primarily for thebenefit of the employer or necessary to theconduct of the employer’s business.

Extra remuneration or special privileges orbenefits given to or received by the laborersover and above their ordinary earnings orwages.70

Forms part of the wage Independent of wage

68 R.A. 917869 Value of facilities - the fair and reasonable value of board, lodging and other facilities customarilyfurnished by an employer to his employees both in agricultural and non-agricultural enterprises

In order that the cost of facilities furnished by the employer may be charged against an employee, hisacceptance of such facilities must be voluntary (Sec. 7, Rule VII, Book III, Rules to Implement the LaborCode)70Atok Big Wedge Mining Co. v. Atok Big Wedge Mutual Benefit Assoc., G.R. No. L‐7349, July 19, 1955

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Deductible from wage Not wage deductible

For the benefit of the worker and hisfamily.

Granted for the convenience of theemployer.

d. Wages vs. salaries

Wages Salaries

Compensation for manual labor71

also known as “blue collared workers”, paidat stated times and measured by the day,week, month or season.

Paid to “white collared workers” and denotesa higher degree of employment, or a

superior grade of services, and implies aposition in office.

Indicates inconsiderable pay for a lower orless responsible character of employment.

Suggests a larger and more permanent orfixed compensation for more importantservices.

General Rule:

Not subject to execution

Exceptions:

Debts incurred for food, shelter,clothing and medical attendance.

Subject to execution

e. Wage distortion72

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 distinctions

71 skilled or unskilled72 Elements:

1. An existing hierarchy of positions with corresponding salary rates.2. A significant change or increase in the salary rate of a lower pay class without a corresponding

increase in the salary rate of a higher one;3. The elimination of the distinction between the 2 groups or classes; and4. The WD exists in the same region of the country (Alliance Trade Unions v. NLRC, G.R. No. 140689,

Feb. 17, 2004)

28

embodied 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.

f. CBA vis-à-vis Wage Orders – CBA creditability

CBA Wage order

Not an ordinary contract. It can beentered into only by an exclusivebargaining agent or unit.

Administrative issuance which results froma statute.73

If the CBA provides better benefits, thenthe employees shall be entitled to the same.

Only sets the minimum

A CBA provision regarding wages prevails over a Wage Order where the CBA providesa wage or salary to be received by the employees which is more than the amount setby the Wage Order, whether issued prior to or after theconclusion of the CBA. It is incumbent upon the employer to compensate theemployees according to the provisions of the CBA with respect to wages.

g. Non-diminution of benefits74

This principle mandates that the reduction or diminution or withdrawal byemployers 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.75

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.76

73 R.A. 672774 The rule is applicable if it is shown that the grant of the benefits is:

Based on an express policy; orHas ripened into practice over a long period of time,The practice is consistent and deliberate; andIt is not due to an error in the construction/ application of a doubtful or difficult question of law.

75 See Art. 10076 Exception:

To correct an error, otherwise, if the error is not corrected for a reasonable time, it ripens into acompany policy and employees can demand it as a matter of right.

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h. Worker’s preference in case of bankruptcy

1. Declaration of bankruptcy or judicial liquidation before enforcement of theworker’s preferential right;

2. Filing of claims by workers;

3. The right does not constitute a lien to the property of the insolvent debtor infavor of workers.77

4. The preference in favor of the employees applies to discharge of funds. Thepreference does not only cover unpaid wages, it also extends to termination pay andother monetary claims;78

5. Applicable only to ordinary preferred credit, hence, must yield to specialpreferred credits.

i. Labor Code provisions for wage protection

No employer shall limit or otherwise interfere with the freedom of anyemployee to dispose of his wages. He shall not in any manner force, compel oroblige his employees to purchase merchandise, commodities or other properties from theemployer or from any other person, or otherwise make use of any store or service of suchemployer or any other person.79

No employer in his own behalf or in behalf of any person, shall make anydeduction from the wages of his employees, except:

(a) In cases where the worker is insured with his consent by the employer,and the deduction is to recompense the employer for the amount paid by him as premiumon the insurance;

(b) For union dues, in cases where the right of the worker or his union to check‐ offhas been recognized by the employer or authorized in writing by the individual workerconcerned; and

(c) In cases where the employer is authorized by law or regulations issued by theSecretary of Labor.80

77 DBP vs. NLRC, G.R. No. 82763 Mar. 19, 1990 and G.R. No. 97176, Mar. 18, 199378 Termination pay, after all, is considered as additional remuneration for services rendered to theemployer for a certain period of time; it is computed on the basis of length of service. (PNB vs. Cruz, G.R.No. 80593, Dec. 18, 1989)79 Art. 112.80 Art. 113

30

No employer shall require his worker to make deposits from which deductionsshall be made for the reimbursement of loss of or damage to tools, materials orequipments supplied by the employer; except when the employer is engaged in suchtrades, occupations or business where the practice of making deductions or requiringdeposits is a recognized one, or is necessary, or desirable as determined by theSecretary of Labor in appropriate rules and regulations.81

No deduction from the deposits of an employee for the actual amount of theloss ordamage shall be made unless the employee has been heard thereon, and his

responsibility has been clearly shown.82

It shall be unlawful for any person, directly or indirectly, to withhold anyamountfrom the wages of a worker or induce him to give up any part of his wages byforce, stealth, intimidation, threat or by any other means whatsoever without theworker’s consent.83

It shall be unlawful to make any deduction from the wages of any employeefor the benefit of the employer or his representative or intermediary as consideration of apromise of employment or retention in employment or retention in employment.84

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 instituted any proceeding under this Title or has testified or is aboutto testify in such proceedings.85

81 Art. 11482 Art. 11583 Art 11684 Art 11785 Art. 118

31

j. Allowable deductions without employee’s consent

General Rule Exceptions

It is strictly prohibited 1. Deductions86 for insurance premiums

2. Union dues in cases where the right of the worker or hisunion to check off has been recognized by the employeror authorized in writing by the individual workerconcerned.87

Art. 241(o) provides that special assessments may bevalidly checked-off provided that there is an individualwritten authorization duly signed by every employee.

3. Deductions for SSS, Medicare and Pag‐ibig premiums

4. Taxes withheld pursuant to the Tax Code

5. Deductions for loss or damage to tools, materials orequipments

6. Deductions made with the written authorization ofthe employee for payment to a third person.88

7. Deductions as disciplinary measures for habitualtardiness.89

8. Agency fees90

9. Deductions for value of meals andfacilities freely agreed upon

10. In case where the employee is indebted to theemployer where such indebtedness has become due anddemandable.91

11.In court awards, wages may be subject of executionor attachment, but only for debts incurred for food,shelter, clothing, and medical attendance.92

86 under Art. 11387 ibid.88 Sec 13, Rule VIII, Book III of the IRR89 Opinion dated March 10, 1975 of the SLE90 under Art. 248(e)91 Art. 1706, NCC92 Art. 1703, id.

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12. Salary deduction of a member of a legallyestablished cooperative.93

k. Attorney’s fees and union service fee in labor cases

Attorney’s fees Union service fee

1.In case of unlawful withholding of wages

– 10% of the amount of wages to berecovered.

2. It shall be unlawful for any person todemand or accept94 atty’s fees that exceed10% of the amount of wages recovered.95

The appearance of labor federations andlocal unions as counsel in laborproceedings has been given legal sanction96

which allows non-lawyers to representtheir organization thereof. The said laborfederations and local unions have a validclaim to atty’s fees which is called theUnion Service Fee.

l. Criteria/Factors for Wage Setting

a) The demand for living wages;

b) Wage adjustment vis-à-vis the consumer price index;

c) The cost of living and changes or increases therein;

d) The needs of workers and their families;

e) The need to induce industries to invest in the countryside;

f) Improvements in standards of living;

g) The prevailing wage levels;

h) Fair return of the capital invested and capacity to pay of employers;

i) Effects on employment generation and family income; and

93 R.A. 6938, Art. 5994 in any judicial or administrative proceedings for the recovery of wages95 The prohibition on atty’s lien refers to proceedings for recovery of wages and not to servicesrendered in connection with CBA negotiations. In the latter case, the amount of atty’s fees may beagreed upon by the parties and the same is to be charged against union funds as provided for inArt. 222 of the Labor Code (Pacific Banking Corp. v. Clave, G.R. No. 56965, Mar. 7, 1984).96 under Art.222 of the LC

33

j) The equitable distribution of income and wealth along the imperatives ofeconomic and social development97

3. Rest Day

a. Right to weekly rest day

Every employer, whether operating for profit or not, shall provide each of hisemployees 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 employeessubject to collective bargaining agreement and to such rules and regulations as the Secretaryof Labor and Employment may provide

b. Preference of the employee

The employer shall respect the preference of employees as to their weekly restday when such preference is based on religious grounds.

c. When work on rest day authorized

1. Actual or impending emergencies caused by serious accident, fire, flood, typhoon,earthquake, epidemic or other disaster or calamity to prevent loss of life and property, orimminent danger to public safety;

2. Urgent work to be performed on the machinery, equipment, or installation, toavoid serious loss which the employer would otherwise suffer;

3. Abnormal pressure of work due to special circumstances, where the employercannot ordinarily be expected to resort to other measures;

4. To prevent loss or damage to perishable goods;

5. The nature of the work requires continuous operations and the stoppage of workmay result in irreparable injury or loss to the employer; and

6. Other analogous or similar circumstances as determined by the Secretary of Laborand Employment.98

97 See Art. 12498 Art. 92

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4. Holidays

a. Right to holiday pay99

(1) In case of absences

LoA100 with pay on the dayimmediately preceding a RH101

LoA without pay on the day immediatelypreceding a RH

General Rule:

All covered employees are entitled toholiday pay.

General Rule:

An employee may not be paid the requiredholiday pay if he has not worked on suchregular holiday.

Exception:

Where the day immediately preceding theholiday is a:

1. Non‐working day in the establishment or

2. The scheduled rest day of the employee.

(2) In case of temporary cessation of work

Instances Rule

1. Yearly inventory or

2. When the repair or cleaning ofmachineries is undertaken

RH falling within the period shall becompensated.

3. Due to business reverses RH may not be paid by the employer

99 Art. 94It is a premium given to employees pursuant to law even if he has not been suffered to work

on a regular holiday. It is limited to the 11 regular holidays, also called legal holidays listed by law.The employee should not have been absent without pay on the working day preceeding the regularholiday.

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;100 Leave of Absence101 Regular Holiday

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

Employees Rule

Private school teachers102 1. RH during semestral vacations

- Not entitled to HP

2. RH during Christmas vacation

- Shall be paid HP

Paid by:

1. results or

2. output103

HP shall not be less than his average dailyearnings for the last 7 actual work days precedingthe RH; Provided: HP shall not be less than thestatutory minimum wage rate.

Seasonal Workers May not be paid the required HP during offseason wherethey are not at work.

Workers having noregular work days

Shall be entitled to HP

Seafarers Shall be entitled to HP

b. Exclusions from coverage

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

102 Faculty members of colleges and universities103 Piece work payment

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5. Leaves

a. Service Incentive Leave Pay104

(1) Right to service incentive leave

Every employee who has rendered at least one (1) year of service105 shall be entitledto a yearly service incentive leave of five (5) days with pay.

(2) Exclusions from coverage

a. Government employees and any of its political subdivisions, includingGOCCs

b. Those already enjoying the benefit

c. Domestic helpers and persons in the personal services of another

d. Those already enjoying vacation leave with pay of at least 5 days

e. Managerial employees

f. Field personnel and other employees whose performance is unsupervised bythe employer

g. Employed in establishments regularly employing less than 10 workers

h. Exempt establishments

i. Engaged on task or contract basis, purely commission basis, or those whoare paid in a fixed amount of performing work irrespective of the time consumed inthe performance thereof.106

104 It is 5 days leave with pay for every employee who has rendered at least 1 yr. of service. It iscommutable to its money equivalent if not used or exhausted at the end of year.105 Service for not less than 12 months, whether continuous or broken reckoned from the datethe employee started working, including authorized absences and paid regular holidays unless theworking days in the establishment as a matter of practice or policy, or that provided in theemployment contract is less than 12 months, in which case said period shall be considered as oneyear. (Sec. 3, Rule V, Book III, IRR)

106 Art. 95[b]

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(3) Commutable nature of benefit

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

b. Maternity Leave107

(1) Coverage

A covered female employee who has paid at least three (3) monthly maternitycontributions in the twelve (12)-month period preceding the semester of her childbirth,abortion or miscarriage and who is currently employed.108

(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 with therules 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;

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, the

107

Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wagesand, therefore, may not be included in computing the employee’s 13th-month pay for the calendar year.

Voluntary or self-employed members are not entitled to the maternity benefit because to be entitledthereto, corresponding maternity contributions should be paid by employers. Voluntary or self-employedmembers have no employers so they do not have maternity contributions.108 Shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her present basicsalary, allowances and other benefits or the cash equivalent of such benefits for 60 days or 78 days in caseof caesarian delivery. .

38

employer shall pay to the SSS damages equivalent to the benefits which said employee wouldotherwise have been entitled to, and the SSS shall in turn pay such amount to the employeeconcerned.109

(3) Availment

Every pregnant woman in the private sector, whether married or unmarried, isentitled to the maternity leave benefits.110

c. Paternity Leave111

(1) Coverage

Granted to a married male employee in the private and public sector allowing himnot to report for work for seven (7) days but continues to earn the compensation therefor.


The male employee is

1. Legally married to, and is cohabiting with the woman who delivers the baby

2. Employee of private or public sector;

3. Only for the first 4 deliveries112 of legitimate spouse with whom he is cohabiting;and

4.Notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery

(3) Availment113

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.

This benefit shall be availed of not later than sixty (60) days after the date of saiddelivery.

109 R. A. 7322, March 3, 1992.110 see also Coverage, supra111 It is not convertible to cash if not availed of.112 include childbirth or any miscarriage113 see also (1) Coverage, supra

39

d. Parental Leave114

(1) Coverage

Leave benefits of not more than seven (7) working days every year granted to a soloparent115 employee to enable him/her to perform parental duties and responsibilities wherephysical presence is required.


1. He or she must fall among those referred to as solo parent

2. Must have the actual and physical custody of the child or children

3. Must have at least rendered service of one (1) year to his or her employer

4. He or she must remain a solo parent

114 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’ WelfareAct of 2000. This leave privilege is an additional leave benefit which is separate and distinct from anyother leave benefits provided under existing laws or agreements115 Any individual who falls under any of the ff. categories:

1. A woman who gives birth as a result of rape and other crimes against chastity even without afinal conviction of the offender, provided, That the mother keeps and raises the child;

2. Parent left solo or alone with the responsibility of parenthood due to:a. Death of spouse;b. Detention or service of sentence of spouse for a criminal conviction for at least 1 yr;c. Physical and/or mental incapacity of spoused. Legal separation or de facto separation from spouse for at least 1 yr as long as he/she is

entrusted with the custody of the children;e. Nullity or annulment of marriage as decreed by a court or by a church as long as

he/she is entrusted with the custody of the children;f. Abandonment of spouse for at least 1 yr;

3. Unmarried mother/father who has preferred to keep and rear his or her child/childreninstead of:

a. having others care for them orb. give them up to a welfare institution;

4. Any other person who solely provides:a. parental care andb. support to a child or children;

5. Any family member who assumes the responsibility of head of family as a result of the:a. death,b. abandonment,c. disappearance ord. prolonged absence of the parents or solo parent.

A change in the status or circumstance of the parent claiming benefits under this Act, suchthat he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibilityfor these benefits. (Sec.3)

40

(3) Availment116

e. Leaves for victims of violence against women117

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

A female employee who is a victim of violence118 is entitled to a paid leave of10 days in addition to other paid leaves, extendible when the necessity arises as specifiedin the protection order.119

6. Service Charges

a. Coverage

These are charges collected by hotels, restaurants and similar establishmentsand shall be distributed at the rate of:

Covered Employees Management

85% 15%

Equally distributed among them 1. To answer for losses and breakages and

2. Distributed to employees receiving more thanP2000 a month at the discretion of themanagement.

b. Exclusion120

Managerial employees.121

c. Distribution122

The share of the employee shall be distributed and paid to themnot less than once every 2 weeks or twice a month at intervals not exceeding 16 days.

116 see (1) Coverage, supra117 under R.A. 9262118 physical, sexual, or psychological119 Sec. 43, 1st par., ibid120 See A. Coverage121 Sec. 2, Rule VI, Book III, IRR122 ibid

41

d. Integration123

If the service charge is abolished, the share of the covered employees shall beconsidered integrated in their wages on the basis of the average monthly share ofeach employees for the past 12 months immediately preceding the abolition.

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

a) Coverage

All rank-and-file employees are entitled to a 13th-month pay124 regardless of theamount of basic salary that they receive in a month, if their employers are not otherwiseexempted from paying the 13th month pay. Such employees are entitled to the 13th

month pay regardless of their designation or employment status, and irrespective of themethod by which their wages are paid, provided that they have worked for at least one (1)month during a calendar year.125

b) Exclusion/Exemptions from coverage

1. Government employees

2. Household helpers

3. Employees paid purely on commission basis

4. Employees already receiving 13th month pay

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 isequivalent to 1/12 of the total basic salary earned by an employee within the calendar year,which is demandable as a legal obligation. It may be given anytime but not later thanDecember 24.

123 ibid124 Forms:

Christmas bonus;Midyear bonus;Profit sharing payments; andOther cash bonuses amounting to not less than1/12 of its basic salary

125 Revised Guidelines on the Implementation of the 13 Month Pay Law

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d) Commissions vis-à-vis 13th month pay

The salesman’s commissions, comprising a pre-determined percent of the sellingprice of the goods sold by each salesman, were properly included in the term basicsalary for purposes of computing their 13th month pay.

e) CBA vis-à-vis 13th month pay

The absence of an express provision in the CBA obligating the employer topay the members of a union 13th month pay is immaterial. Notwithstandingtherefore the absence of any contractual agreement, the payment of a 13th monthpay being a statutory grant, compliance with the same is mandatory and is deemedincorporated in the CBA.

8. Women Workers

a. Discrimination

With respect to the terms and conditions of employment solely on account ofsex

1. Payment of lesser compensation to a female employee as against a maleemployee for work of equal value

2. Favoring a male employee with respect to promotion, training opportunities,study and scholarship grants on account of gender.126

3. Favoring a male applicant with respect to hiring where the particular jobcan equally be handled by a woman

4. Favoring a male employee over a female employee with respect to dismissalof personnel.127

b. Stipulation against marriage

Whether as a condition of employment or continuation of employment

1. A woman employee shall not get married, or

2. Upon getting married, a woman employee shall be deemed resigned or separated,or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employeemerely by reason of her marriage.128

126 Art. 135127 Ibid., 1st par.128 Art.136

43

c. Prohibited Acts

1. Denying any woman employee the benefits provided for by law or to dischargeany woman employed by him for the purpose of preventing her from enjoying any of thebenefits provided for by law.

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

3. Discharging or refusing the admission of such woman upon returning to her workfor fear that she may again be pregnant.129

d. Classification of certain women workers

Any woman who is permitted or suffered to work

1. with or without compensation,

2. in any nightclub, cocktail lounge, massage clinic, bar or similar establishments

3. under the effective control or supervision of the employer for a substantial periodof time

4. shall be considered as an employee of such establishment for purposes of laborand social legislation.130

A woman worker may not be dismissed on the ground of dishonesty for having written ‘’single” on the space for civil status on the application sheet, contrary to the fact that she was married.(PT&T Co. v. NLRC, G.R. No. 118978, May 23, 1997)129 Art. 137130 Art. 138

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e. Anti-Sexual Harassment Act131

The Act punishes sexual harassment if the same is:

1. work-related; or

2. Education-related; or

3. training-related.132

Sexual harassment may be committed by an:

1. Employee

2. Manager

3. Supervisor

4. Agent of the employer

5. Teacher, instructor, professor

6. Coach, trainer, or

7. Any other person who, having authority, influence or moral ascendancy overanother in a work or training or education environment:

a. Demands

b. Requests or

c. Requires

any sexual favor from the other, regardless of whether the demand,request or requirement for submission is accepted by the object of R.A.8777.133

131 R.A. 7877- declares sexual harassment unlawful in the employment, education or training environment.

132 Sec. 3, id.133 ibid.

It is not necessary that the demand, request or requirement of a sexual favor be articulated in acategorical manner. It may be discerned, with equal certitude, from the acts of the offender.

Likewise, it is not essential that the demandrequest or requirement be made as a condition for continued employment or for promotion to ahigher position. It is enough that the respondent’s acts result in creating an intimidating, hostile oroffensive environment for the employee. (Domingo v. Rayala, G.R. No. 155831, Feb. 18, 2008)

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9. Minor Workers134

a. Regulation of working hours of a child135

General Rule Exceptions

1. No person under 18 years of age willbe allowed to be employed in an undertakingwhich is hazardous or deleterious in nature.

2. No employer shall discriminate againstany person in respect to terms andconditions of employment on account of hisage.

A. Below 15 yrs. Old

1. The child works directly under thesole responsibility of his parents, orguardians who employ members ofhis family, subject to the followingconditions:

a. Employment does not endangerthe child’s safety, health and morals

b. Employment does not impair thechild’s normal dev’t.

c. Employer‐parent or legal guardianprovides the child with the primaryand/or secondary education prescribedby the Dept. of Education

2. The child’s employment orparticipation in public entertainmentor information through cinema, theater,radio or television is essential provided:

a. Employment contract is concludedby the child’s parents or legal guardian,

b. With the express agreement ofthe child concerned, if possible, and

c. The approval of DOLE, thefollowing must be compliedwith:

i. The employment does notinvolve advertisement or commercialspromoting alcoholic beverages,intoxicating drinks, tobacco and its by‐

134 R.A. 7678, R.A. 9231135 The term "child" shall apply to all persons under eighteen (18) years of age.

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products or exhibiting violence

ii. there is a written contractapproved by DOLE

iii. the conditions provided inthe first instance are met.

B. Above 15 but below 18 – may beemployed in any non‐hazardous work

C. Above 18 – no prohibition

1. A child below fifteen (15) years of age136 may be allowed to work for not morethan twenty (20) hours a week: Provided, That the work shall not be more than four (4)hours at any given day;

2. 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;

3. 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 day.137

136Children 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 employmentneither 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 prescribedprimary 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 isconcluded by the child's parents or legal guardian, with the express agreement of the child concerned, ifpossible, and the approval of the Department of Labor and Employment: Provided, further, That thefollowing requirements in all instances are strictly complied with:

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

(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking intoaccount 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 competentauthorities, 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 shallensure observance of the above requirements. (Section 12, R.A. No. 7610, as amended by R. A. No. 9231,December 19, 2003).137Sec. 12-A, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.

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b. Employment of the child in public entertainment138

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 pornography.139

10. Employment of Househelpers140

a. Definition

“Domestic or household service” means service in the employer’s home which isusually necessary or desirable for the maintenance and enjoyment thereof and includesministering to the personal comfort and convenience of the members of the employer’shousehold, including services of family drivers.141

b. Benefits accorded househelpers

1. SSS benefits for those who are receiving at least P1,000 per month.142

2. Entitled to minimum wage in addition to lodging, food, and medical attendance.143

3. 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 househelper’s compensation, unless there is a stipulation to the contrary.144

138 see Exceptions (2), supra.139 Sec. 14, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.140 A househelper is synonymous to domestic servant

1. Any person, male or female;2. Who renders services in and about the employers home and;3. Services are usually necessary or Desirable for the maintenance and enjoyment thereof, and4. Ministers exclusively to the personal comfort and enjoyment of employers’ family

The children and relatives of a househelper who live under the employers’ roof and who sharethe accommodations provided for the househelper by the employer shall not be deemed as househelpers if/they are not otherwise engaged as such and are not required to perform any substantial household work. (Sec 3, Rule XII, Book III, IRR)

The definition of a househelper cannot be interpreted to include househelp or laundry womenworking in staffhouses of a company. (APEX Mining CO., Inc., v. NLRC, G.R. No. 94951, April 22, 1991)141 Art. 141, 2nd par.142 Art. 143143 Art. 144144 Art. 146

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c. Termination

The termination of the employment of a househelper should be:

1. Upon expiration of the term of employment, or

2. Based on just cause145

d. Reliefs for unjust termination

Rules:

1. If the period for household service is fixed, neither the employer nor thehousehelper may terminate the contract before the expiration of the term except forjust cause.

2. If the househelper is unjustly dismissed, he or she shall be paid the compensationalready earned plus that for the 15 days by way of indemnity.

3. If the househelper leaves without justifiable reason, he or she shall forfeitany unpaid salary due him or her not exceeding 15 days.

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 notinclude 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.

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 bepaid within one (1) week after the contractor or subcontractor has collected the goods orarticles from the homeworker.146

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 latter’s 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 or

145 Art. 149146 Rule XIII, Book III, Secs. 3 & 4, OR

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homeworkers, 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 employer.147

c. Conditions for deduction from homewoker’s earnings

No deductions shall me made from the homeworker’s 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 ordamage:

b) the employee is given reasonable opportunity to show cause why deductionsshould not be 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 deducted does not exceed 20percent of the homeworker’s earnings in a week.148

147 ibid, Sec. 8, OR.148 Rule XIII, Sec. 5, OR. This is to ensure the homeworker’s right to due process.

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12. Apprentices and Learners149

a. Distinctions between Learnership and Apprenticeship

Learnership ApprenticeshipNature

Training on the job in semi-skilled and otherindustrial occupation or trades which arenon‐apprenticeable and which may belearned thru practical training on the job in arelatively short period of time.

Training in trades which are apprenticeable,that is, practical training on the jobsupplemented by related theoreticalinstruction for more than 3 months.

Duration of training

With commitment to employ the learner as aregular employer if he desires upon

completion of learnership.No commitment to hire

In case of pretermination of contract

Considered a regular employee if pre-termination occurs after 2 months of trainingand the dismissal is without fault of the

learner.

Worker not considered as regular employee.

Coverage

Semi‐skilled/Industrial occupations Highly technical industries and only inindustrial occupation

There is a list of learnable trades by TESDA No list

Written agreement

Require Learnership Agreement Requires Apprenticeship Agreement

149 Under R.A. 7277. Wage rate is 75% of the statutory minimum wage rate.

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13. Handicapped Workers 150

a. Definition of "handicapped workers"

One whose earning capacity is impaired by age, physical or mental deficiency; orinjury.

b. Rights of disabled workers

1. Equal opportunity for employment

2.Sheltered employment151

3. Apprenticeship

4.Vocational rehabilitation152

5. Vocational guidance and counseling.

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 thestatus of a regular employee if the factors that make for a regular employment are present,especially if his appointment was repeatedly renewed.153

Apprentice - a worker who is covered by a written apprenticeship agreement with an employerLearner - a person hired as a trainee in industrial occupations which are non-apprenticeable and which

may be learned through practical training on the job for a period not exceeding three (3) months, whetheror not such practical training is supplemented by theoretical instructions.150 Ibid

If disability is not related to the work for which he was hired, he should not be so considered ashandicapped worker. He may have a disability but since the same is not related to his work, he cannot beconsidered a handicapped worker insofar as that particular work is concerned.151 The gov’t shall endeavor to provide them work if suitable employment for disabled persons cannotbe found through open employment152 means to develop the skills and potentials of disabled workers and enable them to compete in thelabor market153 Bernardo vs. NLRC, July 12, 1999 – GR No. 122917

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c. Prohibitions on discrimination against disable persons

No disable person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions

of employment and the same compensation, privileges, benefits, fringe benefits,incentives or allowances as a qualified able bodied person. Five percent (5%) of allcasual emergency and contractual positions in the Departments of Social Welfare andDevelopment; Health; Education, Culture and Sports; and other government agencies,office or corporations engaged in social development shall be reserved for disabledpersons.154

d. Incentives for employers

Entitled to an additional deduction, from their gross income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons:Provided, however, That such entities present proof as certified by the Department of Laborand Employment that disabled persons are under their employ: Provided, further, That thedisabled employee is accredited with the Department of Labor and Employment and theDepartment of Health as to his disability, skills and qualifications.

Private entities that improve or modify their physical facilities in order to providereasonable accommodation for disabled persons shall also be entitled to an additionaldeduction from their net taxable income, equivalent to fifty percent (50%) of the direct costsof the improvements or modifications. This does not apply to improvements ormodifications of facilities required under Batas Pambansa Bilang 344.155

154 The Magna Carta strictly prohibits discrimination against a qualified disabled person, even as the lawgives incentives to employers of disabled persons.155 Sec. 8, R.A. 7277

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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; and

d. Power of control156

b. Probationary Employment

Employment where the employee, upon his engagement:

1. Is made to undergo a trial period

2. During which the employer determines his fitness to qualify for regularemployment,

3. Based on reasonable standards made known to the employee at the time ofengagement.157

156 the most important test157 Sec 6, Rule I, Book VI, IRR

The services of an employee who has been engaged on probationary basis may be terminatedonly for just cause, when he fails to qualify as a regular employee in accordance with reasonablestandards prescribed by the employer.

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c. Kinds of Employment

(1) Regular employment158

Where:

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 (1) 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.

(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 notcontinuous 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 business159

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.160

The connection can be determined by considering the nature of the workperformed and its relation to the scheme of the particular business or trade in itsentirety.161

(2) Project employment162

158 Regularization is not a management prerogative; it is the nature of employment that determines it.It is a mandate of the law. (PAL v. Pascua, G.R. No. 143258, Aug. 15, 2003)

Regular employment does not mean permanent employment. A probationary employee becomesa regular employee after 6 months. A regular employee may only be terminated for just/authorizedcauses.

The practice of entering into employment contracts which would prevent the workers frombecoming regular should be struck down as contrary to public policy and morals. (Universal RobinaCorp. v. Catapang, G.R. No. 164736, Oct. 14, 2005)

159 International Pharmaceuticals, Inc. vs. NLRC, et al., March 9, 1998, 287 SCRA 213).160 Matling Industrial and Commercial Corp. et al., v. Ricardo Coros, G.R. No. 157802, October 13, 2010)161 Highway Copra Traders v. NLRC, G.R. No. 108889, July 30, 1998

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(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.

(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 employment163

(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 employee164

162 Where the employment has been fixed for a specific project or undertaking the completion ortermination of which has been determined at the time of the engagement of the employee.163 Not limited to those by nature, seasonal or for specific projects with pre-determined dates ofcompletion provided under the Labor Code. They also include contracts to which the parties by freechoice, have assigned a specific date of termination164 Brent School Ruling.

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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 employee.165

(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.166

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.167

165Art. 106166 No. 13, DOLE Primer on Contracting and Subcontracting, Effects of Department Order No. 3, Series of2001.167 Ibid.

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2. Termination of Employment

a. Substantive Due Process

(1) Just Causes

(a) Serious misconduct168 or willful disobedience169

i. Requisites

Serious misconduct Willful disobedience

1. Must be serious or of such a grave andaggravate character;

2. Must relate to the performance of theemployee’s duties; and

3. Must show that the employee has becomeunfit to continue working for the employer.170

1. The employees assailed conductmust have been willful or intentional,the willfulness being characterized by awrongful and perverse attitude.

2.The disobeyed orders, regulationsor instructions of the employer must be:

a. Reasonable and lawful

b. Sufficiently made known to theemployee

c. Must pertain to or be inconnection with the duties which theemployee has been engaged todischarge.171

168 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 withthe work of the employee.169 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 areReasonable and lawfulSufficiently known to the employeeIn connection with his duties

170 Philippine Aeolus Automotive United Corp. v. NLRC, G.R. No. 124617, April 28, 2000171 Cosep v. NLRC, G.R. No. 124966 June 16, 1998

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(b) Gross and habitual neglect of duties

Gross negligence Habitual Neglect

Implies a want or absence of or failure toexercise slight care of diligence or theentire absence of care. It evincesthoughtless disregard of consequenceswithout exerting any effort to avoid them.However, such neglect must not only begross but habitual in character.172

Implies repeated failure to perform one’sduties over a period of time, dependingupon the circumstance.173

i. Requisites174

(c) Fraud175 or willful breach of trust176

i. Requisites

1. The loss of confidence must not be simulated;

2. It should not be used as a subterfuge for causes which are illegal, improper orunjustified;

3. It may not be arbitrarily asserted in the face of overwhelming evidence to thecontrary;

4. It must be genuine, not a mere afterthought, to justify earlier action taken in badfaith; and

5. The employee involved holds a position of trust and confidence.

172 Judy Phils. v. NLRC, G.R. No. 111934, April 29, 1998173 JGB and Associates v. NLRC, GR No. 10939, Mar. 7, 1996174 See table175 Commission of fraud by an employee against the employer will necessarily result in the latter's loss oftrust and confidence in the former. Proof of loss is not required under this ground.176 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.

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(d) Abandonment of employment; Elements that mustconcur

1. The failure to report for work or absence without valid or justifiable reason; and

2. A clear intention to sever the employer-employee relationship.177

(e) Termination of employment pursuant to a Union SecurityClause178

Employer should still afford due process to the expelled unionists. Although theSupreme Court has ruled that union security clauses embodied in the CBA may be validlyenforced and that dismissals pursuant thereto may likewise be valid, this does not erode thefundamental requirement of due process. The reason behind the enforcement of unionsecurity clauses which is the sanctity and inviolability of contracts, cannot override one’sright to due process.

(f) Totality of infractions doctrine179

It is the totality, not the compartmentalization of company infractions that theemployee has committed, which justifies the penalty of dismissal.180

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

177 This is the more determinative factor being manifested by some overt acts.178 In the case of Alabang Country Club, Inc. vs. NLRC, [G.R. No. 170287, Feb. 14, 2008], the Supreme Courtdeclared that in terminating the employment of an employee by enforcing the union security clause, theemployer 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 union’s decision to expel the employee from the union.The foregoing requisites constitute just cause for terminating an employee based on the CBA’s union

security provision.179 Cognate offenses rule180 MERALCO v. NLRC, G.R. No. 114129, Oct. 24, 1996

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(2) Authorized Causes

(a) Redundancy,181Retrenchment and Closure

Redundancy Retrenchment Closure

Exists where the services ofan employee are in excess ofwhat would reasonably bedemanded by the actualrequirements of theenterprise.

A position is redundantwhen it is superfluous.

An employer has no legalobligation to keep on thepayroll employees more thanthe number needed for theoperation of the business.

Cutting of expenses andincludes the reduction ofpersonnel. It is amanagement prerogative, ameans to protect andpreserve the employer’sviability and ensure hissurvival. To be anauthorized cause it must beaffected in good faith andfor the retrenchment,which is after all a drasticrecourse with seriousconsequences for thelivelihood of theemployee’s or otherwiselaid‐off.

The reversal of fortuneof the employer wherebythere is a complete cessationof business operationsto prevent further financialdrain upon an employerwho cannot pay anymorehis employees sincebusiness has already stopped.

i. Procedural steps required

1. Written notice to DOLE 30 days prior to the intended day of termination.182

2. Written notice to employee concerned 30 days prior the intended date oftermination.

3. Payment of separation pay ‐ Serious business losses do not excuse the employerfrom complying with the clearance or report183 before terminating the employment of itsworkers. In the absence of justifying circumstances, the failure of the employer toobserve the procedural requirements184 taints their actuations with bad faith if the lay‐off was temporary but then serious business losses prevented the reinstatement ofrespondents, the employer’s should have complied with the requirements of writtennotice.

181 A position is redundant when it is superfluous.An employer has no legal obligation to keep on the payroll employees more than the number needed

for the operation of the business.182 Purpose: To enable it to ascertain the veracity of the cause of termination.183 required in Art. 283 of the LC and its IRR184 under Art. 284

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ii. Requirements for valid retrenchment/redundancy

Retrenchment Redundancy

1.Written notice served on both theemployee and the DOLE at least 1 monthprior to the intended date of retrenchment

2.Payment of separation pay equivalent toat least one month pay or at least 1/2month pay for every year of service,whichever is higher

3. Good faith

4. Proof of expected or actual losses

5. The employer used fair and reasonablecriteria in ascertaining who would beretained among the employees.185

1. Written notice served on both theemployees and the DOLE at least 1month prior to separation from work

2.Payment of separation pay equivalent toat least 1 month pay or at least 1 monthpay for every year of service, whichever ishigher

3. Good faith in abolishing redundantposition

4. Fair and reasonable criteria inascertaining what positions are to bedeclared redundant:

a. Less preferred status186

b. Efficiency and

c. Seniority187

iii. Criteria in selecting employees for dismissal188

iv. Standards to be followed

Firstly, the losses expected should be substantial and not merely de minimis inextent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown tobe insubstantial and inconsequential in character, the bona-fide nature of the retrenchmentwould appear to be seriously in question.

Secondly, the substantial loss apprehended must be reasonably imminent, as suchimminence can be perceived objectively and in good faith by the employer. There should, inother words, be a certain degree of urgency for the retrenchment which is, after all, a drasticrecourse with serious consequences for the livelihood of the employees retrenched orotherwise laid off.

185 such as status, efficiency, seniority, physical fitness, age, and financial hardship of certainworkers (Asian Alcohol Corp. v. NLRC, G.R. No. 131108, Mar. 25, 1999).186 e.g. temporary employee187 Phil. Tuberculosis Society, Inc. v. National Labor Union, G.R. No. 115414, Aug. 25, 1998188 See table under Retrenchment (no. 5)

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Thirdly, retrenchment, because of its consequential nature, must be reasonablynecessary and likely to effectively prevent the expected losses. The employer should havetaken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other coststhan labor costs.

Lastly, the alleged losses, if already realized, and the expected imminent losses soughtto be forestalled, must be proved by sufficient and convincing evidence. The reason forrequiring this quantum of proof is apparent; any less exacting standard of proof wouldrender too easy the abuse of this ground for termination of services of employees.189

(b) Disease or illness190

i. Requisites

1. The employee suffers from a disease;

2. His continued employment is prohibited by law or prejudicial to his healthor to the health of his co‐employees.191

3. With a certification by competent public health authority that the disease isincurable within 6 months despite due medication and treatment.192

b. Procedural Due Process

(1) Procedure to be observed in termination cases

1.A written notice should be served to the employee specifying the ground/sfor termination and giving the said employee reasonable opportunity to explain.193

2. A hearing or conference should be held during which the employeeconcerned, with the assistance of counsel, if the employee so desires, is given theopportunity to respond to the charge, present his evidence and present the evidencepresented against him.

3. A written notice of termination - If termination is the decision of theemployer, it should be served on the employerindicating that upon due considerations of allthe circumstance, grounds have been established to justify his termination, at least onemonth prior to his termination.194

189F. F. Marine Corporation vs. The Honorable Second Division NLRC, G. R. No. 152039, April 8, 2005; Seealso Clarion Printing House, Inc. vs. NLRC, G. R. No. 148372, June 27, 2005190 Burden of proof rests on the employer.

Company physician is not a “competent public health authority.”Medical certificate issued by company doctor is not sufficient

191 Sec.8, Rule I, Book VI, IRR192 Solis v. NLRC, G.R. No. 116175, Oct. 28,1996193 This first written notice must apprise the employee that his termination is being considered dueto the acts stated in the notice. (Phil. Pizza Inc. v. Bungabong, G.R. No. 154315, May 9, 2005)

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(2) Guiding Principles in connection with the hearing requirementsin dismissal cases

i. "Ample opportunity to be heard" means any meaningful opportunity195 given tothe employee to answer the charges against him and submit evidence in support of hisdefense, whether in a hearing, conference or some other fair, just and reasonable way.

ii. A formal hearing or conference becomes mandatory only when requested by theemployee in writing or substantial evidentiary disputes exist or a company rule or practicerequires it, or when similar circumstances justify it.

iii. The "ample opportunity to be heard" standard in the Labor Code prevails overthe "hearing or conference" requirement in the implementing rules and regulations.

(3) Agabon doctrine

Enunciates the rule that if the dismissal was for just cause but procedural dueprocess was not observed, the dismissal should be upheld. Where the dismissal is for justcause, the lack of statutory due process should not nullify the dismissal or render it illegal orineffectual. However, the employer should indemnify the employee for the violation of hisright to procedural due process. The indemnity to be imposed should be stiffer to discouragethe abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serranoruling. In Agabon, the nominal damages awarded was P30,000.00.

c. Reliefs for illegal dismissal

(1) Reinstatement aspect196

(a) Immediately executory197

i. Actual reinstatement

The employee is admitted back to work.

(b) Payroll reinstatement

The employee is merely reinstated in the payroll.

194 Single notice of termination does not comply with the requirements of the law. (Aldeguer & Co.,Inc. vs. Honeyline Tomboc)G.R. No. 147633, July 28, 2008)195 verbal or written196 restoration to a state from which one has been removed197 Under Art 223, the decision of the Labor Arbiter reinstating a dismissed employee is immediatelyexecutory even while the case is brought up on appeal.

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(2) Separation pay198 in lieu of Reinstatement

(a) Strained Relation rule

When the employer can no longer trust the employee and vice versa, or therewere imputations of bad faith to each other, reinstatement could not effectively serveas a remedy. This doctrine applies only to positions which require trust and confidence.199

Under the circumstances where the employment relationship has become sostrained to preclude a harmonious working relationship and that all hopes atreconciliation are naught after reinstatement, it would be more beneficial to accord theemploye backwages and separation pay.

(3) Backwages200

(a) Components of the amount of backwages

Following several decisions of the Supreme Court, the following benefits, in additionto the basic salary, should be taken into account in the computation of backwages, ifapplicable:

1. Fringe benefits or their monetary equivalent.201

2. Increases in compensation and other benefits, including 13th month pay202

198 Reinstatement can no longer be effected in view of the long passage of time or because of the realitiesof the situation.

It is the amount that an employee receives at the time of his severance from the service and isdesigned to provide the employee with the wherewithal during the period that he is looking for anotheremployment.

Separation pay is payable to an employee whose services are validly terminated for authorized causes(Article 283 and 284).

An employee dismissed for a just cause is not entitled to separation pay (Article 282).Exception:Where the employee is dismissed for causes other than serious misconduct or those reflecting on his

moral character, separation pay may be allowed as a measure of social justice199 Globe Mackay v. NLRC, G.R. No. 82511, March 3, 1992

There is a resultant strained relations or irretrievable estrangements between the employer and theemployee where the employee concerned occupies a position of trust and confidence and it is likely thatif reinstated an atmosphere of antipathy and antagonism may be generated as to adversely affect theefficiency and productivity of the employee.200 A form of relief that restores the income of the employee that was lost by reason of the unlawfuldismissal.

Full Backwages have to be paid by an employer as part of the price or penalty he has to pay for illegallydismissing his employee. Other benefits must be paid in addition to backwages. The computation shouldbe based on the wage rate level at the time of the illegal dismissal and not in accordance with the latest,current wage level of the employee’s position.201 Acesite Corporation vs. NLRC, G. R. No. 152308, Jan. 26, 200202 Traders House, Inc. vs. NLRC, G. R. No. 120677, Dec. 21, 1998, 300 SCRA 360

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3. Transportation and emergency allowances203

4. Holiday pay, vacation and sick leaves and service incentive leaves204

5. Just share in the service charges205

6. Gasoline, car and representation allowances206

7. Any other allowances and benefits or their monetary equivalent.207

The computation of said benefits should be up to the date of reinstatement asprovided under Article 279208 of the Labor Code.209

(4) Constructive dismissal

An involuntary resignation resorted to when continued employment becomesimpossible, unreasonable, or unlikely; when there is a demotion in rank or a diminution inpay; or when a clear discrimination, insensibility or disclaim by an employer becomesunbearable to an employee.210

(5) Preventive Suspension211

During pendency of the investigation, if the worker’s continued employment poses aserious and imminent threat to life and property of employer, or of his co-employees.212

Can be extended provided the employer pays the suspended employee his wages andother benefits.

203 Santos vs. NLRC, G. R. No. 76721, Sept. 21, 1987; Soriano vs. NLRC, G. R. No. L-75510, Oct. 27, 1987..204 St. Louise College of Tuguegarao vs. NLRC, G. R. No. 74214, Aug. 31, 1989; On service incentive leave,see Fernandez vs. NLRC, G. R. No. 105892, Jan. 28, 1998, 285 SCRA 149..205 Maranaw Hotels & Resort Corporation vs. NLRC, G. R. No. 123880, Feb. 23, 1999).206 Consolidated Rural Bank [Cagayan Valley], Inc. vs. NLRC, G. R. No. 123810, Jan. 20, 1999, 301 SCRA223.207 Blue DairyCorporation vs. NLRC, G. R. No. 129843, Sept. 14, 1999.208 See Reference209 Fernandez vs. NLRC, supra.210 Leonardo v. NLRC, G.R. No.125303, June 16, 2000

An employee is deemed constructively dismissed where his status is changed from regular to casual.211 Rule pending appeal:

Preventive suspension is punitive already; hence, if exonerated, the employee must be reinstated andcompensated for the period of his suspension

Suspension beyond 30 days ripens to dismissal212 Max period: 30 days

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(6) Quitclaims213

A quitclaim is a document executed by an employee in favor of the employerpreventing the former from filing any further money claim against the latter arisingfrom employment.

Once an employee resigns and executes a quitclaim in favor of the employer, he isthereby estopped from filing any further money claim.

It should be voluntarily signed.

But even if voluntary, if it is contrary to public policy, it is deemed invalid.

(7) Termination of employment by employee

Without just cause With just causes

By serving written notice on the employerat least one (1) month in advance.

The employer upon whom no suchnotice was served may hold the employeeliable for damages.

An employee may put an end toemployment without serving any noticeon the employer for any of the followingjust causes:

a. Serious insult by the employer or hisrepresentative on the hour and person ofthe employee214

b. Inhuman and unbearable treatmentaccorded the employee by the employeror his representative215

c. Commission of a crime or offense bythe employer or his representative againstthe person of the employee or any ofthe immediate members of his family216

213 Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarilyentered into and represents a reasonable settlement, it is binding on the parties. It is only when there isclear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms areunconscionable that the law will step in to annul it.

“Dire necessity” is not an acceptable ground for annulling the releases.214 Implies malice or denotes ill-will or an intent to injure or to offend, or to wound the feelings ofanother.215 Any conduct which will affect the mind and body or where continuance of it involves the life or healthof the employee

No comfort room provided by the employer compelling the employees to go outside employer’sbusiness premises to heed the “call of nature” constitutes unbearable treatment.

No gas masks provided by employer although employees’ work deals with smoke-producing chemicalsamounts to inhuman treatment

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d. Other causes analogous to any of theforegoing217

3. Retirement Pay Law

a. Coverage

Applies 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, exceptthose specifically exempted.

It also includes and covers part-time employees, employees of service and other jobcontractors and domestic helpers or persons in the personal service of another.


1. Employees of the National Government and its political subdivisions, includinggovernment-owned and/or controlled corporations, if they are covered by the Civil ServiceLaw and its regulations.

2. Domestic helpers and persons in the personal service of another

3. Employees of retail218, service219 and agricultural220 establishments or operationsregularly employing not more than ten (10) employees.221

216 The act of slapping the employee plus the threat of scratching her face with a pair of scissors constitutean offense which would justify employees’ severing employer-employee relationship.217 1. Undue delay in the payment of employees’ salaries or wages

2. Violation of employment term and condition3. Unsanitary or unhygienic working conditions

218 one principally engaged in the sale of goods to end-users for personal or household use. It shall lose itsretail character qualified for exemption if it is engaged in both retail and wholesale of goods.219one principally engaged in the sale of service to individuals for their own or household use and isgenerally recognized as such..220refers to an employer which is engaged in agriculture. This term refers to all farming activities in allbranches and includes, among others, the cultivation and tillage of soil, production, cultivation, growingand harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry,the culture of fish and other aquatic products in farms or ponds, and any activities performed by a farmeror on a farm as an incident to, or in conjunction with, such farming operations, but does not include themanufacture and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farmproducts221 Sec.2, Rule II, Book VI, IRR

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c. Components of retirement pay

In the absence of an applicable employment contract, an employee who retires shallbe entitled to retirement pay equivalent to at least one-half (1/2) month salary for every yearof service, a fraction of at least six (6) months being considered as one (1) whole year.222

d. Retirement pay under R.A. 7641 vis-à-vis retirement benefits under SSSand GSIS laws

Social Security Law Revised GovernmentService Insurance Act

Employees CompensationAct

Compulsory upon allemployees not over 60 yearsof age and their employers.

1.Filipinos recruited in thePhils. by foreign ‐ basedemployers for employmentabroad may be covered bythe SSS on a voluntarybasis.

2. Compulsory upon all self‐employed persons earningP1,800 or more per annum.

Compulsory for allpermanent employees below60 years of age uponappointment to permanentstatus, and for all electiveofficials for the durationof their tenure.

1. Any person, whetherelected or appointed, inthe service of anemployer is a coveredemployee if he receivescompensation for suchservice.

Compulsory uponall employers and theiremployees not over 60yearsof age; Provided, that anemployee who is over 60years of age and payingcontributions to qualify forthe retirement or lifeinsurance benefitadministered bythe System shallbe subject to compulsorycoverage.

222 Art. 287, as amendedComponents. - For the purpose of determining the minimum retirement pay due an employee, the

term “one-half month salary” shall include all the following:(a) fifteen (15) days salary of the employee based on his latest salary rate.(b) the cash equivalent of five (5) days of service incentive leave;(c) one-twelfth (1/12) of the 13th month pay due the employee; and(d) all other benefits that the employer and employee may agree upon that should be included in the

computation of the employee’s retirement pay

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E. MANAGEMENT PREROGATIVE

1. Discipline223

The employer’s right to conduct the affairs of his business, according to its owndiscretion and judgment, includes the prerogative to instill discipline in its employees and toimpose penalties, including dismissal, upon erring employees. This is a managementprerogative where the free will of management to conduct its own affairs to achieve itspurpose takes form. The only criterion to guide the exercise of its management prerogativeis that the policies, rules and regulations on work-related activities of the employees mustalways be fair and reasonable and the corresponding penalties, when prescribed,commensurate to the offense involved and to the degree of the infraction.224

Instilling discipline among its employees is a basic management right andprerogative. Management may lawfully impose reasonable penalties such as dismissal uponan employee who transgresses the company rules and regulations.225

2. Transfer of employees226

The Supreme Court has recognized and upheld the prerogative of management totransfer an employee from one office to another within the business establishment, providedthere is no demotion in rank or diminution of salary, benefits, and other privileges; and theaction is not motivated by discrimination, made in bad faith, or effected as a form ofpunishment or demotion without sufficient cause. This is a privilege inherent in theemployer’s right to control and manage its enterprise effectively.227

3. Productivity standard

The practice of a company in laying off workers because they failed to make thework quota has been recognized in this jurisdiction.228

223 subject to reasonable regulation by the State in the exercise of its police power. (Associated LaborUnions-TUCP vs. NLRC, G. R. No. 120450, Feb. 10, 1999; PLDT vs. NLRC, 276 SCRA 1 [1997]).224 St. Michael’s Institute vs. Santos, G. R. No. 145280, Dec. 4, 2001; Consolidated Food Corporation vs.NRLC, 315 SCRA 129, 139 [1999]225 Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000.226 Jurisprudential guidelines:(a) a transfer is a movement from one position to another of equivalent rank, level or salary without breakin the service or a lateral movement from one position to another of equivalent rank or salary;226

(b) the employer has the inherent right to transfer or reassign an employee for legitimate businesspurposes;(c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as aform of punishment or is a demotion without sufficient cause;226

(d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicialto the employee227 Mendoza vs. Rural Bank of Lucban, G. R. No. 155421, July 7, 2004; Benguet Electric Cooperative vs.Fianza, G. R. No. 158606, March 9, 2004.228 Philippine American Embroideries vs. Embroidery and Garment Workers, 26 SCRA 634, 639.

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Failure to observe prescribed standards of work, or to fulfill reasonable workassignments due to inefficiency may constitute just cause for dismissal. Such inefficiency isunderstood to mean failure to attain work goals or work quotas, either by failing to completethe same within the allotted reasonable period, or by producing unsatisfactory results. Thismanagement prerogative of requiring standards may be availed of so long as they areexercised in good faith for the advancement of the employer's interest.229

4. Grant of Bonus

By definition, a "bonus" is a gratuity or act of liberality of the giver which therecipient has no right to demand as a matter of right230. It is something given in addition towhat is ordinarily received by or strictly due the recipient. The granting of a bonus isbasically a management prerogative which cannot be forced upon the employer who maynot be obliged to assume the onerous burden of granting bonuses or other benefits asidefrom the employee's basic salaries or wages,231 especially so if it is incapable of doing so.

5. Change of working hours

Well-settled is the rule that management retains the prerogative, whenever exigenciesof the service so require, to change the working hours of its employees.232

The employer has the prerogative to control all aspects of employment in hisbusiness organization such as hiring, work assignments, working methods, time, place andmanner of work, tools to be used, processes to be followed, supervision of workers, workingregulations, transfer of employees, work supervision, lay-off of workers and the discipline,dismissal and recall of workers.233

6. Marital discrimination234

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 stipulate

229 Buiser v. Leogardo, Jr., 131 SCRA 151, 158 (1984).230 Traders Royal Bank v. NLRC, 189 SCRA 274 [1990] citing Aragon v. Cebu Portland Cement Co., 61 O.G.4567.231 Kamaya Point Hotel v. NLRC, 177 SCRA 160 (1989).232 Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15 April 1998, 289 SCRA 86233 Consolidated Food Corporation, et al. vs. NLRC, et al., G. R. No. 118647, Sept. 23, 1999.234 Unless the employer can prove that the reasonable demands of the business require a distinctionbased on marital status and there is no better available or acceptable policy which would betteraccomplish the business purpose, an employer may not discriminate against an employee based on theidentity of the employee’s spouse.234 This is known as the bona fide occupational qualification exception.

Since the finding of a bona fide occupational qualification justifies an employer’s no-spouse rule, theexception is interpreted strictly and narrowly by these state courts. There must be a compelling businessnecessity for which no alternative exists other than the discriminatory practice. To justify a bona fideoccupational qualification, the employer must prove two factors: (1) that the employment qualification isreasonably related to the essential operation of the job involved; and, (2) that there is a factual basis forbelieving that all or substantially all persons meeting the qualification would be unable to properlyperform the duties of the job.

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expressly 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 marriage.235

7. Post-employment ban

Whether such an agreement would be held valid and binding will depend on itsreasonableness in relation to the parties concerned, as well as to its public policy.

8. Limitations in its exercise

i. Management's prerogatives must be without abuse of discretion236.

ii. It must be duly established that the prerogative being invoked is clearly amanagerial one.

iii. It is circumscribed by limitations found in law, a collective bargaining agreement,or the general principles of fair play and justice237

So long as a company's management prerogatives are exercised in good faith for theadvancement of the employer's interest and not for the purpose of defeating orcircumventing the rights of the employees under special laws or under valid agreements, thisCourt will uphold them238.

235 Sec. 136.236 Cruz vs. Medina (177 SCRA 565 [1989])237 University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).238 San Miguel Brewery Sales Force Union (PTGWO) vs. Ople (170 SCRA 25 [1989])

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F. SOCIAL LEGISLATION

1. SSS Law239

a. Coverage

i. Compulsory upon all employees not over sixty (60) years of age and theiremployers. In the case of domestic helpers, their monthly income shall not be less than Onethousand pesos (P1,000.00) a month.240

ii. Spouses who devote full time to managing the household and family affairs, unlessthey are also engaged in other vocation or employment which is subject to mandatorycoverage, may be covered by the SSS on a voluntary basis.

iii. Filipinos recruited by foreign-based employers for employment abroad may becovered by the SSS on voluntary basis.

b. Exclusions from coverage241

i. Agricultural labor when performed by a share or leasehold tenant or worker who isnot paid any regular daily wage or base pay and who does not work for an uninterruptedperiod of at least six months in a year;242

ii. Domestic service in a private home;

iii. Employment purely casual and not for the purposes of occupation or business ofthe employer;

iv. Service performed by an individual in the employ of his son, daughter, or spouse,and service performed by a child under the age of twenty-one years in the employ of hisparents;

v. Service performed on or in connection with an alien vessel by an employee if he isemployed when such vessel is outside the Philippines;

239 R.A. 8282240 Also compulsory upon such self-employed persons as may be determined by the Commission undersuch rules and regulations as it may prescribe, including but not limited to the following:

1.All/self-employed/professionals;2. Partners and single proprietors of businesses;3.Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the

definition of the term "employee"4.Professional/athletes,/coaches,/trainers/and/jockeys;/and5.Individual farmers and fishermen.Unless otherwise specified in the law, all provisions of the SSS LAW applicable to covered employees

shall also be241 Sec. 8(j) of Social Security Act (As amended by Sec. 5, P.D. No. 735, S-1975).242 As amended by Sec. 4, R.A. 2658

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vi. Service performed in the employ of the Philippine Government or aninstrumentality or agency thereof;

vii. Service performed in the employ of a foreign government or internationalorganization, or their wholly-owned instrumentality: Provided, however, That his exemptionnotwithstanding, any foreign government, international organization, or their wholly-ownedinstrumentality employing workers in the Philippines or employing Filipinos outside of thePhilippines may enter into an agreement with the Philippine Government for the inclusionof such employees in the SSS except those already covered by their respective civil serviceretirement systems: Provided, further, That the terms of such agreement shall conform withthe provisions of this Act on coverage and amount of payment of contributions andbenefits: Provided, finally, That the provisions of this Act shall be supplementary to anysuch agreement243.

viii. Such other services performed by temporary employees who may be excluded byregulation of the Commission. Employees of bona fide independent contractors shall not bedeemed employees of the employer engaging the services of said contractors244.

c. Benefits

i. Monthly pension;

ii. Dependents’pension ;

iii. Retirement benefits;

iv. Death benefits;

v. Permanent disability benefits;

vi. Funeral benefit;

vii. Sickness benefit;

viii. Maternity leave benefit.

d. Beneficiaries

i. The dependent spouse until he or she remarries

ii. The dependent legitimate, legitimated or legallyadopted, and illegitimate children,who shall be the primary beneficiaries of the member.

iii. In their absence, the dependent parents who shall be the secondary beneficiariesof the member.

243 As amended by Sec. 1, R.A. 3839; Sec. 3, R.A. 4857; and Sec. 5, P.D. No. 735, S-1975244 As amended by Sec. 5, P.D. No. 735, S-1975

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iv. In the absence of all the foregoing, any other person designated by the member ashis/her secondary beneficiary.

2. GSIS Law245

a. Coverage

Compulsory for all employees receiving compensation who have not reached thecompulsory retirement age, irrespective of employment status.


i. Members of the Armed Forces of the Philippines and the Philippine NationalPolice, subject to the condition that they must settle first their financial obligation with theGSIS, and

ii. Contractuals who have no employer and employee relationship with the agenciesthey serve.

c. Benefits

i. Monthly Pension;

ii. Separation Benefits;

iii. Unemployment or Involuntary Separation Benefits;

iv.RetirementBenefits;

v. Permanent Disability Benefits;

vi.Temporary Total Disability Benefits;

vii. Survivorship Benefits;

viii.Funeral/Benefits;

ix. Compulsory Life Insurance Benefit;

x. Optional Insurance and/or pre-need coverage embracing life, health,hospitalization, education, memorial plans, and such other plans as may be designed by theGSIS, for the member and/or his dependents.

245 R.A. 8291

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d. Beneficiaries

i. Primary beneficiaries- The legal dependent spouse until he/she remarries and thedependent children;

ii. Secondary beneficiaries- The dependent parents and, subject to the restrictions ondependent children, the legitimate descendants

3. Limited Portability Law246

Under this law, an employee who has worked in both the private and public sectorsand has been covered by both the Government Service Insurance System (GSIS) and theSocial Security System (SSS) shall have his creditable services or contributions in bothSystems credited to his service or contribution record in each of the Systems, which shall besummed up for purposes of old age, disability, survivorship and other benefits in case thecovered member does not qualify for such benefits in either or both Systems without thetotalization.

4. Employee’s Compensation247 – Coverage and when compensable

Coverage in the State Insurance Fund shall be compulsory upon all employers andtheir employees not over sixty years of age: Provided, That an employee who is over sixtyyears of age and paying contributions to qualify for the retirement or life insurance benefitadministered by the System shall be subject to compulsory coverage: Provided, further, Thatin case of an employee who is both covered by the SSS and GSIS, only his employmentunder the GSIS shall be considered for purposes of his coverage.

The State Insurance Fund shall be liable for compensation to the employee or hisdependents, except when the disability or death was occasioned by the employee'sintoxication, willful intention to injure or kill himself or another, notorious negligence, orotherwise provided under this Title.

246 R.A. 7699247 P.D. No. 626

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G. LABOR RELATIONS LAW

1. Right to Self-organization248

The right to join, assist or form labor organizations for collective bargaining and toengage in lawful concerted activities for the same purpose or for their mutual aid andprotection.

Any employee249, whether employed for a definite period or not, shall beginning onthe first day of his/her service, be eligible for membership in any labor organization.250

a. Who may unionize for purposes of collective bargaining

All persons employed in:

Commercial

Industrial ) enterprises

Agricultural ) whether operating for profit or not

Charitable

Religious ) Institutions

Educational

Likewise:

Ambulant workers

Intermittent workers

Rural workers

248 Employees of government corporations established under the Corporation Code (without originalcharters) shall have the right to organize and to bargain collectively with their respective employers. Allother employees in the civil service shall have the right to form associations for purposes not contrary tolaw.

General rule: All aliens, natural or juridical, as well as foreign organizations are strictly prohibited fromengaging directly or indirectly in all forms of trade union activities without prejudice to normal contactsbetween Philippine labor unions and recognized international labor centers.

Exception: Alien employees with valid working permits issued by the DOLE may exercise the right toself-organization and join or assist labor organizations for purposes of collective bargaining, if they arenationals of a country which grants the same or similar rights to Filipino workers, as certified by theDepartment of Foreign Affairs.249 Three categories of employees:a. Managerial;b. Supervisory; andc. Rank-and-file.250 ibid.; See also Art. 277; No. 10, Basic Amendments under R. A. 6715, prepared by Members of theSenate-House Conference Committee of Congress.

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Workers with no definite employers

Itinerant workers

Self-employed

Specific Coverage:

Supervisory employees251

Terminated employees who are contesting their termination

Aliens with valid work permit

Government employees

New employees

Iglesia ni Kristo members

Security guards

(1) Who cannot form, join or assist labor organizations

As a general rule, only top and middle managers are not allowed to join any labororganization.

First-line managers252 are allowed to join a supervisory union but not the union ofrank-and-file employees or vice-versa. In fact, the law does not allow mixed membership ofboth supervisory and rank-and-file employees in one union. A union with such mixedmembership is no union at all. It cannot exercise the rights of a legitimate labororganization.

(2) Executive Order No. 180

The right of government employees to form, join or assist employees organizationsof their own choosing is not regarded as existing or available for purposes of collectivebargaining but simply for the furtherance and protection of their interests253.

251 Not eligible for membership in a labor union of the rank-and-file employees but may form, join orassist separate labor unions of their own.

A union whose membership is a mixture of supervisors and rank-and-file is not and cannot become alegitimate labor organization

A local supervisor’s union should not be allowed to affiliate with the national federation of union ofrank-and-file employees where that federation actively participates in union activity in the company andthe rank-and-file employees are directly under the authority of the supervisory employees252 or supervisory employees253 Arizala vs. CA, Sept. 14, 1990

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Excluded from negotiation by government employees are the terms and conditionsof employment that are fixed by law, it being only those terms and conditions not otherwisefixed by law.

Concedes to government employees the right to engage in concerted activities,including the right to strike provided such activities are exercised in accordance with law.

b. Bargaining unit

The group or cluster of jobs or positions that supports the labor organization whichis applying for registration, within the employer’s establishment

Refers to a group of employees sharing mutual interests within a given employerunit, comprised of all or less than all of the entire body of employees in the employer unit orany specific occupational or geographical grouping within such employer unit.

(1) Test to determine the constituency of an appropriate bargainingunit

Any of the following four (4) modes may be used:

a. Substantial mutual interests principle or community or mutuality of interests rule.

The employees sought to be represented by the collective bargaining agent musthave substantial mutual interests in terms of employment and working conditions as evincedby the type of work they perform. It is characterized by similarity of employment status,same duties and responsibilities and substantially similar compensation and workingconditions254.

b. Globe doctrine255

The determining factor is the desire of the workers themselves. Consequently, acertification election should be held separately to choose which representative union will bechosen by the workers256.

c. Collective bargaining history.

Enunciates that the prior collective bargaining history and affinity of the employeesshould be considered in determining the appropriate bargaining unit. However, the SupremeCourt has categorically ruled that the existence of a prior collective bargaining history is

254 San Miguel Corporation Employees Union-PTGWO vs. Confesor, G. R. No. 111262, Sept. 19, 1996, 262SCRA 81, 98255 will of the employees256 See also Mechanical Department Labor Union sa Philippine National Railways vs. CIR, G. R. No. L-28223, Aug. 30, 1968.

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neither decisive nor conclusive in the determination of what constitutes an appropriatebargaining unit.257

d. Employment status.

The determination of appropriate bargaining unit based thereon is considered anacceptable mode.258

(2) Voluntary Recognition259

Voluntary recognition of bargaining agent is the free and voluntary act of theemployer of extending and conferring full recognition to a union as the sole and exclusivebargaining representative of the employees in an appropriate bargaining unit, for purposes ofcollective bargaining. This is allowed when there is only one union operating in thebargaining unit.

(a) Requirements

1. Submission to DOLE of a joint statement260 attesting to the voluntaryrecognition.

2. The joint- statement261 must be published for 15 consecutive days in 2conspicuous places in the establishment or CBU where the union seeks tooperate

257 San Miguel Corporation vs. Laguesma, G. R. No. 100485, Sept. 21, 1994; National Association of FreeTrade Unions vs. Mainit Lumber Development Company Workers Union, G. R. No. 79526, Dec. 21, 1990)258 Rothenberg on Labor Relations, pp. 482-510.259 Effect of voluntary recognition:From the time of recording, the union shall enjoy the rights, privileges and obligations of an exclusivebargaining representative

Voluntary acknowledgement can ONLY take place when there is no dispute as to what union counts inits members a majority of the employees.Voluntary recognition is possible only in an unorganized establishment. In an organized setting, theemployer cannot voluntarily recognize any new union because Art. 256, LCP requires the employer tocontinue recognizing and dealing with the incumbent union if it has not been properly replaced byanother union.260 by the employer and union president261 The joint-statement should state the approximate number of employees in the CBU, accompanied bythe names and signatures of at least a majority of the members of the CBU supporting the voluntaryrecognition;

The joint-statement should state that there are no other LLO’s operating within the CBUThe joint-statement must be submitted to the Regional Office within 30 days from date of recognition

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(3) Certification election

It refers to the process of determining through secret ballot the sole and exclusivebargaining representative of the employees in an appropriate bargaining unit, for purposes ofcollective bargaining.

(a) In an unorganized establishment

Certification election shall be "automatically" conducted upon the filing of a petitionfor certification election by a legitimate labor organization. However, it must be emphasizedthat the petitioner-union should have a valid certificate of registration; otherwise, it has nolegal personality to file the petition for certification election.

(b) In an organized establishment

The following are the requisites for certification election in organized establishments.

1. A petition questioning the majority status of the incumbent bargaining agent isfiled before the DOLE within the 60-day freedom period;

2. Such petition is verified; and

3. The petition is supported by the written consent of at least twenty-five percent(25%) of all employees in the bargaining unit

(c) Rules prohibiting the filing of petition for certificationelection

1. Certification year-bar rule;

A certification election petition may not be filed within one (1) year:

i. from the date of a valid certification, consent or run-off election;or

ii. from the date of voluntary recognition.

2. Bargaining deadlock-bar rule;

Neither may a representation question be entertained if:

i. before the filing of a petition for certification election, the dulyrecognized or certified union has commenced negotiations with the employerwithin the one-year period from the date of a valid certification, consent orrun-off election or from the date of voluntary recognition; or

ii. a bargaining deadlock to which an incumbent or certifiedbargaining agent is a party had been submitted to conciliation or arbitrationor had become the subject of valid notice of strike or lockout.

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3. Contract-bar rule262

The Bureau of Labor Relations shall not entertain any petition forcertification election or any other action which may disturb the administration ofduly registered existing collective bargaining agreements affecting the parties.

(d) Requirements for validity of certification election

For a valid election, at least a majority of all eligible voters in the unit must have casttheir votes. The labor union receiving the majority of the valid votes cast shall be certified asthe exclusive bargaining agent of all the workers in the unit.263

(e) Protests and other questions arising from conduct ofcertification election

Certification proceedings directly involve two (2) issues:

1. Proper composition and constituency of the bargaining unit; and

2. The veracity of majority membership claims of the competing unions so as toidentity the one union that will serve as the bargaining representative of the entirebargaining unit.264

(4) Run-off election

It refers to an election between the labor unions receiving the two (2) highestnumber of votes when a certification election which provides for three (3) or more choicesresults in no choice receiving a majority of the valid votes cast; provided, that the totalnumber of votes for all contending unions is at least fifty percent (50%) of the number ofvotes cast.

262 The exceptions to the contract-bar rule are as follows:1. during the 60-day freedom period;2. when the CBA is not registered with the BLR or DOLE Regional Offices;3. when the CBA, although registered, contains provisions lower than the standards fixed by law;4. when the documents supporting its registration are falsified, fraudulent or tainted with

misrepresentation;5.when the collective bargaining agreement is not complete as it does not contain any of the requisite

provisions which the law requires;6. when the collective bargaining agreement was entered into prior to the 60-day freedom period;7. when there is a schism in the union resulting in an industrial dispute wherein the collective

bargaining agreement can no longer foster industrial peace.263 R. Manalac, Phil. Labor Laws and Jurisprudence, 2007 Ed., p. 248264 Some of the employees may not want to have a union; hence, “no union” is one of the choices namedin the ballot. If “no union” wins, the company or the bargaining unit remains un‐unionized for at least 12months, the period is known as 12‐month bar. After that period, a petition for a CE may be filed again.

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(a) Requirements

1. A valid election took place because majority of the CBU members voted

2. The election presented at least three choices

3. Not one of the choices obtained the majority of the valid votes

4. The total votes of the unions is at least 50% of the votes cast

5. There is no unresolved challenge of voter or election protest

(5) Re-run election

1. If one choice receives a plurality of the vote and the remaining choices results in atie; or

2. If all choices received the same number of votes.

In both instances, the no union is also a choice.

(6) Consent election265

It refers to the election voluntarily agreed upon by the parties, with or without theintervention of the Department of Labor and Employment, to determine the issue ofmajority representation of all the workers in the appropriate collective bargaining unit.

In hearing a petition for a CE, the Med-Arbiter may persuade the contending unionsto agree to a consent election. If the unions do agree, the Med-Arbiter shall enter in theminutes of the hearing the fact of the agreement and then cause the immediate scheduling ofthe pre-election conference.

265 The holding of a valid consent election, upon the intercession of the med-arbiter, bars the holding of aCE for one year.

Where no petition for a CE had been filed but the parties themselves have agreed to hold consentelection, the results of the election will NOT bar another CE, UNLESS the winning union had beenextended voluntary recognition by the employer

Consent election is a separate and distinct process and has nothing to do with the import and effect ofa certification election. Neither does it shorten the terms of an existing CBA nor entitle the participantsthereof to immediately renegotiate an existing CBA although it does not preclude the workers fromexercising their right to choose their sole and exclusive bargaining representative after the expiration ofthe 60-day freedom period.

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(7) Affiliation and disaffiliation of the local union from the motherunion

(a) Substitutionary doctrine266

This principle states that even during the effectivity of a collective bargainingagreement executed between employer and employees thru their agent, the employees canchange said agent but the contract continues to bind then up to its expiration date. They maybargain however for the shortening of said expiration date.

In formulating the "substitutionary" doctrine, the only consideration involved is theemployees' interest in the existing bargaining agreement. The agent's interest never enteredthe picture.

In fact, the justification for said doctrine was:

... That the majority of the employees, as an entity under the statute, is thetrue party in interest to the contract, holding rights through the agency of the unionrepresentative. Thus, any exclusive interest claimed by the agent is defeasible at thewill of the principal.267

(8) Union dues and special assessments

Union dues Special assessments

Regular monthly contributions paid by themembers to the union in exchange for

the benefits given to them by the CBAand to finance the activities of the union inrepresenting the union.

These are assessments for any purposeor object other than those expresslyprovided by the labor organization’sconstitution and by‐laws.

Requirements for validity

By obtaining the individual writtenauthorization duly signed by the employeewhich must specify:

1. Amount

By written resolution approved by majorityof all the members at the meeting called forthat purpose.269

266 Employees cannot revoke the validity of a validly executed CBA with their employer by the simpleexpedient of changing their collective bargaining agent

The new agent must respect the subsisting CBAEmployer cannot renege on the CBA, except to negotiate with the management for the shortening

thereofInapplicable to personal undertaking of deposed union; e.g. : no strike stipulation

267 Benguet Consolidated Inc. vs. BCI Employees & W Union-PAFLU, 23 SCRA, 465, 471

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2. Purpose

3. Beneficiary268

(9) Agency fees270

(a) Requisites for assessment

i. The employee is part of the bargaining unit

ii. He is not a member of the union

iii. He partook of the benefits of the CBA

2. Right to Collective Bargaining271

a. Duty to bargain collectively

The performance of the mutual obligation of the employer and the sole bargainingrepresentative to meet promptly, expeditiously, & in good faith & agree on Wages, Hours ofWork & Other terms & conditions of employment (WHO).

269 Art.241268 Ibid.,(o)270 It is an amount equivalent to union dues, which a non-union member pays to the union becausehe benefits from the CBA negotiated by the union.271 Collective Bargaining Agreement (CBA) refers to the negotiated contract between a legitimate labororganization and the employer concerning wages, hours of work and all other terms and conditions ofemployment in a bargaining unit. The CBA is deemed the law between the parties during its lifetime. Itsprovisions are construed liberally.

Legal principles applicable to Collective Bargaining Agreement:A proposal not embodied in CBA is not part thereof.Minutes of CBA negotiation - no effect if its contents are not incorporated in the CBA.Making a promise during the CBA negotiation is not considered bad faith.Adamant stance resulting in impasse, not bad faith.The DOLE Secretary cannot order inclusion of terms and conditions in CBA which the law and the

parties did not intend to reflect therein.Signing bonus, not demandable under the law.Allegations of bad faith, wiped out with signing of CBA.

Term (lifetime) of a CBARepresentation aspect (sole and exclusive status of certified union): - The term is 5 years which means

that no petition questioning the majority status of the incumbent bargaining agent shall be entertained byDOLE and no certification election shall be conducted outside of the 60-day freedom period.

All other provisions (which refer to both economic and non-economic provisions exceptrepresentation): Shall be renegotiated not later than three (3) years after its execution.

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(1) Kiok Loy ruling

In the case of Kiok Loy vs. NLRC,272 the Supreme Court found that petitioner therein,Sweden Ice Cream Plant, refused to submit any counter proposal to the CBA proposed byits employees’ certified bargaining agent. It ruled that the former had thereby lost its right tobargain the terms and conditions of the CBA. Thus, the High Court did not hesitate toimpose on the erring company the CBA proposed by its employees’ union - lock, stock andbarrel.

b. Mandatory provisions of CBA

1. Wages & Hours of Work

2. Other terms & conditions

3. Other modes of compensation

4. Work shifts

5. Vacation & holidays

6. Bonuses

7. Pensions & retirement plans

8. Seniority

9. Transfers

10. Lay-offs

11. Workload

12. Work rules & regulations

13. Rent of company houses

14. Union security agreements

An employer does not commit ULP by insisting to the point of a bargaining impasse,on the inclusion in a contract of a management prerogative clause, or a union disciplineclause, or a no strike clause.

(1) Grievance Procedure

The internal rules of procedure established by the parties in their CBA withvoluntary arbitration as the terminal step, which are intended to resolve all issues arisingfrom the implementation and interpretation of their CBA. It refers to the system ofgrievance settlement at the plant level as provided in the collective bargaining agreement. Itusually consists of successive steps starting at the level of the complainant and his immediatesupervisor and ending, when necessary, at the level of the top union and company officials

272 No. L-54334, January 22, 1986, 141 SCRA 179, 188

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All grievances submitted to the grievance machinery273 which are not settled withinseven (7) calendar days from the date of their submission shall automatically be referred tovoluntary arbitration prescribed in the CBA.

For this purpose, parties to a CBA shall name and designate in advance a VoluntaryArbitrator or panel of Voluntary Arbitrators, or include in the agreement a procedure for theselection of such Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from thelisting of qualified Voluntary Arbitrators duly accredited by the NCMB. In case the partiesfail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the NCMB shalldesignate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary,pursuant to the selection procedure agreed upon in the CBA, which shall act with the sameforce and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties asdescribed above.

(2) Voluntary Arbitration

Refers to the mode of settling labor-management disputes by which the parties selecta competent, trained and impartial third person who shall decide on the merits of the caseand whose decision is final and executor.274

(3) No Strike-No Lockout Clause

The “no strike no lockout” clause in the CBA applies only to economicstrikes. It does not apply to ULP strikes.275

Such no-strike provision in the CBA only bars strikes which are economic in nature,but not strikes grounded on unfair labor practices.276

The Supreme Court consistently ruled in a long line of cases that a strike is illegal ifstaged in violation of the “No Strike/No Lockout Clause” in the CBA stating that a strike,which is in violation of the terms of the CBA, is illegal, especially when such terms providefor conclusive arbitration clause.277

273 The mechanism for the adjustment and resolution of grievances arising from the interpretation orimplementation of a CBA and those arising from the interpretation or enforcement of company personnelpolicies. It is part of the continuing process of collective bargaining.274 Section 1 [d], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Voluntary ArbitrationProceedings [Oct. 15, 2004].275 Hence, if the strike is founded on an unfair labor practice of the employer, a strike declared by theunion cannot be considered a violation of the no strike clause. (Master Iron Labor Union v. NLRC,G.R. No. 92009, Feb. 17, 1993)276 MSMG-UWP vs. Ramos, 326 SCRA 428 (2000), citing Master Iron Labor Union vs. NLRC 219 SCRA 47[1993]).277 Filcon Manufacturing Corporation vs. Lakas Manggagawa sa Filcon-Lakas Manggagawa Labor Center[LMF-LMLC], G. R. No. 150166, July 26, 2004.

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(4) Labor Management Council

The Department shall promote the formation of labor‐management councils in organized and unorganized establishments to enable theworkers to participate in policy and decision‐making processes in the establishment, insofar as said processes will directly affecttheir rights, benefits and welfare, except those which are covered by collectivebargaining agreements or are traditional areas of bargaining.

The Department shall promote other labor management cooperationschemes and, upon its own initiative or upon the request of both parties, may assist in theformulation and development of programs and projects on productivity, occupationalsafety and health, improvement of quality of work life, product quality improvement, andother similar schemes.278

c. ULP in Collective Bargaining

(1) Bargaining in bad faith

The good faith or bad faith is an inference to be drawn from the facts and is largelya matter for the NLRC’s expertise. The charge of bad faith should be raised while thebargaining is in progress.279

(2) Refusal to bargain

A union violates its duty to bargain collectively by entering negotiations with a fixedpurpose of not reaching an agreement or signing a contract.

(3) Individual bargaining

It is an unfair labor practice for an employer operating under a collective bargainingagreement to negotiate or to attempt to negotiate with his employees individually inconnection with changes in the agreement.

The basis of the prohibition regarding individual bargaining with the strikers is thatalthough the union is on strike, the employer is still under obligation to bargain with theunion as the employees' bargaining representative.280

(4) Blue sky bargaining

It means making exaggerated or unreasonable proposals.281

278 Sec. 1, Rule XXI, Book V, IRR279 Instances:

1. Delay of negotiations2. Imposing time limit on negotiations

280 Melo Photo Supply Corporation vs. National Labor Relations Board, 321 U.S. 332281 Arthur A. Sloane and Fred Witney, Labor Relations, 7th Edition 1991, p. 195

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(5) Surface bargaining

It means “going through the motions of negotiating” without any legal intent toreach an agreement.282

It involves the question of whether or not the employers conduct demonstratesan unwillingness to bargain in good faith or is merely hard bargaining.283

Occurs when the employer constantly changes its position over the agreement.d. Unfair Labor Practice

(1) ULP of Employers284

a. To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

b. To require as a condition of employment that a person or an employee shall notjoin a labor organization or shall withdraw from one to which he belongs;285

c. To contract out services or functions being performed by union members whensuch will interfere with, restrain or coerce employees in the exercise of their rights to self-organization;286.

d. To initiate, dominate, assist or otherwise interfere with the formation oradministration of any labor organization, including the giving of financial or other support toit or its organizers or supporters;287

e. To discriminate in regard to wages, hours of work and other terms and conditionsof employment in order to encourage or discourage membership in any labororganization. Nothing in this Code or in any other law shall stop the parties from requiringmembership 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

Whether or not the union is engaged in blue‐sky bargaining is determined by the evidence presented bythe union as to its economic demands. Thus, if the union requires exaggerated or unreasonable economic demands, then it is guilty of ULP. (Standard Chartered Bank v. Confessor, G.R. No. 114974,June 16, 2004)282 Standard Chartered Bank Employees Union [NUBE] vs. Confesor, G. R. No. 114974, June 16, 2004).283 Ibid.284 Only the officers and agents of corporations, associations or partnerships who have actuallyparticipated in, authorized or ratified unfair labor practices shall be held criminally liable.285 a.k.a. yellow dog contract;286The act of an employer in having work or certain services or functions being performed by unionmembers contracted out is not generally an unfair labor practice act. It is only when the contracting out ofa job, work or service being performed by union members will interfere with, restrain or coerceemployees in the exercise of their right to self-organization that it shall be unlawful and shall constituteunfair labor practice (Art. 248 [c], LC; Sec. 6 [f], Department Order No. 18-02, Series of 2002, [Feb. 21,2002).287 a.k.a. company union

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signing of the collective bargaining agreement. Employees of an appropriate bargaining unitwho are not members of the recognized collective bargaining agent may be assessed areasonable fee equivalent to the dues and other fees paid by members of the recognizedcollective bargaining agent, if such non-union members accept the benefits under thecollective bargaining agreement: Provided, that the individual authorization required underArticle 242, paragraph (o) of this Code shall not apply to the non-members of therecognized collective bargaining agent;

f. To dismiss, discharge or otherwise prejudice or discriminate against an employeefor having given or being about to give testimony under this Code;

g. To violate the duty to bargain collectively as prescribed by this Code;

h. To pay negotiation or attorney’s fees to the union or its officers or agents as partof the settlement of any issue in collective bargaining or any other dispute; or

i. To violate a collective bargaining agreement.288

(2) ULP of Labor Organizations

a. 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 ruleswith respect to the acquisition or retention of membership;

b. To cause or attempt to cause an employer to discriminate against an employee,including discrimination against an employee with respect to whom membership in suchorganization has been denied or to terminate an employee on any ground other than theusual terms and conditions under which membership or continuation of membership ismade available to other members;

c. To violate the duty, or refuse to bargain collectively with the employer, provided itis the representative of the employees;

d. To cause or attempt to cause an employer to pay or deliver or agree to pay ordeliver any money or other things of value, in the nature of an exaction, for services whichare not performed or not to be performed, including the demand for fee for unionnegotiations;289

e. To ask for or accept negotiation or attorney’s fees from employers as part of thesettlement of any issue in collective bargaining or any other dispute; or

f. To violate a collective bargaining agreement.

288 but only if gross in character289 a.k.a. feather-bedding

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3. Right to Peaceful Concerted Activities

a. Forms of Concerted Activities

Strike290 Lockout291 Picketing292

Any temporary stoppage ofwork by the concerted actionof the employees as a resultof an industrial or labordispute. It consists not onlyof concerted work stoppagesbut also slowdowns, massleaves, sitdowns, attempts todamage, destroy or sabotageplant equipment and facilitiesand similar activities.

Any temporary refusal of anemployer to furnish work asa result of an industrial orlabor dispute.

The right of workers topeacefully march to and frobefore an establishmentinvolved in a labor disputegenerally accompanied by thecarrying and display of signs,placards and bannersintended to inform thepublic about the dispute.

290 Summary of principles governing strikes:1. A strike or lockout is illegal if any of the legal requisites (enumerated above) is not complied

with. Procedural requirements are mandatory.2. A strike or lockout is illegal if it is based on non-strikeable issues (e.g., inter-union or intra-union

disputes or wage distortion).3. A strike or lockout is illegal if the issues involved are already subject of compulsory or voluntary

arbitration or conciliation or the steps in grievance machinery are not exhausted.4. A strike or lockout is illegal if unlawful means were employed or prohibited acts or practices were

committed (e.g., Use of force, violence, threats, coercion, etc.; Barricades, blockades and obstructions ofingress to [entrance] or egress from [exit] the company premises).

5. A strike or lockout is illegal if the notice of strike or notice of lockout is already converted into apreventive mediation case. (See further discussion below).

6. A strike or lockout is illegal if staged in violation of the “No-Strike, No-Lockout” clause in thecollective bargaining agreement.

7. A strike or lockout is illegal if staged in violation of a temporary restraining order or an injunction orassumption or certification order.

8. A strike is illegal if staged by a minority union.9. A strike or lockout is illegal if conducted for unlawful purpose/s (e.g.: Strike to compel dismissal of

employee or to compel the employer to recognize the union or the so-called “Union-Recognition Strike”)10. The local union and not the federation is liable to pay damages in case of illegal strike.

291 Grounds for Lockout1. Collective bargaining deadlock2. ULP act of a union

292 or peaceful picketing

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b. Who may declare a strike or lockout?

1.Any certified or duly recognized bargaining representative may declare a strikein cases of bargaining deadlock and unfair labor practice. Likewise, the employer maydeclare a lockout in the same cases.

2. In the absence of a certified or duly recognized bargaining representative, anylegitimate labor organization in the establishment may declare a strike but only on theground of unfair labor practice.293

c. Requisites for a valid striked. Requisites for a valid lockout

1. It must be based on a valid and factual ground;

2. A strike or lockout NOTICE shall be filed with the National Conciliationand Mediation Board (NCMB) at least 15 days before the intended date of the strikeor lockout if the issues raised are unfair labor practices, or at least 30 days before theintended date thereof if the issue involves bargaining deadlock.

3. In cases of dismissal from employment of union officers duly elected inaccordance with the union constitution and bylaws, which may constitute union bustingwhere the existence of the union is threatened, the 15‐day coolingoff period shall not apply and the union may take action immediately after the strikevote is conducted and the result thereof submitted to the Department of Labor andEmployment.

4. A strike must be approved by a majority vote of the members of the Unionand a lockout must be approved by a majority vote of the members of the Board ofDirectors of the Corporation or Association or of the partners in a partnership,obtained by secret ballot in a meeting called for that purpose.

5. A strike or lockout vote shall be reported to the NCMB DOLE RegionalBranch at least 7 days before the intended strike or lock-out subject to the cooling‐off period.

6. In the event the result of thestrike/lockout ballot is filed within the cooling-off period, the 7day requirement shall be counted from the day following the expiration ofthe cooling‐off period.294

In case of dismissal from employment of union officers which may constituteunion busting, the time requirement for the filing of the Notice of Strike shall bedispensed with but the strike vote requirement, being mandatory in character, shall “inevery case” be complied with.

293 Sec. 2, Rule XIII Book V, Omnibus Rules Implementing The Labor Code, as amended294 NSFW vs. Ovejera, G.R. No. 59743, May 31, 1982

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7. The dispute must not be the subject of an assumption of jurisdiction by thePresident or the Secretary of Labor and Employment, a certification for compulsoryarbitration, or submission to compulsory or voluntary arbitration nor a subject of apending case involving the same grounds for the strike or lockout.

e. Requisites for lawful picketing

No person engaged in picketing shall commit any act of violence, coercion orintimidation or obstruct the free ingress to or egress from the employer’s premises for lawfulpurposes, or obstruct public thoroughfares.295

f. Assumption of jurisdiction by the Secretary of Labor or Certification of theLabor dispute to the NLRC for compulsory arbitration

1. On intended or impending strike or lockout - automatically enjoined even if aMotion for Reconsideration is filed.

2. On actual strike or lockout - strikers or locked out employees should immediatelyreturn to work and employer should readmit them back.

3. On cases filed or may be filed - All shall be subsumed/absorbed by the assumedor certified case except when the order specified otherwise. The parties to the case shouldinform the DOLE Secretary of pendency thereof.

g. Nature of Assumption Order or Certification Order

The DOLE Secretary may assume jurisdiction over a labor dispute, or certify it tothe NLRC for compulsory arbitration, if, in his opinion, it may cause or likely to cause astrike or lockout in an industry indispensable to the national interest.296

h. Effect of defiance of Assumption or Certification Orders

A strike that is undertaken after the issuance by the Secretary of Labor andEmployment of an assumption or certification order becomes a prohibited activity and thusillegal, pursuant to the second paragraph of Article 264297 of the Labor Code. The unionofficers and members, as a result, are deemed to have lost their employment status forhaving knowingly participated in an illegal strike. Stated differently, from the moment aworker defies a return-to-work order, he is deemed to have abandoned his job. The loss ofemployment results from the striking employees’ own act - an act which is illegal, an act inviolation of the law and in defiance of authority.298

295 Art. 264 (e), as amended296 The President may also exercise the power to assume jurisdiction over a labor dispute297 See Reference298 Philippine Airlines, Inc. vs. Brillantes, G. R. No. 119360, Oct. 10, 1997

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i. Illegal Strike

(1) Liability of officers of the unions

Only the union officers during the strike are liable.

The penalty of dismissal could be imposed only on union officers serving and actingas such during the period of illegal strike299.

As a necessary implication, if employees acted as union officers after said strike, theymay not be held liable and, therefore, could not be terminated.300

(2) Liability of ordinary workers

The mere declaration of the illegality of strike would result in the termination ofemployment of union officers. They are deemed to have lost their employment status. Thisadverse consequence does not apply to ordinary union members except when theyparticipated in the commission of illegal acts in the course of the strike, in which case, theyshall be deemed to have also lost their employment status.

(3) Waiver of illegality of strike

When an employer accedes to the peaceful settlement brokered by the NLRCby agreeing to accept all employees who had not yet returned to work, it waives theissue of the illegality of the strike.301

j. Injunctions

(1) Requisites for Labor Injunctions

No temporary or permanent injunction or restraining order in any case involving orgrowing out of labor disputes shall be issued by any court or other entity.

Exceptions:

1. When prohibited or unlawful acts are being or about to be committedthat will cause grave or irreparable damage to the complaining party.302

2. On the ground of national interest

3. The SLE or the NLRC may seek the assistance of law enforcement agenciesto ensure compliance with this provision as well as with such orders as he may issueto enforce the same.303

299Lapanday Workers Union vs. NLRC, 248 SCRA 95, 106.300CCBPI Postmix Workers Union vs. NLRC, G. R. No. 114521, Nov. 27, 1998301 Reformist Union v. NLRC, G.R. No. 120482,Jan. 27, 1997302 Art. 218[e]

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(2) "Innocent Bystander Rule"

The innocent by stander must show:

1. Compliance with the grounds specified in Rule 58 of the Rules of Court, and

2. That it is entirely different from, without any connection whatsoever to,either party to the dispute and, therefore, its interests are totally foreign to the contextthereof.304

303 Art. 263[g]304 MSF Tire & Rubber v. CA, G.R. 128632, Aug. 5, 1999

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H. PROCEDURE AND JURISDICTION

1. Labor Arbiter

a. Jurisdiction305

Exclusive and original jurisdiction to hear and decide the following cases306 involving all workers:

1. ULP cases

2. Termination disputes

3. If accompanied with a claim for reinstatement, those that workers fileinvolving wages, rates of pay, hours of work and other terms and conditions ofemployment

4.Claims for actual, moral, exemplary and other forms of damages arising from employer‐employee relations

5. Cases arising from any violation of Art. 264,307 including questions involvingthe legality of strikes and lockouts;

6. Except claims for Employment Compensation, Social Security, Philhealthand maternity benefits, all other claims arising from employer-employee relations, includingthose of persons in domestic or household service, involving an amount exceeding P5000regardless of whether accompanied with a claim for reinstatement

7. Monetary claims of overseas contract workers arising from employer‐employee relations under the Migrant Worker’s Act of 1995 as amended by R.A. 10022

305 The jurisdiction is original and exclusive in nature. Labor Arbiters have no appellate jurisdiction.306 Including the following cases:

1. Wage distortion cases only in unorganized establishments. In organized establishments, jurisdictionis vested with Voluntary Arbitrators.

2. All monetary claims of Overseas Filipino Workers arising from employer- employee relationship orby virtue of any law or contract involving Filipino workers for overseas deployment, including claims foractual, moral, exemplary and other forms of damages.

3. Illegal dismissal cases of employees of cooperatives, but not members of cooperatives because theyare not employees.

4. Cases involving employees of government-owned or controlled corporations without originalcharters (organized under the Corporation Code). They have no jurisdiction if entity has original charter.

Labor Arbiters have no jurisdiction over termination of corporate officers and stockholders which,under the law, is considered intra-corporate dispute.

Labor Arbiters have no jurisdiction over labor cases involving entities immune from suit. Exception:when said entities perform proprietary activities (as distinguished from governmental functions).307 See Reference

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8. Wage distortion disputes in un organized establishments not voluntarily settled bythe parties pursuant to R.A. 6727

9. Enforcement of compromise agreements when there is non‐compliance by any of the parties; and

10. Other cases as may be provided by law.

b. Effect of self-executing order of reinstatement on backwages

The decision of the LA reinstating a dismissed or separated employee, shall beexecutory, even pending appeal:308

The employee shall either be:

1. Admitted back to work under the same terms and conditions prevailing prior tothe dismissal or separation; or

2. At the option of the employer, merely reinstated into the payroll.

c. Requirements to perfect appeal to NLRC309

1. The appeal is perfected:

a. Filed within the reglementary period provided in Sec. 1 of this Rules

b. Verified by the appellant himself in accordance with Sec. 4, Rule 7 ofthe Rules of Court, as amended

c. In the form of a memorandum of appeal which shall state thegrounds relied upon and the arguments in support thereof, the relief prayed for,and with a statement of the date the appellant received the appealed decision,resolution or order

d. In 3 legibly typewritten or printed copies

308 The posting of a bond by the employer shall not stay the execution of reinstatementEven if the order of reinstatement of the LA is reversed on appeal, it is obligatory on the part of

the employer to reinstate and pay the wages of the dismissed employee during the period of appealuntil reversal by the higher court. On the other hand, if the employee has been reinstated during theappeal period and such reinstatement order is reversed with finality, the employee is not requiredto reimburse whatever salary he received for he is entitled to such, more so if he actuallyrendered services during the period. (Pfizer v. Velasco, G.R. No. 177467, March 9, 2011)Unless there is a restraining order, it is ministerial upon the LA to implement the order ofreinstatement and it is mandatory on the employer to comply therewith. (Garcia v. PAL, G.R. No.164856, Jan. 20, 2009)309 Appeal from the decision of the Labor Arbiter is brought by ordinary appeal to the NLRC within ten (10)calendar days from receipt by the party of the decision.

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e. Accompanied by

(i) proof of payment of the required appeal fee;

(ii) posting of a cash or surety bond;

(iii) a certificate of non‐forum shopping; and

(iv) proof of service upon the other parties.

2. Mere notice of appeal without complying with the other requisites aforestatedshall not stop the running of the period for perfecting an appeal.

2. National Labor Relations Commission (NLRC)

a. Jurisdictions310

Exclusive Original Exclusive Appellate

1. Injunction in ordinary labor disputes toenjoin or restrain any actual or threatenedcommission of any or all prohibited orunlawful acts or to require the performanceof a particular act in any labor dispute which,if not restrained or performed forthwith, maycause grave or irreparable damage to anyparty.

2. Injunction in strikes or lockouts underArticle 264 of the Labor Code.

3. Certified labor disputes causing or likelyto cause a strike or lockout in an industryindispensable to the national interest,certified to it by the Secretary of Labor andEmployment for compulsory arbitration.

1. All cases decided by the Labor Arbitersincluding contempt cases.

2. Cases decided by the DOLERegional Directors or his dulyauthorized Hearing Officers311 involvingrecovery of wages, simple money claims andother benefits not exceeding P5,000 and notaccompanied by claim for reinstatement.

310 Distinction between the jurisdiction of the Labor Arbiters and the NLRC.The NLRC has exclusive appellate jurisdiction on all cases decided by the Labor Arbiters. The NLRC does

not have original jurisdiction on the cases over which Labor Arbiters have original and exclusivejurisdiction (see above enumeration). If a claim does not fall within the exclusive original jurisdiction ofthe Labor Arbiter, the NLRC cannot have appellate jurisdiction thereover.311 under Art. 129

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b. Effect of NLRC reversal of Labor Arbiter’s order of reinstatement

Even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it isobligatory on the part of the employer to reinstate and pay the wages of the dismissedemployee during the period of appeal until reversal by the higher court.

On the other hand, if the employee has been reinstated during the appeal period andsuch reinstatement order is reversed with finality, the employee is not required to reimbursewhatever salary he received for he is entitled to such, more so if he actually rendered servicesduring the period.

In other words, a dismissed employee whose case was favorably decided by theLabor Arbiter is entitled to receive wages pending appeal upon reinstatement, which isimmediately executory. Unless there is a restraining order, it is ministerial upon the LaborArbiter to implement the order of reinstatement and it is mandatory on the employer tocomply therewith.

c. Requirements to perfect appeal to Court of Appeals

Generally, certiorari as a special civil action will not lie unless a motion forreconsideration is filed before the NLRC to allow it an opportunity to correct its imputederror.

Under Section 4, Rule 65312 of the Rules of Civil Procedure, thepetition must be filed within sixty (60) days from notice of the judgment or fromnotice of the resolution denying the petitioner’s motion for reconsideration. Thisamendment is effective September 1, 2000, but being curative may be given retroactiveapplication.313

The period within which a petition for certiorari against a decision of the NLRC may be filed should be computed from the date counsel of record of the partyreceives a copy of the decision or resolution, and not from the date the partyhimself receives a copy thereof. Article 224 of the Labor Code, which requires thatcopies of final decisions, orders or awards be furnished not only the party’s counselof record but also the party himself applies to the execution thereof and not to thefiling of an appeal or petition for certiorari.314

312 as amended by A.M. No. 00‐2‐03‐SC313 Narzoles v. NLRC, G.R. No. 141959, Sep. 29, 2000314 Ginete v. Sunrise Manning Agency, G.R. No. 142023, June 21, 2001

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3. Bureau of Labor Relations (BLR) – Med Arbiters

a. Jurisdiction

The BLR has original and exclusive jurisdiction over the following:

1. “Inter-union disputes” or “representation disputes” which refer to cases involvingpetition for certification election filed by a duly registered labor organization which isseeking to be recognized as the sole and exclusive bargaining agent of the rank-and-fileemployees in the appropriate bargaining unit of a company, firm or establishment.

2. “Intra-union disputes” or “internal union disputes” which refer to disputes orgrievances arising from any violation of or disagreement over any provision of theconstitution and by-laws of the union, including any violation of the rights and conditions ofunion membership provided for in the Labor Code.

3. All disputes, grievances or problems arising from or affecting labor-managementrelations in all workplaces, except those arising from the interpretation or implementation ofthe CBA which are subject of grievance procedure and/or voluntary arbitration.

The BLR no longer handles “all labor management disputes;” rather itsfunctions and jurisdiction are largely confined to:

1. Union matters

2. Collective bargaining registry and

3. Labor education

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4. National Conciliation and Mediation Board (NCMB)

a. Conciliation vs. Mediation

Conciliation Mediation

Conceived of as a mild form of interventionby a neutral third party

A mild intervention by a neutral thirdparty

The conciliator‐Mediator, relying on hispersuasive expertise, who takes an activerole in assisting parties by trying to keepdisputants talking, facilitating otherprocedural niceties, carrying messages backand forth between the parties, and generallybeing a good fellow who tries to keep thingscalm and forward‐looking in a tensesituation.

The conciliator-mediator, whereby heStarts advising the parties or offeringsolutions or alternatives to the problemswith the end in view of assisting themtowards voluntarily reaching their ownmutually acceptable settlement of thedispute.

It is the process where a disinterested3rd party meets with management andlabor, at their request or otherwise,during a labor dispute or in collectivebargaining conferences, and by coolingtempers, aids in reaching an agreement.

It is when a 3rd party studies each sideof the dispute then makes proposals for

the disputants to consider. The mediatorcannot make an award nor render adecision.

b. Preventive Mediation

Refer to the potential labor disputes which are the subject of a formal orinformal request for conciliation and mediation assistance sought by either or bothparties or upon the initiative of the NCMB to avoid the occurrence of actual labor disputes.

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5. DOLE Regional Directors

a. Small money claims

The Regional Director or any of the duly authorized hearing officers of DOLE havejurisdiction over claims for recovery of wages, simple money claims and other benefits,provided that:

i. the claim must arise from employer-employee relationship;

ii. the claimant does not seek reinstatement; and

iii. the aggregate money claim of each employee does not exceed P5,000.00315

6. DOLE Secretary

a. Visitorial and Enforcement Powers316

Visitorial Powers Enforcement Powers

1. Access to employer’s records andpremises at any time of the day or night,whenever work is being undertaken therein

2. To copy from said records

3. Question any employee and investigateany fact, condition or matter which maybe necessary to determine violations orwhich may aid in the enforcement of the

Labor Code and of any labor law, wage

1. Issue compliance orders

2. Issue writs of execution for theenforcement of their orders, except incases where the employer contests thefindings of the labor officer and raiseissues supported by documentary proofwhich were not considered in the courseof inspection

3.Order stoppage of work or suspensionof operation when non‐

315 Article 129316 Visitorial and enforcement power by Secretary of Labor or duly authorized representative

1. Access to employer's records and premises2. Right to copy records3. Right to question any employee4. Investigate any fact, condition or matter which may be necessary to5. Order and administer, after due notice and hearing, compliance with the Labor Standards provisions6. Issue writs of execution to the appropriate authority for enforcement of their orders7. Order stoppage of work or suspension of operations when non-compliance with law and

implementing regulations poses grave and imminent danger to the health and safety of workers in theworkplace (only Secretary of Labor has this power)

- Hearing within 24 hours- Employer liable for salaries during suspension of operations if found to have caused the violation- No TRO or Temporary/Permanent injunction may be issued by an inferior court over any case

involving the enforcement orders issued

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order, or rules and regulation issuedpursuant thereto.

compliance with the law or implementingrules and regulations poses grave and imminent danger to health and safety ofworkers in the workplace

b. Power to suspend effects of termination

The Secretary of the Department of Labor may suspend the effects of thetermination pending resolution of the dispute in the event of a prima facie finding by theappropriate official of the Department of Labor and Employment before whom suchdispute is pending that the termination may cause a serious labor dispute or is inimplementation of a mass lay-off.317

7. Voluntary Arbitrators

The Voluntary Arbitrator318 has original and exclusive jurisdiction over the following:

i. all unresolved grievances arising from the interpretation or implementation of thecollective bargaining agreement after exhaustion of the grievance procedure; and

ii. all unresolved grievances arising from the implementation or interpretation ofcompany personnel policies.319

iii. all other labor disputes including unfair labor practices and bargaining deadlocks,upon agreement of the parties.320

a. Submission Agreement

It is the policy of the state to encourage voluntary arbitration on all other labor-management disputes. Before or at any stage of the compulsory arbitration process, theparties may opt to submit their dispute to voluntary arbitration.321

b. Rule 43, Rules of Court

The decision of a Voluntary Arbitrator or panel of Voluntary Arbitrators isappealable by ordinary appeal under Rule 43 of the Rules of Civil Procedure directly to theCourt of Appeals. From the Court of Appeals, the case may be elevated to the SupremeCourt by way of ordinary appeal under the same Rule 45.322

317 Art. 277, last sentence318 or panel of Voluntary Arbitrators319 Art. 261320 Art. 262321 Bk. V, Rule II, Sec. 3, OR322 Luzon Development Bank vs. Association of Luzon Development Bank Employees, et al., G. R. No.120319, October 6, 1995.

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8. Court of Appeals

a. Rule 65, Rules of Court

A party may avail itself of the civil action for certiorari, where the tribunal, board oroffice exercising juridical functions:

Has acted without or in excess of jurisdiction; and, or

With grave abuse of discretion and praying that judgments be rendered annulling ormodifying the proceedings, as the law requires, of such tribunal, board or officer

It may be filed not later than 60 days from notice of the judgment, order orresolution. Both SC and CA has jurisdiction over the action; however in line with thedoctrine of minatory of warts, the petition should initially be presented to the lower of thetwo courts, that is, the CA.

9. Supreme Court

a. Rule 45, Rules of Court

A party desiring to appeal by certiorari from a judgment or final order or resolutionof the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courtswhenever authorized by law, may file with the Supreme Court a verified petition for reviewon certiorari. The petition shall raise only questions of law which must be distinctly setforth.323

10. Prescription of Actions

a. Money claims - three (3) years from accrual of cause of action.

b. Illegal dismissal – four (4) years from accrual of cause of action.

c. Unfair labor practice - 1 year from accrual of the cause of action.

d. Offenses penalized by the Labor Code and IRR issued pursuant thereto –three (3) years

Include: Pertinent Supreme Court decisions up to January 31, 2012.

323 Sec. 1

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ReferenceArticle 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder ofauthority:

To charge or accept, directly or indirectly, any amount greater than that specified in theschedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amountgreater than that actually received by him as a loan or advance;

To furnish or publish any false notice or information or document in relation to recruitmentor employment;

To give any false notice, testimony, information or document or commit any act ofmisrepresentation for the purpose of securing a license or authority under this Code.

To induce or attempt to induce a worker already employed to quit his employment in orderto offer him to another unless the transfer is designed to liberate the worker from oppressive termsand conditions of employment;

To influence or to attempt to influence any person or entity not to employ any worker whohas not applied for employment through his agency;

To engage in the recruitment or placement of workers in jobs harmful to public health ormorality or to the dignity of the Republic of the Philippines;

To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his dulyauthorized representatives;

To fail to file reports on the status of employment, placement vacancies, remittance offoreign exchange earnings, separation from jobs, departures and such other matters or information asmay be required by the Secretary of Labor.

To substitute or alter employment contracts approved and verified by the Department ofLabor from the time of actual signing thereof by the parties up to and including the periods ofexpiration of the same without the approval of the Secretary of Labor;

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

To withhold or deny travel documents from applicant workers before departure formonetary or financial considerations other than those authorized under this Code and itsimplementing rules and regulations.

ARTICLE 110. Worker preference in case of bankruptcy. - In the event of bankruptcy orliquidation of an employer’s business, his workers shall enjoy first preference as regards their wagesand other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaidwages and monetary claims shall be paid in full before claims of the government and other creditorsmay be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989).

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ARTICLE 129. Recovery of wages, simple money claims and other benefits. - Upon complaint ofany interested party, the Regional Director of the Department of Labor and Employment or any ofthe duly authorized hearing officers of the Department is empowered, through summary proceedingand after due notice, to hear and decide any matter involving the recovery of wages and othermonetary claims and benefits, including legal interest, owing to an employee or person employed indomestic or household service or househelper under this Code, arising from employer-employeerelations: Provided, That such complaint does not include a claim for reinstatement: Providedfurther, That the aggregate money claims of each employee or househelper does not exceed Fivethousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve thecomplaint within thirty (30) calendar days from the date of the filing of the same. Any sum thusrecovered on behalf of any employee or househelper pursuant to this Article shall be held in aspecial deposit account by, and shall be paid on order of, the Secretary of Labor and Employmentor the Regional Director directly to the employee or househelper concerned. Any such sum notpaid to the employee or househelper because he cannot be located after diligent and reasonableeffort to locate him within a period of three (3) years, shall be held as a special fund of theDepartment of Labor and Employment to be used exclusively for the amelioration and benefit ofworkers. Any decision or resolution of the Regional Director or hearing officer pursuant to thisprovision may be appealed on the same grounds provided in Article 223 of this Code, withinfive (5) calendar days from receipt of a copy of said decision or resolution, to the NationalLabor Relations Commission which shall resolve the appeal within ten (10) calendar days fromthe submission of the last pleading required or allowed under its rules. The Secretary of Labor andEmployment or his duly authorized representative may supervise the payment of unpaid wages andother monetary claims and benefits, including legal interest, found owing to any employee orhousehelper under this Code. (As amended by Section 2, Republic Act No. 6715, March 21, 1989).

ARTICLE 217. Jurisdiction of the Labor Arbiters and the Commission. -(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original andexclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of thecase by the parties for decision without extension, even in the absence of stenographic notes, thefollowing cases involving all workers, whether agricultural or non- agricultural:

1. Unfair labor practice cases;

2. Termination disputes

3. If accompanied with a claim for reinstatement, those cases that workers may file involvingwages, 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 theemployer- employee relations;

5. Cases arising from any violation of Article 264 of this Code, including questionsinvolving the legality of strikes and lockouts; and

6. Except claims for Employees’ Compensation, Social Security, Medicare and maternitybenefits, all other claims arising from employer-employee relations, including those of persons indomestic or household service, involving an amount exceeding five thousand pesos (P5,000.00)regardless of whether accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by LaborArbiters.

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(c) Cases arising from the interpretation or implementation of collective bargaining agreement andthose arising from the interpretation or enforcement of company personnel policies shall bedisposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntaryarbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No.6715, March 21, 1989).

ARTICLE 279. Security of tenure. - In cases of regular employment, the employer shall notterminate the services of an employee except for a just cause or when authorized by this Title. Anemployee who is unjustly dismissed from work shall be entitled to reinstatement without loss ofseniority rights and other privileges and to his full backwages, inclusive of allowances, and to hisother benefits or their monetary equivalent computed from the time his compensation was withheldfrom him up to the time of Any union officer who knowingly participates in an illegal strike andany worker or union officer who knowingly participates in the commission of illegal acts during astrike may be declared to have lost his employment status: Provided, That mere participation of aworker in a lawful strike shall not constitute sufficient ground for termination of his employment,even if a replacement had been hired by the employer during such lawful strike.

ARTICLE 264. Any union officer who knowingly participates in an illegal strike and any workeror union officer who knowingly participates in the commission of illegal acts during a strike maybe declared to have lost his employment status: Provided, That mere participation of a worker in alawful strike shall not constitute sufficient ground for termination of his employment, even if areplacement had been hired by the employer during such lawful strike. (paragraph 2)

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