Lab Std Reviewer

LABOR STANDARDS / Midterms

SOURCES: Azucena, various Disini reviewers scattered throughout the

Sec. 1 – Labor Law in General

1.01. LABOR LAW DEFINED

Labor law is the field of law governing the relationship between employers and employees.

Labor law is the law governing the rights and duties of the employer and employees: 1. with respect to the terms and

conditions of employment, and 2. with respect to labor disputes

arising from collective bargaining respecting such terms and conditions.

1.02. LAW CLASSIFICATION – LABOR STANDARDS, LABOR RELATIONS, AND WELFARE LAWS

Philippine labor laws can be classified into three (3) categories: labor standards, labor relations, and welfare laws.

Labor standards: that which sets out the minimum terms, conditions and benefits of employment that employers must provide or comply with and to which employers are entitled to as a matter of legal right. Labor standards are dealt with in the following books of the Labor Code:

o Book I: Pre-employment (Arts. 12-42)

o Book II: Human Resources Development Program (Arts. 23-81)

o Book III: Conditions of Employment (Arts. 82-155)

o Book IV: Health, Safety, and Social Welfare Benefits (Arts. 156-210)

o Book VI: Post-employment Labor relations: that which

defines the status, rights and duties, and the institutional mechanisms that govern the

individual and collective interactions of employers, employees or their representatives. Labor relations are dealt with in:

o Book V: Labor Relations (Arts. 211-277)

Welfare laws: that which is designed to take care of the contingencies which may affect the workers (e.g. where there is loss of income for reasons beyond control like sickness, death or accident). Some Philippine welfare laws are the following:

o Social Security Act of 1997 (RA 8282)

o Philippine Government Service Insurance System Act of 1997 (RA 8291)

o Employment Compensation and State Insurance Fund

o National Health Insurance Act of 1195 (RA 7875)

Labor Standards

Batong Buhay Goldmines, Inc. v. de la Serna: Labor standards refers [sic] to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards. Labor standards cases are governed by Article 128(b) of the Labor Code.

Peñaranda v. Baganga Plywood Corp.: Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days.

1.03. BASIS FOR ENACTMENT – CONSTITUTION (1987)

Art. II, Sec. 18. The State affirms labor as a primary social economic force. It shall

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protect the rights of workers and promote their welfare.

Art. XIII, Sec. 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.

Police Power

Police power is the state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare.

CMS Estate, Inc. v. Social Security System: It (compulsory coverage of employers and employees under the SSS as required by RA 1161) is actually a legal imposition on said employers and employees, designed to provide social security to the working men. Membership in the SSS is therefore in compliance with the lawful exercise of the police power of the State.

1.04. SOURCES OF LAW

A. Labor Code and Related Special Legislation (including IRR)

Mariveles Shipyard Corp. v. CA: Labor laws are considered written in every contract. Stipulations in violation thereof are considered null. Similarly, legislated wage increases are deemed amendments to the contract.

B. Contract (Art. 1305 – 1306, NCC)

Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself with respect to the other, to give something or to render some service.Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary

to law, morals, good customs, public order, or public policy.

Kasapian ng Malayang Manggagawa sa Coca-Cola v. CA: The MOA, being a contract freely entered into by the parties, now constitutes as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein.

C. Collective Bargaining Agreement – Book V, Rule I, Sec. 1(j), Omnibus Rules

Rule I, Sec. 1(j). “Collective Bargaining Agreement” or “CBA” refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit.

DOLE Phils., v. Pawis ng Makabayang Obrero: The CBA is the norm of conduct between the parties and compliance therewith is mandated by the express policy of the law.

D. Past Practices

To be a source of rights and obligations, the following requisites must be present:

1. The practice must be freely, voluntarily and continuously given within a considerable length of time (Davao Fruits Corp. v. Associated Labor Union)

2. The practice must be not just a single instance; i.e. not granted only once (Samahang Manggagawa, etc. v. NLRC)

3. The practice should be done over a long period of time and must be shown to have been consistent and deliberate (American Wire and Cable Daily Rated Employers Union v. American Wire and Cable Co., Inc.)

4. The practice must not be by reason of a strict legal or contractual

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obligation, but by reason of an act of liberality on the part of the employer (Pag-asa Steel Works, Inc. v. CA)

E. Company Policies

China Banking Corp. v. Borromeo: Company policies are generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally o preferably through negotiation by competent authority, unless shown to be grossly oppressive or contrary to law.

1.05. LAW AND WORKER

Amkor Technology v. Juangco: While the Constitution is committed to the policy of social justice and the protection of the working class, it should not be expected that every labor dispute will be automatically decided in favor of labor. Management also has its own rights which, as such, are entitled to respect and enforcement in the interest of simple fair play.

Cebu Royal Plant v. Deputy Minister of Labor: We take this opportunity to reaffirm our concern for the lowly worker who, often at the mercy of his employers, must look up to the law for his protection. Fittingly, that law regards him with tenderness and even favor and always with faith and hope in his capacity to help in shaping the nation's future … If we cherish him as we should, we must resolve to lighten "the weight of centuries" of exploitation and disdain that bends his back but does not bow his head.

1.06. LABOR CASE

To determine whether or not there is a labor case, two elements must concur:

1. the presence of an employer-employee relationship; and

2. a violation of the Labor Code – Art. 217 enumerates acts that fall

under the jurisdiction of labor arbiters:- Unfair labor practices;- Termination disputes;- If accompanied with a claim for

reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment;

- Claims for actual, moral exemplary and other form of damages arising from employer-employee relations;

- Cases arising from any violation of Article 264 of this Code, including questions involving legality of strikes and lockouts; and

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

Without these two elements, there is no labor case. (Lapanday Agricultural Development Corp. v. CA)

1.07. CASE DECISION

Anino v. NLRC: A decision should faithfully comply with Sec. 14, Art. VIII of the Constitution. (No decision shall be rendered by any court [or quasi-judicial body] without expressing therein clearly and distinctly the facts of the case and the law on which it is based.) The factual and legal bases of public respondent's conclusions were bereft of substantial evidence — the quantum of proof in labor cases — its disposition is manifestly a violation of the constitutional mandate and an exercise of grave abuse of discretion. Such decision is a nullity.

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1.08. MANAGEMENT FUNCTION

Recognition

Gustilo v. Wyeth: It is the employer’s prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the preemptory dismissal of the employee.

Limitations

Phil. Airlines v. Pascua: The exercise of management prerogative is not absolute. While the employer may be conceded that management is in the best position to know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. It must always be exercised with the principles of fair play at heart and justice in mind.

The limitations to the exercise of management prerogatives are as follows:

1. Law and public policy on labor on social justice

2. Terms and conditions of the collective bargaining agreement (CBA) negotiated between labor and capital

3. Principles of fair play and justice4. That the exercise of management

prerogatives be in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements (Valiao v. CA)

1.09. COMPROMISE AND WAIVER – Art. 227, Labor Code; Arts. 2028, 2036, Civil Code

Art. 227. Compromise agreements – Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

Art. 2028. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.

Art. 2036. A compromise comprises only those objects which are definitely stated therein, or which by necessary implication from its terms should be deemed to have been included in the same.A general renunciation of rights is understood to refer only to those that are connected with the dispute which was the subject of the compromise.

Waivers and compromise are frowned upon by law because it is subject to abuse (leading to instances when labor may be exploited by capital)

Even so, not all compromises and waivers are void or contrary to law – labor law is not meant to suppress employers; just as it protects employees, it also protects employers. There’s a shared responsibility: employee’s right to the fruits of his labor, and employer’s right to the return of his investment.

There are three elements that must concur to determine the validity of a compromise or waiver:

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o The amount involved is reasonable and not unconscionable

o It is voluntarily entered intoo There is proximate equality,

no moral ascendancy over the other

Sec. 2 – Labor and the Constitution

STATUTORY REFERENCE – 1935, 1973, and 1987 Constitutions

2.01. HISTORICAL BACKGROUND AND RATIONALE

Antamoc Goldfields Mining Co., v. CIR: … our Constitution was adopted in the midst of surging unrest and dissatisfaction resulting from economic and social distress which was threatening the stability of governments the world over. Embodying the spirit of the present epoch, general provisions were inserted in the Constitution which are intended to bring about the needed social and economic equilibrium between component elements of society … to be secured through the counterbalancing of economic and social forces and opportunities which should be regulated, if not controlled, by the State or placed, as it were, in custodia societatis. 'The promotion of social justice to in sure the well-being and economic security of all the people' was thus inserted as vital principle in our Constitution. (Sec. 5, Art. II, Constitution.) And in order that this declaration of principle may not just be an empty medley of words, the Constitution in various sections thereof has provided the means towards its realization …

2.02. NATURE OF PROVISION

Phil. Airlines, Inc. v. Santos: The sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes such sympathy, but because of the one-sided relation between labor and capital. The constitutional

mandate for the promotion of labor is as explicit as it is demanding. The purpose is to place the workingman on an equal plane with management — with all its power and influence — in negotiating for the advancement of his interests and the defense of his rights. Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privileges in life should have more privileges in law.

To summarize, the interpretation of labor laws should be made in favor of the laborers.

2.03. 1987 CONSTITUTION

A. Labor Sector – Characterized – Art. II, Sec. 18

Art. II, Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

B. Protection of Labor – Guarantees – Art. XIII, Sec. 3 (Compare: 1935 Constitution – Art. XIV, Sec. 3; 1973 Constitution – Art. II, Sec. 9; and 1987 Constitution, Art. XIII, Secs. 1, 3; Art. II, Secs. 10, 18)

Art. XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of

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

C. Social Justice – Art II, Sec. 10; 1973 Constitution; Art. II, Sec. 5, 1935 Constitution; 1987 Constitution, Art. XIII, Secs. 1-2

Art. II, Sec. 10. (1987) The State shall promote social justice in all phases of national development.

Art. II, Sec. 6. (1973) The State shall promote social justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits.

Art. II, Sec. 5. (1935) The promotion of social justice to insure the well-being and economic security of all the people should be the concern of the State.

Art. XIII, Sec. 1. (1987) The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Sec. 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

Definition – Social Justice

Calalang v. Williams: Social justice is the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objective secular conception may at least be approximated.

Limits of Use

PLDT v. NLRC: Social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an underserved privilege.

2.04. CONSTITUTIONAL RIGHTS AND LABOR LAW

Management of the Constitution

GR: The Constitution protects and promotes the welfare of the employee.

EX: The Constitution does not protect the employee when the employee is wrong and the employer is right.

Dayan v. BPI: Law, in protecting the rights of labor, authorized neither oppression nor self-destruction of an employer company which itself is possessed of rights that must be entitled to recognition and respect.

Equal Work Opportunities

Star Paper Corp. v. Simbol: The absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislature’s silence that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of

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petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative.

Labor as Property

Asuncion v. NLRC: A worker’s employment is property in the constitutional sense. He cannot be deprived of his work without due process. In order for the dismissal to be valid, not only must it be based on just cause supported by clear and convincing evidence, the employee must also be given an opportunity to be heard and defend himself. It is the employer who has the burden of proving that the dismissal was with just or authorized cause. The failure of the employer to discharge this burden means that the dismissal is not justified and that the employee is entitled to reinstatement and backwages.

Due Process Requirements

Ang Tibay v. CIR: The procedural due process requirements are:

1. Right to a hearing; includes the right of a part to present his own case and submit evidence in support thereof

2. The tribunal must consider the evidence presented

3. Decision must be supported by evidence

4. Evidence must be substantial; relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds equally reasonable would opine otherwise

5. Decision must be rendered on the evidence presented at the hearing or at least contained in the record and disclosed to the parties affected

6. Independent consideration of judge; must not simply accept views of subordinate in arriving at a decision

7. Decision rendered in such a

manner as to let the parties know the various issues involved and the reasons for the decision rendered.

Air Manila, Inc. v. Balatbat & Agabon v. NLRC:

8. A tribunal so constituted as to give him reasonable assurance of honesty and impartiality, and one of competent jurisdiction

9. Specifically for termination case: twin notice rule.

Liberty of Contract/Laissez-faire and State Interference

Leyte Land Transportation Co. v. Leyte Farmers and Workers Union: The State still exercises control/power to interfere where the parties are not equal in standing.

Welfare State

Alalayan v. NPC: The welfare state concept is not alien to the philosophy of our Constitution. It is implicit in quite a few of its provisions. There is the clause on the promotion of social justice to ensure the well-being and economic security of all the people, as well as the pledge of protection to labor with the specific authority to regulate the relations between landowners and tenants and between labor and capital.

Participation in Decision-Making Process

Philippine Airlines, Inc. v. NLRC: Industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. The attainment of a harmonious labor-management relationship and the then already existing state policy of enlightening workers concerning their rights as employees demand no less than the observance of transparency in managerial moves affecting employees’ rights.Unlike management prerogative regarding business operations, the exercise of

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management prerogative regarding matters which affect the rights of employees should be made known to employees. They should be properly informed of the decision and the modes through which they were arrived at.

Sec. 3 – Labor and the Civil Code

STATUTORY REFERENCE – Civil Code of the Philippines, R.A. No. 386 as amended

3.01. ROLE OF LAW – Art. 1700

Art. 1700. The relation between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Labor Contracts

3.02. EMPLOYER-EMPLOYEE STANDARD OF CONDUCT – Art. 1701

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest of convenience of the public.

Fair Treatment

Uypitching v. Quiamco: The basic principle of human relations, embodied in Article 19 of the Civil Code, provides: [Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act with justice, give every one his due, and observe honesty and good faith.] Article 19, also known as the 'principle of abuse of right, prescribes that a person should not use his right unjustly or contrary to honesty and good faith, otherwise he opens himself to liability. It seeks to preclude the use of, or the tendency to use, a legal right (or duty) as

a means to unjust ends. There is an abuse of right when it is exercised solely to prejudice or injure another. The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh; there must be no intention to harm another. Otherwise, liability for damages to the injured party will attach.

Law Compliance

Sarmiento v. Tuico: It must be stressed that while one purpose of the return-to-work order is to protect the workers who might otherwise be locked out by the employer for threatening or waging the strike, the more important reason is to prevent impairment of the national interest in case the operations of the company are disrupted by a refusal of the strikers to return to work as directed. More particularly, it is the national economy that will suffer because of the resultant reduction in our export earnings and our dollar reserves, not to mention possible cancellation of the contracts of the company with foreign importers.

Employee Obedience and Compliance [to] Employer Orders

PCIB v. Jacinto: Any employee who is entrusted with responsibility by his employer should perform the task assigned to him with care and dedication. The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties.

Public Policy

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Avon Cosmetics, Inc. v. Luna: Public policy is that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good. As applied to contracts, in the absence of express legislation or constitutional prohibition, a court, in order to declare a contract void as against public policy, must find that the contract as to the consideration or thing to be done, has a tendency to injure the public, is against the public good, or contravenes some established interests of society, or is inconsistent with sound policy and good morals, or tends clearly to undermine the security of individual rights, whether of personal liability or of private property.

Sec. 4 – Labor and International Covenants (Labor Standards and

Welfare Law)

4.01. UNIVERSAL DECLARATION OF HUMAN RIGHTS – Arts. 3, 7, 17, 22, 23, 24, 25

Art. 3. Everyone has the right to life, liberty and security of person.

Art. 7. All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination.

Art. 17. (1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his property.

Art. 22. Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for

his dignity and the free development of his personality.

Art. 23. (1) Everyone has the right to work, to free choice of employment, to just and favorable conditions of work and to protection against unemployment. (2) Everyone, without any discrimination, has the right to equal pay for equal work. (3) Everyone who works has the right to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. (4) Everyone has the right to form and to join trade unions for the protection of his interests.

Art. 24. Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.

Art. 25. (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

4.02. INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS – Part III, Arts. 6, 7, 9, 11

Art. 6. 1. The States Parties to the present Covenant recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right. 2. The steps to be taken by a State Party to the present Covenant to achieve the full

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realization of this right shall include technical and vocational guidance and training programmes, policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual.

Art. 7. The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favorable conditions of work which ensure, in particular: (a) Remuneration which provides all workers, as a minimum, with: (i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; (ii) A decent living for themselves and their families in accordance with the provisions of the present Covenant; (b) Safe and healthy working conditions; (c) Equal opportunity for everyone to be promoted in his employment to an appropriate higher level, subject to no considerations other than those of seniority and competence; (d) Rest, leisure and reasonable limitation of working hours and periodic holidays with pay, as well as remuneration for public holidays

Art. 9. The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.

Art. 11. 1. The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international co-operation based on free consent.

2. The States Parties to the present Covenant, recognizing the fundamental right of everyone to be free from hunger, shall take, individually and through international co-operation, the measures, including specific programmes, which are needed: (a) To improve methods of production, conservation and distribution of food by making full use of technical and scientific knowledge, by disseminating knowledge of the principles of nutrition and by developing or reforming agrarian systems in such a way as to achieve the most efficient development and utilization of natural resources; (b) Taking into account the problems of both food-importing and food-exporting countries, to ensure an equitable distribution of world food supplies in relation to need.

4.03. INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS – Part III, Art. 8

Art. 8. 1. No one shall be held in slavery; slavery and the slave-trade in all their forms shall be prohibited. 2. No one shall be held in servitude. (a) No one shall be required to perform forced or compulsory labor; (b) Paragraph 3 (a) shall not be held to preclude, in countries where imprisonment with hard labor may be imposed as a punishment for a crime, the performance of hard labor in pursuance of a sentence to such punishment by a competent court; (c) For the purpose of this paragraph the term "forced or compulsory labor" shall not include: (i) Any work or service, not referred to in subparagraph (b), normally required of a person who is under detention in consequence of a lawful order of a court, or of a person during conditional release from such detention; (ii) Any service of a military character and, in countries where conscientious objection is recognized, any national service required by law of conscientious objectors;

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(iii) Any service exacted in cases of emergency or calamity threatening the life or well-being of the community; (iv) Any work or service which forms part of normal civil obligations.

4.04. CONVENTIONS AND RECOMMENDATIONS OF THE INTERNATIONAL LABOR ORGANIZATION (ILO)

International Conventions

International School Alliance of Educators v. Quisumbing: The Constitution, Labor Code and the International Covenant on Economic, Social, and Cultural Rights impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries.

Sec. 5 – The Labor Code of the Philippines

5.01. DECREE TITLE

Art. 1. Name of decree – This Decree shall be known as the “Labor Code of the Philippines.”

5.02. EFFECTIVITY

Art. 2. Date of effectivity – This Code shall take effect six (6) months after its promulgation.

The Labor Code was promulgated on May 1, 1974 and hence took effect on November 1, 1974; however, PD No. 607 deferred the effectivity of portions of Book IV to January 1, 1975.

5.03. POLICY DECLARATION – CF. CONSTITUTION, ART. XIII, Sec. 3

Art. 3. Declaration of basic policy – The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between worker and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and humane conditions of work.

5.04. RATIONALE, SPIRIT, INTENT

Magallanes v. Sun Yat Sen Elem. School: The Labor Code was promulgated to promote the welfare and well-being of the working man. Its spirit and intent mandate the speedy administration of justice, with least attention to technicalities but without sacrificing the fundamental requisites of due process.

5.05. APPLICABILITY – 276, Art. IX, B, Sec. 2(1), CONSTITUTION

Art. 6. Applicability – All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural, or non-agricultural.

Art. 276. Government employees – The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of the Code.

Sec. 2. (1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters.

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GR: The Labor Code applies to all workers, whether agricultural or non-agricultural (also see Requisite Relationship below).

EX: The Labor Code does not apply to those specified as such therein, such as government employees and employees of GOCCs with original charters.

Requisite Relationship

Uy v. Bueno: The requirement of employer-employee relationship is jurisdictional for the provisions of the Labor Code to apply.

Test – GOCC

Light Railway Transit Authority v. Venus: Labor law claims against government-owned and controlled corporations without original charter fall within the jurisdiction of the Department of Labor and Employment and not the Civil Service Commission.

The manner by which how a GOCC was created is important in determining which law applies to it:

If with original charter: the Civil Service Law applies (Art. 276, LC; Art. IX-B, Sec. 2 (1), Consti.)

If incorporated under the Corporation Code (no original charter): the Labor Code applies

However, in terms of wages, the Labor Code does not distinguish as to the nature of the GOCC – its provisions on wages apply on both.

International Agencies/Organizations

Ebro III v. NLRC: The grant of immunity from local jurisdiction to [an international organization] is clearly necessitated by their international character and respective purposes. The objective is to avoid the danger of partiality and interference by the host country in their internal workings. The exercise of

jurisdiction by the Department of Labor in these instances would defeat the very purpose of immunity, which is to shield the affairs of international organizations, in accordance with international practice, from political pressure or control by the host country to the prejudice of the member State of the organization, and to ensure the unhampered performance of their functions.

School Teachers

Chiang Kai Shek College v. CA: Under the Manual of Regulations for Private Schools, for a private school teacher to acquire a permanent status of employment and, therefore, be entitled to a security of tenure, the following requisites must concur: (a) the teacher is a full-time teacher; (b) the teacher must have rendered three consecutive years of service; and (c) such service must have been satisfactory.

National Mines and Allied Workers Union v. San Ildefonso College: On the issue of whether the individual petitioners were permanent employees, it is the Manual of Regulations for Private Schools, and not the Labor Code, which is applicable. This was settled in University of Sto. Tomas v. NLRC, where we explicitly ruled that for a private school teacher to acquire permanent status in employment and, therefore, be entitled to security of tenure, the following requisites must concur: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three (3) consecutive years of service; and (3) such service must have been satisfactory.

However, the Labor Code is suppletory to the Manual.

Religious Corporations

Austria v. NLRC: An ecclesiastical affair involves the relationship between the church and its members and relate to matters of faith, religious doctrines, worship and governance of the

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congregation. Examples of this so-called ecclesiastical affairs to which the State cannot meddle are proceedings for excommunication, ordinations of religious ministers, administration of sacraments and other activities which attached religious significance.

If ecclesiastical affairs: Labor Code does not apply

If not ecclesiastical affairs: Labor Code applies

Managerial Employees

Peñaranda v. Baganga Plywood Corp.: Petitioner’s duties and responsibilities conform to the definition of a member of a managerial staff under the Implementing Rules. Petitioner supervised the engineering section of the steam plant boiler. His work involved overseeing the operation of the machines and the performance of the workers in the engineering section. This work necessarily required the use of discretion and independent judgment to ensure the proper functioning of the steam plant boiler. As supervisor, petitioner is deemed a member of the managerial staff.

5.06. RULE-MAKING POWER – 5

Limitation – Rule-Making Power – Policy Instructions

Sonza v. ABS-CBN: Sonza argues Policy Instruction No. 40 by Minister of Labor said the types of employees in broadcast are the station and program employees. Court said this instruction is a mere executive issuance which does not have the force and effect of law and not binding on the Court.

CBTC Employees Union v. Clave: A labor regulation which in effect amends the Labor Code is null and void. An administrative interpretation which diminishes the benefits of labor to less than what the statute delimits or withholds is obviously ultra vires.

5.07. LAW INTERPRETATION – 4; Art. 1702, NCC

Art. 4. Construction in favor of labor – All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Liberal Construction

Salinas v. NLRC: In carrying out and interpreting the provisions of the Labor Code and its implementing regulations, the workingman’s welfare should be the primordial and paramount consideration.

Duncan Association v. Glaxo-Wellcome: Glaxo’s policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative. Glaxo has a right to guard its trade secrets, etc.The commands of the equal protection clause are addressed only to the state or those acting under the color of authority, and erect no shield against merely private conduct, however discriminatory or wrongful.

EX: when the state in any of its manifestations or actions has been found to have become entwined or involved in the wrongful private conduct

“In favor of labor” – Rationale”

Abella v. NLRC: In any event, it is well-settled that in the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare

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should be the primordial and paramount consideration. The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor.It is the kind of interpretation which gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the New Labor Code which states that “all doubts in the implementation and interpretation of the provisions of this Code including its implementing rules and regulations shall be resolved in favor of labor."

Acuña v. CA: It is a time-honored rule that in controversies between a worker and his employer, doubts reasonably arising from the evidence or in the interpretation of agreements and writing should be resolved in the worker's favor. The policy is to extend the applicability of the decree to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor.

Doubt

Clemente v. GSIS: Doubts should be resolved in favor of the claimant-employee.

No Doubt

Bonifacio v. GSIS: While the court does not dispute petitioner's contention that under the law, in case of doubt in the implementation and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the doubt shall be resolved in favor of the laborer, the court finds that the same has no application in this case since the pertinent provisions of the Labor Code leave no room for doubt either in their interpretation or application.

Sweeping Interpretation

Bravo v. Employees Compensation Commission: “We are aware of the mandate that social legislation should be applied in consonance with the principles of social justice and protection to labor. However, we cannot adopt a sweeping interpretation of the law in favor of labor lest we engage in judicial legislation.”

Factual Considerations and Rationality

Phil. Airlines, Inc. v. NLRC: [First, while the issue of labor-only contracting may involve some factual considerations] the existence of an employer-employee relation is nonetheless a question of law. Thus, it falls squarely within the ambit of this Court’s judicial review.

Equity and Moral Consideration

Manning International Corp. V. NLRC: Considerations of "equity and social justice” cannot prevail over against the expressed provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay.

Fairness

Reliance Surety and Insurance Co., Inc. v. NLRC: The sympathy of the Court is on the side of the laboring classes, not only because the Constitution imposes sympathy but because of the one-sided relation between labor and capital. The Court must take care, however, that in the contest between labor and capital, the results achieved are fair and in conformity with the rules.

Balancing Conflicting Claims

Phil. Airlines, Inc. v. NLRC: That there should be care and solicitude in the protection and vindication of the rights of workingmen cannot be gainsaid; but that care and solicitude cannot justify disregard of relevant facts or eschewal of

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rationality in the construction of the text of applicable rules in order to arrive at a disposition in favor of an employee who is perceived as otherwise deserving of sympathy and commisseration.

Duncan Association v. Glaxo-Wellcome: Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that eveyr labor dispute will be decided in favor of the workers. The law also recognizes that managements has rights which are also entitled to respect and enforcement in the interest of fair play.

Sec. 6 – Work Relationship

6.01. WORK RELATIONSHIP

A. Definitions: Employer and Employee

Definition in relation to wages:

Art. 97. As used in this title: (a) “Person” means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons.(b) “Employer” includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivision and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.(c) “Employee” includes any individual employed by an employer.

Definition in relation to the Employees Compensation and State Insurance Fund (now superseded/modified by the GSIS Act of 1997 and the SSS Act of 1996):

Art. 67. … (f) “Employer” means any person, natural or juridical, employing the services of the employee.

(g) “Employee” means any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act 1161, as amended.

Definition as regards labor relations:

Art. 212. … (e) “Employer” includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers except when acting as employer.(f) “Employee” includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless this Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any labor substantially equivalent and regular employment.

Employee

B. Employer-Employee Relationship

Factual Test

The existence of an EE-ER relationship is a question of fact.

The elements of an EE-ER relationship are:

o Selection and engagement of employee

o Payment of wageso Power of dismissalo Employer’s power to control

the employee as regards the means and methods by which work is accomplished, i.e. the control test

Established

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Miguel v. JCT Group: The test for determining an employer-employee relationship hinges on resolving who has the power to select employees, who pays for their wages, who has the power to dismiss them, and who exercises control ... [t]he last factor, the “control test”, is the most important.

Factors

see Factual TestControl Test

R. Transport v. Ejandra: According to the control test, the power to dismiss an employee is one of the indications of an employment relationship.

Economic Test

In general, the “right of control” test has been used to determine the existence of an EE-ER relation: whether the person for whom the services are performed reserves a right to control not only the end to be achieved, but also the means to be used in reaching such end. Also considered are the economic conditions prevailing between the parties, e.g. the inclusion of the EE in the payrolls.

Agreement

Lopez v. MWSS: The existence of an EE-ER relationship cannot be negated by expressly repudiating it in the agreement and providing therein that the EE is “not an employee” when the terms and conditions show otherwise. The employment status of a person is defined and prescribed by law and not by what the parties say it should be.

Broadcast – Talents – Performers

Method of Wage Payment

Lazaro v. SSS: Insurance agents are EE’s of their insurance company, even though the agents’ compensation is not paid by the company but by the investor/person

insured. The relevant factor remains that determined by the control test.

Hours of Work

Lazaro v. SSS: It doesn’t follow that a person who does not observe normal hours of work cannot be deemed an employee. A sales supervisor, although compensated on commission basis, [is] exempt from the observance of normal hours of work for his compensation in measured by the number of sales he makes.

Proof

Domasig v. NLRC: In administrative and quasi-judicial proceedings, substantial evidence is sufficient as basis for judgment on the existence of an EE-ER relationship. No particular form of evidence is required; any competent and relevant evidence may be admitted. (Substantial evidence = such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.)

Absence of Relationship

Abante v. Lamadrid: There can be no EE-ER relationship where thereis no element of control.

Denial – Negative Pregnant Rule

6.02. INDEPENDENT CONTRACTOR AND LABOR CONTRACTOR ONLY – 106-107; 109; DOLE ORDER No. 18-02, series of 2002 – Azucena, Essentials of Labor Law, pp. 634-645

Art. 106. Contractor or subcontractor – Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code.

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In the event that the contractor or sub-contractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out of Labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considerd the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.There is “labor-only contracting” where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing acivities which are directly related to the principal busines of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Art. 107. Indirect employer – The privisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.

Art. 109. Solidary liability – The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible

with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.

A. Independent Contractor

Recognition

Management Function – Determination Need

MERALCO v. Quisumbing: The company can determine in its best business judgment whether it should contract out the performance of some of its work for as long as the employer is motivated by good faith, and the contracting out must not have been resorted to circumvent the law or must not have been the result of malicious or arbitrary action.

Trilateral Relationship

Requirements – Independent Contractor

Manila Water Co. V. Peña: These are what distinguishes an independent (job) contractor: a) carries on an indepentend business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from control and direction of his employer or principal in all matters connected with the performance of work except as to the results thereof; b) has substantial capital or investment in the form of tools, equipments, machineries, work premises and other material swhich are necessary in the conduct of business.

Desirable – Unnecessary

Coca-Cola Bottlers Phils. V. NLRC: Although janitorial services may be considered directly related to the principal business of an employer, the Court deemed them unnecessary in the conduct of the employer’s principal business.

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Proof

Employer-Employee Relationship

Philippine Airlines v. NLRC: The private respondents were doing work which are directly related to its nature of business. Hence, they are deemed regular employees pursuant to Art. 280 of the Labor Code. They had been employed for a period ranging from 1 – 4 months to 11 years & 10 months. The continuous employment indicates that their jobs are directly necessary to the daily operation of petitioner’s business. The private respondents were supervised, directed and controlled by PAL’s regular employees. Thus, G.C. is a labor-only contractor who acted as mere supplier of manpower.

Liability

Mariveles Shipyard v. CA: (see Arts. 106, 108 and 109 on preceding page, focus on 109) The solidary liability of petitioner with that of Longest Force does not preclude the application of the CC provision on the right of reimbursement from his co-debtor by the one who paid.

B. Labor Contractor Only

Requisites and Prohibition

Labor-only contracting, a prohibited act, is an arrangement where the contractor merely recruits, supplies or places workers to perform a job for a principal.

Permissible job contracting, on the other hand, is an agreement where a principal agrees to farm out with a contractor the performance of a specific job within a definite or predetermined period.

Maraguinot v. NLRC: It is settled that the contracting out of labor is allowed only in case of job contracting.As labor-only contracting is prohibited, the law considers the person or entity

engaged in the same a mere agent or intermediary of the direct employer. But even by the preceding standards, the associate producers of VIVA cannot be considered labor-only contractors as they did not supply, recruit nor hire the workers.

Labor-only contractors: where the contractor/sub-contractor merely recruits, supplies or places workers to peform jobs, works, or services for a principal.

o Does not have substantial capital or investment which relates to the job, work or service to be performed

o Does not exercise the right to control over the performance o f the work of the contractual employees

C. Effect of Finding

San Miguel Corp. v. Bernardo: SMC played a large and indispendable part in the hiring of MAERC’s workers. Majority of the complainants have also been working for SMC long before the service contract between SMC and MAERC was entered into. SMC also maintained a constant presence in the workplace thru its own checkers who are tasked to report on the identity of workers whose performance was not according to the rules and standards set by SMC. [An EE-ER relationship thuse found between SMC and the compalinants, the former was found guilty of illegal dismissal.]

Sec. 7 – Employee Classification

STATUTORY REFERENCE: Art. 280; Book VI, Rule I, Sec. 5, Omnibus Rules

Art. 280. Regular and casual employment – The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has

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been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season.An employment shall be deemed casual if it is not covered by the preceding paragraph: provided, that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Rule I, Sec. 5. (a) Regular employment – The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties, employment shall be deemed regular for purposes of Book VI of the Labor Code where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the job, work or service to be performed is seasonal in nature and the employment is for the duration of the season.(b) Causal employment – There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of engagement: provide, that any employee who has rendered at least one year of service, whether such service is continuous or not, shall be considered a regular employee with respect to the activity in which he is employed and his

employment shall continue while such activity exists.Notwithstanding the foregoing distinctions, every employee shall be entitled to the rights and privileges, and shall be subject to the duties and obligations, as may be granted by law to regular employees during the period of their actual employment.

7.01. COVERAGE – 278

Art. 278. Coverage – The provisions of this title shall apply to all establishments or undertakings, whether for profit or not.

7.02. EMPLOYEE CLASSIFICATION – 280-281

Recognition and Types

Pangilinan v. General Mining Corp.: Article 280 of the Labor Code comprehends three kinds of employees: (a) regular employees or those whose work is necessary or desirable to the usual business of the employer; (b) project employees or those whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season; and, (c) casual employees or those who are neither regular nor project employees. A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal.There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer; and, (2) if the employee has been performing the job for at least a year.

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Nature of Issue

Universal Robina, etc. v. Caballeda: Whether or not an employee was a seasonal/project employee or a regular employee is a question of fact. As such, the Supreme Court is not at liberty to review the said factual issue because our jurisdiction is generally limited to reviewing errors of law that the CA may have committed. When the findings of the LA, the NLRC and the CA are in absolute agreement, the same are accorded not only respect but even finality as long as they are amply supported by substantial evidence.

Employer Determination – Effect

San Miguel Corp. v. NLRC: Thus, under Article 280 of the Labor Code, an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business or trade of the employer even if the parties enter into an agreement stating otherwise. But considered not regular under said Article (1) the so-called "project employment" the termination of which is more or less determinable at the time of employment, such as those connected, which by its nature is only for one season of the year and the employment is limited for the duration of that season, such as the Christmas holiday season. Nevertheless, an exception to this exception is made: any employee who has rendered at least 1 year of service, whether continuous or intermittent, with respect to the activity he performed and while such activity actually exists, must be deemed regular.

7.03. REGULAR EMPLOYEES – 280, 1st par.; 280, 2nd par.; 281, last sentence and 75(d)

Types – Regular Employees

Philips Semiconductors, etc. v. Fadriquela: According to Article 280 of the Labor Code, there are 2 kinds of regular employees: (1) those engaged to

perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed.

Nature of Work

Magsalin v. National Organization, etc.: In determining whether an employment should be considered regular or non-regular, the applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer.

Hacienda Fatima v. National Federation of Sugarcane Workers Food and General Trade: The fact that respondents do not work continuously for one whole year but only for the duration of the season does not detract from considering them in regular employment since in a litany of cases the Supreme Court has already settled that seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until re-employed.

Hiring Extend Period

Lopez v. MWSS: Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and considered regular employees.

Contract to Contract

Beta Electric v. NLRC: The fact that employee’s employment has been a contract-to-contract basis cannot alter the character of employment, because contracts cannot override the mandate of law.

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Length of Time

Maraguinot v. NLRC: Length of time is not a controlling factor as to whether the EE is project-based or regular. Length of time is merely a badge of employment.

Seafarers

Dela Cruz v. Maersk: Seafarers are not covered by the term "regular employment", as defined under Article 280 of the Labor Code. Instead, they are considered contractual employees whose rights and obligations are governed primarily by the POEA Standard Employment Contract for Filipino Seamen (POEA Standard Employment Contract), the Rules and Regulations Governing Overseas Employment, and, more importantly, by Republic Act No. 8042, otherwise known as The Migrant Workers and Overseas Filipinos Act of 1995.

7.04. PROJECT EMPLOYEES – 280, 1st par.

Art. 280. … except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee…

Defined

ALU-TUCP v. NLRC: As evident in Article 280 of the Labor Code, the principal test for determining whether particular employees are properly characterized as “project employees” as distinguished from “regular employees” is whether or not the “project employees” were assigned to carry out a “specific project or undertaking, the duration (and scope) of which were specified at the time the employees were engaged for that project.In business and industry, “project” could refer to one or the other of at least two distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the regular or usual business of the employer company,

but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. Secondly, the term “project” could also refer to a particular job or undertaking that is not within the regular business of the corporation. Such job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.Whichever type of project employment is found in a particular case, a common basic requisite is that the designation of named employees as “project employees” and their assignment to a specific project, are effected and implemented in good faith, and not merely as a means of evading otherwise applicable requirements of labor laws.

Project Employees

Sandoval Shipyards v. NLRC: The completion of their work or project automatically terminates their employment.

Rationale [re: ruling in Cartagenas case, that contract workers are not considered regular employees]

De Ocampo v. NLRC: 'The rationale of this rule is that if a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. In effect, these stand-by workers would be enjoying the status of privileged retainers, collecting payment for work not done, to be disbursed by the employer from profits not earned. This is not fair by any standard and can only lead to a coddling of labor at the expense of management.'

Employer Obligation

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A, M. Oreta and Co. Inc. v. NLRC: If dismissal was unjustified and done before expiration of the term, the project employee should be paid his salary for the unexpired portion of his contract.

Specific Period

Purefoods Corp. v. NLRC: Under Art. 280, “specific period or undertaking” contemplates an activity which is not commonly or habitually performed, or such type of work which is not done on a daily basis, but only for a specific duration of time or until completion. In Brent School v. Zamora, the criteria by which term employment cannot be said to be a circumvention of the law on security of tenure are:(1) a fixed period of employment knowingly and voluntarily agreed upon without any force, duress, or improper pressure being brought to bear upon the employee, absent any other circumstance vitiating his consent; and(2) satisfactory appearance that the ER and EE dealth with each other on more or less equal terms, with no moral domonance exercised by the ER over the EE,

Continuous Rehiring

Chua v. NLRC: A (project) employment ceases to be co-terminous with specific projects when the employee is continuously rehired and re-engaged for many more projects without interruption.

Workpool Employees

Maraguinot v. NLRC: Once (1) a project/pool employee has been continually, as opposed to intermittently, re-hired by the same employer for the same tasks, and (2) those tasks are vital, necessary, and indispensable, then the employee must be deemed a regular employee.

Aguilar Corp. v. NLRC: Members of a work pool from which a construction

company draws its project employees, if considered employees of the construction company while in the workpool, are non-project employees or employees for an indefinite period. If they are employed in the particular project, its completion or that of any phase thereof will not mean severance of the ER-EE relationship.

Length of Service

Filipinas Pre-Fabricated Building Systems Inc. v. Puente: The length of service of a project employee is not the controlling test of employment tenure but WON “the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee”.

7.05. CASUAL EMPLOYEES – 280, 2nd par.

Nature of Work

A.M. Oreta & co. V. NLRC: Test: not the employment contract, but the nature of the job (if usually necessary or desirable to the main business of the ER, EE = regular employee).

San Miguel Corp. v. Abella: On janitorial and messengerial services: may be considered directly related to business, but are deemed necessary.

One Year Service

Kimberly v. Drilon: If the casual employee exceeds one year in service, the status of regular employment attaches to him on the day immediately after the end of his first year of service.

7.06. CONTRACT – FIXED PERIOD

Tests [for] Validity

Fixed-term employment is valid; (even as Art. 280 in its strictest interpretation appears to restrict

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without reasonable distinctions the right of an employee to freely stipulate with his employer the duration of his engagement,) nothing in the law really prohibits fixed-term employment, provided that it does not intend to circumvent the law on tenurial security.

There are two requisites for validity of fixed-term employment:

o It should be entered knowingly and voluntarily by the parties without any force, duress or improper pressure

o That ER and EE dealt with each other on more or less equal terms; no moral dominance over the other.

Seasonal Employees

Manila Hotel v. CIR: The general rule is that where the work or service to be performed is seasonal in character, the employment is deemed to last only for the duration of the season, unless when the employee involved is constantly rehired after every season, which will garner him the consideration that he’s merely on LOA with pay, and that the employment relationship is never severed, only suspended.

Sec. 8 – Probationary Employee

STATUTORY REFERENCE – Probationary Employees – 281; 61, 2nd sentence, Book VI, Rule I, Sec. 6, Omnibus Rules

8.01. PROBATIONARY EMPLOYEES – 281; 61, 2nd sentence, Book VI, Rule I, Sec. 6, Omnibus Rules

Art. 281. Probationary employment – Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of

an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in acordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considerd a regular employee.

Rule I, Sec. 6. Probationary employment – (a) Where the work for which an employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor, the probationary employment period of the employee shall be limited to the authorized learnership or apprenticeship period, whichever is applicable.(b) Where the work is neither learnable nor apprenticeable, the probationary employment period shall not exceed six (6) months reckoned from the date the employee actually started working.(c) The services of an employee who has been engaged on probationary basis may be terminated only for a just cause or when authorized by existin glaws, or when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.(d) In all cases involving employees engaged on probationary basis, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement.

Definition

International Catholic Migration Commission v. NLRC: A probationary employee is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether the prospective employee is qualified for permanent employment. Duration is immaterial; the nature of the probationary period lies in the objective sought to be attained by both the employer and employee during

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the said period. Failure to qualify as a regular employee in accordance of to reasonable standards of the employer is reasonable cause for terminating employment under Art. 281, LC.

Purpose

Dela Cruz v. NLRC: A probationary employment is made to afford the employer an opportunity to bserve the fitness, skill, competence and attitude of a probationer while at work, and to ascertain whether he will become a proper and efficient employee.

Employer’s Right [to] Set Period/Obligation

Grand Motors Corp. v. MOLE: The employer has the right to choose as to who will be hired and who will be declined. It is within the exercise of his righ tot select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hirihg him permanently.

Duration/Exception

Buiser v. Leogardo, Mariwasa v. Leogardo, ICMC v. NLRC: see subsequent general rule and exceptions

GR: shall not exceed 6 months from date the employee started workingEX: period may be extended if (1) the parties agree so or (2) a longer period is necessary to learn the nature of the work to be performed, provided that:

There is no indication that the extension s a mere strategem of ER to avoid legal consequences of probe period satisfactorily completed

There is written consent of the EE EE wanted the extension

him/herself to improve performance and qualify for regular employment

Criteria Regularization

Mitsubishi v. Chrysler Labor Union: ER has obligation to inform EE of the reasonable standards to qualify as regular EE.

Alcira v. NLRC: Not being able to pass the standards (e.g. by means of absences, tardiness, failing to wear proper uniform and showing inferior skills) justifies ER to end employment relationship with EE.

Extension of Contract

Mariwasa Manufacturing v. Leogardo: Agreements stipulating longer probationary periods are considered lawful exceptions to the statutory prescription limiting such period to 6 months ... [in this case, the extension made was] an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. By voluntarily agreeing to an extension of the probationary period, EE in effect waived any benefit attaching to the completion of said period.

Absorbed Employees

Absorption: merger of companies; Ees of the absorbed company are absorbed into the new company.

Cebu Stevedoring v. Regional Director: In this case, the EE’s cannot be considered as probationaries because they were already well-trained in their functions. They were absorbed as regular employees.

Double Probation

A Prime Security Services v. NLRC: There can be no double probation: if EE is probationary then became regular, then was absorbed to another company, EE remains regular and cannot be subjected to another probationary employment.

Termination and Salary

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A probationary’s services may be terminated:

1. For just cause2. When EE fails to qualify as regular

EE in accordance with reasonable standards made known by ER to EE at the time of engagement

Dela Cruz v. NLRC: As long as the temrination was made before the expiration of the 6-month probationary period, the ER may decide to sever the relationship [for just cause].

Valid termination = EE not entltled to salary for unexpired portion of probationary period.

Rule [on] Private School Teachers

Requisites before a private teacher may be deemed to have acquired permanent employment:

o Teacher is a full-time teacher

o Teacher must have rendered 3 consecutive years of service

o Teacher’s service must have been satisfactory

In determining the employment status of private school teachers, the Manual of Regulations for Private Schools, not the Labor Code, applies. (see page 11)

Good luck and God bless you!

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