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Part I

Introductory Materials
Section 1. Labor Law in General
1.1 Labor Law Defined [S, R, J]
1. Labor Legislation Consists of statutes, regulations and jurisprudence
governing the relations between capital and labor by:
a. providing for certain terms and conditions of employment or
b. providing a legal framework within which these terms and
conditions and the employment relationships may be
negotiated
adjusted and
administered.
. Social Legislation Includes all laws that provide particular kinds of
protection or benefits to society or segments thereof in furtherance of
social justice. In that sense! labor laws are necessarily social legislation.
promote public welfare
1. Law !lassification
1. Labor Standards Law "hat which sets out the minimum terms!
conditions and benefits of employment that #$%s must provide or comply
with and to which ##%s are entitled as a matter of legal right.
#&. '(hour labor law
. Labor Relations Law "hat which defines )* $ + , I-.
the status! rights and duties
and the institutional mechanisms
that govern the individual and collective interaction of #$%s and ##%s or
their representatives.
#&. /ook 0 of 1abor Code
2. Welfare Legislation designed to take care of contingencies which may
affect workers! e.g. where there is loss of income for research beyond the
worker%s control. /#3#4I"*
5 *ocial *ecurity 1aw.
1." #istory and $rigin
1.% &asis for 'nact(ent
1. )rt. II, Sec.*, !onst. + "he maintenance of peace and order! the
protection of life! liberty! and property! and the promotion of general
welfare are essential for the enjoyment by all the people of the blessing of
democracy.
. )rt. II, Sec. 1,, !onst. : "he *tate affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their
welfare.
2. )rt. -III, Sec. I, !onst. : "he Congress shall give highest priority to the
enactment of measures that protect and enhance the right of all the
people to human dignity! reduce social! economic and political
ine6ualities! and remove cultural ine6uities by e6uitably diffusing wealth
and political power for the common good.
"o this end! the *tate shall regulate the ac6uisition! ownership! use! and
disposition of property and its increments.
5 1abor and social legislation are enacted pursuant to the police power of
the *tate. "his is its inherent power to enact wholesome and reasonable
laws to promote order! safety! health! morals and general welfare of
society. In its e&ercise the state may interfere with personal liberty! with
property and with business and occupation. (Calalang vs. Williams).
5 3o longer may the due process clause and the freedom of contract be
invoked to challenge labor and social legislation. "his has long been
discarded since the 1728 case of West Coast Hotel vs. Parish (US) and the
1924 case of Pp. vs. Pomar (P).
5 1abor relation laws enable workers to obtain from their employers more
than the minimum benefits set by labor standard laws
1.* Law and .or/er
"he *C reaffirms its concern for the lowly worker who! often at the mercy of
his #$! must look up to the law for protection. 4ittingly! the law regards him
with tenderness and even favor and always with hope in his capacity to help
in shaping the nation%s future. It is an error to take him for granted. (Ce!"
o#al Plant vs. $ep"t# %inister of &a!or)
Section . Labor and t0e !onstitution

.1 !onstitutional 1ro2isions
1. )rt. II, Sec. 3, !onst. : "he *tate shall promote a just and dynamic social
order that will ensure the prosperity and independence of the nation and
free the people from poverty through policies that provide ade6uate social
services! promote full employment! a rising standard of living! and an
improved 6uality of life for all.
. )rt. II, Sec. 14, !onst. : "he *tate shall promote social justice in all
phases of national development.
2. )rt. II, Sec. 1", !onst. : "he *tate recogni9ed the role of the youth in
nation(building and shall promote and protect their physical! moral!
spiritual! intellectual! and social well(being. . .
:. )rt. II, Sec. 1%, !onst. : "he *tate recogni9es the role of women in
nation(building! and shall ensure their fundamental e6uality before the law
of women and men.
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;. )rt. II, Sec. 1,, !onst. : "he *tate affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their
welfare.
<. )rt. -III, Sec. 1, !onst. : "he 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
ine6ualities! and remove cultural ine6uities by e6uitably diffusing wealth
and political power for the common good.
"o this end! the *tate shall regulate the ac6uisition! ownership! use! and
disposition of property and its increments.
8. )rt. -III, Sec. " 51
st
6ar7, !onst. : "he *tate shall
5afford full protection to labor! local and overseas! organi9ed and
unorgani9ed! and
5promote full employment and e6uality of employment opportunities for all
. . .
'. )rt. -III, Sec. %, !onst. : "he *tate shall! by law! undertake an agrarian
reform program founded on the right of farmers and regular farmworkers!
who are landless! to win collectively or collectively the lands they till or! in
the case of other farmworkers! to receive a just share of the fruits thereof .
. .
7. )rt. -III, Sec. 11, !onst. : "he *tate shall adopt an integrated and
comprehensive approach to health development which shall endeavor to
make essential goods! health and other social services available to all the
people at affordable cost . . .
10. "he present Constitution has gone further than the 1782 Constitution in
guaranteeing vital social and economic rights to marginali9ed groups of
society! including labor. "he framers of the Constitution intended to give
primacy to the rights of labor and afford the sector =full protection>
regardless of the geographical location of the workers and whether they
are organi9ed or not ('lo!e %ac(a# vs. )&C).
. 1rotection to Labor
1. )rt. -III, Sec. ", !onst. : "he *tate shall afford full protection to labor!
local and overseas! organi9ed and unorgani9ed! and promote full
employment and e6uality of employment opportunities for all.
It shall guarantee the rights of all workers to 17 self organi9ation! 7
collective bargaining and negotiations! and "7 peaceful and concerted
activities including the right to strike in accordance with law.
"hey shall also participate in policy and decision(making processes
affecting their rights and benefits as may be provided by law.
"he *tate shall promote the principle of shared responsibility between
workers and #$%s and the preferential use of voluntary modes in settling
disputes! including conciliation! and shall enforce mutual compliance
therewith to foster industrial peace.
"he *tate shall regulate the relations between worker%s and #$%s!
recogni9ing the right of labor to its just share in the fruits of production and the
right of enterprises to reasonable returns in investment! e&pansion and
growth.
172; Const. : "he *tate shall afford protection to labor! especially to working
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women and minors! and shall regulate the relation between landowner and
tenant! and between labor and capital in industry and in agriculture. "he *tate
may provide for compulsory arbitration.
Three aggregates of power against which the individual employee needs
protection
1. collective labor ( ?nion
. collective capital ( management
2. collective bargaining relationship
5 "he law! while protecting the rights of laborers! does not authori9e the
oppression or destruction of the employer
Laissez Faire
1. 1aisse9 faire or the principle of free enterprise never found full acceptance in
this jurisdiction . . . (*CC+* vs. CU'C,)
." Labor Sector
1. )rt. II, Sec. 1,, !onst. : "he *tate affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare.
.: Policy Considerations Social Justice
1. )rt. II, Sec. 14, !onst. : "he *tate shall promote social justice in all phases of
national development.
. .0at does social 8ustice en2ision9 It envisions )#! $! C.
a. e6uitable diffusion of wealth and political power for the common
good@
b. regulation of the ac6uisition! ownership! use and disposition of
property and its increments@
c. and creation of economic opportunities based on freedom of
initiative and self(reliance. ABrt. CIII! *ec. 1 , ! Const. @ BlcantaraD
Definition [#, ', 1, )]
1. *ocial justice is neither communism nor despotism! nor atornism! nor
anarchy! but the humani9ation of laws and the e6uali9ation of social and
economic forces so that justice in its rational and objectively secular
conception may at least be appro&imated. It means the promotion of the
welfare of the people! the adoption of measures by the government to
ensure economic stability of all the competent elements of society!
through the e&ercise of powers underlying the e&istence of all
governments on the time(honored principle of salus populi est suprema
lex. (Calalang vs. Williams)
. Ehat does social justice guaranteeF
*ocial justice does not champion division of property of economic status@
what it guarantees are e6uality of opportunity! e6uality of political rights!
e6uality before the law! e6uality between values given and received! and
e6uitable sharing of the social and material goods on the basis of efforts
e&erted in their production. ('"ido vs. P*)
="hose who have less in life should have more in law>
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=#6ual pay for e6ual wok>
Limits of Use
5 "he policy of social justice is not intended to countenance wrongdoing simply
because it is committed by the underprivileged. Bt best it may mitigate the
penalty but it certainly will not condone the offense. "hose who invoke social
justice may do so only if their hands are clean and their motives blameless and
not simply because they happen to be poor. (P&$- vs. )&C)
.* S6ecific Labor Rig0ts
5 Brt. CIII! *ec. 2! Const. : )In the relation between workers and #$%s the
following rights shall be assured by the *tate:
a. $ights to self(organi9ation
b. $ight to collective bargaining
c. $ight to collective negotiations
d. $ight to peaceful and concerted Bctivities including the right to
strike
e. $ight to security of "enure
f. $ight to just and humane Conditions of work
g. $ight to a living Eage
h. $ight to participate in policy and +ecision(making processes
AEBC" /G3+D
5 Gnly to those that affect the rights of employees and have repercussions on
their right to security of tenure.
Protection to Labor
1. "he law must protect labor! at least to the e&tent of raising him to e6ual
footing in bargaining relations with capital and to shield him from abuses
brought about by the necessity for survival. It is safe to presume!
therefore! that an ## or laborer who waives in advance any benefit
granted him by law does so! certainly not in his interest or through
generosity but under the forceful intimidation of urgent need@ and hence!
he could not have so acted! freely and voluntarily. (Sanche. vs. Harr#
&#ons)
.: $t0er Rig0ts
1. )rt. II, Sec. 14, !onst. : 3o law impairing the obligation of contracts shall
be passed.
;;; !o(6assionate Justice
- disregarding rigid rules and giving due weight to all the e6uities of
the case
- years of service without derogatory record taken into account
- harshness of penalty also taken into account
. )rt. III, Sec. 1:, !onst. : Bll persons shall have the right to a speedy
disposition of their cases before all judicial! 6uasi(judicial or administrative
bodies.
2. )rt. III, Sec. 1, 57, !onst. : 3o involuntary servitude in any form shall
e&ist e&cept as a punishment for a crime whereof the party shall have
been duly convicted.
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Labor as Property
5 "he right of a person to his labor is deemed property within the meaning of the
Constitutional guarantees. "hat is his means of livelihood. He cannot be deprived
of his labor or work without due process of law. APhil. -ovieworkers Bssn. 0s.
Premiere ProductionsD
ue Process Re!uirements
5 "he twin re6uirements of notice and hearing constitutes essential elements of
due process in cases of ## dismissal: the re6uirement of notice is intended to
inform the ## of the #$%s intent to dismiss and the reason for the proposed
dismissal@ upon the other hand! the re6uirement of hearing affords the ## an
opportunity to answer his #$%s charges against him and accordingly to defend
himself therefrom before dismissal is effected. 3either of these re6uirements
can be dispensed with without running afoul of the Constitution. "#entury Te$tile
vs% &LR#'
Liberty of #ontract and State (nterference
5 1egislation appropriate to safeguard to people%s vital interests may modify or
abrogate contracts already in effect. $eservation of essential attributes of
sovereign power is read into contracts as a postulate of the legal order. Bll
contracts made with reference to any matter that is subject to regulation under
the police power must be understood as made in reference to the possible
e&ercise of that power. ABbellaIHad. +anao vs. 31$CD such was the case when
Brt. '2 of the 1abor Code granted severance pay to workers who at the time of
their employment were not entitled under the law to receive such pay. AId.D
55 #mployees have a vested and demandable right over e&isting benefits
voluntarily granted to them by their employer.
MG<. Rig0ts [! 1 S <]
1. $ight to conduct business
. $ight to prescribe rules
2. $ight to select employees
:. $ight to transfer and discharge employees
Waiver and #ompromise
5 =ot all wai2ers and >uitclai(s are in2alid as against 6ublic 6olicy
1. It is only when there is clear proof that the waiver was wangled an
unsuspecting person! or the terms of settlement are unconscionable on its
face! that the law will step in to annul the 6uestionable transaction.
2. /ut where it is shown that the person making the waiver did so voluntarily!
with full understanding of what he was doing! and the consideration for the
6uitclaim is credible and reasonable! the transaction must be recogni9ed
as a valid and binding undertaking. (Sicangco vs. )&C)
2. *hould a party fail or refuse to comply with the terms of a valid
compromise or amicable settlement! the other party could either enforce
the compromise by a writ of e&ecution! or regard it as rescinded and to
insist upon his original demand. A-orales vs. 31$CD
- 0oluntary consideration not unconscionable
- Eaiver of future benefits is not valid and binding
- "he law does not consider as valid any agreement
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a. to receive less compensation on what a worker is entitled
to recover
b. to prevent him from demanding benefits to which he is
entitled
5 Instances w0en >uitclai(, wai2er or co(6ro(ise is 2alid+
1. C! a national promoter salesman! with high educational attainment!
tendered his resignation after a spot audit found out that he had a
tentative shortage of Php:7!JJ;.;7. It is unbelievable that C, occupying a
responsible position, and with high education attainment, can be rattled
and confused into signing a resignation letter, on account of a mere spot
audit. (Callanta vs. )&C)
2. /ank and ##%s association! entered into a C/B providing for the
withdrawal of the pending case of the association against the bank for
non(payment of Php<J.JJ #CG1B. There is nothing in the compromise
which contravenes the law, morals, good customs, public order, or public
policy. (%onte de Piedad vs. %,&/)
3. +uring pendency of appeal before the 31$C! workers e&ecuted a
voluntary affidavit before the 1abor Brbiter declaring intention to withdraw
appeal in lieu of payment of severance pay. The affidavits executed
voluntarily and knowingly in the presence of the Labor rbiter has the
effect and authority of res judicata. (,la#!ar vs. )&C)
4. B number of ##%s made 6uitclaims in e&change for the dropping of
charges of embe99lement of P; million which the ##%s allegedly
embe99led. The consideration for the waiver is ade!uate. (P0C vs.
/chiveri)
Instances w0en >uitclai(, wai2er or co(6ro(ise in2alid+
1. B worker hospitali9ed for several times for work(related accidents was told
by an immediate supervisor and a personnel officer to retire and e&ecute a
6uitclaim or else would be dismissed and got nothing. The retirement and
!uitclaim was made under threat of dismissal. (*lcantara)
2. B messenger with ; years employment resigned and e&ecuted a 6uitclaim
after being told by his manager to resign or else charges will be filed
against him. The threat was unjust since the messenger did not commit
any unlawful act. There was intimidation, which vitiated consent. ('"atson
-o"rs vs. )&C)
3. B 6uitclaim of future benefits made by an ## at the time of employment
(*lcantara)
4. Bfter the CI$ rendered a decision ordering the #$ to pay wage
differentials! the ##%s e&ecuted a 6uitclaim waiving their rights under the
decision. The !uitclaim contravenes public policy since after a civil action
is filed in court, the cause of action may not be subject of compromise
unless the same is with leave of court. ( Pampanga S"gar $evt. 1s. S"gar
Wor(ers *ssn.)
5. B 6uitclaim e&ecuted by an G4E repatriated to the Philippines because of
an illness re6uiring surgical treatment in consideration of the return travel
fund. There was no consideration since the "" regularly contributed to the
fund. #esides, the !uitclaim is negotiable and in congruous to the
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declared policy of the $tate to afford protection to labor and to assure the
right of workers to security of tenure. (C"ales vs. )&C)
6. #$ appealed the decision of the PG#B awarding K2!'JJ.JJ disability
benefits to worker. +uring pendency of appeal! the worker e&ecuted a
6uitclaim in e&change for Php1'!JJJ.JJ since at the time the worker
needed money for medical treatment. The law does not consider valid any
agreement to receive less compensation than what the workers should
receive. %t was clear that the worker was forced to accept the payment out
of necessity.(P2SC vs. )&C)
7. Bfter the finality of judgment awarding them severance pay! the workers
e&ecuted a 6uitclaim before labor arbiter who had no participation in the
case. $uch settlements must be approved by the labor arbiter before
whom the case is being heard. (St. 'othard P"! vs. )&C)
Luitclaims are ineffective to bar recovery of the full
measure of the worker%s rights
+ire 3ecessity is not an acceptable ground to annul
releases unless there is showing that
a. workers were forced to e&ecute them
b. the considerations for the 6uitclaims where unconscionably low
Manage(ent 1rerogati2es
1. $ight to select and discharge employees with valid cause
. promulgate reasonable employment rules and regulation
2. designation of work to employees
:. transfer and promote employees
;. control company operations
<. install money(saving devices
8. re(clarify or abolish positions
'. sell or close business
Drug <esting
G. R. : cannot right to privacy
'?ce6tion+
- if job or occupation involve public safety
#&.ample:
a. bus drivers
b. security guards
Participation in ecision)ma*ing Process
Gnly if it affects his )$! +! E.:
c. rights
d. duties
e. welfare
- not management prerogatives regarding business operation
- must at least be informed
1. "he law e&plicitly considers it a *tate Policy =to ensure the participation
of workers in decision and policy(making processes affecting their rights!
duties and welfare. However! a line must be drawn between
management prerogatives regarding business operations per se and
those which affect the rights of ##%s. in treating the latter! management
should see to it that ##%s are at least properly informed of its decisions
or modes of action. APB1 vs. 31$CD In this respect! a legislation
providing a worker%s representation in the /oard of +irectors of
corporations is not valid since the constitutional guaranty does not
8
include the worker%s right to participate in the management of the
enterprise. "+lcantara'
. -ay the #$ be compelled to share with its ##%s the prerogative of
formulating a code of disciplineF I a code of discipline unilaterally
formulated by the #$ enforceableF Mes! the #$ has the obligation to
share with its ##%s its prerogative of formulating a code of discipline
since this will be affecting their rights and benefits. B code of discipline
unilaterally formulated and promulgated by the #$ would be
unenforceable. &%d.'
*ection 2. 1abor and the Civil Code
2. 1 $ole of 1aw
1. )rt. 1@44, =!! : "he relation between capital and labor are merely
contractual. "hey are so impressed with public interest that labor contracts
must yield to common good. "herefore! such contracts are subject to
special laws on labor unions! collective bargaining! strikes! lockouts!
closed shops! wages! working conditions! hours of labor and similar
subjects.
2. #$(## *tandard of Conduct
5 )rt. 1@41 : 3either capital nor labor shall act oppressively against the other! or
impair the convenience of the public.
Fair Treatment
5 "he 3CC states that every person must in the e&ercise of his rights! and in the
performance of his duties! act with justice! give everyone his due! and observe
honesty and good faith. (*HS Phils. vs. )&C)
9
Law #ompliance
( "he return(to(work order in this case not so much confers a right as it imposes
a duty and while as a right it may be waived! it must be discharged as a
duty even against a worker%s will. "hus! it does not constitute a violation
of the right against involuntary servitude. (Sarmiento vs. -"ico) "his is
differentiated from the instance where there is a mere breach of
contractual stipulation. Ehile the ## may be held liable for damages by
virtue of the breach of contract! he may not be compelled to work against
his will because this will be involuntary servitude. (*lcantara)
'' $bedience and !o(6laince 'R $rders
; It is a recogni9ed principle that company policies and regulations are! unless
shown to be grossly oppressive or contrary to law! generally binding and
valid on the parties and must be complied with until finally revised or
amended unilaterally or preferable through negotiation or by a competent
authority. (S%C vs. U!aldo) +eliberate disregard or disobedience of rules!
defiance of management authority by the ##%s cannot be countenance.
?ntil and unless the rules or orders imposed by the #$ are declared to
be illegal or improper by competent authority! the ##%s ignore or disobey
them at their own peril. AN"# +irectories vs. *anche9D
'R $bligation
5 Bn ## must be treated as a disdained subordinate but with respect and
fairness! if not affection and gratitude due to an e6ual partner. (&agniton
vs. )&C)
Section %. <0e Labor !ode of t0e 10ili66ines
:.1 +ecree "itle 5 Brt. 1 : =1abor Code of the Philippines>
:. #ffectivity 5 Brt. : < months after its promulgation.
%. " )66licability
1. )rt. :: Bll rights and benefits granted under this Code shall! e&cept as
many otherwise be provided! apply alike to all workers! whether
agricultural! or non(agricultural.
. )rt. @:: "he terms and conditions of employment of all government of all
government ##%s! including ##%s of NGCC%s shall be governed by the Civil
*ervice 1aw.
2. )rt. I-A&, Sec. 517, !onst. :"he Civil *ervice embraces all branches of
Novernment! including NGCC%s with original charters.
<estAG$!!
1. "he rule now is that only the NGCC%s with original charters come under
the Civil *ervice 1aw. (Ca!rera vs. )&C)
%.% I(6le(enting Rules
1. )rt. *: Implementing rules and regulations of the +G1# and other
government agencies of the Code shall become effective
10
; 1* days after announcement of their adoption in newspapers of general
circulation.
Li(itation BRule Ma/ing 1ower
1. 5 "his power is limited to the promulgation of rules and regulations to
effectuate policies of the Code. *uch rules and regulations must conform to the
terms and standard prescribed in the statute. "hey cannot supplant its plain and
e&plicit command. (*lcantara)
5 B rule or regulation promulgated by an administrative body! such as the +G1#!
to implement a law! in e&cess of its rule(making authority is void. (*."cena)
. ,$amples of void (RR-s:
5 I$$ providing the 1J(day period specified in Brt. 2 refers to working days as
stated in the article.
5 Bn I$$ providing that ##%s paid by the month shall be presumed to be paid for
all days in the month! whether worked or not. %n effect, will except "")s paid by
the month from the enjoyment of the holiday pay benefit. (2ns"lar 0an( // Union
vs. 2nciong)
5 I$$ of $B <81; e&cluding security guards from those allowed to join unions.
(%/*&C, vs. S,&/)
5 I$$ including commission in the computation of 12
th
month pay. *nduly
expanded the concept of +basic salary,. (0oie3-a(eda vs. $e &a Serna)
%.* 1olicy Declaration
5 )rt. ": "he *tate shall 5)1'R)7
1. Bfford protection to labor
. Promote full employment
2. #nsure e6ual work opportunities regardless of se&! race or creed
:. $egulate the relations between workers and #$%s.
;. Bssure the rights of workers to self(organi9ation! collective bargaining!
security of tenure! and just humane conditions of work.
%.: Law Inter6retation
1. )rt. % : Bll 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.
. )rt. 1@4, =!! : In case of doubt! all labor legislation and labor contracts
shall be construed in favor of the safety and decent living of the laborer.
(n Favor Labor)Rationale
5 "his kind of interpretation gives meaning and substance to the liberal and
compassionate spirit of the law. "he policy is to e&tend the decree%s
applicability to a greater number of ##%s to enable them to avail of the
benefits under the law! in consonance with the *tate%s avowed policy to give
ma&imum aid and protection to labor. (*!ella vs. )&C)
Liberal #onstruction
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5 Bre the provisions violative of the e6ual protection clauseF 3o. "he #$ and
the laborer do not stand on e6ual footing@ to ensure e6uality! the latter must!
be afforded protection. Insofar as labor contracts are concerned! the same
are usually drafted and prepared by the #$. Bll doubts in their provisions
should therefore be resolved against it. (*lcantara)
oubt
5 Ehen these are or more possible e&planations regarding an issue affecting
worker%s rights! that which favors the worker must be chosen. (Clemente vs. 'S2S)
&o doubt
5 "he provision in case of doubt does not apply where the pertinent provisions of
the 1abor Code leave no room for doubt either in their interpretation or
application. (0onifacio vs. 'S2S)
Sweeping (nterpretation
5 "he *upreme Court cannot also adopt a sweeping interpretation of the law! lest
it engages itself in judicial legislation. (0ravo vs. //C)
Factual #onsideration and Rationality
5 "he care and solitude in the protection and vindication of the right of
workingmen cannot justify disregard of relevant facts or schewal of rationality in
the construction of the te&t of applicable rules in order to arrive at disposition in
favor of an ##. (P*& vs. )&C)
,!uity and .oral #onsideration
; Considerations of e6uity and social justice cannot prevail against the e&pressed
provisions of labor laws. (%anning vs. )&C)
/alancing #onflicting #laims
5 "he basic policy of the law is to balance or to coordinate the rights and interests
of both workers and #$%s. It should not be deduced that the basic policy is to
favor labor to prejudice capital. (*."cena)
:.8 #nforcement and *anctions
1. )rt. 1@ 5a7 57, 5"7, 5%7, 5:7: -urisdiction of Labor rbiters and the Commission
1. "he 1abor Brbiters shall have e&clusive and original jurisdiction! e&cept as
otherwise provided! the following cases involving all workers: Aunfair labor
practiceD
. "ermination disputes A6ualified by Brt. <1 which grant voluntary
arbitrators original and e&clusive jurisdiction over all unresolved
grievances arising from C/Bs and company personnel policiesD@
2. Cases involving terms and conditions of employment! if accompanied with
a claim for reinstatement Aincluding claims of G4E%s arising out of an #$(
12
## relationship! including claims for actual! moral and e&emplary
damages! as provided in $ec. ./, 0igrant 1orkers ctD@
:. Claims for actual! moral! e&emplary and other damages arising from the
#$(## relations@
;. #&cept claims for ##%s Compensation! *ocial *ecurity! -edicare and
maternity benefits! all other claims! arising from the #$(## relations@
including
- those of persons in domestic or household service! involving an
amount e?ceeding 106*,444! regardless of whether of whether
accompanied with a claim for reinstatement.
<. +isputes arising from Brt. <: including legality of strikes and lockouts
. )rt. 1, : 2isitorial and "nforcement 3ower of the $ecretary of Labor or his
duly authori4ed representative.
1. Bccesss to #$%s records and premises at anytime of the day or night
whenever work is being undertaken therein and copy thereform@
. Luestion any ##@ and
2. Investigate any fact! condition or matter which may be necessary to
determine violations of this Code of any labor law! wage order or rules and
regulations issued pursuant thereto.
5 In cases where the relationship of #$(## still e&ists! the power to issue
Compliance Grders to give effect to the labor standard provisions of this Code
and other social legislation.
Erits of e&ecution to the appropriate authority shall be issued for
the enforcement of the said orders! e&cept in cases:
a. where the #$ contests the findings of the labor
employment and enforcement officer@ and
b. raises issues supported by documentary profits which were
not considered in the course of inspection.
5 Grder *toppage of work or suspension of operations of any unit or department
of an establishment when non(compliance poses grave and imminent danger to
the health and safety of workers in the workplace.
Eithin : hours! a hearing shall be conducted to determine whether
an order for the stoppage of work and suspension of operations
shall be lifted or not.
In case the violation is attributable to the fault of the #$! he shall
pay ##%s their ##%s their salaries or wages during said period.
5 It shall be unlawful for any person to Gbstruct! impede! delay or otherwise
render ineffective the order of the *ecretary of 1abor.
5 3o inferior court shall issue a temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any case involving the enforcement
orders in accordance with this Brticle.
5 Bny government ## found guilty of violation! after appropriate administrative
investigation! be subject to *ummary dismissal from the service.
5 "he *ecretary of 1abor may re6uire #$%s to keep and maintain #mployment
records as may be necessary. AB* CG3#*D
". )rt. 13. Recovery of wages0 simple money and other benefits%
5 "he $egional +irector of the +G1# or any of the duly authori9ed hearing
officers of the +epartment is empowered! through summary proceedings and
after due notice! to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits! including legal interest owing to a
person employed in domestic or household service: Provided
13
such complain does not include claim for reinstatement
aggregate money claims of each househelper does not e&ceed
P;!JJJ.JJ
5 "he complaint shall be resolved within 2J days from the date of the filing of the
same.
%. )rt. ,, + Penalties and 1urisdiction )
a. #&cept! as otherwise provided in the Code! or unless the acts
complained of hinges in a 6uestion or interpretation or
implementation of ambiguous provisions of an e&isting C/B! any
violation of this Code declared to be unlawful or penal in nature
shall be punished with:
a fine not less than P1!JJJ.JJ nor more than P1J!JJJ.JJ.
or imprisonment of not less than 2 months nor more than 2 years.
Gr both such fine and imprisonment at the discretion of the court.
In addition to such penalty any alien found guilty shall be
summarily deported upon completion of service of service.
b. Bny criminal offense punished under this Code shall be under the
concurrent jurisdiction of the -"C and the $"C.
*. )rt. ,3 + "he penalty Aof the offenses listed in the 1abor CodeD shall be
imposed upon the guilty officer of officers of a corporation! trust! firm! partnership!
association pr entity which committed said offenses.
:. )rt. 34. Prescription of 2ffensses )
5 Gffenses penali9ed under this Code and the I$$%s 2 years.
5 ?nfair labor practice 1 year from accrual of such unfair labor practice.
@. )rt. 31 + Prescription of .oney #laims) Bll money claims arising from #$(
## relations accruing during the effectivity of this Code 2 years from the time
the cause of action is accrued.
,. )rt. 3 + -oney claims specified in rt. 56.shall be filed before the
appropriate entity independently of the criminal action that may be instituted in
the proper courts.
Pending the final determination of the merit of money claims filed with the
appropriate entity! no civil action shall be filed with any court.
"his provision shall not apply to ##%s compensation cases which
shall be processed and determined strictly in accordance with the
pertinent provisions of this Code.
Section *. .or/ Relations0i6
*. 1 .or/ Relations0i6
'R and ''
1. )rt. 3@ 5a7 and 5b7 : =Person> means individual! partnership! association!
corporation! business trust! legal representative! or any organi9ed group of
persons.
AbD =#$> includes any person acting directly or indirectly in the interest of
the #$ in relation to an ## and shall include the Novernment and all its
branches! subdivisions and instrumentalities! all NGCC%s and institutions!
as well as non(profit private institutions! or organi9ations.
14
. )rt. 1:@ 5f7 and 5g7 : AfD =#$> means any person! natural or juridical!
employing the services of the ##.
AgD =##> means any person compulsory covered by the N*I* . . .!
including members of the B4P! and any person employed as casual!
emergency! temporary! substitute or contractual! or any person
compulsory covered by the ***. . .
2. )rt. 1 5e7 and 5f7 : =#$> includes any person acting in the interest of the
#$ directly or indirectly. "he term shall not include any labor organi9ation
or any of its officers e&cept when acting as an #$.
AfD =##> includes any person in the employ of an #$. "he term shall not be
limited to the ##%s of a particular #$! unless this Code e&plicitly states. It
shall include any individual whose work has ceased as a result or in
connection with any current labor dispute or because of unfair labor
practice if he has not obtained any other substantially e6uivalent or regular
employment.
!L)SSICI!)<I$=
1. casual
. regular
2. emergency
:. temporary
;. substitute
<. contractual
:. Is the purchaser of the assets of an #$ corporation considered a
successor #$ of the latter%s ##F 3o. 1abor contracts are not enforceable
against a transferee of an enterprise! labor contracts being in personam,
thus binding only between parties.
,R),, Relationship 3 (ndependent #ontractor and Labor #ontractor
1. )rt. 14: + #ontractor or subcontractor B
a. Ehenever an #$ enters into a contract with another person for the
performance of the former%s work! the ##%s of the contractor and of
the latter%s subcontractor! if any shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or the subcontractor fails to pay the wages
of his ## in accordance with this Code! the #$ shall be jointly and severally be
liable with his contractor or subcontractor to such ##%s to the e&tent of the work
performed under the contract! in the same manner and e&tent that he is liable to
##%s directly employed by him.
b% There is 4labor)only5 contracting where6
1. the person supplying in workers to an #$ does not have [!,I]
substantial capital
)substantial. investment in the form of tools! e6uipment!
machineries! work premises! among others
. and the workers recruited and placed by such persons are performing
activities which are directly related to the principal business of such #$.
In such cases! the person or intermediary shall be considered merely as an
agent of the #$ who shall be responsible to the workers in the same manner
and e&tent as if the latter were directly employed by him.
15
. Sec. 3, Rule DIII, &oo/ III, IRREs : AaD Bny person who undertakes to
supply workers to an #$ shall be deemed to be engaged in labor(only
contracting where such person :
; Does not 0a2e
substantial capital
)substantial. investment in the form of tools! e6uipment!
machineries! work premises and other materials@ and
5 "he workers recruited and placed by such person are performing activities
which are directly related to the principal business or operations of the #$ in
which the workers are habitually employed.
1abor(only contracting as defined herein is hereby prohibited and the person
acting as contractor shall be considered merely as an agent or intermediary of
the #$ who shall be responsible to the workers in the same manner and e&tent
as if the latter were directly employed by him.
AcD 4or cases not falling under this Brticle! the *ecretary of 1abor shall determine
through whether or not the contracting out is permissible in the light of the
circumstances of each case and after considering the operating needs of the #$
and the rights of the workers involved.
2. )rt. 14@ : %ndirect "7 "he provisions of the immediately preceding
Brticle shall likewise apply in any person! partnership! association or
corporation which! not being an #$! contracts with an independent
contractor for the performance of any work! job or project.
:. )rt. 143 : #very #$ or indirect #$ shall be held responsible with his
contractor or subcontractor for any violation of the provisions of this Code.
4or purposes of determining the e&tent of their civil liability under this
Chapter! they shall be considered direct #$%s.
;. Sec. ,, Rule DIII, &oo/ III, IRREs + -ob Contracting 8 "here is job
contracting permissible under the Code if the following conditions are met:
1. "he contractor carries on an independent business and undertakes the
contract work )B $ - ( 4.
a. on his own account
b. under his own responsibility
c. according to his own manner and method
d. free from the control and direction of his #$ or principal in all
matters connected with the performance of the work e&cept as to
the results thereof@ and
. "he contractor has
a. substantial capital or
b. )substantial. investment in the form of tools! machineries! work
premises! and other materials which are necessary in the conduct
of his business.
5Ehere the #$(## relationship has become ascertained! the #$ becomes bound
by statutory re6uirements pertaining! though not limited! to terms and conditions
of employment! labor relations and post employment. (Phone3Po"lenc vs. )&C)
3onetheless! when a contractor fails to pay the wages of his ##%s! the #$ who
contracted out the job to the contractor becomes jointly and severally liable with
his contractor to the ##%s of the latter =to the e&tent of the work performed under
the contract> as if such #$ were the #$ of the contractor%s ##%s. "he law itself!
establishes an #$(## relationship between the #$ and the job contractor%s ##%s
for a limited purpose i.e. in order to ensure that the latter get paid the wages due
them. B similar situation obtains where there is a =labor(only> contracting. "his
16
time! however! for a comprehensive purpose: =#$ for purposes of this Code! to
prevent any violation or circumvention of any provision of this Code.> "he law in
effect holds both the #$ and the =labor only> contractor responsible to the latter%s
##%s for more effective safeguarding of the ##%s rights under the 1abor Code.
(P0C vs. )&C)
). D'<'RMI=)<I$=
5 In determining whether the relationship is that of #$ and ## or one of
independent contractor! each case must be determined on its own facts and all
the features of the relationship must be considered. (1illal"ga vs. )&C)
55 the e&istence of an #$(## relationship is a 6uestion of law and cannot be
made the subject of agreement
5 the nature of ones business is not determined by self(serving appellations one
attaches thereto but by the tests provided by statute and prevailing case law
&. C)!<$RS
1. The e$istence of ,R),, relationship is determined by the following
elements namely6
a. the *election and engagement of the ##%s
b. the payment of Eages
c. the power of +ismissal@ and
d. the power to control the ##%s conduct
AE#+*D although the latter is the most important element. (osario 0rothers vs.
,ple) 3o particular form of evidence is re6uired to prove the e&istence of an #$(
## relationship. Bny competent and relevant evidence to prove the relationship
may be admitted (,p"lencia vs. )&C)
. Is there an #$(## relationshipF
5 Eorkers under a pakiao agreement arranged by N whom P$C considered as
an independent contractor. #$ gives orders to N! on where to store the copra!
when to bring out! how much to load and where! and what class of copra to
handle. "he e6uipment used is owned by P$C. Mes. 37C has direct control
over the handling of the copra. The control test is satisfactorily met.
5 Piece workers subject to specifications. Mes. The fact that the making of the
basket is subject to Dy)s specifications indicates the existence of control. ($# 4oh
0eng vs. 2&%U)
5 "ailors! pressers! stitchers and similar workers employed by CG+ on a piece(
work basis. "he ##%s are governed by the company%s regulations i.e. '(hour
workday! recording of attendance etcO 4urthermore! a master cutter distributes
job orders e6ually! supervises the work and sees to it that they were finished as
soon as possible. Mes. The worker)s conduct in the performance of their work
was controlled by the company (osario vs. ,ple)
5 Cargadores and pahinantes recruited by *-C through a labor contractor who
are governed by the regulations of the *-C whose work consisted of loading!
unloading! pilling or palleting empty bottles and wooden shells from company
trucks and warehouses. Mes. The evidence firmly establishes the control
exercised by the $0C. (0&U% vs. 5amora)
17
5 *hoe shiners who had their own customers but shared proceeds with company.
3o. The company does not exercise any degree of control or supervision over
his work. The shoe shiner is a partner in trade. (0esa vs. -ra6ano)
5 0endees of cigarettes who are governed by the regulations of the vendor
company i.e. definite sales territory! re6uirement to submit daily! weekly and
monthly reports! etc. Mes. 2endor company had control over the vendee. (SSS vs.
C*)
5I. *! a prominent social figure! had an agreement with "E* to act as =branch
manager@ "he agreement provided that she would be entitled to a part of the
commission on sale of tickets@ and that she would share in the e&penses of
maintaining the office. *he was also a signatory to a lease agreement covering
the branch%s premises! holding herself solidarily liable for the prompt payment of
rentals. 3o. %. $ was not subject to the control by T1$. The services rendered by
%.$ must have been done by her pursuant to a contract of agency. (Sevilla vs. C*)
5 B plant manager hired by a marble company which was about to close in a few
month%s time due to business losses. "he company had no control over the
former! either as to hours of work or method of accomplishing the work. "he
former was entitled to a percentage of the net profits of the company for that
period. 3o. 0anager was merely a party to a joint venture. (C%C vs. )&C)
5 4ishermen(crew of a trawl fishing vessel subject to control and supervision of
the owner of the vessel i.e. conduct of fishing operations@ time to report to fishing
port! etcO Mes. ("ga vs. )&C)
5 "ailors! seamstresses and other workers of a haberdashery who were paid on a
piece(rate basis. "hey were directed by the proprietor of the establishment as
specified by the customers. "hey were re6uired to finish jobs orders in one day
before due date. Mes. They did not exercise independence in their own methods,
but on the contrary were subject to the control of the establishment from the
beginning of their task to their completion. They also had to rely on the tools and
e!uipment supplied by the haberdashery. (%a(ati Ha!erdasher# vs. )&C)
5 "he power of control refers merely to the e&istence of the power and not the
actual e&ercise thereof.
5 Caddles who are not under the control and supervision of the golf club as to
working hours! manner of carrying out their services! etc. 3o. "he club did not
have the measure of control over the incidents of the caddy%s work and
compensation that the #$ would possess. (%anila vs. 2*C)
5 College teachers. Mes. The Court takes judicial notice that a university controls
the work of the members of its faculty9 that it prescribes the courses or subjects
that they teach and the time and place for teaching. (+eati vs. 0a"tista)
5 Peepney drivers working under the boundary system. Mes. The driver does not
have any interest in the business because he did not invest anything in the
ac!uisition of jeeps and did not participate in the management thereof. (Citi.en7s
&eag"e of +ree Wor(ers vs. *!!as)
!. !$=<R$L <'S<
555 "here is an #$(## relationship where the #$ controls or has reserved the
right to control the ## not only as the result of the work but also as to the means
by which said work is to be accomplished (Paradise vs. )g). "he test merely calls
18
for the e&istence of the right to control the manner of doing the work not the
actual e&ercise of the right. ("ga vs. )&C) "he line should be drawn between
rules that merely serve as guidelines towards the achievement of the mutually
desired results without dictating the means or methods employed in attaining it!
and those that control or fi& the methodology and bind or restrict the party hired
to the use of such means. "he first ! which aim only to promote the result! create
no #$(## relationship unlike the second! which addresses both the result and
the means to achieve it. (2ns"lar &ife vs. )&C) "he control test calls merely for
the e&istence of the right to control and manner of doing work! not the actual
e&ercise of the right. ($# 4eh 0eng)
D. '!$=$MI! <'S<
1. "he absence of #$(## relationship may be determined through economic
tests like the inclusion of the ## in the payrolls! having irregular
compensation and having a personal stake in the business. (Sevilla vs.
)&C)
'. )GR''M'=<
5 "he e&istence of an #$(## relationship is a 6uestion of law and being such! it
cannot be made the subject of an agreement. (-a!as vs. C%C)
;. Inde6endent !ontractor and Labor !ontractor $nly
1. )rt. 14: : Contractor or subcontractor
a. Ehenever an #$ enters into a contract with another person for the
performance of the former%s work! the ##%s of the contractor and of
the latter%s subcontractor! if any shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or the subcontractor fails to pay the wages
of his ## in accordance with this Code! the #$ shall be jointly and severally
liable with his contractor or subcontractor to such ##%s to the e&tent of the work
performed under the contract! in the same manner and e&tent that he is liable to
##%s directly employed by him.
b. "here =labor(only> )considered as agent. contracting where:
5 the person supplying workers to an #$ does not have
substantial capital
)substantial. investment in the form of tools! e6uipment!
machineries! work premises! among others
Eith respect to the first re6uirement! the law does not re6uire both substantial
capital and investment in the form of tools! e6uipment! machineries! etc. "his is
clear from the use of the conjunction =or>. ()eri vs. )&C)
. and the workers recruited and placed by such persons are performing
activities which are directly related to the principal business of such #$.
Eith respect to the second re6uirement! the service provided by janitors!
firemen! mechanics! hired helpers and similar workers are considered directly
related to the operations of a company since this is necessary to the proper
maintenance of the premises and machineries as well as the protection of the
company premises against fires. ('"arin vs. )&C)
19
In such cases! the person intermediary shall be considered merely as an
agent of the #$ who shall be responsible to the workers in the same manner and
e&tent as if the latter were directly employed by him.
;;; Cactors to Deter(ine e?istence of Inde6endent !ontractor Relations0i6+
1. whether the contractor is carrying on an independent business@
. whether the work is part of the #$%s general business@
2. the nature and e&tent of the work@
:. the skill re6uired@
;. the terms and duration of the relationship@
<. the right to assign the performance of the work to another@
8. the control and supervision of the work and the #$%s powers with respect
to the hiring! firing and payment of salaries@
8. the duty to supply premises! tools and appliances. (%afinco vs. ,ple)
;; '?a(6les of Inde6endent !ontractor+
5 !o((ission agent : IPC Company entered into agreement with registered
representatives who worked on a commission basis. Ehile the agents were
subject to a set of rules and regulations governing the performance bond@ the
termination for certain causes! however! the agents were not re6uired to report to
work@ to devote their time e&clusively for the company@ to account for their time
nor submit a record of their activities@ and that they were paid on a commission
based on a certain percentage of sales. The fact that for a certain specified
causes &failure to meet annual !uota' the relationship may be terminated does
not mean such control exists, for the causes of termination have no relation to
the means and methods of work. (2PC vs. SSS)
5 Dealers0i6 : B contract whereby one engages to purchase and sell soft drinks
on trucks supplied by the manufacturer but providing that the other party
ApeddlerD shall have the right to employ his own workers! shall post a bond to
protect the manufacturer against losses shall be responsible for damages caused
to third person! shall obtain the necessary licenses and permits and bear the
e&penses incurred in the sale of the soft drinks. (%afinco vs. )&C)
Bnother dealership agreement wherein the dealer: handles the products in
accordance with e&isting laws and regulations@ sends his orders to the factory
plant@ is supplied by the factory with a delivery truck and all e&penses for repairs
are borne by the factory@ receives no commission but given a discount for all
sales@ is responsible alone for any violation of the law! sells the product at the
price agreed upon between the parties@ and posts a surety bond of not less than
P1J!JJJ.JJ. (&a S"erte vs. $irector of &a!or elations)
5 Security )gency : *hipping company entered into an agreement with a
security agency wherein the security agency was responsible for the hiring and
assignment of the guards! the guards were not known to the shipping company
for it dealt directly with the agency! and a payment of a lump sum to the agency
who in turn paid the compensation of the individual watchmen. *nder the
circumstances, the guards cannot be considered "")s of the shipping company.
%t is the security agency that recruits, hires and assigns the work of the
watchmen. %t is the wages to which the watchman is entitled. The powers to
dismiss lies with the agency. Lastly, since the company has to deal with the
agency, and not with the individual watchmen, on matters, pertaining to the
contracted task, it stands to reason that the company does not exercise any
power or control over the watchmen)s conduct. (*P& vs. Clave)
20
5 Ste2edoring Ser2ices : *HIP*I+# entered into a =Contract for *ervices> with
1a ?nion providing among others that the latter would furnish all labor needed for
stevedoring work in piers controlled by the former. "he net balance of the
stevedoring charges will be divided e6ually among the parties. The records do
not show any participation on the part of $:%3$%D" with respect to the selection
and engagement of the individual stevedores. The terms and conditions of their
services are matters determined not by $:%3$%D" but by La *nion. %t is also
sufficiently established that La *nion exercised supervision and control over its
labor force. 1hile $:%3$%D" occasionally issued instructions to the stevedores,
such instructions, in legal contemplation are mere re!uests since the privity of
contract lies between the workers and La *nion. (SH2PS2$/ vs. )&C)
; !ollection )gency + *inger entered into a =collection agency agreement> with
collectors providing among others that the collector is to be considered at all
times to be an independent contactor@ he was re6uired to comply with certain
rules and regulations Ai.e. use of authori9ed receipts! monthly collection 6uota!
cash bond! and submission of report of all collections at least once a weekD@ and
his services can be terminated in case of failure to satisfy these regulations.
However! the agent was not re6uired to observe office hours or to report to
*inger e&cept for remitting his collections. He did not have to devote his time
e&clusively for *inger and the manner and method of collection were left solely to
the discretion of the agent! and he shouldered his transaction services. A
5 MessengerialFJanitorial Ser2ices + Panitors were hired by C*I and assigned
to 1a ?nion Carbide. "hey drew their salaries from C*I. C*I e&ercised control
over them through a *CI ## who gave orders and instructions. -oreover! C*I
had the power to assign its janitors to various clients and pull them out. C*I was
a registered service contractor and did business with a number of known
companies in the country. It maintains its own office and had its own office
e6uipment. It furnishes its janitors the cleaning e6uipment. (hone3Po"lene vs.
)&C)
/CC! capitali9ed at P1 million fully subscribed and paid for provided
janitorial and other services to various firms. It hired B and / and assigned them
to work for 4#/"C. "he two reported for work wearing the prescribed uniform of
the /CC@ their leave of absences were filed directly with /CC@ and their salaries
drawn only from /CC. 4#/"C however issued a job description which detailed
the functions of two. pplying the control test, #CC is the "7 of the two.
;urthermore, it had substantial capital. The guidelines in the job description were
laid down merely to ensure the desired result was achieved. %t did not, however,
tell how the work should be performed. ()eri vs. )&C)
5 Re6air and Maintenance Ser2ice + 4 doing business! was hired by *hell to
conduct a hydro(pressure test. He was paid a lump sum for the work he and his
men accomplished. He utili9ed his own tools and e6uipment. He accepted
business from other companies. He was not controlled by *hell with regard to
the manner in which he conducted the test. (Pilipinas Shell vs. C*)
55 Instances of LaborA$nly !ontracting
5 )gency 0iring : P/C and C#*I entered into an agreement under which the
latter undertook to supply the former with 11 messengers. "he agreement
provided that the messengers would remain ##%s of C#*I@ P/C remitted to C#*I
amount e6uivalent to the wages of the messengers@ C#*I in turn paid them and
their names are not included in the P/C%s payroll@ the bank! in cases of dismissal
would re6uest C#*I! and C#*I would in fact withdraw such messenger! and the
21
messengers performed their functions within the bank%s premises. C"$% cannot
be considered a job contractor because its undertaking is not the performance of
a specific job9 it merely undertook to provide the bank with a certain number of
persons able to carry out the work of messengers. (P0C vs. )&C)
?nder the Eork Contract between B and a motorshop! B undertook to
supply labor and supervision in the performance of automotive body painting
work. B and his men were paid lump sum! the company supplied the tools!
e6uipment! machineries and materials and moreover! the jobs were done in the
premises of the motor shop. side from the fact that the company exercised
control and direction over the work done by and his men, the line of work<
automobile painting 8 was directly related to, if not an integral part of the regular
business of the motor shop. (0road8a# %otors vs. )&C)
1* provided helpers! janitors! mechanics to 3P! a corporation engaged in
garment manufacturing. "he agreement between the two provided that 1* shall
provide 3P with workers! 3P shall pay 1* a fee based on rates fi&ed by the
agreement! there is no #$(## relationship between the two and 1* shall have
e&clusive direction in the selection! engagement and discharge of its personnel
and the latter shall be within is full control. L$ is a +labor<only, contractor since it
is merely an agent to procure workers for the real "7. ('"arin)
5 Security Guard #iring + Hyatt and 0** entered into a contract of services
wherein 0** agreed to protect the properties and premises of Hyatt by providing
security guards. "he security guards filled up Hyatt employment application
forms and submitted the forms to the *ecurity +epartment of the hotel. "heir
wages were paid directly by Hyatt and their assignments! promotions!
supervisions and dismissal were approved by the Chief *ecurity Gfficer of Hyatt.
(1all"m Sec"rit# vs. )&C)
*ection <. #mployment Policies! $ecruitment and Placement of Eorkers! and
Bgencies
<. 1 '(6loy(ent 1olicies
1. )rt. 1 : *tatement of Gbjectives (t is the policy of the State:
a. "o promote and maintain a state of 4ull employment through improved
manpower training! allocation and utili9ation@
b. "o protect every citi9en desiring to work locally or overseas by securing for
him the best possible terms and conditions of employment@
c. "o facilitate a free choice of Bvailable employment by persons seeking work in
conformity with national interest@
d. "o facilitate and regulate the -ovement of workers in conformity with national
interest@
e. "o regulate the employment of Bliens! including the establishment of a
registration andIor work permit system@
f. "o strengthen the network of public employment offices and rationali9e the
participation of the private sector in the $ecruitment and placement of workers!
locally and overseas! to serve national development objectives@
g. "o issue careful selection of 4ilipino workers for overseas employment in order
to protect the good name of the Philippines abroad. AB4P -B$CD
22
<. '(6loy(ent )gencies
3rivate $ector<gencies and "ntities
B. 1)R<I'S
B.1. Eorker
5 )rt. 1" 5a7 4Wor*er5 any member of the labor force! whether employed or
unemployed
B. Bgency
5 )rt. 1" 5c7 : =Private fee)charging employment agency> any person or
entity engaged in the recruitment or placement of workers for a fee which is
charged directly or indirectly! from the workers or #$%s or both.
B.2 #ntity
5 )rt. 1" 5e7 : =Private recruitment entity> any person or association engaged
in the recruitment and placement of workers! locally or overseas! without
charging! directly or indirectly! any fee from the workers or the #$%s or both.
/. )LL$.'D '=<I<I'S
/.1 +llowed Private +gencies and ,ntities
5 )rt. 1: : #&cept as provided in Chapter II of this "itle! no person or entity! other
than the public employment offices! shall engage in the recruitment and
placement of workers.
Sec. 1, Rule III, &oo/ I, IRREs 3o person or entity shall engage in the
recruitment and placement of workers either for local or overseas employment
e&cept the following: [allowed agencies]
1. public employment agencies
. PG#B
2. private recruitment entities
:. private employment agencies
;. shipping or manning agents or representatives@ and
<. such other persons or entities as may be authori9ed by the *ecretary.
5)rt. * : . . . the private employment sector shall participate in the recruitment
and placement of workers! locally and overseas! under such guidelines! rules
and regulations as may be issued by the *ecretary of 1abor.
/. 1ro0ibited &usiness )gencies and 'ntities
1. )rt. 1, : Ban on Direct Hiring 3o #$ may hire a 4ilipino worker for overseas
employment e&cept through the /oards and entities authori9ed by the *ecretary
of 1abor.
a. +irect hiring by members of the diplomatic corps@
b. International organi9ations and such other #$%s as may be@
c. allowed by the *ecretary of 1abor is e&empted from this provision.
23
. )rt. : : "ravel agencies and sales agencies of airline companies are
prohibited from engaging in the business of recruitment and placement of
workers for overseas employment! whether for profit or not.
C. G$D'R=M'=< <'!#=IGH'S $C R'GHL)<I$= B 1RID)<'
R'!RHI<M'=< )=D 1L)!'M'=< &HSI='SS
C.1 Licensing, !itiIens0i6, !a6italiIation, Duration, <ransferability and
Cees
1. )rt. @ : Citi9enship $e6uirement:
a. Gnly 4ilipino citi9ens or
b. Gnly corporations! partnerships or entities at least 8;Q of the
authori9ed and voting capital stock of which is owned and
controlled by 4ilipino citi9ens shall be permitted to participate in the
recruitment and placement of workers! locally or overseas.
. )rt. , : Capitali9ation *ubstantial capitali9ation as determined by the
*ecretary of 1abor. AP1 -D
Sec. 1, Rule D, &oo/ I, IRREs : =ualification of pplicants for 3rivate
employment agencies 8 Bll applicants for licenses to operate private
employment agencies either for local or overseas recruitment and placement
shall possess the following 6ualifications. . .
2. )rt. 3 : >on<tranferability of License or uthority
5 3o license or authority shall be used directly or indirectly by any other
person other than the one in whose favor it was issued@ or
5 at any place other than that stated in the license of authority
5 nor such license or authority be transferred! conveyed or assigned to any
other person or entity.
5 Bny transfer of business address! appointment or designation of any agent
or representative including the establishment of additional offices everywhere
shall be subject to the prior approval of the +G1#.
:. )rt. 1* 5a7 : AaD "he /ureau of #mployment *ervices shall be primarily
responsible for developing and monitoring a comprehensive employment
program. It shall have the power and duty:
D "o establish and maintain a registration andIor licensing system to
regulate private sector participation in the recruitment and placement of
workers! locally or overseas! and to secure the best possible terms and
conditions of employment for 4ilipino contract workers and compliance
therewith under such rules and regulations as may be issued by the -inister
of 1abor.
;. +istinguish authority from licenseF 4+uthority5 means a document issued
by the *ecretary of 1abor and #mployment authori9ing a person or
association to engage in recruitment and placement activities as a private
recruitment entity@ while a 4license5 is the document issued to a person or
entity to operate a private employment agency. ABrt. 12D
<. Ehat is the duration of a license recruitF B license is valid for a period of
years from the date of issuance unless sooner cancelled! revoked or
suspended for violation of the 1abor Code or its I$$%s.
5 non(tranferrable
C. &onds
24
1. Brt. 21 : Bll applicants for license or authority shall post such cash and
surety bonds as determined by the *ecretary of 1abor to guarantee
compliance with prescribed recruitment procedures! rules and regulations!
and terms and conditions of employment as appropriate.
. "he purpose of bonds is to insure that if the rights of these overseas
workers are violated by their #$%s recourse would still be available to them
against the local companies that recruited them for the foreign principal.
A*tronghold vs. CBD
C.2 .or/ers Cees
5 )rt. " : Bny person applying with a private fee<charging employment
agency for employment assistance shall not be charged any fee until
1. he has obtained employment through its efforts@ or
. he has actually commenced employment. *uch fee shall be always
covered with the appropriate receipt clearly showing the amount paid. "he
*ecretary of 1abor shall promulgate the schedule of allowable fees.
C.: Re6orts Sub(ission
5 )rt. "" : Ehenever the public interest re6uires! the *ecretary of 1abor may
direct all persons or entities within the coverage of this "itle to submit a report on
the status of employment! including job vacancies! details of job re6uisitions!
separation from job! wages! other terms and conditions! and other employment
data.
1ercentage of salary re(ittance
1. seaman 'JQ
. construction worker 8JQ
2. professional workers with free board and lodging 8JQ
:. professional without board and lodging ;JQ
;. domestic helpers ;JQ
<. other workers ;JQ
C.; 1ro0ibited 1ractices [IC C)I<S !#$.]
1. )rt. "% : Prohibited Practices It shall be unlawful for any individual! entity
license or holder of authority:
1. "o charge or accept@ directly or indirectly! any amount greater than that
specified in the schedule of allowable fees! or make a worker pay any
amount greater than that actually received by him as a loan or advance@
. "o furnish or publish any false notice or information or document in
relation to recruitment or employment@ )includes the act of furnishing fake
employment documents to a worker. AB9ucenaD
2. "o give any false notice! testimony! information or document or commit
any Bct of misrepresentation for the purpose of securing a license of
authority under this Code@
:. "o induce or attempt to induce a worker already employed to 6uit his
employment in order to offer him to another unless the transfer is so
designed to liberate the worker from oppressive terms and conditions of
employment@
;. "o influence or attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency@
<. "o engage in the recruitment or placement of workers in jobs Harmful to
public health or morality or to the dignity of the $epublic of the Philippines@
25
8. "o obstruct or attempt to obstruct inspection by the secretary of 1abor or
by his duly authori9ed representatives@
'. "o 4ail to file reports on the status of employment! placement vacancies!
remittance of foreign e&change earnings! separation from jobs! departures
and such other matters of information as may be re6uired by the *ecretary
of 1abor@
7. "o substitute or alter employment contracts approved and verified by the
+G1# from the time of actual signing thereof by the parties up to and
including the period of e&piration of the same without the approval of the
*ecretary of 1abor ?nless it is to improve the terms and conditions of
employment. A0ir(Pen vs. 31$CD@
1J. "o become an officer or member of any corporation engaged in "ravel
agency or to be engaged directly or indirectly in the management of a
travel agency@
11. "o Eithhold or deny travel documents from applicant workers before
departure for monetary or financial consideration other than those
authori9ed under this Code and its implementing rules and regulations.
. B! 4ilipina! was recruited by a local private employment agency for a
tutoring job abroad. ?pon arrival in the place of employment! she was made
to work as a housemaid. Ehat advice will you give herF I will advice the
4ilipina to commence a criminal action against the employment agency for
violation of rt. ?@ of the 1abor Code. *he was recruited under false
pretense. (*lcantara)
2. *"C! a travel agency! advertised for young women to work as domestic
helpers in Hongkong. 4ive women who left for Hongkong were later brought
to prostitution houses. Have the officers of *"C committed any unlawful actsF
Mes. 0iolation of Brt. < and Brt. 2: AdD and AfD of the 1abor Code. (*lcantara)
C.< Illegal Recruit(ent
1. )rt. 1" 5b7 : =$ecruitment and Placement> ( Bct of [!'!A<H#1I]
a. Canvassing
b. #nlisting
c. Contracting
d. "ransporting
e. ?tili9ing
f. Hiring or
g. Procuring workers and
h. Includes referrals! contracts services! promising or advertising for
employment! locally or abroad! whether for profit or not.
Provided
"hat any person or entity which! in any manner! offers or promises for a fee
employment to or more persons shall be deemed engaged in recruitment or
placement. )"he number of persons dealt with is not! an essential ingredient of
the act of recruitment or placement. "he provision merely lays down a rule of
evidence that where a fee is collected in consideration of a promise or offer of
employment to or more prospective workers! the individual or entity dealing
with them shall be deemed to be engaged in the act of recruitment or placement.
(Pp vs. Panis)
55 Illegal ter(ination
- full reimbursement fees R 1Q
- salaries for une&pired portion or 2 mos. 4or every year of une&pired
term whichever is lower
26
;; Liability of 6ri2ate e(6loy(ent agency B e(6loy(ent contract
- joint and solidary with employer
- all claims and liabilities that may arise in connection with the
implementation of the contracts
. Bny recruitment activities! including the prohibited practices! enumerated
under Brt. 2: of this Code! to be undertaken by non(licensees or non(
holders of authority shall be deemed illegal and punishable under Brt. 27
of this Code.
5 (llegal recruitment when committed by a6
syndicate
or in large scale
shall be considered an offense involving economic sabotage and shall be
penali9ed in accordance with Brt. 27 hereof.
- non(bailable
- life imprisonment
55 Illegal recruit(ent by a syndicate Carried out by a group of 2 or more
persons conspiring andIor confederating with one another in carrying out any
unlawful or illegal transaction! enterprise or scheme defined under the first
paragraph hereof.
55 Illegal recruit(ent in large scale Committed against 2 or more persons
individually or as a group.
)Ehen the 1abor Code speaks of illegal recruitment! =committed against 2 or
more persons>! it must be understood as referring to the number of complainants
therein! otherwise! prosecutions for single crimes of illegal recruitment can be
cumulated to make out a case of large scale illegal recruitment. In other words! a
conviction for large<scale illegal recruitment must be based on a finding in each
case if illegal recruitment of ? or more persons whether individually or as a
group. (Pp vs. e#es)
". Sec. ,, Migrant .or/ers )ct : B criminal action arising from illegal
recruitment as defined herein shall be filed with the $"C of the province or city
where the offense was committed or where the offended party actually resides at
the time of the commission of the offense: provided! "hat the court where the
criminal action is first filed shall ac6uire jurisdiction to the e&clusion of other
courts.
:. <0e cri(e of illegal recruit(ent 0as ele(ents+
a. "hat the offender is a non(license or non(holder of authority to
lawfully engage in the recruitment and placement of workers@ and
b. "hat the offender undertakes any of the recruitment activities
defined under rt. .? &b' of the 1abor Code or any of the prohibited
practices enumerated under rt. ?@ of the same Code.
;. N convinced 4 and *! that they could be employed for 4rance for a fee. N was
also able to persuade B that he could give B a working visa. 3othing happened
to 4! * and B. N did not have any license to recruit or authority to recruitF B may
be charged and convicted of a large(scale illegal recruitment since he did not
have the license or authority to recruit! and yet recruit at least 2 persons. (Pp vs.
-"rda) 4urthermore! he can also be convicted and charged of estafa since the
latter is a malum in se while the former is a malum prohibium &%d.'
27
<. 3B"G! a national union of teachers was able to find jobs abroad for its
member by directly contacting other teachers organi9ations in foreign countries!
without charging additional fees. Is this legalF 3o. Gnly persons or entities with
appropriate license or authority can engage in recruitment and placement of
workers. Contact services are activities that fall within the scope of recruitment
and placement of workers. (*lcantara)
8. B paper manufacturing company in Cainta would like to know if it needs to
obtain a license authority before it can recruit workers for its plant. 3o license or
authority is necessary. "he company is not engaged in the business of
recruitment and placement of workers! it is not recruiting workers to be employed
by others. It does not represent a principal. It is recruiting its own workers.
(*lcantara)
C.8 Rule Ma/ing
5 "he *ecretary of 1abor and #mployment has the power and authority not only
to restrict and regulate the recruitment and placement activities of all agencies
but also promulgate rules and regulations to carry out the objectives and
implement the provisions governing said activities. (/astern *ss"rance vs.
Secretar# of &a!or)
C. ' 'nforce(ent
1. )rt. ": : "he *ecretary of 1abor shall have the power to restrict and
regulate the recruitment and placement activities of all agencies within the
coverage of this "itle and is hereby authori9ed to issue orders and
promulgate rules and regulations to carry out the objectives and
implement the provisions of this "itle.
Sec. , Rule DI, &oo/ I, IRREs : Pending investigation of the complaint or report!
the *ecretary may suspend the license of the private employment agency
concerned. . .
. )rt. "@ : "he *ecretary or his duly authori9ed representatives may! at any
time! inspect the premises! books of account and records of any person or
entity covered by this "itle! re6uire it to submit records regularly on
prescribed forms! and act on violations of any provisions of any provisions
of this "itle.
Public Sector +gencies
B. 'M1L$JM'=< $CCI!'S )=D <#' 1$')
1. )rt. 1% 5a7 : "he *ecretary of 1abor shall have the power and authority: AaD
"o organi9e and establish new employment agencies in addition to the
e&isting employment offices under the +G1# as the need arises.
. Sec. ", '$ %@ : P2,+ functions
a. $egulate private sector participation in the recruitment and
overseas placement of workers by setting up a licensing and
registration system@
b. 4ormulate and implement in coordination with appropriate entities
concerned! a system for promoting and monitoring the overseas
employment of 4ilipino workers taking into consideration their
welfare and the domestic manpower re6uirements@
28
c. Protect the rights of 4ilipino workers to fair and e6uitable
recruitment and employment practices and ensure their welfare@
d. #&ercise original and e&clusive jurisdiction to hear and decide all
pre(employment cases which are administrative in character
involving or arising out of violation of recruitment laws! rules and
regulations! or violation of the conditions for issuance of license or
authority to recruit workers. "he PG#B has no jurisdiction to hear
and decide a claim for enforcement of a foreign judgment. *uch a
claim must be brought before the regular courts. APacific Bsia vs.
31$CD
/. +efinition of "erms
Sec. 1 587, 5w7, 5I7, 5ff7, and 5>>7, Rule II, &oo/ I, Rules and regulations on
$2erseas '(6loy(ent
1. 4#ontract Wor*er5 ( Bny person working or who has worked overseas
under a valid employment contract.
. 4.anning agency5 Bny person or entity recruiting seamen for vessels
plying international waters and fore related maritime activities.
2. 4&ame 7ire5 Eorker who is able to secure employment overseas on his
own without the assistance or participation of an agency.
:. 42verseas employment5 #mployment of a worker outside the
Philippines! including employment on hoard vessels plying international
waters covered by a valid employment contract.
;. 4Placement fee5 Bmount charged by a private employment agency
from a worker for its services in securing employment.
<. 4Service fee5 Bmount charged by a license from its foreign #$ as
payment for actual services rendered in relation to the recruitment and
employment of workers for said principal.
<. 2 Sanctions
1. )rt. "* : $uspension andAor Cancellation of License or uthority "he
*ecretary of 1abor shall have the power to suspend or cancel any license
or authority to recruit ##%s for overseas employment for violations of rules
and regulations by the +G1#! the PG#B! or for violation of the provisions
of this! and other applicable laws . .
. )rt. "3 : 3enalties 8 0iolations of any provisions of this "ile or I$$%s by
license or holder of authority :
a. imprisonment of not less than years nor more than ; years
b. or a fine of not less than P1J!JJJ.JJ nor more than P;J!JJJ.JJ
c. or both such imprisonment and fine! at the discretion of the court.
2. 0iolation of any of the provisions thereof or its implementing rules and
regulations by a non(license or non(holder of authority
a. imprisonment of not less than : years nor more than ' years
b. or a fine of not less than PJ!JJJ.JJ nor more than P1JJ!JJJ.JJ
c. or both such imprisonment and fine! at the discretion of the court.
29
:. If the offender is a corporation! partnership! association or entity! the
penalty shall be imposed upon the officer or officers of the corporation!
partnership! association or entity responsible for violation@ and if such
officer is an alien! he shall in addition to the penalties herein prescribed!
be deported without further proceedings:
5 Illegal recruit(ent+
a. imprisonment of not less than < years and 1 day but not more than
1 years and
b. a fine of not less than PJJ!JJJ.JJ nor more than P;JJ!JJJ.JJ.

5 Illegal recruit(ent constituting 'cono(ic Sabotage+
c. life imprisonment@ and
d. a fine of not less than P;JJ!JJJ.JJ nor more than P1!JJJ!JJJ.JJ.
5 <0e (a?i(u( 6enalty s0all be i(6osed if+
a . the person illegally recruited is less than 1' years of age@ or
b. committed by a non(license or non(holder of authority.
5 "he *ecretary of 1abor or his duly authori9ed representative may order the
closure of illegal recruitment establishments.
5. Brt. 2' AcD of the 1abor Code granting the *ecretary of 1abor the power to
issue search or arrest warrants is declared unconstitutional and null and
void. (Sala.ar vs. *chacoso)
- money claims arising from #$(## relationship prescribes in 2 years
- strict rules of evidence are not applicable in claims for
compensation and disability benefits
;. In case of breach of the employment contract by a foreign(based #$! may the
private employment agency or recruitment entity be held liableF Ehat is the
nature of the liability of the recruitment and placement agency and its principalF
Mes. "he agency or entity undertakes under oath to assume full and complete
responsibility for all claims and liabilities which may arise in connection with the
use of the license or authority. "he agency is jointly severally liable with the
principal or foreign(based #$ for any of the violations of recruitment agreement
contract of employment. (*m!ra9"e vs. )&C: Pp vs. Catan)
Section @. )lien '(6loy(ent
8. 1 <ec0ni>ue of RegulationA'(6loy(ent 1er(it
1. )rt. %4 : "mployment 3ermit of >on<resident liens 8 Bny alien seeking
admission to the Philippines for employment purposes and any domestic
or foreign #$ who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the +G1# . . .
4or an enterprise registered in preferred areas of investments! said
employment permit must be issued upon recommendation of the government
agency charged with the supervision of the registered enterprise.
Sec. @, Rule -ID, &oo/ I, IRREs : "he employment permit shall be valid for a
minimum period of 1 year.
30
. )rt. %1 : 3rohibition gainst Transfer of "mployment AaD Bfter the
issuance of an employment permit! the alien shall not transfer to another
job or change his #$ without prior approval of the *ecretary of 1abor.
)rt. ,, : Bny alien found guilty shall be summarily deported upon completion
of service of sentence.
2. -ay an #$ in the Philippines employ a worker who is not a 4ilipino
citi9enF Mes! e&cept to nationali9ed activities such as:
a. public utility to develop! e&ploit and utili9e natural resources <JQ
4ilipino@
b. -ass media 1JJQ owned by 4ilipino citi9ens
c. Bdvertising 8JQ 4ilipino owned
d. $etail /usiness 1JJQ 4ilipino owned
e. 4inancing business <JQ 4ilipino owned
4. Bre there e&ceptions to the prohibition against employment of aliens in
entities engaged in nationali9ed activitiesF Mes! when AaD the *ecretary of
Pustice specifically authori9es the employment of technical personnel@ or
AbD where aliens are elected members of /oard of +irectors in proportion
to their allowable participation in the capital@ or AcD when allowed under
certain special laws. (*lcantara)
#overage
5 B resident alien need not obtain an employment permit in order to be employed
in the Philippines. (*lmodiel vs. )&C)
,mployment Permit 3 #onditions for 8rant
1. )rt. %4 : "he employment permit may be issued to a non(resident alien or
to the applicant #$ after a determination of: [. ) !]
a. competent
b. able and
c. willing
at the time of the application to perform the services for which the alien is
desired. )"he +G1# is the agency vested with jurisdiction to determine the
6uestion of availability of the local workers. ('eneral %illing vs. -orres)
. Sec. *, Rule -ID, &oo/ I, IRREs : $e!uirements for "mployment 3ermit
pplicants 8 "he applicant for an employment permit shall be
accompanied by the following:
a. Curriculum vitae signed by the applicant indicating the educational
background! his work e&perience and other data showing that he
possesses technical skills in his trade or profession.
b. Contract of employment between the #$ and the principal! which
shall embody the following! among others:
"hat the non(resident alien shall comply with all applicable laws
and rules and regulations@
"hat the non(resident alien worker and #$ shall bind themselves to
train at least 4ilipino understudies@ and
B designation by the #$ of at least understudies which must be
the most ranking regular ##%s in the section or department for
which the e&patriates are being hired to ensure actual transfer of
technology.
31
Section ,. De2elo6(ent of #u(an Resources
'.1 $b8ecti2es A Definitions
1. )rt. %" : It is the objectives of this [C ' D]
a. "itle to +evelop human resources
b. #stablish training institutions! and
c. 4ormulate such plans and programs as will ensure efficient
allocation! development and utili9ation of the nation%s manpower
and thereby promote employment and accelerate economic and
social growth.
. Ehat is human resources developmentF Process by which the actual and
potential labor force is made systematically to ac6uire greater knowledge!
skills and capabilities for the nation%s sustained economic and social
growth. &$ec. ., 7ule %, #ook %%, %77)s'
2. +efine manpowerF Is the portion of the population which has actual or
potential capability to contribute to the production of goods and services.
&$ec. . &c', 7ule %, #ook %%, %77)s'
:. Is human resources development intended solely to train workersF 3o.
-anpower development also means training for self(employment. "his is
known as =entrepreneurship> &rt. @@ &b'.
;. Ehat is dual systemItrainingF It refers to a delivery system of 6uality
technical and vocational education which re6uires training to be carried
out alternatively in venues:
a. in school and
b. in the production plant.
In school! training provides the trainee the theoretical foundation! basic training!
develops his skill and proficiency in actual working conditions as it continues
personal discipline and work value. &$ec. @ &p', 7 BB6C'
'. 1rogra( Incenti2e
5 )rt. * : +eduction from ta&able income of S of the value of labor training but
not to e&ceed 1JQ direct labor wage: Provided! "hat in the case of
apprenticeship programs! the program is recogni9ed by +G1#.
'.2 <raining and '(6loy(ent of S6ecial .or/ers B )66rentices, Learners
and #andica66ed .or/ers
Policy 2b9ectives
5 Ehat is the policy of the *tate on apprenticeshipF
1. "o help meet the demand of the economy for trained manpower@
. "o establish a national apprenticeship program through participation of
#$%s workers! and government and non(government agencies@ and
2. "o establish apprenticeship standards for the protection of apprentices.
&rt. DB'
Definition
1. )rt. *, : K+pprenticeship5 8 Practical training on the job supplemented
by related theoretical instruction.
32
. )rt. @" : KLearners5 8 Persons hired as trainees in semi(skilled and other
industrial occupations which are non(apprenticeable and which may be
learned through practical training on the job in a relatively short period of
time which shall not e&ceed 2 months.
2. )rt. @, : K7andicapped wor*ers5 8 "hose whose earning capacity is
impaired by age or physical or mental deficiency or injury
Who #an ,mploy and When

B. )11R'=<I!'S must be approved by "#*+B
1. )rt. :4 : Gnly #$%s in highly technical industries and only in
apprenticeable occupations may employ apprentices.
Sec. 1, Rule ID, &oo/ II, IRREs : =:ighly Technical %ndustries> "rade!
business! enterprise! industry or other activity which is engaged in the
application of advanced technology.
)rt. *, : =pprenticeship Eccupation> $e6uires more than 2 months of
practical training supplemented by related theoretical instruction.
- 1 month probation
- prior approval by "#*+B of the proposed apprenticeship program
is a condition sine 6ua non before an apprenticeship can be validly
entered into
- employer is not obliged to employ the apprentice after the
completion of his training
. )rt. @4 : Bpprenticeship programs shall be primarily voluntary e&cept:
a. Ehen national security or particular re6uirements of economic
development so demand! the President may re6uire compulsory
training where the shortage of trained manpower is deemed critical
by the *ecretary of 1abor.
b. Ehere services of foreign technicians are utili9ed by private
companies in apprenticeable trades.
/. L')R='RS
( 1earnership programs must be approved by "#*+B
5 )rt. @% : 1earners may be employed when:
1. no e&perienced worker is available
. the employment of learners is necessary to prevent curtailment of
employment opportunities
2. and the employment does not create unfair competition in terms of labor
costs or impair or lower working standards.
C. #)=DI!)11'D .$RL'RS
5 )rt. @3 : Handicapped workers may be employed when their employment
1. is necessary to prevent curtailment of employment opportunities@ and
. when it not create unfair competition in labor costs or lower working
standards.
Conditions of "mployment
- not e&ceed ' hours
- allowed overtime
33
5 )rt. :1 :
1. Period of apprenticeship shall not e&ceed < months.
. Eages shall not start below 8;Q of the minimum wage.
3. Bpprenticeship program must be duly approved by "#*+B or apprentices
becomes regular ##. "his must be evidenced by an apprenticeship
agreement. ()itto /nterprises vs. )&C)
Ratio of t0eoretical 2s. on t0e 8ob training M 144+ 444
( may work overtime duly credited as his training time
5 )rt. @ : "he *ecretary of 1abor may authori9e the:
1. hiring of apprentices without compensation whose training on the job is
re6uired by the school or training program curriculum as a re6uisite for
graduation or board e&amination. "here is no #$(## relationship between
students on one hand! and schools! where there is written agreement
between them under which the former agree to work for the latter in
e&change for the privilege to study free of charge. &$ec. .@, 7ule F, #ook
%%%, %77)s'
2. B clerk in the College of 1aw of a ?niversity worked without pay but was
allowed to take up no more than 2 units per semester free of charge. "he
clerk resigned and demanded payment of unpaid wages. Is the clerk
entitled to unpaid wagesF Mes. *ec. 1:! $ule C! /ook III! I$$%s : only
applies in instances where the students are given real opportunity!
including such facilities as may be reasonably necessary to finish their
chosen courses under such arrangement. In this problem! the clerk was
not given any real opportunity to finish law as he was allowed to take up
no more than 2 units per semester. "here is therefore an #$(##
relationship between the clerk and the university. (*lcantara)
". Gualifications of an )66rentice+
a. Bt least 1; years of age: provided! those below 1' years of
age shall not work in ha9ardous occupations@
b. /e physically fit for the occupation.
c. Possess vocational aptitude and capacity.
d. Possess the ability to comprehend! and follow oral and
written instructions. &$ec. .., 7ule 2%, #ook %%%, %77)s'
4. B ;(star hotel would like to have an apprentice program dishwashersF 3o.
"his is not an apprenticeable program occupation because proficiency can
be attained within a very short period. /esides! the hotel industry is not
highly technical. (*lcantara)
;. Bfter working for 1 month may an apprentice be dismissed without causeF
3o. Bfter the probationary period of 1 month! the apprenticeship
agreement may be terminated only for cause.
:% #auses for termination of apprenticeship agreement by apprentice6
a. $epeated violation by #$ of agreement
b. Cruel or inhuman treatment
c. Personal problems which prevents a satisfactory performance Abad
healthD
d. *ubstandard working conditions
'M1L$J'R
a. habitual absentism
34
b. willful disobedience e.g. rules
c. insubordination lawful order
d. poor physical conditions apprentice
e. theft or malicious destruction
f. poor efficiency of performance
g. engaging in violence
h. gross misconduct
i. bad health or continuing illness. &$ec. 5D, 7ule 2%, #ook %%, %77)s'
5 employer must make a commitment to employ the business
/. L')R='RS
( learnership must be approved by "#*+B
1. )rt. @* :
1. +uration of the learnership period shall be 2 months@
. Eages and salary rates begin at not less than 8;Q minimum wage@ and
2. B commitment to employ learners if they so desire! as regular ##%s upon
completion of the learnership.
Bll learners who have been allowed or suffered work during the first

nd
months to be deemed ##%s training is terminated by the #$
before the end of the stipulated period though no fault of the
learner.
. )rt. @: : 1earners employed in piece or incentive(rate jobs during training shall
be paid in full for the work done.
2. P entered into a learnership agreement with employer B. /efore the end of
months! B terminated the agreement. Ehen P re6uested for a chance to let him
finish the 2 months period. Bt the end of 2 months! B refused to hire P. Is the
stand of B sustainableF 3o. B has a commitment under the learnership
agreement to employ P as a regular worker upon the completion of the
learnership.
C. #)=DI!)11'D .$RL'RS )) 1 M I.
1. )rt. ,4 :
$ates to be paid to handicapped workers shall not be less than
8;Q of the applicable minimum wage.
#mployment agreement must state the duration of the employment
period and the work to be performed.
. )rt. ,1 : Handicapped workers may be hired as apprentices or learners if
their handicap is not such as to effectively impede the performance of job
operations in the particular occupations for which they are hired.
,nforcement
1. )rt. :: : ppeal to the $ecretary of Labor < "he decision of the authori9ed
agency of the +G1# may be appealed to the *ecretary of 1abor within ;
days from receipt of the decision. "he decision of the *ecretary of 1abor
shall be final and e&ecutory.
. )rt. :@ : "xhaustion of dministative 7emedies 8 3o person shall institute
any action for the enforcement of any apprenticeship agreement or
damages for breach of any such agreement! unless he has e&hausted all
available administrative remedies.
35
Section 3. !onditions of '(6loy(ent B #ours of .or/
7. 1 #ours Regulation
7ationale and "nforcement
5 "he '(hour labor law was designed not only to safeguard the health and
welfare of the laborer but in a way to minimi9e unemployment by forcing #$%s! in
cases! where more than an '(hour operations is necessary! to utili9e different
shifts of laborers working only for ' hours each. (%anila -erminal vs. C2)
7. !o2erage
I. )rt. , : "he provisions of this "itle shall apply to ##%s in all establishments
and undertakings whether for profit or not but to [GMSA CMD1]
1. Novernment ##%s )whether employed by the 3ational Novernment or any
of its political subdivisions! including those employed in NGCC%s with
original charters. &$ec. 5, 7ule %, #ook %%%, %77)sG
. -anagerial ##%s )refer to those who meet all of the following conditions!
namely:
a. "heir primary duty consists of the management of the
establishment in which they are employed or of a department or
sub(division thereof@
b. Customarily or regularly direct the work of or more ##%s
c. Has the authority to hire or fire other ##%s of lower rank@ or their
suggestions and recommendations as to the hiring and firing and
as to the promotion or any change of status of other ##%s are given!
particular weight. Ad.D.
-ere designation to a position with a high(sounding title! does not
make an ## a managerial ## where the e&ercise of the
independent judgment is not present. (Sierra vs. )&C)
2. Gther officers or members of the managerial staff if they perform the
following duties and responsibilities:
a. Primary duty consists of the performance of work directly related to
management policies of the #$@
b. Customarily and regularly! e&ercise discretion and independent
judgment@
c. $egularly directly assist a proprietor or managerial ## or e&ecute
under general supervision work along speciali9ed or technical lines
re6uiring special training! e&perience or knowledge@ or e&ecute
under general supervision special assignment and tasks@ and
d. +o not devote more than JQ of their hours worked to activities
which are not directly and closely related to the performance of the
work described in the preceding paragraphs. AId.D
:. 4ield personnel )3on(agricultural ##%s who regularly perform their duties
away from the principal place of business or branch office of the #$ and
whose actual hours of work in the field cannot be determined with
reasonable certainty. &rt. H5'
;. -embers of the family of the #$ who are dependent on him for support
domestic helpers and persons in the personal service of another. 3erform
such serviceI
36
a. In the #$%s home which are usually necessary or desirable for the
maintenance or enjoyment thereof@
b. Gr minister to the personal comfort! convenience or safety of the
#$ as well as the members of his #$%s household. &sec. 5, 7ule %,
#ook %%%, %77)s'
However! house personnel hired by a ranking company official! but
paid for the company itself! to maintain a staff house provided for
the official! are not the latter%s domestic helpers but regular ##%s of
the company. (Cadi. vs. Philippine Sinter)
"he function of a managerial employee re6uires the use of
discretion and independent judgment Anature of his functionsD
<. Bnd workers who are paid by results. )Including those who are paid on
piece(work! =takay>! =pakiao>! or task basis if their output rates are in
accordance with the standards prescribed..
II. Nive the reason for the e&ceptionsF
1. Jovernment "")s "erms and conditions of employment are governed by
the Civil *ervice 1aw
. 0anagerial "")s #mployed by reason of their special training! e&pertise
or knowledge and for positions re6uiring the e&ercise of discretion and
independent judgment. 0alue of work cannot be measured in terms of
hours.
2. >on<agricultural field personnel "hese regularly perform their duties
away from the principal or branch office or place of business of the #$@
they are on their own in the field and the number of hours of actual work
they render cannot be reasonably ascertained.
:. 0embers of the family dependent upon him for support Bmounts given
by way of support may far e&ceed the benefits to which the ##%s are
entitled under the laws on overtime.
;. Domestic helpers and persons in the personal service of another "hey
minister to the personal needs and comfort their #$ and his family and
terms and conditions of employment are governed in other parts of the
1abor Code.
6. 1orkers paid by results Compensation computed on the basis of work
accomplished and not on time spent in accomplishing the work.
(*lcantara)
III. +etermine whether e&empted ## or notF
1. 4oremen! inspectors and supervisors given the power to recommend
hiring and firing of ##%s but where ultimate power to hire or fire rested with
personnel managerF 3o. 1here such recommendatory powers are
subject to evaluation and review, the same are not effective and not an
exercise of independent judgment as re!uired by law. ( +ran(lin 0a(er
Compan# vs. -ra6ano)
2. *upervisory ##%s are given the following duties and functions assist the
department superintendent in various aspects of management such as in
the planning of systems and procedures! recommends disciplinary action
against erring subordinates or promotion of deserving personnel! train and
37
guide subordinates@ communicate and coordinate with other supervisors@
recommend measures to improve work method@ and other related tasks as
may be assigned by his immediate superior. Mes. They discharge duties
and responsibilities which !ualify them as members of the managerial
staff. (*lcantara)
3. Cutter in tailoring shop was assigned chore of distributing work to shop%s
tailors when the shop%s manager were absent. He saw to it that work
conformed with pattern he had prepared and if not! had them redone!
repaired or sewn. 3o. :e did not participate in policy<making. %t is true that
in the absence of the manager and assistant manager, he distributes and
assigns work to "")s but such duty though involving discretion is
occasional and not regular and customary. (1ill"ga vs. )&C)
7.2 =or(al #ours
5 )rt. ," : "he normal of hours of work of any ## shall not e&ceed ' hours a
day.
55 Health personnel in cities and municipalities with a population of at least
1!JJJ!JJJ or in hospitals and clinics with a bed capacity of at least 1JJ shall hold
regular office hours for ' hours a day! for ; days a week! e&clusive of time of
meals! e&cept where the e&igencies of the service re6uire that such personnel
work for < days or :' hours in which case they shall be entitled to an additional
compensation at least 2JQ of their regular wage for work on the <
th
day. )=:ealth
personnel> Includes resident physicians! nurses! nutritionists! dieticians!
pharmacists! social workers! laboratory technicians! paramedical technicians!
psychologists! midwives! attendants and all other hospital or clinic personnelO.
5 "he :J(hour work week would not be applicable if there is a training agreement
between the resident physician and the hospital and the training program is duly
accredited or approved by appropriate government agency. (*."cena)
7.: #ours .or/ed
1. )rt. ,% : Hours worked shall include:
B. all time during which an ## is re6uired
to be on duty
to be at a prescribed workplace and
/. all time during which an ## is suffered or permitted to work.
$est periods of short duration during working hours shall be counted as hours
worked.
. Sec. %, Rule III, &oo/ III, IRREs :
Principles in etermining 7ours Wor*ed
1. Bll hours are hours worked which the ## is re6uired to give to his #$
regardless of whether or not such hours are spent in productive labor or
involve physical or mental e&ertion@
. Bn ## need not leave the premises of the workplace in order that his rest
period shall not be counted! it being enough that
a. he stops working!
b. may rest completely and
c. may leave his workplace! to go elsewhere! whether within or
outside the premises of the workplace@
38
2. If the work performed was necessary or it benefited the #$ or the ##
could not abandon his work at the end of the normal working hours
because he had no replacement! all the time spent for such work shall be
considered as hours worked! if the work was with the knowledge of his #$
or immediate supervisor@
:. "he time during which an ## is inactive by reasons of interruptions in his
work beyond his control shall be considered working time either if the
imminence of the resumption of the work re6uires the ##%s presence at
the place of work or if the interval is too brief to be utili9ed effectively and
gainfully in the ##%s own interest.
2. Pose works as a janitor. He continues sweeping the floors after ;:JJ p.mO
"he manager is aware of this! but he does not stop Pose from doing work after
;:JJ p.m. Is this hours of workF Mes. Blthough Pose was not instructed e&pressly
to render work! he was impliedly allowed to do so by failure of the #$ to warn
him against rendering such work. /esides the work rendered by Pose benefited
the #$.
Waiting Time
1. Sec. *, Rule I, &oo/ III, IRREs : Eaiting time spent by an ## shall be
considered as working time if waiting is an
a. integral part of his work! or
b. the ## is re6uired to engage by an #$ to wait
"he controlling factor is whether waiting time spent in idleness is so spent
predominantly for the #$%s benefit or for the ##%s. AB9ucenaD
2. *! a company driver has the following work schedule: ':2J a.m. ( fetches
N.-.@ 7:JJ a.m. 1:JJ noon does nothing on call for N.-. at the
company premises @ 1 noon 1:JJ p.m. lunch@ 1:JJ p.m. ;:JJ p.m.
drives the N.-. to conferences@ ;:JJ p.m. goes home. "he company
refuses to pay him for the 7:JJ a.m. to 1:JJ noon period. Is this validF
3o. * is not free to make use of the period effectively and gainfully for his
own purposes. He must remain in the premises as at any time he may be
called to drive for the N.-. (*lcantara)
3. 2J minutes prior to the start of the scheduled working hours! the workers
of an enterprise assembled at a designated area to answer roll call. Bs
their houses are situated right where the farms are located! the workers
can go back in their houses after roll call to do some chores. Is the
assembly time working timeF 3o. "he works are not subject to the
absolute control of the company during the period. "he workers were not
deprived of the time to attend to other personal pursuits. (*ria vs. )&C)
(dle Time
1. B laborer need not leave the premises of the factory! shop or boat in order
that his period of rest shall not be counted! it being enough that he =cease
to work>! may rest completely and leave or may leave at his will the spot
where he actually stays while working! or go somewhere else! whether
within or without the factory! shop or boat. (&".on Stevedoring vs. &".on
%arine $ept. Union)
2. B! an accountant in the manufacturing firm! has idle time in her work
schedule! =waiting for company papers to work on. *he dovotes this time
working on papers of other firms for which she receives remuneration. Is
the firm obligated to pay her for this timeF Mes. Blthough she is working on
39
the papers of other companies! she has no absolute control over her time.
Her #$ may at any time re6uire her to do some work. *he cannot
furthermore leave the place of work during her work schedule. (*lcantara)
2. "! a machine operator was forced to stop operating his machine for 1 hour
during a brownout. Is this working timeF Mes. "he interruption was not due
to the fault of ". /esides 1 hour is too brief to be utili9ed effectively and
gainfully for his own interest.
.eal Time
1. Sec. @, Rule I, &oo/ III, IRREs : #very #$ shall give his ##%s not less than
1 hour time(off for regular meals! e&cept in the following cases where a
meal period of not less than J minutes may be given by the #$ provided
5A"hat such shorter meal period is credited as compensable hours worked hours
worked of the ## /ut if it is the ## who re6uested for the shorter meal time! then
such shortened meal period is not compensable. (*."cena);
[= $ 1 ']
Ehere work is 3on(manual in nature or does not involve strenuous
physical e&ertion@
Ehere the establishment regularly Gperates less than 1< hours a
day@
In cases of actual or impending #mergency or there is urgent work
to be performed on machineries and e6uipment to avoid serious
loss which the #$ would otherwise suffer@ and
Ehere the work is necessary to Prevent serious loss of perishable
goods.
5 $est periods or coffee breaks running from ; to J minutes shall be considered
as compensable working time.
2. Ehere during the so(called meal period! the laborers are re6uired to stand
by for emergency work! or where said meal hour is not one of complete
rest! such period is considered overtime. (Pan *m vs. Pan *m //7s
*ssociation)
Wor*ing While Sleeping
5 *leeping time may be considered working time if it is subject to serious
interruption or takes place under conditions substantially less desirable than
would be likely to e&ist at the ## home i.e. firemen permitted to sleep a portion of
the time they are so on duty at the fire station. (*."cena)
2n #all
1. Sec. *, Rule I, &oo/ III, IRREs : Bn ## while he is re6uired to remain on
call in the #$%s premises or so close thereto that he cannot use the time
effectively and gainfully for his own purpose shall be considered as
working hours while on call. Bn ## who is not re6uired to leave word at his
own or with company officials where he may be reached is not working
while on call.
40
2. If an ## is kept within reach through a cellular phone. Is it on callF 3o.
(*."cena)
Travel Time
555Principles which determine whether or not time spent in travel is working time:
Travel from 7ome to Wor* 3ormal travel from home to work is
no work time but an emergency call outside of regular working
hours re6uiring him to go to his regular place of business is working
time.
Travel that is all in the day-s wor* "ime spent by an ## in
traveling from one job site to another! during the workday! must be
counted as hours worked.
Travel away from home "ravel away from home is clearly
worktime when it cuts across the ##%s workday! e&cept during meal
period or when ## is permitted to sleep in ade6uate facilities
furnished by the #$. "he time is not only hours worked on regular
workdays but also during corresponding working hours on non(
working days. Gutside of these regular working hours! travel away
from home is not considered working time. "+zucena'
Lectures0 .eetings0 Training Programs
5 Sec. :, Rule I, &oo/ III, IRREs : Bttendance at lectures! meetings! training
programs and other similar activities shall not be counted as working time if all of
the following conditions are met:
1. Bttendance is outside of the #$%s regular working hours@
. Bttendance is in fact voluntary@ and
2. "he ## does not perform any productive work during such attendance.
Semestral /rea*
5 $egular full(time teachers are entitled to salary and CG1B during semestral
break. (U.Pang. +ac"lt# Union vs. U. Pang.)
7.; $2erti(e .or/ and $ffsetting 1ro0ibition
1. )rt. ,@ : Evertime 1ork 8
regular work day plus ;Q basic hourly rate
*pecial days! holiday or rest day plus 2JQ of the regular hourly
rate on said days.
. )rt. ,3 : "mergency Evertime 1ork < Bny ## may be re6uired by the #$
to perform overtime work in any of the following cases:
[.'DAH1S]
a. Ehen the country is at war
b. Ehen any other national or local emergency has been declared
c. Ehen it is necessary to prevent loss of life or property or in case of
imminent danger to the public safety due to an actual or impending
emergency in the locality caused by serious accidents! fire! flood!
typhoon! earth6uake! epidemic or other +isaster or calamity.
41
d. Ehen there is ?rgent work to be performed on machines and
installations in order to avoid serious loss or damage to the #$ or
some other cause of similar nature.
e. Ehen the work is necessary to prevent loss or damage to
Perishable goods.
f. Ehere the completion or continuation of the work started before the
'
th
hour is necessary to prevent *erious obstruction or prejudice to
the business operations of the #$.
"he ##%s refusal to obey the order of the ## constitutes
insubordination for which he may be subjected to disciplinary action.
(*lcantara)
". )rt. ,, : ?ndertime work in any particular day shall not be offset by
overtime work on another day /?" not on someday.
Permission given to the ## to go on leave on some other day of the
week shall not e&empt the #$ from paying the additional
compensation re6uired.
:. )rt. 34 : 4or purposes of computing overtime and other additional
remuneration as re6uired by this Chapter the =regular wage> of an ##
shall include the cash wage only! without deduction on account of facilities
provided by the #$.
;. M! corporation! as a company policy! re6uired its ##%s to render only <
hours of work daily but pays them the minimum wage corresponding to '
hours work. 1ater! the full '(hours was re6uired without any increase in
wages. Bre the ##%s entitled to overtime payF Mes. "hough voluntary
practice or policy! the company has fi&ed the normal workday at < hours. It
now constitute part of the terms and conditions of employment and cannot
be unilaterally withdrawn by the #$. (*lcantara)
<. +istinguish overtime pay from premium pay : $2erti(e 6ay is additional
compensation for work done beyond the normal work hours on ordinary
working days. 1re(iu( 6ay is additional compensation for work rendered
by the ## on days normally he should not be working. /ut additional
compensation for work rendered in e&cess of ' hours during these days is
also considered overtime pay.
8. B was late for work on a particular day. "o offset for the time he was late!
B worked on additional period e6uivalent to the period he was late for
work. "he period was offset against B% undertime. Is this validF Mes. "he
prohibition to offset overtime against undertime applies to undertime
incurred and overtime rendered on different days.
Provisions for overtime covers both profit and non(profit
establishment or undertaking
4or purposes of computing overtime
$#N?1B$ EBN# includes the cash wage only@ without
deduction of facilities provided.
'. -ay the right to overtime pay be waivedF Bs a general rule! the right
cannot be waived. (Cr". vs. <es Sing) However! when the waiver is
e&change for certain benefits and privileges! which may be more than
what will accrue to them in overtime pay! the waiver may be permitted.
(%/*&C, Wor(ers Union vs. %/*&C,)
Rationale 3 2vertime Pay
42
5 "he reasons for overtime pay is that the worker is made to work longer than
what is commensurate with the agreed compensation for the statutorily fi&ed or
voluntary agreed hours of labor he is supposed to do. Ehen he thus spends
additional time to his work! the effect upon him is multi(faceted@ he puts in more
effort! physical or mental@ he is delayed in going home to his family to enjoy the
comforts thereof@ he might have no time for rela&ation! amusement or sports@ he
might miss important pre(arranged arrangements. (P)0 vs. P/%*)
#ompressed Wee* 3 2oluntary basis
5 Ehile as a general rule! the right to overtime pay cannot be waived under
e&isting laws! the ##%s and #$ can agree to a compressed workweek of ; days
of 7 hours each with no payment of overtime if this will redound to the benefit of
the workers i.e. if the original workweek is reduced from -onday *aturday to
-onday 4riday. (*.".ena) However! Blcantara answered in a 17': problem
differently when he answered that overtime pay should be paid. In that problem!
the workers were re6uired to render 7.; hours of work for ; days. AEhat is the
answer! I really do not know! ask the reviewerD
!onditions for K#ompressed Wor* Wee*N
1. voluntary agreed upon
. not to e&ceed :' hoursI week
2. no diminution on take home pay or fringe benefits
:. waivers must be made
;. all hours e&ceeding :' hoursIweek considered overtime
<. must submit report to +G1#
Retail 'stablis0(ent
- sale of goods for personal or household use
e&. grocery
Ser2ice 'stablis0(ent
- sale of services to individuals for their own or household use
e&. ".0. repair shop
&o Formula /asic #ontract
5 Ehen the contract of employment re6uires work for more than ' hours at
specific wages per day! without providing for a fi&ed hourly rate or that the daily
wages include overtime pay! said wages cannot be considered as including
overtime compensation. (%anila -erminal vs. C2)
/uilt)(n #ompensation
5 "he employment contract may provide for a =built<in> overtime pay. /ecause of
this! non(payment of overtime pay by the #$ is valid. (/ngineering e9"ipment vs.
%inister of &a!or)
7.< =ig0t .or/
1. )rt. ,: : #very ## shall be paid night shift differential of not less than 1JQ
of his regular wage for each hour of work performed between 1J:JJ p.m.
and <:JJ a.m.
. Sec. 1, Rule II, &oo/ III, IRREs + "his rule shall apply to all ##%s e&cept:
[G R S D M C]
43
a. "hose of the government and any of its political subdivisions!
including NGCC%s.
b. $etail and service establishments regularly employing not more
than ; workers.
c. +omestic helpers and persons in the personal service of another.
d. -anagerial ##%s.
e. 4ield personnel and other ##%s whose time and performance is
unsupervised by the #$.
f. Includes task and contract basis
2. C works at a gasoline station which has only ; ##%s. Is he entitled to night
shift differentialF 3o. He works in a retail establishment employing not
more than ; workers. (*lcantara)
:. Ehat if C works at Ting%s -inimarts! a retail store chain with 1J outlets of
##%s each outlet. Is he entitled to night shift differentialF Mes. "he total
number of ##%s of the #$ e&ceeds ;. It is at least J. AIdD
Rationale 3 Prohibition
5 4irst! there are remotely injurious effects of permanent nightwork manifested in
the later years of worker%s life. Gf the more immediate importance is the
disarrangement of his social life! including the recreational activities of his leisure
hours and the ordinary associations of normal family relations. 4rom an
economic point of view! it is to be discouraged because of its adverse effect upon
efficiency and output. B moral argument in the case of workers is that they go to
and from the factory in the darkness. (Shell vs. )&U)
#&ercise of a profession is neither a retail nor service
Section 14 + .ee/ly Rest 1eriods
5 )rt. , : "he provisions of this "itle shall apply to ##%s in all establishments
and undertakings whether for profit or not! but not to ;8 . S F ( 3 F R<
1. 8overnment ,,-s )whether employed by the 3ational Novernment or any
of its political subdivisions! including those employed in NGCC%s with
original charters. A*ec. ! $ule I! /ook III! I$$%s.
. .anagerial ,,-s )refer to those who meet all of the following conditions!
namely:
a. "heir primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof@
b. Customarily and regularly direct the work of or more ##%s@
c. Has the authority to hire or fire other ##%s of lower rank@ or their
suggestions and recommendations as to the promotion or any other
change of status of other ##%s are given particular weight. AIdD
U -ere designation to a position with a high(sounding title! does not make an ##
where the e&ercise of independent judgment is not present. (Sierra vs. )&C)
2. 2ther officers or members of the managerial staff )if they perform the
following duties and responsibilities:
a. Primary duty consists of the performance of work directly related to
management policies of the #$@
b. Customarily and regularly e&ercise discretion and independent
judgment@
44
c. $egularly directly assist a proprietor or managerial ## or e&ecute
under general supervision work along speciali9ed or technical lines
re6uiring special training! e&perience or knowledge! or e&ecute
under general supervision special assignment and tasks@ and
d. +o not devote more than JQ of their hours worked to activities
which are not directly and closely related to the performance of the
work described in the preceding paragraphs. AIdD
:. Field personnel )3on(agricultural ##%s who regularly perform their duties
away from the principal place of business or branch office of the #$
whose actual hours of work in the field cannot be determined with
reasonable certainty &rt. H5'G
=% .embers of the family of the ,R who are dependent on him for
support
<. omestic helpers and persons in the personal service of another.
)Perform such services:
a. In the #$%s home which are usually necessary or desirable for the
maintenance or enjoyment thereof@
b. Gr minister to the personal comfort! convenience! or safety of the
#$ as well as the members of his #$%s household &$ec. 5, 7ule %,
#ook %%%, %77)s'
However! house personnel hired by a ranking company official! but
paid for by the company itself! to maintain a staff house provided
for the official! are not the latter%s domestic helpers but regular ##%s
of the company. (Cadi. vs. Philippine Sinter)
8. Bnd wor*ers who are paid by results. )Including those who are paid on
piece(work! =takay>! =pakiao>! or task basis if their output rates are in
accordance with the standards prescribed..
Sec. 1, Rule III, &oo/ III, IRREs : "his rule shall apply to all #$%s whether
operating for profit pr not! including public utilities operated by private
persons.
1J. Sc0eduling of Rest DayO .0en !o(6ulsory .or/ )llowedO and
!o(6ensation
1. )rt. 31 : It shall be for the duty of every #$! whether operating for profit or
not! to provide ## a rest period of not less than : consecutive hours after
every < consecutive normal working days.
5 "he #$ shall determine and schedule the weekly rest day of his ##%s
However! the #$ shall respect the preference of ##%s as to their
weekly rest day when such preference is based on religion
grounds.
Sec. %, Rule III, &oo/ III, IRREs : Ehere however the choice of the ##%s as to
their rest day based on religious grounds will inevitably result in serious
prejudice or obstruction to the operation of the undertaking! the #$ may so
schedule the weekday rest day of their choice at least days in a month.
. )rt. 3 + KWhen ,R may re!uire Wor* on rest day5 3 [D H ) A 1 = )]
a. In case of actual or impending emergency caused by serious
accident! fire! flood! typhoon! earth6uake! epidemic! or other
+isaster or calamity to prevent loss of life! or imminent danger to
public safety.
45
b. In case of ?rgent work! to avoid serious loss which the #$ would
otherwise suffer@
c. In the event of Bbnormal pressure of work due to special
circumstances! where the #$ cannot ordinarily be e&pected to
resort to other measures@
d. "o prevent or damage to Perishable goods@
e. Ehere the 3ature of work re6uires continuous operations and
stoppage of the work may result in irreparable injury or loss to the
#$@ and
f. Bnalogous Aavail of favorable weatherD or similar circumstances
)PB3B+?.
". #ow (uc0 is a wor/er entitled if 0e wor/s on a rest day9
Sc0eduled rest day B additional compensation of at least 2JQ of
his regular wage.
Sc0eduled rest day w0ic0 is a nonAwor/ing 0oliday entitled to
additional compensation of at least ;JQ of his regular wage.
Sc0eduled rest day w0ic0 is a regular 0oliday entitled to
additional compensation of at least 2JQ of his regular holiday rate
of JJQ based on his regular wage rate. &$ec. @, 7ule %%%, #ook %,
%77)s'
:. 0 works on board the -I0 *tarfish. *ometimes! the boat remains at sea
for weeks! while at other times! especially during bad weather! the
vessel returns to port only after a few days. Ehile the vessel is in port! 0
stays home with his family. Can 0 claim the additional compensation for
work on rest dayF 0%s work is such that no regular workdays and no rest
days can be scheduled. In such cases! the law provides that if he
performs work on *undays and holidays! he shall be paid an additional
compensation of at least 2J Q of his regular wage. )Brt. 27 AbD.
Rationale 3 Rest day
5 Grdinarily! *undays and legal holidays are dedicated to reading and instruction
so as to fill the mind with culture or some sort of advancement. Gn these days!
the laborer spends longer hours in the company of his family. "he deprivation of
that opportunity to satisfy mental! moral and spiritual needs should not be
ignored! and should be properly compensated. (%/*&C, vs. P"!lic Utilities
//7s *ssociation)
Section 11 + !onditions of '(6loy(ent #olidays
11.1 !o2erage
1. ; )rt. 3% : #very worker shall be paid his regular daily wage during holidays!
e&cept: [RSI$, G, D#, M, C1]
a. in retail and service establishments regularly employing less than 1J workers@
Sec. 1, Rule ID, &oo/ III, IRREs :
b. "hose of the government and any of its political subdivisions! including
NGCC%s.
c. +omestic helpers and persons in the personal service of another.
d. -anagerial ##%s.
46
e. 4ield personnel and other ##%s whose time and performance is supervised by
the #$.
5 If re6uired to work on regular holidays!
regular rate ?
Regular #olidays
1. 3ew Mears day
. -aundy "hursday
2. Nood 4riday
:. /ataan +ay
;. 1abor day
<. Independence day
8. 3ational heroes day
'. /onifacio day
7. C(mas day
1J. $i9al day
=ationwide S6ecial #olidays
1. 3ov. 1
. +ec. 21
. -onthly paid ##%s are not e&cluded from the benefits of holiday pay.
(%antrade vs. 0ac"ngan)
". C is a manicurist in the +%*tyle /arbershop which has J barbers and
manicurists. Is she entitled to holiday payF Mes. C is an ## who is paid by results
ad she works in a service establishment employing more than 1J persons. &$ec.
H, 7ule %2, #ook %%%, %77)s'
1. #oliday 1ay
1. )rt. 3% : "he #$ may re6uire an ## to work on a holiday but such ##
shall be paid a compensation e6uivalent to twice his regular rate.
. "o receive holiday pay! the ## should not have been absent without pay
on the working day preceding the regular holiday. (*."cena)
2. B legal holiday falling on a *unday creates no legal obligation for the #$
to pay e&tra to the ## who does not work on that day! aside from the
usual holiday pay! to its monthly(paid ##%s. (Wellington vs. -ra6ano)
:. C was told by #$ to work during a legal holiday which fell on a *unday.
How much is he entitled toF C will get JJQ of his daily rate plus premium
pay pf 2JQ of the holiday pay V regular daily rate 5 2JQ.
;. If C works overtime during that day! how much will he earnF Holiday pay
rateI' plus overtime pay of 2JQ of the holiday hourly rate V holiday pay
rateI' 5 12JQ.
<. $ was absent without pay on +ecember :. Is he entitled to holiday pay
for Christmas dayF 3o. Bn ## may not be paid on holiday pay if he was
absent on the day preceding holiday! or in the case of -aundy "hursday
and Nood 4riday! if he was absent on the day preceding the first holiday. It
would be different if the day preceding the legal holiday was the ##%s rest
day. "hen he is entitled to holiday pay. (*lcantara)
Gn leave with pay
47
8. Can monthly pay under employment contract already include pay for any
unworked regular holiday within the monthF Mes. "his is management
prerogative provided that the monthly pay comply with the least minimum
rates prescribed under minimum wage laws.
Ehat an employer has voluntarily given cannot be unilaterally
withdrawn
If the employees are already paid for all non(working days! the
divisor should be ?CD and not 5D.
Dacation and sic/ lea2e must be claimed otherwise waived
- cannot be converted into cash unless allowed by employer
Caculty 1ri2ate Sc0ool
5 $egular holidays specified by law are known to both school and faculty
members as =no class days>. "hus! hourly paid faculty members are not entitled
to their pay for unworked regular holidays. Gn the other hand! hourly paid faculty
members are however entitled to their regular hourly rate on days declared as
special holidays or when classes are called off or shortened since the faculty
member! although forced to take a rest! does not earn what he should earn on
that day. (=C vs. )&C)
ivisor as Factor
5 "he daily rate is a constant figure for the purpose of computing overtime and
night differential pay and commutation of sick and vacation leave credits! and this
should also be the same basis for computing unpaid holidays. (Union of +ilipro
vs. 1ivar)
Section 1. !onditions of '(6loy(ent B Ser2ice Incenti2e Lea2e
Dacation and Sic/ lea2e
- employer must still bind himself in C/B or grant it unilaterally
- not granted by law
1.1 !o2erage
#overage
; )rt. 3* : -he provision on service incentive leave shall not appl# to:
[',S, I$, ', G, D, M, C]
1. "hose who are already enjoying the benefit.
. "hose enjoying vacation leave with pay of at least ; days.
2. "hose employed in establishments regularly employing less than 1J
workers
:. #&empt establishments.
Sec. 1, Rule D, &oo/ III, IRREs +
;. "hose of the government and any of its political subdivisions including
NGCC%s.
<. +omestic helpers and persons in the personal services of another.
8. -anagerial ##%s.
'. 4ield personnel and other ##%s whose performance is unsupervised by the
#$ including those who are engaged on task or contract basis! purely
48
commission basis! or those who are paid in a fi&ed amount of performing
work irrespective of the time consumed in the performance thereof.
5 "eachers of private schools on contract basis are entitled to service incentive
leave. (Ce!" 2nstit"te of -echnolog# vs. ,ple)
1. 'ntitle(ent
- can be converted to cash
; )rt. 3* : ; days incentive leave with pay for at least 1 year of service.
)"he term Wat least 1 year of service% shall mean service within 1 months!
whether continuous or broken! reckoned from the date the ## started working!
including authori9ed absences and paid regular holidays unless the working days
in the establishment as a matter of practice or policy! or that provided in the
employment contract are less than 1 months! in which case said period shall be
considered as 1 year. &$ec. ?, 7ule 2, #ook %%%, %77)s'
D)!)<I$= )=D SI!L L')D'
employer must still bind himself in C/B or grant it unilaterally
not granted by law
Section 1". Mini(u( .ages and .age Ci?ing Mac0inery
12.1 Mini(u( .ages
1. )rt. 33 : "he minimum wages for agricultural and non(agricultural ##%s
and workers in each and every region of the country shall be those
prescribed by the $egional "ripartite Eages and Productivity /oards.
. #&plain the rule 4a fair day-s wage for a fair day-s labor5F ?nless
specifically re6uired by law! contract or established policy! the #$ is not
bound to pay wages to a worker who has not actually rendered any
service.
2. Nive > aspects of 4agriculture5 ? "he primary aspect covers cultivation
and tillage of the soil! growing and harvesting of any agricultural and
horticultural commodities and raising of livestock and poultry. "he
secondary aspect covers any practices performed by a farmer on a farm
as an incident to or in conjunction with the farming operations.
:. 4armers employed by / cultivate the soil and plant and harvest tobacco
and they also cut big trees grown on the land which they used for fencing
and repair of the owner%s house. "hey claim for minimum wages for non(
agricultural workers. Is the claim validF
3o. "hey are still agricultural workers. "hey perform activities which fall under
the primary aspect of agriculture and the cutting of trees to be used for
fencing is incidental to the farming operations and falls under the secondary
aspect of agriculture.
#overage
; )rt. 3, : "his "itle shall not apply
to farm tenancy or leasehold
domestic services and
49
persons working in their respective homes in needle or in any
cottage industry duly registered in accordance with law.
Section ", Rule DII, &oo/ III, IRREs +
; Eorkers in duly registered cooperatives when so recommended by the bureau
of Cooperative +evelopment and upon approval of the *ecretary of 1abor . . .
.inimum Wage
1. )rt. 3@ 517 : =Eage> paid to
5 "he remuneration or earnings! however designated! A1#NB1 "#3+#$D
capable of being e&pressed in terms of money! whether fi&ed or
ascertained on a time! task! piece! or commission basis! or other
method of calculating the same!
which is payable by an #$ to an ## under a written or unwritten
contract of employment for work done or to be done! or for services
rendered or to be rendered
5 and includes the fair and reasonable value! as determined by the *ecretary of
1abor! of board! lodging or other facilities customarily furnished by the #$ to ##.
)=;air and reasonable value> shall not include any profit to the #$ or to any
person affiliated with the #$.
. )rt. :1 : )66rentices : Eage rates shall in no case fall below 8; Q of the
applicable minimum wage.
2. )rt. @* : Learners : Eage rates shall begin at not less than 8;Q of the
applicable minimum wage.
:. )rt. ,4 + #andica66ed .or/ers + Eage rates shall not be less than 8;Q
of the applicable minimum wage.
;. )rt. 1% : Bll recogni9ed learnership and apprentice agreements shall be
considered automatically modified insofar as their wage clauses are
concerned to reflect the prescribed wage rates )set by the $egional
tripartite and Eages Productivity /oard..
). C)!ILI<I'S )=D SH11L'M'=<S
5 "he law guarantees the laborer a fair and just wage. "he =minimum wage> can
by no means imply only the actual minimum. *ome margin or leeway must be
provided! over and above the minimum! to take care of contingencies! such as
increase in wants! and to provide means for a desirable improvement in his mode
of living. (*to(30ig Wedge vs. *to(30ig3Wedge %"t"al 0enefit *ssociation)
&. SH11L'M'=<)L C)!ILI<J
1. +istinguish between supplements and facilitiesF
Su66le(ents #&tra remuneration or special privileges or benefits given to
or received by the worker over and above his ordinary earnings or wages.
- granted for the convenience of the #$
Cacilities Items of e&pense necessary for the laborer%s and his family%s
e&istence and subsistence. "hey form part of the wage and when furnished
by the #$ are deductible therefrom since if they are not furnished! the laborer
50
would spend and pay for them just the same i.e. meals@ housing for dwelling
purposes@ fuel including electricity! gas! water for the non(commercial
personal use of the ##@ and other articles and services given primarily for the
benefit of the worker or his family.
- for the benefit of the worker and his family
. "he criterion in determining whether an item is a supplement or facility is
not so much with the kind of benefit or item given! but its purpose. (State
%arine vs. Ce!" Seamen7s *ssociation)
2. C-C has 2 buses used to transport its workers! free of charge from
-akati to its plat in -untinlupa. "he buses became dilapidated and the
service was discontinued by the company. "he ##%s demanded for their
replacement. +ecide with reasons.
"he company may be compelled to continue providing the transportation free
of charge. "his is considered a supplement given over and above the ordinary
earnings or wages of the workers. Gnce given! a supplement cannot be
eliminated or diminished. (*lcantara)
- <est on w0et0er or not ite(s are facilities [! C, D ), C R]
a. Bre these items automatically furnished by the tradeF
b. +id the employee voluntarily accepted the same in writingF
c. Is the value thereof fair and reasonableF
- (f the employer fails to prove this:
a. "hen it is a supplement not a facility.
b. Gnce given! a supplement cannot be eliminated or
diminished.
c. Nrant of bonus may be unilaterally be reduced by the
employer if it depends on profits ac6uired.
:. /ecause he lived ;J kilometers from its work! C re6uested his #$ if he
can sleep in the company premises. "he latter agreed with the condition
that he will deduct P;.JJ per day as board charges from C. Is the
deduction legalF
3o. 1odging is not customarily finished by the #$ to his ##%s. "he deduction!
furthermore! is not with the written consent of C.
C. !)S# .)G' legal tender
1. Ehat is basic salaryF In its common! generally accepted meaning! it is the
rate of pay for a standard work period! e&clusive of such additional
payment as bonuses and overtime. (0oic3-a(eda vs. $ela Serna)
. Bre emergency cost of living allowances considered part of regular wageF
Mes. "his is taken into account in determining overtime and premium pay !
premium contributions! social security! maternity pay! etc. A#G 18'D
+. 'CC'!< A I=)&ILI<J <$ 1)J
5 If a company cannot pay a living wage! it has no business operating at the
e&pense of the lives of the workers. (Phil. *pparel vs. )&C)
#. GR)<HI<J and .)G'S
51
5 8ratuity "hat paid to the beneficiary for past services rendered purely out of
the generosity of the giver or grantor. Ehile it may be enforced once it forms part
of a contractual undertaking! the grant of such benefit is not mandatory so as to
be considered a part of labor standard law. (Plastic -o8n vs. )&C)
4. &'='CI!I)RJ $C <#' MI=IMHM .)G' L).
5 "he minimum wage law directly benefits the lowly paid ##%s who receive
inade6uate wages on which they support themselves and their families. It
benefits all wage earners indirectly by setting a floor below which their
remuneration cannot fall. It increases the standard of competition among #$%s
since it would protect the fair(minded #$ who operates at lower costs by reason
of paying his workers a wage below subsistence. (Pp vs. 'atchalian)
N. &'='CI<S
1. )rt. 144 : 3othing in this /ook shall be construed to eliminate or in any
way diminish supplements! or other ## benefits being enjoyed at the time
of promulgation of this Code.
. ?nless agreed otherwise! statutory benefits are apart from contractual
benefits. (%e#ca"a#an College vs. $rilon) "hus! ##%s are entitled to the full
amounts of both a wage increase under a C/B and an increase in living
allowances prescribed by law during the period when both increases are
concurrently effective! for want of an agreement between the parties to
treat the increase in living allowances as applicable to the wage increases.
(+ilipinas 'olf vs. )&C)
2. "he work of batillos! cargadores of fish catch! were limited to days of
arrival of fishing vessels. 4rom 178< to 17'J! operators paid them a fi&ed
monthly emergency allowance which included non(working days. Can the
operators now discontinue the practice and pay the batillos only for actual
days worked! following the principle of =no work! no pay> F
3o. /enefits voluntarily given cannot be unilaterally withdrawn by the #$. Brt.
1JJ prohibits the elimination or diminution of e&isting benefits.
:. Eorkers in a plastic manufacturing company are able to clean and inspect
only ;J containers of ' hours despite repeated appeals from
management. "hey were paid a daily rate of P1;J.JJ. "hrough time and
motion studies set by the +G1#! the #$ was able to ascertain that an
ordinary worker can clean and inspect :;J containers for ' hours. "he
company then changed its mode of payment from time basis to piecework
at PJ.:J per container. Is this validF
Mes. "he company has the right to change the basis of the payment of the
wages of the workers. "he workers would not suffer since it is within their
capability to clean and inspect the number of containers to enable them to at
least earn the rate they were receiving at the time the change was effected.
"hey cannot however be deprived of benefits they were already enjoying at
the time of such change. (*lcantara)
55 Ehile normally discretionary! the grant of a gratuity or bonus! by reason of its
long and regular concession! may become part of a regular compensation.
52
5 G$ employer agreed to give its regularly without any condition imposed for its
payment
12. Rationale for .age RationaliIation
5 Section , .age RationaliIation )ct : It is hereby declared the policy of the
*tate to rationali9e the fi&ing of minimum wages and to promote productivity(
improvement and gain(sharing measures: [J ) D ']
1. "o ensure +ecent standard of living for the workers and their families@
. "o guarantee the rights to its Pust share in the fruits of production@
2. "o enhance #mployment generation in the countryside through industry
dispersal@ and
:. "o Bllow business and industry reasonable returns on investment!
e&pansion and growth.
12.2 )gencies for .age Ci?ing Mac0inery
+dvisory agency 8 >ational 1ages and 3roductivity Commission
1. )rt. 14 : =ational .ages and 1roducti2ity !o((ission attached to
the +G1# the policy and program coordination.
. Gi2e at least * (a8or 6owers and functions of t0e =ational .ages
and 1roducti2ity !o((ission :
a. "o act as the national consultative and advisory body to the
President and Congress on matters relating to wages! incomes and
productivity.
b. "o formulate policies and guidelines on wages! incomes and
productivity improvement at the enterprise! industry and national
levels.
c. "o prescribe rules and guidelines for the determination of
appropriate minimum wage and productivity measures at the
regional! provincial or industry levels.
d. "o review regional wage levels set by the $egional "ripartite
Eages and Productivity /oards .
2. )rt. 1: : 3o preliminary or permanent injunction or temporary restraining
order may be issued by any court! tribunal or any entity against any
proceedings before the Commission or the regional /oards.
Wage Fi$ing +gency
1. )rt. 1 + Regional <ri6artite .ages and 1roducti2ity &oards In all
regions! including autonomous regions.
. Gi2e at least " (a8or 6owers and functions of t0e Regional <ri6artite
and 1roducti2ity &oards wit0in t0eir territorial 8urisdiction:
a. "o develop plans! programs and projects relative to wages!
incomes and productivity improvement for their respective regions.
b. "o determine and fi& minimum wage rates applicable in their
region! provinces or industries therein and to issue the
corresponding wage orders! subject to guidelines by the
Commission.
c. "o receive! process and act on applications for e&emption from
prescribed wage rates as may be provided by law or any Eage
Grder. )Implementation of the plans shall be through the respective
53
offices of the +G1# but the $egional /oards shall have technical
supervision over the said +G1# offices..
2. )rt. 1: : 3o preliminary or permanent injunction or temporary restraining
order may be issued by any court! tribunal or other entity against any
proceedings before the Commission or the regional /oards.
"he #CG1B now forms part regular wage
#mployees paid by results should receive not less than the
applicable wage rates provided for ' hours workday
12.: )rea Mini(u( .ages and !riteria
5 )rt. 1% + Standards@#riteria for .inimum Wage Fi$ing 8 $egional minimum
wages shall be nearly as ade6uate as is economically feasible to maintain the
minimum standards of living necessary for the health! efficiency and general well(
being of the ##%s within the framework of the national economic and social
development program. In the determination of such regional minimum wages! the
$egional /oard shall! among other relevant factors! consider the following:
1. "he demand of living wages@
. Eage adjustment vis<K<vis the consumer price inde&@
2. "he cost of living and changes and their families@
:. "he need to induce industries to invest in the countryside@
;. Improvements in the standard of living
<. "he prevailing wage levels
8. 4air return of the capital invested and capacity to pay of #$%s
'. #ffects on employment generation and family income@ and
7. "he e6uitable distribution of income and wealth along the imperatives of
economic and social development.
"hese wages shall include wages varying within industries! provinces or
localities if in the judgment of the $egional /oard conditions make such local
differentiation proper and necessary to effectuate the purpose of this "itle.
12.; .age $rder
5 )rt. 1" : Ehenever conditions in the region so warrant! the $egional /oard
shall investigate and study pertinent facts and! based on the standards and
criteria herein prescribed! shall proceed to determine whether a Eage Grder
should be issued.
In the performance of its wage(determining functions! the $egional /oard
shall conduct public hearings! consultations! giving notices to ##%s and #$%s
groups! provincial! city and municipal officials and other interested parties.
Bny party aggrieved by the Eage Grder issued by the $egional /oard
may appeal such order to the Commission within 1J calendar days from the
publication of such order. It shall be mandatory for the Commission to decide
such appeal within <J calendar days from the filing thereof.
.ethods of Fi$ing
5"he determination of wages has generally involved two methods! the =floor(
wage> method and the =salary(ceiling> method. "he 1
st
method involves the fi&ing
of determinate amount that would be added to the prevailing statutory minimum
wage. In the
nd
method! the wage adjustment is applied to ##%s receiving a
certain denominated salary ceiling. (/C,P vs. )WPC)
Wage istortion
5 B severe contraction of the wage or salary differences is enough
54
1. )rt. % + Wage istortion ( +istortion where an increase in the
prescribed wage rates results in the elimination or severe contraction of
intentional 6uantitative differences in wage salary rates between and
among ## groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills! length of
service! or other logical bases of differentiation.
. #ow is a wage distortion correctedF Bny dispute arising from wage
distortions shall be resolved through the grievance procedures under their
C/B! and if it remains unresolved! through arbitrary arbitration. If there is
no recogni9ed labor union or there are no collective bargaining
agreements! the dispute shall be settled through the 3ational Conciliation
and -ediation /oard! or if unresolved after 1J days of conciliation! through
the 31$C which shall decide the dispute within J calendar days. ABrt. :D
"he law recogni9es the validity of negotiated wage increases to correct
wage distortions. "he legislative intent is to encourage the parties to seek
solution to the problems of wage distortions through voluntary negotiation
or arbitration! rather than strikes! lockouts! or other concerted activities of
the ##%s or management. "+LU)TU#P vs% &LR#' In a case where a union
went on strike over a salary distortion dispute! the Court held the strike
illegal. (2la8 at 0"(lod ng %anggaga8a vs. )&C)
12. < .ages and 1roducti2ity Measures
Wage@Salary
+ifferentiate wages from salaryF
5 =Wages> Compensation for manual labor! skilled or unskilled paid at stated
times! and measured by the day! week! month! or season. It indicates
considerable pay for a lower and less responsive character of employment.
5 =Salary> +enotes a higher degree of employment! or a superior grade of
services! and implies a position of office@ by contrast! the term =wages>! while
=salary> is suggestive of a larger and more important service. ('aa vs. C*)
Wage Payment
1. )rt. 14 + Forms of Payment : 3o #$ shall pay the wages of an ## by
means of promissory notes! vouchers! coupons! tokens! tickets! chits or
any object other than legal tender! even when e&pressly re6uested by the
##. )"he laborer%s wage shall be paid in legal currency. ABrt. 18J;! 3CCD.
- Payment of wages by chec* or money order shall be allowed
when 6
a. such manner of payment is customary on the date of the
effectivity of this Code! or
b. is necessary because of special circumstances as
specified in appropriate regulations to be issued by the
*ecretary of 1abor or as stipulated in a C/B.
- #2&(T(2&S
a. bank 1 km
b. written consent of ##
c. #$ does not receive any pecuniary benefit
d. ## given time to withdraw from the bank considered as
compensable his work
55
. )rt. 14" : Time of Payment
; Generally + Gnce every two weeks or twice a month at intervals not
e&ceeding 1< days. 3o #$ shall make payment with less fre6uency than once
a month.
; Corce Ma8eure + Immediately after the force majeure or the circumstances
have ceased.
; <as/ cannot be co(6leted in wee/s in t0e absence of a !&) or
arbitration award+
a. "he payments are made at intervals not e&ceeding 1< days! in
proportion to the amount of work completed@
b. "hat final settlement is made upon completion of work@
2. )rt. 14% : 3lace of 3ayment I Payment of wages shall be made at or near
the place of undertaking! e&cept as otherwise provided by such
regulations as the *ecretary of 1abor may prescribe under conditions to
ensure greater protection of wages.
1. deterioration of peace and order conditions
. actual or impending emergencies calamity
- #$ must provide or reimburse transportation back and forth
- "ime spent collecting wages considered compensable his work
:. )rt. 14* : irect Payment of Wages 3
; General Rule + Eages paid directly to workers.
; '?ce6tions+
1. 4orce majeure rendering such payment impossible or under the special
circumstances! in which case the worker may be paid through another
person under written authority given by the worker for the purpose.
. Ehere the worker has died! in case the #$ may pay the wages of the
deceased worker to the heirs of the latter without the necessity of intestate
proceedings.
B. DIR'!< 1)JM'=<
Payment of wages to leader of group not violation of direct payment since
the contract to perform the services was made by the leader of the group! for and
in behalf of the latter! not for each and everyone of them individually. (0ermiso vs.
/scano)
Wage Prohibition
1. )rt. 11 : >on<%nterference in Disposal of 1ages 8
- 3o #$ shall limit or otherwise interfere with the freedom of any ##
to dispose of his wages.
- He shall not in any manner force! compel or oblige his ##%s to
purchase merchandise! commodities or other property from the #$
or from any other person! or otherwise make use of any store or
services of such #$ or any other person.
. B meat processing company gives a ;Q discount to ##%s for purchase
on credit of its product. However! said purchases on credit will be
considered payment of his wages. Bn ## purchases 1J cans of the
product but objects to the application of his purchases as part of his
wages. Is the objections validF
56
Mes. "he application of his purchases on credit as part of his wages the
products in lieu of legal tender. (*lcantara)
2. -ay an #$ make any deductions from the wages of ##%sF
General Rule + 3o. His own behalf or in behalf of any person.
'?ce6tions+ [)llowable Deductions]
1. +eductions of ***! -edicare and Pag(ibig Premiums ABlcantaraD
. Eithholding ta& A31$CD
2. +eductions for reimbursement of insurance premium advanced by the #$
where the worker is insured with his consent by the former. ABrt. 112D
:. +eductions for unions dues where the right to check(off has been
recogni9ed by the #$ or individual ## himself. AIdD
;. +eductions made with the written authori9ation of the ## for payment to a
2
rd
person and the #$ agrees to do so! provided that the latter does not
receive any pecuniary benefit! directly or indirectly! from the transaction.
ABlcantaraD
<. +eductions for reimbursement of loss or damage to tools! materials or
e6uipment supplied by the #$ to the ##! in trades! occupations or
business where the practice of making such deductions is recogni9ed.
ABrt. 11:D
8. +eductions as a disciplinary measure for habitual tardiness ABlcantaraD
'. Bgency fees under rt. 5@H &e' of the Code.
7. +eductions for debts due the #$ from the ##! when such debts become
due and demandable. ABrt. 18J<! 3CCD
1J. In court awards! wages may be the subject of e&ecution or attachment! but
only for debts incurred for food! shelter! clothing and medical attendance.
ABrt. 18J'D
11. +eductions for value of meals and others. ABlcantaraD
2. )rt. 11% : Deposits for Loss or Damage I 3o #$ shall re6uire his worker to
make deposits from which deductions shall be made for the reimbursement for
loss or damage to tools! materials or e6uipment supplied by the #$ e$cept:
a. Ehen the #$ is engaged in such trades! occupations or business where the
practice of making deductions or re6uiring deposits is a recogni9ed one! or
b. is necessary or desirable as determined by the *ecretary of 1abor in
appropriate rules and regulations.
:. P works as a dishwasher in a big restaurant. Bt the time of his employment! he
was told that it was an industry practice that the value of plates broken by him
while in the performance of his work will be deducted from his wages. -ay
management deduct the said value from P%s wagesF
Mes! provided the following conditions are met: [1R$AC4]
1. "he practice of making deductions is a recogni9ed one or is necessary
and desirable in the business of the #$.
. P is clearly shown to be responsible
2. He is given reasonable opportunity to show cause why the deduction
should not be made.
:. "he amount of deductions is fair and reasonable and does not e&ceed the
actual loss or damage.
;. "he deduction does not e&ceed JQ of P%s wages in a week. (Sec. 14> "le
1222> 0oo( 222> 27s)
;. )rt. 11: : 1ithholding of 1ages and kickbacks prohibited 8 It shall be unlawful
for any person! directly or indirectly!
"o withhold any amount from the wages of a worker or
57
Induce him to give up any part of his wages by force! stealth!
intimidation! threat or by any other means whatsoever without the
workers consent.
<. )rt. 11@ : Deduction to ensure employment ( It shall be unlawful to make any
deduction from wages of any ## for the benefit of the #$ or his life
representative or intermediary as consideration of a promise of employment or
retention in employment.
8. )rt. ( 3o attorneys fees! negotiation fees or similar charges of any kind
arising from any collective bargaining negotiations or conclusions of the C/B
shall be imposed on any individual member of the contracting union: Provided!
however that attorneys fees may be charged against union funds in an amount
agreed upon by the parties. Bny contract! agreement or arrangement of any sort
to the contrary shall be null and void.
'. )rt. 1@4, : "he laborer%s wages shall not be subject to e&ecution or
attachment e&cept for debts incurred for food! shelter! clothing and medical
attendance.
B. .)G' D'DH!<I$=
1. Bn obligation arising from non(payment of stock subscriptions to a
corporation cannot be offset against a money claim of an ## against an
#$. (*podaca vs. )&C)
. "he wife of an ## tells the manager that her husband has not been giving
her support. "aking pity! the manager instructs the cashier to deduct 1I2 of
the ##%s pay and give the same to the wife. Is this validF
3o. "he ## concerned did not give his written authori9ation for the deduction.
(*lcantara)
2. X borrowed P;JJ.JJ from his #$. Ehen the loan became due and
demandable! X did not pay his #$. -ay the #$! without the written
authori9ation of X! deduct the loan from the latter%s wagesF
Mes. Compensation can take place under rt. .B/C of the 3CC. (*lcantara)
/. !#'!LA$CC
5 Bn #$ may be compelled to =check(off> union dues from the wages of his ##
when the #$ has been authori9ed to do so by the ##. "his is upon the theory
that it is necessary to promote the welfare and integrity of the union to which he
belongs. (%anila -rading vs. %anila -rading &a!or *ssociation)
C. G)R=IS#M'=<F)<<)!#M'=<
1. ?nder Brt. 18J' of the 3CC! =laborers% wages shall not be subject to
e&ecution or attachment! e&cept for debts incurred for food! shelter!
clothing and medical attendance> (Pacific C"stoms vs. 2nter32sland $oc(men
and &a!or Union)
. Brt 18J' which e&empts laborers% wage from attachment or e&ecution
does not apply to a responsibly placed ##! supervisory or managerial ##!
but only to the rank(and(file. ('aa vs. C*)
58
+. D'1$SI<
1. B marketing firm retains ;Q of the weekly salary of its collectors as a
deposit to answer for any shortage in their collections. "hese are refunded
at the end of the month! if no shortages are incurred. Is the practice legalF
It depends. If it is a recogni9ed practice of #$%s to re6uire such deposits! then
such is legal! since the sum retained is not e&cessive and is kept by the #$
only for a reasonable period. (*lcantara)
. B ta&icab company re6uires its drivers to make deposits to defray
boundaries and to cover car wash payments. Is this legalF
rt. ..@ does not permit deposits for deficiency in the remittances of drivers)
+boundary, but the re!uirement for deposit for car wash payments is lawfull.
(?3= -a@i vs. )&C)
Prohibited +cts
1. )rt. 11, : It shall be unlawful for an #$ to reuse to pay or reduce the
wages and benefits! discharge or in any manner discriminate against any
## who has filed any complaint or instituted any proceedings under this
"itle or has testified or is about to testify in such proceedings.
. )rt. 113 : It shall be unlawful for any person to make any material false
statement! report or record filed or kept pursuant to the provisions of this
Code.
). R'!$RD L''1I=G
5 "he records shall be kept and maintained in or about the premises of workplace
or in the branch where the ## is regularly assigned! the keeping of the records in
any other place is prohibited. (So"th %otorists vs. -osoc)
1:. 8 Liability of 'R and ot0er 1arties
,R0 (ndependent #ontractor and Subcontractor and Labor)2nly
#ontracting
1. "he rules on t0e liability of Job contractors, Indirect 'REs and KLaborA
onlyN contractors are the following:
1. General Rule : Bn #$ who enters into a contract with a contractor to
perform work for the #$! does not thereby create an #$(## relationship
between himself and the ##%s of the contractor. "hus the ##%s of the
contractor remain the contractor%s ##%s and his alone. (P0C vs. )&C)
. =onet0eless : Ehen a contractor fails to pay the wages of his ##%s in
accordance with the 1abor Code! the #$ who contracted out the job to the
contractor becomes 8ointly and se2erally liable with the contractor to the
##%s of the latter =to the e&tent of the work performed under the contract>
as if such #$ were the #$ of the contractor%s ##. AIdD
"he law itself! established an #$(## relationship between the #$ and the job
contractor%s ##%s for a limited purpose i.e. in order to ensure that the latter get
paid for wages due them.
59
2. Indirect 'R : "hese provisions shall likewise apply to any person!
partnership ! association or corporation which! not being an #$! contracts
with an independent contractor for the performance of any work! task! job
or project. &rt. ./B'
:. LaborA$nly !ontractor : "he conclusion is different where there is =labor(
only> contracting. "he =labor(only> contractor i.e. person or intermediary!
is considered =merely as an agent of the #$.> "he statute makes the #$
directly responsible to the ##%s of the =labor(only> contractor as if such
##%s had been directly employed by the #$. "he statute establishes an
#$(## relationship between the #$ and the ##%s of the =labor(only>
contractor! this time for a comprehensive purpose! to prevent any violation
of this Code. (0road8a# %otors vs. )&C)
"he legitimate job contractor provides services while the labor(only
contractor only provides manpower.
Pob contractor undertakes to perform a specific job while labor(only
contractor merely provides personnel to work for the employer.
. )rt. 14, : Bn #$ or indirect #$ may re6uire the contractor or subcontractor to
furnish a bond e6ual to the cost of labor under contract! on condition that the
bond will answer for the wages due the ##%s should the contractor or
subcontractor! as the case may be fail to pay the same.
2. C! a former ## of B/C entered into an agreement with the company
wherein C will hire person to work in the painting department and the
company will reimburse him for whatever wages he will pay plus 1JQ of
this amount. If C fails to pay the wages! can the workers claim from the
companyF
Mes. C is merely a =labor(only> contractor and is considered merely an agent
of the #$ who shall be responsible to the workers in the same manner and
e&tent as if the latter were directly employed by him. (*lcantara)
:. C entered into a contract with $ for the construction of C%s house. *ome
workers of $ were not paid their wages. Is C liableF
Mes. *nder rt. ./B, the person, though not an #$! who contracts with the
independent contractor for the damages employed by the latter are indirect
#$%s. (*lcantara)
;. B entered into a verbal agreement with * wherein B would be paid a
commission for milled rice she sold or palay for the farmer. B would spend
her own money for the undertaking! but to enable her to carry out the
agreement more effectively! she was authori9ed to borrow from other
persons! subject to reimbursement from * and either of them may
terminate the business arrangement at will! with or without cause. -ay B
be considered an independent contractorF
Mes. B was contracted to do a piece of work according to her own method
and without being subject to the control of the #$ e&cept as to the result of
the work. (Sara vs. *garrado)
,$tent of Liability
60
1. "he direct #$ and the indirect #$ are jointly and severally liable to
petitioners for the monetary claims. ($eferia vs. )&C) 4or purposes of
determining the e&tent of their civil liability! they shall be considered as
direct #$%s. ABrt. 1J7D
In legitimate job contracting! no #$(## relationship e&ist between
the principal and the job contractors employees.
Insolvency or unwillingness to pay by the contractor or direct #$ is
not a prere6uisite for the joint and solidary liability of the principal or
indirect #$. ($0P vs. )&C)

. If an independent service contractor fails to pay the wages of the janitors


its supplies to CMX! is CMX liable for the unpaid wagesF
Mes. Bccording to rt. ./C, the #$ shall be jointly and severally liable to the
##%s of the contractor or subcontractor to the e&tent of the work performed
under the contract. (*lcantara)
2. Eould your answer change if CMX already paid the independent
contractor the contract priceF
3o! CMX will still be liable for the unpaid wages of the janitor since the
obligation is imposed by law. AIdD
:. P"*! a government agency! entered into a service agreement with B/C or
the supply of janitors to P"*. B/* failed to pay the wages of the janitors.
P"* refused to pay on the ground that it is a government agency. Is this
claim validF
3o. "he janitors employed by B/C are considered indirect ##%s and not to
indirect ##%s coming from the private sector. (a!ago vs. )&C)
1:. ' .or/er 1referenceA&an/ru6tcy
1. )rt. 114. In the event of bankruptcy or li6uidation of an #$%s business! his
workers shall enjoy first preference as regards their wages and other
monetary claims! any provisions of law to the contrary notwithstanding.
*uch unpaid wages and monetary claims shall be paid in full before claims
of the government and other creditors may be paid.
5 "he right or preference has to be asserted in distribution proceedings such
as insolvency where all the creditors convened! their claims ascertained and
inventories and the preferences determined.
. B declaration of bankruptcy or a judicial li6uidation must be present before
the worker%s preference may be enforced. "he said article cannot be
viewed in isolation@ it must always be read in relation to the provisions of
the Civil Code concerning the classification! concurrence and preference
of the credits. ($0P vs. Santos) "he aforesaid provisions of the Civil Code!
including rt. ../ re6uires judicial proceedings in rem in adjudication of
creditor%s claims against the debtor%s assets to become operative.
(*lcantara)
2. "?CP obtained a judgment from the 31$C in an unfair labor case. "wo
days before the judgment! the PCI/! mortgage creditors of the company!
foreclosed all mortgages in their favor. "he union sought to garnish in its
61
favor a portion of the purchase price. Is the bank subject to the claims of
the unionF
Mes! under rt. ../ workers enjoy first preference as regards wages owed
them for services rendered during the period prior to the bankruptcy or
li6uidation. (PC20 vs. )ational %ines and *llied Union)
:. Btlas "e&tile mortgaged its assets to +/P. +/P foreclosed the asset. "he
##%s filed a complaint against Btlas and +/P for the wage differentials.
"he labor arbiter and the 31$C held that the worker%s preference under
Brt. 11J does not create a lienF
3o. Brt. 11J does not create a lien in favor of the workers. (*lcantara)
)rt. 114
establishes merely a rule of preference and does not create a lien
in favor of the workers
workers claim for unpaid wages and other monetary benefits
cannot prevail over a mortgages lien
1:. 7 .age Reco2ery
1. )rt. 1@ 5a7 57, 5"7, 5%7, 5:7 + 1urisdiction of Labor +rbiters and the
#ommission "he 1abor Brbiters shall have e&clusive and original
jurisdiction! e&cept as otherwise provided! the following cases involving all
workers:
a. "ermination +isputes A6ualified by rt. 5C.which grant
voluntary arbitrators original and e&clusive jurisdiction over
all unresolved grievances arising from C/B* and company
personnel policiesD@
b. Cases involving terms and conditions and employment! if
accompanied with a claim for reinstatement Aincluding
claims of an #$(## relationship! including claims for
actual! moral and e&emplary damages! as provided in *ec.
1J! -igrant Eorkers BctD
c. Claims for actual! moral! e&emplary and other damages
arising from the #$(## relations@
d. #&cept claims for ##%s Compensation! *ocial *ecurity!
-edicare and maternity benefits! all other claims! arising
from the #$( ## relations! including
those of persons in domestic or household service! involving an
amount e&ceeding P;!JJJ.JJ regardless of whether accompanied
with a claim for reinstatement.
. )rt. 1, + Disitorial and 'nforce(ent 1ower oft t0e Secretary of
Labor or 0is duly aut0oriIed re6resentati2e
Bccess to #$%s records and premises at anytime of the day or night
whenever work is being undertaken therein and copy therefrom@
6uestion any ##@ and investigate any fact! condition or matter
which may be necessary to determine violations of this Code and of
any labor law! wage order or rules and regulations issued pursuant
thereto.
62
In cases where the relationship or #$(## still e&ists! the power to
issue Compliance Grders to give effect to the labor standard
provisions of this Code and other social legislation.
Erit of e&ecution to the appropriate authority shall be
issued for the enforcement of the said orders! e&cept in
cases where the #$ contests the findings of the labor
employment and enforcement officer and raises issues
supported by documentary proofs which were not
considered in the course of inspection.
Grder stoppage of work or suspension of operations of any unit of
or department of an establishment when non(compliance poses
grave and imminent danger to the health and safety of workers in
the workplace.
Eithin : hours! a hearing shall be conducted to determine
whether an order for the stoppage of work or suspension of
operations shall be lifted or not.
In case the violation is attributable to the fault of the #$! he
shall pay ##%s their salaries or wages during the said
period.
It shall be unlawful for any person to Gbstruct! impede! delay or
otherwise render ineffective the order of the *ecretary of 1abor.
5 3o inferior court shall issue a temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any case involving the enforcement
orders in accordance with this Brticle.
Bny government ## found guilty of violation! after appropriate
administrative investigation! be subject to *ummary dismissal from
the service.
"he *ecretary of labor may re6uire #$%s to keep and maintain
employment records as may be necessary. AB* CG3#*D
5 ?nder what circumstances may the $egional +irector be divested of his
jurisdiction to issue compliance orders under Brt. 1' AbDF
a. #$ contests the findings of the labor regulations officer and raises
issue thereon@
b. In order to resolve such issue! there is need to e&amine evidentiary
matters@
c. *uch matters are not verifiable in the normal course of inspection.
(ed 1. Cocon"t vs. &eogrado)
2. )rt. 13 + $ecovery of wages! simple money claims and other benefits
"he $egional +irector of the +G1# or any of the duly authori9ed
hearing officers of the +epartment is empowered! through summary
proceedings and after due notice! to hear and decide any monetary
claims and benefits! including legal interest to a person employed in
domestic or household service@ 3rovided
a. *uch complaint does not include claim for reinstatement
b. Bggregate money claims of each househelper does not e&ceed
P;!JJJ
"he complaint shall be resolved within 2J days from the date of
filing of the same.
63
:. )rt. 111 +
In cases of unlawful withholding of wages the culpable party may
be assessed attorney%s fees e6uivalent to 1JQ of the amount of
wages recovered.
It shall be unlawful for any person to demand or accept! in any
judicial or administrative proceedings for the recovery of the wages!
attorney%s fees! which e&ceed 1JQ of the amount of wage
recovered.
Section 1%+ Ser2ice !0arges
1:. 1 !o2erage
1. Section 1, Rule D, &oo/ III, IRREs + "his rule shall apply only to
establishments collecting service charges such as hotels! restaurants!
lodging houses! night clubs! cocktail lounge! massage clinics! bars!
casinos and gambling houses! and similar enterprises! including those
entities operating primarily as private subsidiaries of the Novernment.
. Section , Rule DI, &oo/ III + "his rule shall apply to all ##%s of covered
#$%s e&cept to managerial ##%s.
.anagerial ,, 3
a. powers of prerogatives to lay down! and e&ecute management to
lay don and e&ecute management policies andIor
b. hire! transfer! suspend! lay(off! recall! discharge! assign! or
discipline ##%s or to effectively recommend such managerial
actions.
Collection of service charges is a management decision and not a
re6uirement of law
1:. Ser2ice !0arges
5 )rt. 3: : "o be distributed at the rate of ';Q for covered ##%s )distributed
e6ually among them. and 1;Q for management.
C a waiter at +C +iner was receiving a share in the restaurant%s service charges.
1ater! the restaurant discontinued the collection of service charges. "he take(
home pay of C was reduced by the value of the discontinued service charges.
-ay C ask his #$ to continue paying the service chargesF

Mes. In case the service charge is abolished! the share or the covered ##%s shall
be considered integrated in their wages. 5)rt. 3:7
"he employees share in the service charges is part of the other
benefits to which he is entitled! in addition to full backwages
Section 1*+ <0irteent0 Mont0 1ay
1;.1 Law B !o2erage
#overage
64
1. *ection ! $evised Nuidelines on the 12
th
-onth Pay 1aw : The following
,R-s are still not covered by P A=B6
"he government and any of its political subdivisions! including
NGCC%s! e&cept those corporations operating essentially as private
subsidiaries of the government.
#$%s already paying their ##%s a 12
th
month pay or more in a
calendar year or its e6uivalent at the time of this issuance.
)"he term =its e!uivalent> O shall include Christmas bonus! mid(
year bonus! cash bonuses and other payments but shall not include
cash and stock dividends! cost of living allowances and other
allowances regularly enjoyed by the ##! as well as non(monetary
benefits. Ehere an #$ pays less than re6uired 1I1
th
of the ##%s
basic salary! the #$ shall pay the differences..
#$%s of household helpers and persons in the personal service of
another in relation to such workers! and
#$%s of those who are paid on purely commission! boundary! or
task basis! and those who are paid a fi&ed amount for performing
specific work! irrespective of the time consumed in the performance
thereof! e&cept where the workers are paid on piece(rate basis in
which case the #$ shall grant the re6uired 12
th
month pay to such
workers.
B distressed #$ may 6ualify for e&emption for the 12
th
month pay if
there is prior authori9ation from the +G1#. A+entech vs. 31$CD
. "he C/B provides for the payment of Christmas bonuses to all regular
##%s in the bargaining unit with of at least 1 year of continuous service. Is
this e6uivalent to the 12
th
month payF
3o. "he Christmas bonuses provided in the C/B accords a reward for loyalty
to certain ##%s. "his is evident from the stipulation granting the bonus in
6uestion to workers with at least 1 year of continuous service. "he bonus
therefore is to be in addition to the legal re6uirement. 5H!1 2s. =LR!7
1;. )(ount and 1ay(ent Date
1. Sec C Revised 8uidelines on the BD
th
.onth Pay Law6
)(ount : S of the total basic salary earned by an ## within a
calendar year.
"he 12
th
month pay is to be paid only to rank(and file employees
regardless of the amount of their basic salary.
<i(e of 1ay(ent: 3ot later than +ecember :.
. +efine basic salary: 4or purposes of computing the 12
th
month pay! basic
salary>
include remuneration or earnings paid by this #$ for services
rendered
but does not include allowances and monetary benefits which are
not considered or integrated as part of the regular or basic salary!
such as the cash e6uivalent or unused vacation and sick leave
65
credits! overtime! premium! night(differential and holiday pay! and
cost(of(living allowances.
However! these salary(related benefits should be included
as part of the basic salary in the computation of the 12
th
month pay if the individual or collective agreement!
company practice or policy! the same are treated as part of
the basic salary of the ##%s.
2. 4rom 171 to 1778! +4C included in the computation of this 12
th
month
pay! the ##%s sick! vacation and maternity leaves! In 177'! the company
discontinued the inclusion of the aforementioned items in the 12
th
month
pay. Is this validF
"he considerable length of time the 6uestioned items had been included by
the company indicates a unilateral and voluntary action on its part! sufficient
in itself to negate any claim of mistake. B company practice favorable to the
##%s had been established! and the payments made pursuant thereto ripened
into benefits enjoyed by them. Bny benefit and supplement being enjoyed by
the ##%s cannot be reduced! diminished! discontinued or eliminated by the
#$. (*lcantara)
&asic .age
1. Bre the sales commission of a salesman paid a guaranteed wage plus
commissions included in the computation of this 12
th
month payF
It depends on what kind of commissions may properly be considered part of
the basic salary! they should be included in computing the 12
th
month pay. If
the commission are not an integral part of the basic salary! then they should
be e&cluded. (*."cena) *ales commissions which comprised an automatic
increment to the monetary value assigned to each unit of work rendered by
the salesman! or that of the wages(or sales(percentage type should be
included in the 12
th
month pay computation. Gn the other hand! commission
in the form of productivity bonuses which closely resembles profit(sharing
payments and have no clear direct or necessary relation to the amount of
work actually done by each individual ##! or the profit(sharing or bonus(type!
should be e&cluded from the computation of the 12
th
month pay. (Philippine
$"plicators vs. )&C)
Substitute 1ay(ent
1. /enefits in the form of food or free electricity not proper substitute for the 12
th
month pay. (+ramanlis vs. %inister of &a!or)
1%
t0
Mont0 1ay
1. "he grant of the 1:
th
month pay is a management prerogative! gratuitous in
nature and therefore it cannot be forced. (4ama#a Hotel vs. )&C)
1;. 2 =onAinclusion
1. Sec. @, Re2ised Guidelines on t0e 1"
t0
Mont0 1ay Law: "he mandated
12
th
month pay need not be credited as part of the regular wage of ##%s
for purposes of determining overtime and premium pays! fringe benefits as
well as contributions to the state insurance fund! *ocial *ecurity! -edicare
and private retirement plans.
66
Section 1: + &onus
1<. 1 Definition
1. B bonus is an amount is an amount granted and paid to an ## for his
industry and loyalty which contributed to the success of the #$%s business
and made possible the reali9ation of profits. (*."cena)
1<. .0en De(andable
1. 4rom the legal point of view! a bonus is not a demandable and
enforceable obligation. /ut it is so when it is made part of the wage or
salary or compensation. In such case! the latter would be a fi&ed amount
and the former would be a contingent one dependent upon the reali9ation
of profit. (*."cena) 4urthermore! while normally discretionary! the grant if
gratuity or bonus by reason of its long and regular concession! may
become regarded as part of the regular compensation. (&i!eration
Steamship vs. C2)
Section 1@. .or/ing !onditions for S6ecial Grou6s of .or/ers B .o(en
18.1 .o(en and t0e !onstitution
1. )rt. II, Sec. 1%, !onst. : "he *tate recogni9es the role of women in
nation(building! and shall ensure the fundamental e6uality before the law
of women and men.
18. !o2erage
1. Section 1, Rule -II, &oo/ III, IRREs : "his rule shall apply to all #$%s
e&cept to:
a. government and NGCC%s and
b. to #$%s of household helpers and persons in their personal service
insofar as such workers are concerned
18.2 1ro0ibited )cts
=IG#< .$RL )=D '-!'1<I$=
1. )rt. 1"4 : 3o woman shall be employed or permitted or suffered to work!
with or without compensation:
a. (ndustrial underta*ing 6 /etween 1J:JJ pm and <:JJ am of the
following day.
b. #ommercial underta*ing 6 /etween midnight and <:JJ am of the
following day.
c. +gricultural underta*ing 6 3ighttime unless she is given a period
of rest of not less than 7 consecutive hours.
. )rt. 1"1 : #&ceptions to 3ightwork prohibition
[), C, H, 1 B M, #, M, A C)]
a. In cases of actual or impending emergencies caused by a serious
accident! fire! flood! earth6uake! epidemic or other +isasters or
calamity! to prevent loss of life or property.
b. Cases of force majeure or imminent danger to public safety.
c. Cases of urgent work to be performed on machineries! e6uipment
or installation! to avoid serious loss which the #$ would otherwise
suffer.
67
d. Eork is necessary to prevent serious loss of perishable goods
e. Eoman ## holds a responsible position of managerial or technical
in nature.
f. Eoman ## has been engaged to provide health and welfare
service.
g. Ehere the nature of the work re6uires the manual skill and
de&terity of women workers@
h. Ehere the women ##%s are immediate members of the family
operating the establishment or undertaking@ and
i. Bnalogous cases. AH?--P* 4B+D
2. 1N! a manufacturer and e&porter of jeans! has a 2(shift work schedule but
maintains a policy of not assigning women in the 2
rd
shift from 1J:JJ pm to
<:JJ am. Is this policy discriminatory to womenF
Mes. "he women sewers! by reason of their se&! are denied the opportunity to
earn additional pay. "he nature of the work re6uires the manual skill and
de&terity of women workers and cannot be performed with e6ual efficiency to
male workers. "his is one of the e&ceptions to the night work prohibition. 5)rt.
1"17
/. DIS!RIMI=)<I$=
1. )rt. 1"*: It shall be unlawful for any #$ to discriminate against woman ##
with respect to terms and conditions of employment solely on account of
her se&.
The following are acts of discrimination [1, C]
a. Payment of lesser compensation! as against a male ##! for work of
e6ual value.
b. 4avoring a male ## over a female ## with respect to the
promotion! training opportunities! study and scholarship grants
solely on account of their se&es.
Criminal liability for violations shall be penali9ed as provided in Brt. ''
and '7 of this Code. "he institution of any criminal action under this
provision shall not bar the aggrieved ## from filing an entirely separate
and distinct action for money claims! which may include claims for
damages and other affirmative reliefs. "he actions hereby authori9ed shall
proceed independently of each other.
. C! a :;(year old teacher was dismissed by the school after she got
married to L! her 1'(year old :
th
year high school student. Is the dismissal
lawfulF
3o! in the absence of substantial evidence to show that C took advantage of
her position to court her student. "here is nothing wrong if the two fell in love
despite the disparity in their ages. (Ch"a3A"a vs. Clave)
C. M)RRI)G'
1. )rt. 1": : Stipulation against marriage It shall be unlawful for an #$ to
: [!, S, D]
a. $e6uire as a condition of employment or continuation of
employment that a woman ## shall not get married@
68
b. *tipulate e&pressly or tacitly that upon getting married a woman
shall be deemed resigned or separated@
c. Bctually dismiss! discharge! discriminate or otherwise prejudice a
woman ## merely by reason of her marriage.
+. G'='R)L
1. )rt. 1"@ : It shall be unlawful for any #$ to : [D&, D1, R)]
a. +eny any woman ## the benefits provided for in this Chapter or to
discharge any woman employed by him for the purpose of
preventing her from enjoying any of the benefits provided under this
Code@
b. +ischarge such woman on account of her pregnancy! or while on
leave or in confinement due to her pregnancy@
c. +ischarge or refuse the admission of such woman upon returning
to her work for fear that she may again be pregnant.
. In 1%s contract of employment with Club #! it was stipulated that her
employment as a dancer would cease once she gets pregnant. Ehen 1
got pregnant! 1 was no longer allowed to dance and since there were no
other work available for which her talents were suitable! her employment
was terminated. Is the action legalF
Mes. It is both awkward and dangerous for her to dance during her
pregnancy. Gf course the #$ has the obligation to give her another job! but
as stated in the problem there is no other work for which her talents are
suited. It is not fair to re6uire the #$ to continue employing her. (*lcantara)
2. B pharmaceutical company rejected the applications of ; pregnant women
as sales representatives for contraceptive pills and family planning
devices. Is this validF
Mes. "he company has the prerogative to select its ##%s. Ehat is unlawful is
for the #$ to discriminate against or dismiss a woman by reason of their
pregnancy. (*lcantara)
18. : Cacilities
1. )rt. 1" : "he *ecretary of 1abor shall establish standards that will ensure
the safety and health of women ##%s. In appropriate cases! he shall! by
regulations! re6uire #$ to:
a. Provide seats proper for women and permit them to use seats
when they are free from work and during working hours! provided
they can perform their duties in the position without detriment to
efficiency.
b. "o establish a nursery in a workplace.
c. "o determine appropriate minimum age and other standards for
retirement or termination in special occupations such as those of
flight attendants and the like.
. )rt. 1"% : AaD #stablishments which are re6uired by law to maintain clinic
or infirmary shall provide free family planning services to their ##%s.
2. Is the #$ re6uired by law to give maternity benefits to its female workersF
69
3o. -aternity benefits are to be paid in appropriate instances by the ***.
"he only obligation of the #$ is to advance the benefit subject to
reimbursement by the ***. (*lcantara)
18.; S6ecial classification S6ecial .o(en .or/ers
1. C works as a hostess in a nightclub! she is paid a percentage of the lady%s
drink ordered by customers. "here are nights when she does not earn
anything because there are no customers. Is C an ## of the nightclubF
Mes. Bny woman who is permitted or suffered to work! with or without
compensation! in any nightclub! cocktail lounge! massage clinic! bar! or
similar establishment! under the effective control or supervision of the #$ for
a substantial period of time as determined by the *ecretary of 1abor shall be
considered an ## of such establishment for purposes of labor and social
legislation. 5)rt. 1",7
Section 1,. .or/ing !onditions for S6ecial grou6 of .or/ers B Minors
1'.1 Minors and t0e !onstitution
)rt. II, Sec. 1", !onst. + "he *tate recogni9ed the role of the youth in nation(
building and shall promote and protect their physical! moral spiritual! intellectual!
and social well(being. It shall inculcate in the youth patriotism and nationalism!
and encourage their involvement in public and civic affairs.
1'. !o2erage
Section 1, Rule -II, &oo/ III, IRREs : "his $ule shall apply to all #$%s e&cept
[G #]
1. to the Novernment and NGCC%s and
. to #$%s of household helpers and persons in their personal service insofar
as such workers are concerned.
1'.2 '(6loyable )ge
Section 1, R) @:14 as a(ended by R) @:*, :
5 General rule+ Children below 1; years of age shall not be employed.
5 '?ce6tions+ [1, ']
1. Child works directly under the sole responsibility of his parents or legal
guardian and where only members of the #$ family are employed!
providedI
a. his employment neither endangers his life! safety! health and
morals! nor impairs his normal development:
b. the parent or legal guardian shall provide the said minor child with
the prescribed primary andIor secondary education.
. Child is employed in entertainment or information through cinema!
theater! radio or television! providedI
c. #mployment contract is concluded by the child%s parents or legal
guardian! with the e&pressed agreement of the child concerned! if
possible! and the approval of the +G1#.
d. "he #$ shall ensure the protection! health! safety and morals of the
child@
e. "he #$ shall institute measures to prevent the child%s e&ploitation
or discrimination.
70
f. "he #$ shall formulate and implement! subject to the approval and
supervision of competent authorities! a continuing program for
training and skills ac6uisition of the child.
g. "he #$ shall first secure! a work permit from the +G1# which shall
ensure observance of the above re6uirements.
. )rt. 1"3 : Bny person! between 1; and 1' may be employed in any non(
ha9ardous work. In any ha9ardous work! the employable age is 1' and up.
D% What are considered hazardous wor* places? ; # . P<
a. Ehere the nature of work e&poses the worker to +angerous
environmental elements! contaminations or work conditions.
b. *tevedoring! construction work! logging! firefighting! mechani9ed
farming and similar work.
c. -anufacture or handling of #&plosives and other pyrotechnic
products.
d. Ehere the workers are e&posed to heavy or power(driven
machinery or e6uipment or tools.
:. 1! 1J years old! was hired as a singer in a carnival which stages shows
wherever there is a town fiesta. *he is paid P;!JJJ.JJ a month. 1 is
therefore always on the road! traveling to different parts of the country. Is
her employment lawfulF
3o. *uch employment will endanger her health and impair her normal
development. *he is also deprived of the opportunity to get primary education
as she is always traveling to different parts of the country. (*lcantara)
1'.: Discri(ination
1. )rt. 1%4 : Prohibition against child discrimination 3o #$ shall
discriminate against any person in respect to terms and conditions of
employment on account of his age.
. Eould a company rule providing for lower wages for workers below 1'
years who are ine&perienced violate the prohibitionF
3o. "he payment of lower wages is by reason of the worker%s ine&perience!
not his age. "here is no discrimination on account of the worker%s minority.
(*lcantara)
Section 13. .or/ing !onditions for S6ecial grou6 of .or/ers B
#ouse0el6ers
17.1 !o2erage
)rt. 1%1 : "his chapter shall apply to all persons rendering services in
households for compensation
17. #ouse0el6ers
1. Define do(estic or 0ouse0old ser2ice : *ervice in the #$%s home which
is usually necessary or desirable for the maintenance and enjoyment
thereof and includes ministering to the personal comfort and convenience
of the member%s of the #$%s household! including services of family
drivers. 5)rt. 1%17
71
. C was employed by B company to work as a maid in the cottages of its
/aguio mining site to attend to the needs of its e&ecutives or guests who
now and then visit the site. Is * a househelper or domestic servantF
3o. "he services of a househelper is rendered e&clusively for the personal
comfort and enjoyment of the family of the #$ and are performed in the
latter%s home. *ervices rendered in an e&ecutive cottage cannot be
considered domestic. * must be considered a regular ## of the mining
company. (*pe@ %ining vs. )&C)
17.2 =onA#ouse0old .or/ )ssign(ent
" lives in a compound where he operates a modest candy business. *ometimes!
when there is no work in his house! his maids help in the packing of the candies
and his family driver delivers the candies to the outlets. How should the work
rendered in connection with the candy business be compensatedF
4or work rendered by the maids and the family driver! they should be paid at the
rate prescribed by law for non(agricultural workers. (*lcantara) 3o household
helper shall be assigned to work in a commercial industrial or agricultural
enterprise at a wage or salary rates lower than that provided for agricultural or
non(agricultural workers as prescribed therein. (*rt. 14?)
17. : !onditions for '(6loy(ent
1. -! 1; years old! worked as a maid in the house of 1. *he was paid in
advance for 2 years and she agreed that she will work for 1 for the said
period. Is there any legal infirmity in the said agreementF
Mes. "he period contract e&ceeds the ma&imum set by the law. Brt. 1:
provides that the original contract of domestic service shall not last for more
than years! although it may be renewed for such periods as may be agreed
upon by the parties. -%s contract will therefore be good for only years.
(*lcantara)
. What are the minimum wages for househelpersF
a. -etro -anila and highly urbani9ed cities : P'JJ.JJ
b. Chartered cities and 1
st
class municipalities : P<;J.JJ
c. Gther municipalities : P;;J
Househelpers receiving P1!JJJ.JJ shall be covered by the ***.
". +side from the rights to minimum wage0 what other rights are
en9oyed by a househelper9 [' J & A I C]
a. Gpportunity for elementary education if a househelper is less than
1' years old ABrt. 1:<D
b. Pust and human treatment ABrt. 1:8D
c. /oard! lodging and medical attendance ABrt. 1:'D
d. Indemnity for unjust termination of services of 1; days plus the
compensation already earned.
72
e. 4uneral benefits if the househelper has no relatives with sufficient
means in the place where the head of the family lives. ABrt. 1<7<!
3CCD )4 I / # P.
f. If househelper is unjustly dismissed!
pay wages already earned R 1; days wages AIndemnityD
g. If househelper leaves without justifiable cause!
forfeits any unpaid salary not e&ceeding 1; days
:. - works as a live(in labandera in the house of " somewhere in Lue9on
City. *he works for 11 hours a day. /ased on their contract! she is paid
P'JJ.JJ. Is she entitled to additional compensationF
Mes. Blthough she is merely a househelper! she should not be allowed to
work more than 1J hours a day. ABrt. 1<7;! 3CCD *ince she worked for 11
hours daily! she should be paid an additional compensation beyond the
minimum wage of P'JJ.JJ set by the law. (*lcantara)
;. )rt. 1*4 : If the duration of the household service is not determined either
in the stipulation or by the nature of the service! the #$ or the househelper
may give notice to put an end to the relationship of the service.
Section 4. .or/ing !onditions for S6ecial grou6 of .or/ers B
#o(ewor/ers
J.1 'R
1. )rt. 1** : 4,R5 of homewor*ers includes any person! natural or
artificial! who for his account or benefit! or on behalf of any person residing
outside the country! directly or indirectly or though any ##! agent!
contractor! sub(contractor or any other person:
a. +elivers or causes to be delivered! any goods! fabricated in or
about a home and thereafter to be returned or to be disposed of or
distributed in accordance with his directions@ or
b. *ells any goods! articles or materials to be processed or fabricated
in or about a home then rebuys them after such processing or
fabrication! either himself or through some other person.
J. 'R Liability
1. Section ,, Rule -ID, &oo/ III, IRREs : "he #$ shall be jointly and
severally liable to the ##%s or homeworkers of the contractor or sub(
contractor! in the same manner as if the ##%s or homeworkers were
directly engaged by the #$.
. * represents in the Philippines the *ears chain of department stores in the
?*. *he sells wood and leather to housewives who makes these into
wooden clogs according to the patterns and specifications of *. Is there an
#$(## relationship between * and the housewivesF
Mes. "he housewives are considered homeweorkers and * is their #$.
(*lcantara)
2. Ehat is the liability of *earsF
*ears is jointly and severally liable if * is not able to pay the wages of the
homeworkers. 5Sec. ,, Rule -ID, &oo/ III, IRREs7
73
:. "erms and conditions of employment involving money claims of
homeworker shall be heard by the $egional +irector of the +G1#. /eyond
that! the case falls under the jurisdiction of the 1abor Brbiter. (*."cena)
Section 1, Medical, Dental and !onditional Safety
1.1 Cirst )id <reat(ent and 'R )ssistance
1. )rt. 1*:. #very #$ shall keep in his establishment such first(aid
medicines and e6uipment as the nature and conditions of work may
re6uire! in accordance with such regulations as the +G1# shall prescribe.
Section 1, Rule I, &oo/ ID, IRREs = "his rule shall apply to all #$%s whether
operating for profit or not! including the Novernment ant NGCC%s! which
employ in any workplace 1 or more workers.
. )rt. 1:1 : It shall be the duty of an #$ to provide all the necessary
assistance to ensure the ade6uate and immediate medical and dental
attendance and treatment to an injured or sick ## in cases of emergency.
2. "he #$ is not obliged to provide and spend for the continued or follow(up
treatment of the ## unless it has bound itself to do so by contract or
established practice or policy. (*lcantara)
1. '(ergency Medical and Dental Ser2ices
When and What is Re!uired
1. +escribe briefly these free emergency medical0 dental services and
facilities re!uired to be furnished by the ,RF
14 to *4 wor/ers : "he services of a first(aider shall be provided
who may be one of the workers in the workplace and who has
immediate access to the first(aid medicines.
*1 to 44 wor/ers: *ervices of a full(time registered nurse shall be
provided. However! if the work is non(ha9ardous! the services of a
full(time first(aider may be provided if a nurse is not available.
41 to "44 wor/ers : *ervices of a full(time registered nurse! a
part(time emergency clinic shall be provided regardless of the
nature of the undertaking therein. "he physician and dentist
engaged for such workers shall stay in the premises for at least
hours a day.
Ehere the establishment has more than 1 workshift a day!
the re6uired hour stay shall be devoted to the workshift
which has the biggest number of workers and they shall! in
addition to the re6uirements under this $ule! be subject to
call at anytime during the other workshifts to attend to
emergency cases.
"41 or (ore wor/ers : *ervices of a full(time nurse! a full(time
physician! a full(time dentist! a dental clinic! and an infirmary or
emergency hospital with one bed capacity for every 1JJ workers
74
shall be provided. "he physician and dentist shall stay in the
premises of the workplace for at least ' hours a day.
Ehere the workplace has more than 1 shift per day! they
shall be at the workplace during the work(shift which has
the biggest number of workers and they shall be subject to
call at anytime during the other workshifts to attend to
emergency cases.
Ehere the undertaking in such workplace is non(ha9ardous! the #$
may engage the services of a part(time physician and part(time
dentist who shall have the same responsibilities ass those of the
part(time physician and the part(time dentist in the preceding
paragraph! and shall engage the services of a full(time nurse.
In all workplaces where there are more than 1 workshift in a day!
the #$ shall in addition to the re6uirements under this rule! provide
the services of a full(time first(aider for teach workshift. 5Sec. %,
Rule I, &oo/ ID, IRREs7
.0at are considered 0aIardous wor/ 6laces9 [D ! M 1]
Ehere the nature of the work e&poses the worker to +angerous
environmental elements! contaminations or work conditions.
*tevedoring! construction work! logging! firefighting! mechani9ed
farming and similar work.
-anufacture or handling of e&plosives and other pyrotechnic
products
Ehere the workers are e&posed to heavy or power(driven
machinery or e6uipment or tools.
Bn auto repair shop has ' ##%s. Ehat medical and dental services
or facilities must be furnished by the owner of the latterF
*ince the establishment employs less than 1J workers! the owner is
only obliged to keep in the workplace first aid medicines.
.0en not Re>uired
)rt. 1*, : "he re6uirement for an emergency hospital or dental clinic shall not be
applicable in case there is a hospital or dental clinic which is accessible from the
#$%s establishment and he makes arrangement for the reservation therein of the
necessary beds and dental facilities for the use of his ##%s
; km urban
; min rural
1.2 )d(inistration
)rt. 1:* : AaD "he +G1# shall be solely responsible for the administration and
enforcement of occupational safety and health laws! regulations and standards in
all establishments and workplaces wherever they may be located.
Chartered cities may be allowed to conduct industrial safety
inspections of establishments within their respective jurisdictions
where they have ade6uate facilities and competent personnel for
the purpose as determined by the +G1# and subject to national
standards established by the latter.
75
AbD "he *ecretary of 1abor may! through appropriate regulations!
collect reasonable fees for the inspection of steam boilers! pressure
vessels and pipings and electrical installations! the test and approval
for safe use of materials! e6uipment and other safety devices and the
approval of plans for such materials! e6uipment and devices. "he fee
so collected e&pended e&clusively for the administration and
enforcement of safety and other labor laws administered by the +G1#.
Section . '' !lassification
.1 !o2erage
Section 1, Rule I, &oo/ DI, IRREs : "his $ule shall apply to all establishments
and undertakings! whether operated for profit or not! including educational!
medical! charitable and religious institutions and organi9ations! in cases of
regular employment with the e&ception of the Novernment and its political
subdivisions including NGCC%s.
. '' !lassification
1. )rt. ,4
a. $egular ##%s
b. Project ##%s
c. Casual ##%s
d. *easonal ##%s
. )rt. ,1
Probationary ##
". $t0ers
Contract(fi&ed period
'R Deter(ination
1. Ehat determines whether a certain employment is regular or casual is not
the will and words of the #$! much less the procedure of hiring the ## or
the manner of paying his salary. It is the nature of the activities performed
in relation to the particular business or trade considering all
circumstances! and in some cases the length of time of its performance
and its continued e&istence. ($e &eon vs. )&C)
. "ucor Industries! a company engaged in moving and storage of foods
hired packers and drivers pursuant to employment contracts which
provided that the workers were employed on =as(needed> basis and
considered =daily(hired>. Bre they considered regular ##%sF
Mes. Packing and driving activities are usually necessary and desirable in
"ucor%s usual business. "hey are entitled to security of tenure! the provisions
of the written agreement to the contrary notwithstanding. (-"cor vs. )&C)
.2 Regular ''Es
B% Who are considered regular ,,-s?
a. "hose who have been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
#$! their employment not being fi&ed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement! or seasonal nature and
the employment is for the duration of the season. 5)rt. ,47
76
b. Casual ##%s who have rendered at least 1 year of service is
continuous or broken@ they are considered regular ##%s with
respect to the activities in which they are employed@ their
employment shall continue while such activity e&ists. 5Id.7
c. B probationary ## who is allowed to work after the probationary
period. 5)rt. ,17
d. 1earners who have been allowed or suffered work during the first
months if training is terminated by the #$ before the end of the
stipulated period through no fault of the learner. 5)rt. @*7
. H applied for employment with Holiday Inn and was accepted for =Gn(the(
job training> as telephone operator for 2 weeks. Bfter the completion of the
training she was employed on a =probationary basis> for < months. 4our
days before the said period! she was dismissed by the hotel on the ground
that she failed to meet the standards of the hotel. Is the dismissal validF
3o. Bt the time of her dismissal! she was already a regular ## since the =on(
the(job training> was already her =probationary period.> *he was not dropped
after that period. #ven granting that the probation did not end with the
training! there is no reason why that period should not be included in the
stipulated <(month period probation. (Holida# 2nn vs. )&C)
2. 1 was hired as a component mechanic by a manufacturing firm for a
probationary period for < months. -anagement decided not to hire her
after the probationary period. Bfter a month! the company again hired 1 for
another <(month probationary period. Bfter the
nd
<(month probationary
period! she was dismissed. Is 1 a regular ##F
Mes. "he nature of her job re6uired her to perform activities which are
necessary and desirable in the usual business of her #$. *he was also
rehired after the probationary employment e&tended to her. "his fact of
rehiring negates any claim that she failed to 6ualify as a regular ##.
*uccessive hirings and firings cannot be resorted to by the #$ to avoid
obligations imposed by law for the protection and benefit of probationary
##%s. (,ctaviano vs. )&C)
:. P is employed on a probationary period for 2 months. Blthough the #$ was
not satisfied with his performance! he is allowed to work after the end of
the 2(month period. Has P become a regular ##F
Mes. Bn ## is allowed to work after a probationary period shall be considered
a regular ##. (*lcantara)
=ature of .or/
1. What is the primary standard of determining regular employmentF
"he primary standard to determine a regular employment is the
reasonable connection between the particular activity performed by the ##
in relation to the usual business or trade of the #$. ($e &eon vs. )&C)
"he connection can be determined by considering the nature of the work
performed and its relation to the scheme of a particular business or trade
in its entirety. Blso! if the ## has been performing the job for at least one
year! even if the performance is not continuous or merely intermittent! the
law deems the repeated and continuing need for its performance as
sufficient evidence of the necessity if not indispensability of that activity to
77
the business. Hence! the employment is also considered regular! but only
with respect to such activity and while such activity e&ists. AId.D
. /! was hired by a /uddhist "emple as secretary and interpreter. *he also
attended personally to some needs of the Head -onk. Is / a regular ##
or a domestic helperF
/ is a regular ##. Her functions were essential and important to the
operation and religious function of the temple@ they could not be categori9ed
as mere domestic work.
2. *tevedores were employed by corporation engaged in deep(sea fishing to
unload the tuna fish catch from latter%s vessels into refrigerated vans.
"heir work was intermittent depending on the arrival of fishing vessels.
"here were also times when the stevedores worked on vessels belonging
to other companies. Bre the stevedores regular ##%sF
Mes. "hey were engaged to perform activities usually necessary or desirable
in the usual business or trade of their #$%s. "he activity of catching fish is a
continuous process@ it cannot be considered as a specific project or a
seasonal activity. "heir working on other vessels does not militate against the
e&istence of the #$(## relationship since it is but natural for the worker to
seek other employment during the periods of temporary la(off. (=& %artine.
vs. )&C)
:. Bn electric cooperative only e&tended permanent appointments to
linemen! secretaries! clerks and electricians after < months from the date
of their hiring. -ay the #$ treat these workers as regular ##%s only from
the date they were e&tended permanent appointmentsF
3o. "heir services are usually necessary or desirable in the usual trade or
business of the cooperative. (Central )egros /lectric vs. )&C)
#iring '?tended 1eriod
1. B company engaged in construction hired carpenters and issued them
some notices of employment that they were hired for specific projects and
their employment shall be deemed automatically terminated at the
completion of the project. However! when the project to which they were
assigned were completed! they would be immediately assigned to the ne&t
project. Considering that they have been working for a number of years!
are they regular ##%sF
Mes. "hey perform activities usually necessary or desirable in the usual
business of the company. "hey are considered =non(project ##%s> of the
construction company. (+eg"rin vs. )&C)
. 4! a skilled welder was hired by +- Consunji for several projects wherein
he was assigned. "here was also evidence that the worker was under
obligations to be always available on call by the company and that he
could not offer his services to other #$%s. Is he a regular ##F
3o. 4 is a project ##. (+ernande. vs. )&C)
!ontract to !ontract
78
1. P was hired by a te&tile firm as a machine operator. P%s employment
contract stipulates that the company shall make an annual assessment of
his performance and his continued employment shall depend on said
evaluation. Is the stipulation validF
3o. It determines the security of tenure enjoyed by P who is a regular ##.
His continued employment is made to depend upon the whims of the #$.
(*lcantara)
. - Co.! is engaged in the manufacture of furniture for e&port. It has regular
customers but also receives special orders. It hires =temporary workers>
for special orders. "hese are made to sign temporary contracts. Bre these
workers considered regular workersF Mes. "hey are engaged in activities
which are usually necessary of desirable in the usual business or trade of
the #$. *ignificantly! the special orders are not seasonal but more or less
regular! re6uiring the continuous services of the =temporary workers.> "he
temporary employment contracts have little probative value. (%ehita!el
+"rnit"re vs. )&C)
2. - was employed as a carpenter by a company engaged in the concrete
structural business. His work involved the making of moulds for bridges.
He was never assigned to work outside the plant of the #$. #very 2
months! he was made to fill up and sign an employment contract relating
to a particular phase of a work in a specific project. Is - a regular ##F
Mes. He was assigned to perform tasks which are usually necessary or
desirable in the usual trade or business of the #$. +espite the signing of
employment contracts! the work did not end on a project to project basis. He
continued to perform the same kind of work throughout his period of
employment. (%agante vs. )&C)
.: 1ro8ect ''Es
Who are considered pro9ect ,,-s?
B project ## is one whose employment has been fi&ed for a
specific project or undertaking! the completion or termination of
which has been determined at the time of the engagement of the
## or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season. 5)rt.
,47
<est of 1ro8ect ''Es
Ehat is the principal test to determine whether ##%s are =project
##%s> as distinguished from =regular ##%s>F "he test is whether or
not the project ##%s are assigned to carry out a specific project or
undertaking the duration and scope of which are specified at the
time the ##%s are engaged for that project. (*&U3-UCP vs. )&C)
1ro8ect ''Es
1. PPI! a company providing construction supervision of the -anila
#&pressway hired $ for a term of : months. Bfter the e&piration of the
period! he was hired for another term of 1J months! and then for 17
months. Bll these were entered during various stages prior to the
completion of the construction project. Eas $ a regular ## of PPIF
79
3o. He was hired in a specific project or undertaking as a driver. He was a
project ## whose employment terminated upon the e&piration of his
employment contract or upon the completion of the project. (ada vs. )&C)
. B company engaged in the building and repair of vessels hired welders to
work in the repair of a specified vessel. Is the employment of the workers
considered regularF
3o. "hey are project ##%s whose work is co(terminus with the project for
which they are hired. (Sandoval Ship#ards vs. &eogardo)
2. Consumer Pulse hired field interviewers on specified project basis for a
definite period of time. -any of the interviewers worked for several
projects. Nenerally! the contractual employment is not continuous but
intermittent! sporadic with long intervals of idle periods in between projects
due to lack of work or job contracts. Bre the filed interviewers considered
regular ##%sF
3o. "he interviewers were hired for specific projects the completion or
termination of which are determined at the start of their employment.
(%anansag vs. )&C)
:. B construction firm hired as project ##%s several workers. Instead of being
assigned solely to the job sites! they were also made to work as inventory
clerk or warehouseman in the company%s central shop. Bre they project
##%sF
3o. "heir work did not end upon the completion of a project. "hey perform
their jobs even after a job had been finished. *ince they performed tasks vital
and indispensable to the efficient administration and completion of the
company%s various projects! they are considered regular ##%s. (Capitol
2nd"strial vs. )&C)
Rationale
1. "he rationale for this rule is that if a project has already been completed! it
would be unjust to re6uire the #$ to maintain them in the payroll while
they are doing absolutely nothing e&cept waiting until another program
begun! if at all. In effect! these stand(by workers would be enjoying the
status of a privileged retainers! collecting payments for work not done! to
be disbursed by the #$ from profits not earned. "his is not fair by any
standards and can only be lead to a coddling of labor at the e&pense of
management. ($e ,campo vs. )&C)
I(6lication
Project ##%s are not entitled to separation pay as their work was coterminous
with the completion of the project. (Sandoval Ship#ards vs. &eogardo)
.; !asual ''Es
1. Ehat is casual employmentF Bn employment is casual when the ## is
engaged to perform tasks or activities which are not usually necessary or
desirable in the usual business or trade of the #$. 5)rt. ,47
. Pai Blai -anila hired a mason and plumber to do renovation work on its
building. "he work lasted for 11 months. Bre the mason and plumbers
regular ##%sF
80
3o. "hey were engaged for a specific project or undertaking. "hey are casual
##%s and as such do not enjoy the security of tenure since they work for only
11 months. (Philippine =ai *lai vs. Clave)
.< Seasonal ''Es
1. Bgricultural workers were hired by the owners of a rice and sugar land to
perform particular phases of agricultural work necessary in rice
production! after which they were free to render services. Considering that
they rendered services for many years! in their employment! though
seasonal! deemed regularF
3o. "hey are considered project or seasonal ##%s .their employment legally
ends upon the completion of the project or the season. (%ercado vs. )&C)
.8 !ontractACi?ed 1eriod
1. B was engaged as athletic director by /rent *chool for a fi&ed term of ;
years. *he was not rehired after that term. Is she a regular ##F
3o. B%s employment was for a fi&ed period! her employment ended. It does
not necessarily follow that where the duties of the ##%s entail activities which
are usually necessary or desirable in the usual trade or business of the #$!
the parties should not be forbidden to stipulate any period of time for these
activities. "here is nothing essentially contradictory between a definite period
of employment and the nature of the ##%s duties. (0rent vs. 5amora)
>% 8ive the criteria under the fi$ed period contracts of employment
cannot be said to be in circumvention of the wor*er-s security of
tenure%
"he fi&ed period of employment was knowingly and voluntarily
agreed upon by the parties! without any force! duress or improper
pressure being brought to bear upon the ## and absent any other
circumstances vitiating his consent@ or
It satisfactorily appears that the #$ and ## dealt with each other on
more or less e6ual terms with no moral dominance whatever being
e&ercised by the former on the latter. (Pantranco vs. )&C)
Ehen such stipulations were not designed to circumvent the laws
on security of tenure. A/rent vs. XamoraD
2. C was engaged by a trucking company to work as a truck driver for a
period of si& months. It appears that all drivers of the company were hired
on fi&ed contract basis. "he company merely filled in the blanks in a
mimeographed form with the corresponding driver%s data. Bfter the <(
month period! C%s services were terminated. Eas this a valid terminationF
3o. "he contract for a fi&ed period was a clever scheme to prevent its ##%s
from becoming regular ##%s. he should be considered a regular ##. (Cielo vs.
)&C)
:. 1; years after his dismissal for cause. B was re(hired as a driver for 1
month. +id such re(hiring result in his reac6uisition of his former regular
statusF
3o. "he contract specifically provided for a fi&ed term. (Pantranco vs. )&C)
81
.' 1robationary ''Es
1. What is a probationary employmentF It is employment for a specified
period generally no e&ceeding < months for the purpose of determining
whether the ## can 6ualify for regular employment in accordance with
reasonable standards prescribed by the #$. (*lcantara)
. Ehat is the probationary period for apprentices and learnersF
)66rentices : "he probationary period in the apprenticeship may
not be under probationary employment in the company where he
trained. In another company! however! the probationary period for
him would be < months.
Learners : If the job is learnable can be learned within 2 months
then the probationary period is 2 months or less. APolicy
Instructions 3o.1D
1ur6ose
Pustify the rights of the #$ to fi& a probationary period of employmentF "he #$
has the right to select his ##%s that the #$ may set or fi& a probationary period
within which the latter may test and observe the conduct of the former before
hiring him permanently. ('rand %otors vs. %inister of &a!or) B probationary
appointment is made to afford the #$ the opportunity to observe the fitness of a
probationer while at work! and to ascertain whether he will become a proper and
efficient ##. (2nternational Catholic %igration Commission vs. )&C) It is
necessary for the probationary ## to undergo a period of probation to test his
6ualifications! skills and e&perience. ('rand %otors)
DurationF'?ce6tion
-ay a company impose a longer probationary period than < monthsF Mes.
Nenerally! the probationary period of employment is limited to < months. "he
e&ception to this general rule is when the parties to an employment contract may
agree otherwise! such as when the same is established by company policy or
when the same is re6uired by the nature of the work to be performed by the ##
i.e. where a probationary period was set for 1' months! especially where the ##
must learn a particular kind of work such as selling or when the job re6uires
certain 6ualifications! skills! e&perience or training. (0"iser or &eogardo)
'?tension !ontract 'ffect ''Es
+ was hired on probation by -ariwasa. ?pon e&piration of the probationary
period! he was informed by the #$ that his work proved unsatisfactory. "o give
him a chance to improve his performance and to 6ualify for her regular
employment! -ariwasa e&tended! with his written conformity! his probationary
period for another 2 months. His performance did not improve! and his services
was terminated. +id he become a regular ##F
3G. /y voluntary agreeing to the e&tension of the original probationary period!
+! in effect! waived any benefit attaching to the completion of the said period.
(%ari8asa vs. &eogardo)
)bsorbed ''Es
Private respondents could not be considered probationary ##%s because they
were already well(trained in their respective positions. (Ce!" Stevedoring vs.
egional $irector)
82
<er(ination and Salary
Bward to the private respondent of the salary for the une&pired 2(month portion
of her <(month probationary employment who was validly terminated during her
probationary employment is unjust and oppressive to the #$. (2nternational
Catholic 2mmigration Commission vs. )&C)
Rule 1ri2ate Sc0ool <eac0er
1. 8ive the legal re!uisites for a private school teacher to ac!uire
permanent employment and security of tenureF "hese re6uisites are:
a. "he teacher is a full time teacher.
b. "he teacher must have rendered 2 consecutive years of service.
c. *uch service must have been satisfactory. (Caga#an Capitol College
vs. )&C)
. Bt the time of her retirement! B has been employed as school teacher for
years. Bfter 2 years from her retirement! she was rehired by the school
teacher under contract which was renewable yearly. Bfter years of
continuous satisfactory performance! her contract was not renewed. Eas
the non(renewal violative of her security of tenureF
Mes. Ehen she was rehired! she did not have to undergo a probationary
employment as her teaching competence had already been tried and tested
during her years of service. she could not be discharged solely on account
of the e&piration of her
nd
annual contract. *he could not only be dismissed
for cause and with due process. (St. -heresita7s *cadem# vs. )&C)
2. B teacher was hired by a private school on a yearly basis. /efore the
e&piration of the
nd
yearly contract! the school refused to renew her
contract on the ground that her teaching performance was not satisfactory.
Is the refusal justifiedF
Mes. "he positions were temporary in nature and her employment was for a
definite period. #ven assuming that she was on probationary employment! the
probationary period for teachers is 2 years. (0i!oso vs. 1ictoria %illing)
Section "+ <er(ination and '(6loy(ent
2.1 Introduction+ ''Es Security of <enure
!o2erage
1. )rt. @, : "he provisions of this "itle shall apply to all establishments or
undertakings! whether for profit or not.
. Confidential and managerial are also entitled to security of tenure! fair
standards of employment and the protection of labor laws. (2nter3,rient
%aritime vs. )&C) Probationary and contractual ##%s enjoy security of
tenure but only to a limited e&tent. "hat is! they remained secure in their
employment during the period of time their respective contracts remained
in effect. (&a!a6o vs. *le6andro)
2. Pakiao workers who by the nature of their work are considered regular
workers enjoy security of tenure. ($# 4eh 0eng vs. 2&%U) However! if the
83
circumstances indicate that they are in reality independent contractors!
then they do not enjoy security of tenure. (*lcantara)
Security of <enure
1. Ehat is meant by the =security of tenure%F of an ##F Security of tenure
of an ,, is his right against unjust and arbitrary dismissal. He cannot be
deprived of his work! which is property in the constitutional sense! without
a just cause and without the benefit of hearing. (*lcantara)
. Is there an e&press constitutional guarantee of the security of tenure of an
##F Mes. Brt. CIII! *ec. 2! Const. (ance vs. )&C)
=ature of Rig0ts
"ermination of employment is not anymore a mere cessation or severance of
contractual relationship but an economic phenomenon affecting members of the
family. "his e&plains why under the board principles of social justice the
dismissal of ##%s is ade6uately protected by the laws of the state. (*lham!ra vs.
)&C) However! the worker%s right to security of tenure is not an absolute right
for the law provides that he may be dismissed for cause. "he law in protecting
the rights of the laborers! authori9es neither oppression nor self(destruction of
the #$. (%/*&C, vs. )&C)
Rationale Regulation
"he right of #$ to freely select or discharge his ##%s is regulated by the *tate!
because the preservation of the lives of citi9ens is a basic duty of the *tate!
more vital than the preservation of the corporate profit. (&losa3-an vs. Silahis)
2. Manage(ent Rig0ts and t0e Just !ause of <er(ination
)rt. , + )n 'R (ay ter(inate an e(6loy(ent for any of t0e following
casues+
1. *erious misconduct or willful disobedience by the #$ of the lawful orders
of his #$ or representative in connection with his work@
. Nross and habitual 3eglect by the ## of his duties@
2. 4raud or willful breach by the ## of the "rust reposed in him by his #$ or
duly authori9ed representative@
:. Commission of a crime or offense by the ## against
a. the person of his #$ or
b. any immediate member of his family or
c. his duly authori9ed representative and
;. Bnalogous cases.
Manage(ent Rig0ts
"he following are management rights with respect to ##>s:
1. 7ight to manage people in general : #&cept as limited by special laws! an
#$ is free to regulate! according to his own discretion and judgment! all
aspects of employment. (San %ig"el vs. ,ple)
. 7ight to just share in the fruits of production : #very business enterprise
endeavors to increase its profits. In the process it may adopt or devise
84
means designed toward the goal. "he free will of management to conduct
its own business affairs to achieve its purpose cannot be denied. (2d.)
2. 7ight to discipline : "he #$ has the prerogative to instill discipline in his
##%s and to impose reasonable penalties! including dismissal! on erring
##%s pursuant to company rules and regulations. (San %ig"el vs. )&C)
:. 7ight to transfer "")s : It is management prerogative to transfer an ##
from one office to another within the business establishment! provided
there is no demotion in rank or diminution of his salary! benefits and other
privileges. (<"co Chemical vs. %inisrt# of &a!or) Bn ##%s right to security of
tenure does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment or
transfer him where he will be most useful. AP""C vs. 31$CD "he
managerial prerogative! however! to transfer personnel! must be e&ercised
without grave abuse of discretion and putting to mind the basic elements
of justice and fair play. It cannot be used as a subterfuge by the #$ to rid
himself of an undesirable worker. 3or where the real reason is to penali9e
an ## for his union activities and thereby defeat his right to self(
organi9ation. AId.D
;. The right to demote : It is management prerogative to tranfer! demote!
discipline and even dismiss an ## to protect its business! provided it is not
tainted with unfair labor practice (Petrophil vs. )&C)
<. 7ight to dismiss : "he right of the company to dismiss its ##%s is a
measure of self(protection. A$eyes vs. -inister of 1aborD Bn #$ cannot
legally be compelled to continue with the employment of a person who
admittedly was guilty of malfeasance towards his #$! and whose
continuance in the service of the latter is patently inimical to his interests.
(%anila -rading vs. 5"l"eta)
Just !auses of <er(ination
-ay an #$ dismiss an ## who enjoys security of tenureF Mes. *ecurity of tenure
does not guarantee perpetual employment. If there is a just or authori9ed cause
the #$ may terminate the services of an ##@ the former cannot be legally
compelled to have in its employ s person whose continued employment is
patently inimical to its interest. (*lcantara)
B. JHS< !)HS' + S'RI$HS MIS!$=DH!<
1. What is serious misconductF -isconduct is improper or wrong conductI
it is the transgression of some established and definitive rule of action! a
forbidden act! a dereliction of duty! willful in character! and implies
wrongful intent and not mere error in judgment. "he misconduct to be
serious must be of such a grave and aggravated character and not merely
trivial or unimportant. *uch misconduct! however serious! must!
nevertheless! be in connection with the ##%s work to constitute just cause
for its separation.
>% ,$amples of serious misconduct 6
a. ## utters obscene! insulting or offensive words against a superior
(*sian $esign vs. $ep"t# %inister of &a!or) or challenging a superior
officer to a fistfight. (&".on Stevedoring vs. C2) However! other
later cases ruled that the penalty of termination is e&treme and
e&cessive and is not commensurate with the acts committed.
85
(%aranao Hotel vs. C* and %ar# =ohnston Hospital vs. )&C) "he
controlling factor is the circumstances surrounding the willful
misconduct. (*lcantara)
b. *erious breach of company rules by allowing security guards to
come inside the *ecurity Gffice! drinking and having se& with one of
the guards! although both of them are married. (Stanford vs. )&C)
c. Bs a general rule! immorality does not justify a discharge. /ut when
the ## holds a responsible position and has under him a good
number of men! the ## must set a good e&ample for his men to
follow. "hus! when he got a young concubine and drove away the
members of his family from the conjugal home! such dismissal is
justified. (Sanche. vs. *ng -i!a#)
d. *leeping in post! gross insubordination! dereliction of duty and
challenging superior officers to a fight committed by a security
guard. (&".on Stevedoring vs. C2)
e. *eaman%s assault with a knife of a member of the ship%s crew.
(Haverton vs. )&C)
f. Into&ication is such a misconduct as will justify separation from
employment! where such into&ication interferes with the
employment. (*."cena)
g. *e&ual harassment by a managerial ## of one of his subordinates.
(1illarama vs. )&C)
h. Buthorship of a manifesto which ridiculed the officers of a school
and demanded their removal! and which disrupted the good order
and decorum in the school! when such charges in the manifesto are
found to be not true. (St. %ar#7s College vs. )&C)
i. Cheating a customer. (P&$- vs. )&C)
D% What are e$amples of misconduct which does not warrant
dismissal?
a. 4istcuffs between two ##%s as a result of mere private matter
between them. (*ris vs. )&C)
b. 0ending! soliciting! and engaging in usurious activities. (Pacific
Prod"cts)
c. /orrowing money from a patient which the ## later paid back.
(%a(ati %edical Center vs. )&C) However! when there is use for a
trust relationship as leverage for borrowing money! the act
becomes serious misconduct. (Pearl S. 0"c( +o"ndation vs. )&C)
d. "eacher falling in love with student provided the teacher did not
take advantage of her position to court her student. (Ch"a3A"a vs.
Clave)
/. JHS< !)HS' + .ILLCHL DIS$&'DI'=!'
B% What are the re!uisites in order that willful disobedience may
constitute a 9ust cause for terminating employment?
86
"he orders! regulations! instructions of the #$ or his representative
must be:
a. $easonable and lawful has reference not only to the
kind and character of directions! but also the manner
in which they are made.
b. *ufficiently known to the ##.
c. In connection with the duties which the ## has been
engaged to discharge.
"he #$%s conduct must have been willful or intentional! willfulness
being characteri9ed by a wrongful and perverse mental attitude
rendering the ##%s act inconsistent with proper subordination.
(*."cena)
. 3ot every case of insubordination or willful disobedience by an ## of a
lawful work(connected order of the #$ or its representatives is reasonably
penali9ed with dismissal. "here must be a reasonable proportionality
between the offense and the penalty imposed therefor. ('old Cit# vs.
)&C) Past infractions! to which the ## was already meted out
disciplinary measures cannot be used as a justification for ##%s dismissal
from service of the current infraction does not suffice as a ground for just
termination. (+ilipino vs. ,ple)
2. -! an ## of "ritran was told by the personnel manager to see right away
the president to apologi9e for his past misdeeds. He was dismissed
because he failed to see the company president. Is the dismissal justifiedF
3o. "he directive to see the company president was neither reasonable nor
one connected with his duties. (%ancho vs. )&C)
C% ,$amples of willful disobedience 6
0iolation of a rule which prohibits ##%s from using company
vehicles for private purposes without authority from management
and stubborn refusal to attend a grievance conference to discuss
the violation. (Soco vs. %ercantile Corp.)
Eillful violation of rules and regulations designed for the safety of
laborers i. e. smoking by a painter in the painting booth. "&orthern
.otors vs% &LU'
Bllowing a customer to pass thru the e&it gate without paying for the
work done on his car! despite clear instructions to the contrary!
(%anila -rading vs. 5"l"eta)
Bct of gambling if it is penali9ed under company rules with
dismissal. ($imalanta vs. Secretar# of &a!or)
4ailure to comply with reportorial re6uirements in the sales policies.
('-/ vs. Sanche.)
3! driver refused to drive ##%s to -akati head office to collect their
profit shares despite repeated orders made by the vehicle
supervisor and the officer(in(charge. ()"e. vs. )&C) In this case!
even if he was employed for 17 years! and this was his 1
st
offense!
no separation pay! on the basis of compassion was given to the
##.
87
/ was employed as Chief +ietician of a hospital. *he refused to
follow the instructions of the /oard of "rustees of the hospital to
buy from a food supplier who was willing to give a discount on food
purchases. /ecause of this! / was dismissed. Is the dismissal
justifiedF
Mes. Her acts constitute serious defiance of the lawful orders of her
superiors with respect to matters involving her duties. "hey are also
sufficient basis for her superiors to lose their trust and confidence in
her. (St. &"(e7s vs. %inister of &a!or)
;. +! an ## of 3orthwest Birlines refused a promotion. +oes such refusal
constitute insubordination warranting dismissalF
3o. "here is no law which compels an ## to accept a promotion. He was
e&ercising a right and he cannot be punished for it as !uijure suo utitor
neminem laedit. He who uses his own legal right injures no one. ($osch vs.
)&C)
<. N! a press(helper of a printing company drank beer outside company
premises after his tour of duty. He later went to the company%s canteen to
eat lunch. He was dismissed based on the company policy prohibiting
=drinking in the company premises or coming to work under the influence
of alcohol.> Is the dismissal justifiedF
3o. He did not drink beer in the company premises@ neither did he report for
work under the influence of li6uor because it was not their tour of duty then.
(Catalan vs. 'enilo)
C. JHS< !)HS' + ='GL'!< $C DH<I'S
1. What is the rule on neglect of duties to constitute a 9ust cause for
terminationF In order to constitute a just cause for ##%s dismissal! the
neglect of duties must not only be gross but also habitual . Nross neglect
means an absence of that diligence that an ordinarily prudent man would
use in his own affairs! unless the contract of employment re6uires a higher
degree of care. It is sufficient that the gross and habitual neglect by the ##
tends to prejudice the #$%s interest since it would be unreasonable to
re6uire the #$ to wait until he is materially injured before removing the
cause of the impending evil. ($,&/ %an"al)
>% ,$amples of gross negligence 6
4ailure to properly estimate the fair market value of a property to be
used for a loan by an appraiser. (*ssociated 0an( vs. )&C)
)bandon(ent. "o constitute abandonment! two elements must
concur:
a. "he failure to report for work or absence without valid
or justifiable reason! and
b. B clear intention to sever the #$(## relationship! with
the second element as the more determinative factor
and being manifested by overt acts. (&a!or vs. )&C)
Habitual tardiness and absenteeism (Sa6onas vs. )&C)
3umerous unauthori9ed absences. (Cando vs. )&C)
88
2. *! working as a lobby boy of a movie theater! was pursuant to standard
management practice transferred from the day shift where he had been for
6uite some time to the night shift. He asked that the change be recalled
but his re6uest was denied. Bs he disliked the new assignment! he did not
report for work. "he company dismissed him due to abandonment. Is the
dismissal jusitifiedF
Mes. "here was nothing unusual or discriminatory in his change of
assignment because the rotation was standard company practice. (Castillo vs.
C2)
:. +ue to unauthori9ed absences! -! employed with the company for 1'
years! was transferred from the 4ire "ender *ection to the Pan Nrinding
*ection. He however did not report to his new section! on the ground that
the transfer was unreasonable and amounted to demotion. "he company
contends that his failure to work despite repeated notices constitutes
abandonment and a ground for his dismissal. Is this validF
"he penalty of dismissal is out of proportion to the offense committed
considering the number of years of -%s employment. B 1 year suspension
would be sufficient. (%eracap vs. 2nternational Ceramics)
;. B! met a work(connected accident. Ehen he was completely recovered!
he failed to report to work despite the certification of ; doctors that he
could resume his normal work. He was dismissed pursuant to company
)policy that an ## who incurs without valid reason < or more absences is
subject to dismissal. Is the dismissal validF
Mes. He was guilty of serious neglect of his duties. (Phil. 'eothermal vs.
)&C)
+. JHS< !)HS' + DIS#$='S<J, L$SS $C !$=CID'=!'
1. What *ind of fraud 9ustifies as 9ust terminationF 4raud has been
defined as any act! omission! or concealment which involves a breach of a
legal duty! trust or confidence justly reposed and is injurious to another. "o
constitute a just cause for terminating the ##%s services! the fraud must be
committed against the #$! or representative and in connection with the
##%s work. "hus! fraud committed by an ## against 2
rd
persons not in
connection with his work and which does not in any way involve his #$
not a ground for the dismissal of the ##. ($,&/> %an"al)
>% ,$ample of ishonesty
4alsification of time cards. (S%C vs. )&C)
"heft of company property. (+irestone vs. &ariosa) However! the
penalty must be proportional to the offense committed i.e. ##
should not be dismissed for theft of used motor oil of minimal
6uantity if the ## has no previous record. ('elmart vs. )&C): ##
should not be dismissed for theft of lead pipe to be used for
personal use if the ## has no previous record. (P*& vs. P*&/*)@
president of union should not be dismissed for leading an
=une&pected strike> which lasted for days and which resulted in a
loss to the company of only P2!JJJ.JJ (Sampang vs. 2nciong):
counter clerk of P1+" should not be dismissed for tampering with
a phone bill where the worth of the tampering only amounted to
89
P2J.JJ and it was the first offense in 8 years (P--C vs. )&C).
3ote that the length of time the ## is employed and the fact that it
was the ##%s 1
st
offense is an important factor in many of these
cases wherein the penalty of dismissal was deemed to harsh.
Ehere a penalty less punitive would suffice! whatever missteps
may be committed by the worker should not be visited with the
supreme penalty of dismissal. (*lmira vs. 0+ 'oodrich)
Circulating fake tickets. (2!arrientos vs. )&C)
2. ,$plain loss of confidence as a ground for 9ust termination : "he
basic premise for dismissal on the ground of loss of confidence is that the
## concerned holds a position of trust and confidence. (A"e.on /lectric vs.
)&C) -ere e&istence of basis for believing that the ## has breached the
trust of #$ is sufficient and does not re6uire proof beyond reasonable
doubt. (48i(8a# vs. )&C) However! to constitute as valid ground! it must
be substantial and not arbitrary! and must be founded on clearly
established facts sufficient to warrant the ##%s separation from work.
(&a!or vs. )&C)
:. ,$amples of loss of confidence as ground for 9ust termination :
N- of hotel found to have anti(4ilipino tendencies! who did not
perform his functions properly and who re6uisitioned wines for
personal use. "Ri*er vs% 2ple'
+irector who represented to the company that machinery brought
were brand(new when in fact they were second(hand. (Pepsico vs.
)&C)
/ank teller%s act allowing encashment of checks over the counter
without verification of drawer%s signature. (*llied 0an( vs. Castro)
0iolation of the company sales policy of distributing its goods to as
many customers as possible by a salesman who made it appear
that they were sold to many customers. (+ilipro vs. )&C)
#ngaging in business other than that of #$! if the activities tend to
injure or endanger the business of the #$ or the ## is unable to
give time and attention to the discharge of his duties. (*."cena)
Competing with #$%s business. (*."cena)
$epeated shortages incurred by a bill collector! although resulting
in no material damage as the amounts were returned. (Piedad vs.
&anao del )orte /lectric Cooperative)
;. ; ##%s of an electric cooperative were dismissed for loss of confidence
when they were caught pilfering electric current through tampered meters
in their houses. Considering that the ##%s held no position involving trust
and confidence! is loss of confidence a ground to dismiss themF
3o. "he offense they committed is not work(related. "he pilferage could have
been effected even if they were not ##%s of the cooperative. (A"e.on /lectric
Cooperative vs. )&C) Compare this with the case of ;lores vs. >L7C, where
the same act constituted a ground of serious misconduct and breach of trust.
90
<. P! a checker! was dismissed by *an -iguel for breach of trust due to
possible involvement in a burglary incident. "he dismissal was effected
despite P%s ac6uittal in a criminal case for the said offense. Is the dismissal
lawfulF
3o. "he termination of rank and file ##%s due to breach of trust re6uires proof
of actual involvement in the acts constituting the offense. (S%C vs. )&C)
#. JHS< !)HS' + !$MMISSI$= $C ) !RIM' $R $CC'=S'
1. Bnother just cause of terminating an employment is the ##%s commission
of a crime or offense against the person of his #$ or against any
immediate member of the #$%s family. "he immediate members of the
family referred to are limited to the spouse! ascendants! descendants! or
legitimate! natural! or adopted brothers or sisters of the #$ or of his
relative by infinity in the same degrees! and those by consanguinity within
the :
th
degree. (*."cena)
. Conviction or prosecution is not re6uired! to warrant his dismissal by his
#$ and the fact that a criminal complaint against the ## has been
dropped by the city fiscal as not binding and conclusive upon the tribunal.
(Starlite vs. )&C)
4. )=)L$G$HS !)S'S
1. "o be considered analogous to the just cases enumerated! the cause
must be due to the voluntary andIor willful act or omission of the ##.
()ed"ra vs. 0eng"et Consolidated)
>% ,$amples of +nalogous #ases 6
?nreasonable behavior and unpleasant deportment in dealing with
the people she closely works with in the course of her employment!
is analogous to the other =just causes> enumerated under the 1abor
Code. (Cathedral School vs. )&C)
N. $<#'RS
B% 2ther e$amples of 9ust termination6
Courtesy resignation (0atong!acal vs. *ssociated 0an()
4aculty members of a school whose appointments as department
heads are terminated. (&a Sallette vs. )&C)
2.2 )ut0oriIed !ases of <er(ination
)rt. ," + <0e 'R (ay also ter(inate t0e e(6loy(ent of t0e '' due to+
1. the Installation of labor saving device.
. redundancy
2. retrenchment to prevent losses.
:. closing or cessation of operation of the establishment or undertaking.
)rt. ,%: ## who has been found to be suffering from and +isease and whose
continued employment is prohibited by law or is prejudicial to his health as well
as to the health of his co(##%s.
Introduction of Labor sa2ing De2ices
91
Redundancy
Redundancy e&ists where the services of an ## are in e&cess of what is
reasonably demanded by the actual re6uirements of the enterprise@ a position is
redundant when it is superfluous! and superfluity of a position or positions may
be the outcome of a number of factors such as:
1. the overthrowing of workers
. decreased volume of business or
2. the dropping of a particular product line or
:. service activity previously manufactured or undertaken by the enterprise.
$edundancy is an #$%s personnel force! however does not necessarily or even
ordinarily refer to duplication of work. "hat no other person was holding the same
position which the dismissed ## held prior to the termination of his services does
not show that his position had not become redundant. (/scareal vs. )&C)
Retrenc0(ent
What are the general standards to determine whether the retrenchment is
valid? "he general standards are the following:
1. "he losses e&pected should be substantial and not merely de minimis in
e&tent.
. "he substantial loss apprehended must be reasonably imminent! as such
imminence can be perceived objectively and in good faith by the #$.
2. It must be reasonably necessary and likely to prevent the e&pected losses.
:. "he #$ should have taken other measures prior or parallel to the
retrenchment to forestall losses. I. e. @ cut other costs other than labor
costs.
;. Blleged losses if already reali9ed! and the e&pected minimum losses
sought to be forestalled! must be proved by sufficient and convincing
evidence. (&ope. S"gar vs. ++W)
+istinguish redundancy from retrenchmentF Redundancy means that the
position of the ## has become superfluous! an e&cess over what is actually
needed! even if the business reduction or reverses. (*."cena)
!losure of &usiness
1. "he burden of proving that the termination was for a valid or authori9ed
cause shall rest on the #$. (2ndino vs. )&C)
. Is the #$ re6uired to pay separation pay for closure of business due to the
serious business lossesF
3o. "he cases of *tate Investment House vs. CB! -endo9a vs. 31$C! and
the -indanao "erminal vs. -inister of 1abor provide that the rule in Brticle
'2 with respect to separation pay applies only to closure not due to business
reverses. (*."cena)
D% What are the re!uirements for a valid cessation of business not due
to business reverses?
*ervice of a written notice to the ##%s and to the +G1# at least 1
month before the intended date thereof.
Cessation or withdrawal from business operations must be bona
fide in character.
92
Payment to the ##%s termination pay amounting to at least S month
pay! for every year of service! or 1 month pay! whichever is higher.
(*&U vs. )&C)
)il(ent or Disease
If the ## suffers from a disease and his continued employment is prohibited by
law or prejudicial to his health or to the health of his co(##%s! the #$ shall not
terminate his employment unless there is a certification by a competent public
health authority that the disease is of such nature or at such a stage that it
cannot be cured within a period of < months even with proper medical treatment.
"Sec% A0 Rule B0 /oo* E(0 (RR-s' B medical certificate issued by the company%s
own physician! is not a =competent public health authority.>
2.: 1rocedure to <er(inate '(6loy(ent
<wo Cacets of Dalid <er(ination
1. "he legality of the act of dismissal which constitutes discharge with just
cause@ and
. "he legality in the manner of dismissal with due process. (Shoemart vs.
)&C)
Due 1rocess + =otice
"he law re6uires that the #$ must furnish the worker sought to be dismissed with
two written notices before termination of employment can be legally effected:
1. 3otice which apprises the ## of the particular acts or omissions for which
his dismissal is sought@ and
. *ubse6uent notice which informs the ## of the #$%s decision to dismiss
him. 4ailure to comply with the re6uirements taints the dismissal with
illegality. (Pepsi3Cola vs. )&C)
$66ortunity to be #eard
1. Bn ## must be given ample opportunity prior to his dismissal to
ade6uately prepare for his defense. /y 4ample opportunity5 is meant
every kind of assistance that management must be accord to the ## to
enable him to prepare ade6uately for his defense. ?nder the rules! indeed
workers may be provided with a representative. ("ff# vs. )&C) "he
re6uirement of hearing affords the ## the opportunity to answer his #$%s
charges against him and accordingly to defend himself therefrom before
dismissal is effected. (Sala8 vs. )&C)
. 3o hearing is re6uired if the grounds for dismissal or termination of service
does not relate to blameworthy act or omission on the part of the ## i.e.
retrenchment or redundancy. (Witshire vs. )&C).
2. E was called to the Gffice of the Neneral -anager and was told that she
was being charged with discourtesy and insubordination. +uring that time!
she was also called to e&plain her side. Bs she could not give an
e&planation! she was dismissed. Is the dismissal validF
3o. *he was denied procedural due process. *he was not given ample
opportunity to be heard and to defend herself.
93
:. 2< conductors of a bus were dismissed after investigations conducted by
the Pago and the fiscal found out that they defrauded the company. Is the
dismissal violative of due processF
3o. 4or the company to conduct its own investigation is a duplication of the
PBNG and the city fiscal%s investigation. (0&-0 vs. )&C)
;. + was dismissed by his #$ based on the preliminary investigation of the
city fiscal which relied on an affidavit of an accused(turned state witness.
Is this violative of due processF
Mes. Bs compared to the /1"/ case! the findings of the city fiscal were
based solely on the affidavit of the accused(turned state witness. "he
substantial evidence re6uirement is not present. (China Cit# esta"rant vs.
)&C)
<. * was dismissed by his #$ due to his well documented involvement in
pilferage. Prior to dismissal! he was called to a meeting of all delivery
personnel to discuss pilferage incidents. He denied involvement therein.
1ater he was dismissed. Is the dismissal violative of due processF
Mes. "he meeting called by the #$ does not 6ualify as the hearing re6uired
by law. (Segism"ndo vs. %ontalvo)
Rig0t to !ounsel
"he right to counsel is a basic re6uirement of substantive due process. "he right
to counsel cannot be waived e&cept in writing and in the presence of counsel.
(Sala8 vs. )&C)
&urden of 1roof
)rt. @@ : "he burden of proving that the termination was for a valid or authori9ed
cause shall rest on the #$.
Degree of 1roof
In administrative or 6uasi(judicial proceedings! proof beyond reasonable doubt is
not re6uired as basis for a judgment of the legality of an #$%s dismissal of an ##!
nor even preponderance of evidenced! substantial evidence being sufficient.
(%/*&C, vs. )&C)
!ondonation
Having condoned the misconduct of the ## and pardoned the latter! he is
deemed to have lost or waived his right to insist on the #$%s acts as a ground for
dismissal. (*."cena)
Dis(issal for !ause but .it0out Due 1rocess
B sanction! in the form of damages! must be imposed upon the #$ for failure to
give a formal notice and conduct an investigation as re6uired by law before
dismissing the ## from employment. (Wenphil vs. )&C)
Rules B Managerial ''Es and Ran/ and Cile ''Es
Bs a general rule! #$%s are allowed a wider latitude of discretion in terminating
the employment of managerial personnel or those who! while not of similar rank!
94
perform functions which by their nature re6uire the #$%s full trust and confidence.
This must be distinguished from the case of ordinary rank<and<file "")s whose
termination on the basis of these same grounds re6uire a higher proof of
involvement in the events in 6uestion@ mere uncorroborated assertions and
accusations by the #$ will not suffice. (Coca3Cola vs. )&C)
$ffer to Reinstate
"he fact that his #$ latter made an offer to re(employ him did not cure the vice of
his earlier arbitrary dismissal. (anara vs. )&C)
1rescri6tion
B complaint founded on illegal dismissal is not an ordinary money claim but for
reinstatement. "he action may be brought within : years from dismissal pursuant
to Brt. 11:< of the 3CC. ()e8 2m"s &"m!er vs. )&C)
2.; !onse>uences of <er(ination
Se6aration 1ay
B. General Rule
If there is valid cause to terminate an employment! no separation pay need be
paid. &$ec. B, 7ule %, #ook 2%, %77)s'
/. '?ce6tions
1. )rt. ," :
%nstallation of labor saving devices and redundancy : 1 month or 1
month pay for every year of service! whichever is higher.
7etrenchment to prevent losses and closure or cessation of
operation or establishment or undertaking not due to serious
business losses or financial reverses : 1 month pay or S month
pay for every year of service! which ever is higher.
. )rt. ,% +
Disease : 1 month salary or S month salary for every year of
service! whichever is higher.
2. #ven if an ## resigns! he shall be given a separation pay if there is a
company policy to that effect. (Philoil vs. %inistr# of &a!or)
:. iscerning compassion octrine: *eparation pay shall be allowed as a
measure of social justice for instances where the ## is validly dismissed
for causes other than serious misconduct or those reflecting on his moral
character i.e. B was found to have demanded and received money in
consideration for promise to facilitate approval of telephone line
application. ()asipit &"m!er vs. )&C)
;. +ntipathy and +ntagonism Reinstatement is no Longer Possible :
*trained relations in order that it may justify award of separation pay in
lieu of reinstatement with backwages! should be such! that they are so
compelling and so serious in character! that the continued employment
has become inconsistent with peace and tran6uility which is an ideal
atmosphere in every workplace. (Si!al vs. )otre $ame) "his is particularly
true when the position the ## is occupying is a position involving trust and
confidence. (*lcantara)
95
C. !$M1H<)<I$= of S'1)R)<I$= 1)J
Includes not just the basic salary but also the regular allowances the ## has
been receiving. (Planters Prod"cts vs. )&C) However! commissions are not
included in such base figure. (Soriano vs. )&C)
+. 'CC'!<A R'!'I1<
##%s who received their separation pay are not barred from contesting the
legality of their dismissal. "he acceptance of those would not amount to estoppel.
(San %ig"el vs. =avate)
&ac/wages
1. /ackwages in general are granted on grounds of e6uity which a worker
has lost due to his illegal dismissal. (-orillo vs. &eogrardo) Bs a general
rule! an ## is entitled to backwages only where his dismissal is due to the
unlawful act of the #$ or to the latter%s bad faith. (e#es vs. %inister of
&a!or) Ehile generally an order of reinstatement carries with it an award
of backwages! the court may not only mitigate! but also absolve the #$
from liability fro backwages where good faith is evident. ($"ra!ilt vs.
)&C)
. +ifferentiate backwages from separation payF *eparation pay is the
amount that an ## receives at the time of his severance from the service
and is designed to provide the ## with the =wherewithal during the period
that he is looking for another employment.> (-orillo vs. &eogardo)
/ackwages represent compensation that should be earned but not
controlled because of the unjust dismissal. (&im vs. )&C) "he basis of
computing the two are different! the 1
st
being usually the length of the ##%s
service and the
nd
the actual period when he was lawfully prevented from
working. AId.D
B. !$M1H<)<I$= $C &)!L.)G'S
1. )rt. @3 : Bn ## who is unjustly dismissed from work shall be entitled to
full backwages! inclusive of allowances! and to his other benefits or their
monetary e6uivalents computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
. "he effects of e&traordinary inflation are not to be applied without an
agreement between the parties and without an official declaration thereof
by competent authorities. (&antion vs. '*U+)
Reinstate(ent
1. $einstatement is a restoration to a state which one has been removed or
separated. It is the turn to the position from which he was removed and
assuming again the functions of the office already held. $einstatement
presupposes that the previous position from which one had been removed
still e&ists! or that there is an unfilled position more or less of a similar
nature as the one previously occupied by ##% ()*-U vs. Secretar# of
&a!or)
. Bn #$ has options in order for him to comply with an order of
reinstatement! which is immediately e&ecutory! even pending appeal!
firstly! he can admit the dismissed ## back worth under the same terms
and conditions prevailing prior to his dismissal or separation or to a
96
substantially e6uivalent position if the former position is already filled up.
*econdly! he can reinstate the ## merely in the payroll. (%edina vs. C0S)
2. "he decision of the labor arbiter reinstating a dismissed ## is immediately
e&ecutory even while the case is brought up on appeal. 5)rt. "7 In
authori9ing this! the law itself has laid down a compassionate policy which
once more vivifies and enhances the provisions of the Constitution. (*ria
vs. )&C)
:. $einstatement is not self(e&ecuting. Payroll reinstatement or actual
reinstatement needs the issuance of a writ of e&ecution. (%aranao Hotel
vs. )&C)
;. Ehat if reinstatement is not prayed for in the case before the labor arbiter.
Is the labor arbiter allowed to grant reinstatementF
3o. "he ## will not be reinstated if he did not pray for reinstatement. (&a!or
vs. )&C) /ut an earlier case! ('eneral 0aptist Colloge vs. )&C) says that ##
is entitled to reinstatement although he failed to specifically pray for the same.
"he 1abor case is a later case.
<. Bfter a finding that the dismissal of N! the manager of +unkin +onuts
violated procedural due process. N asked that he be reinstated. "he
company refused on the ground of loss of confidence of N. Is the refusal
validF
Mes. N held a sensitive position. "he case left both parties with less than full
trust and faith in each other. He should be paid severance compensation in
lieu of reinstatement. ('olden $on"ts vs. )&C)
2.< <er(ination by '' and Sus6ension of $6eration
<er(ination by '' B Just !auses
)rt. ,* + n "" may put an end to the relationship without serving any notice
on the "7 for any of the following just causesI
1. *erious insults by the #$ and or his representative on the honor and
person of the ##@
. Ihuman and unbreakable "reatment accorded the ## by the #$ or his
representative@
2. Commission of a crime or offense or his representative against
the person of the ##
or any immediate members of his family! and
Bnalogous cases.
.it0out Just !ause B Re>uisites
)rt. ,*5a7 : Bn ## may terminate without just cause the #$(## relationship by
serving a written notice on the #$ at least 1 month in advance. "he #$ upon
whom no such notice has been served may hold the ## liable for damages.
B. R'SIG=)<I$=
$esignation is a voluntary act of an ## who =finds himself in a situation where he
believes that personal reasons cannot be sacrificed in favor of the e&igency of
the service! then he has no other choice but to disassociate himself from his
employment.> "he #$ has no control over resignation and so! in order to ensure
97
that no disruption of work would be involved by reason of resignation. "his
practice has been recogni9ed because =every business enterprise endeavors to
increase its profits by adopting a device or means designed towards that goal.
$esignation once accepted and being the sole act of the ## may not be
withdrawn without the consent of the #$. ( 2ntertrod %aritime vs. )&C)
/. !$=S<RH!<ID' DIS!#)RG'
1. B constructive discharge is a 6uitting because continued employment is
rendered impossible! unreasonable or unlikely@ as! an offer involving a
demotion in rank and diminution in pay. APhilippine Papan Bctive Carbon
vs. 31$CD "his is not a case of voluntary resignation. It is in the nature of
a contrivance to effect to dismissal without cause. (i.al %emorial vs.
)&C)
. X was hired as a production recorder by a tobacco company. Bfter 1:
years of occupying the position! she was demoted to picker by reason of
inefficiency due to alleged fre6uent mistakes in her report. X refused to
report for work and filed a complaint for illegal dismissal. Eas the
dismissal justifiedF
3o. "he management based its action merely on communications between
officers of the company. *he was not notified in advance of the company%s
actions. "he demotion done in bad faith constitute constructive dismissal.
Sus6ension of $6erations
1. )rt. ,: : "he bona fide suspension of the operation of a business or
undertaking for a period not e&ceeding < months! or the fulfillment by the
## of a military or civic duty shall not terminate employment. In all such
cases! the #$ shall reinstate the ## to his former position without loss of
seniority rights if he indicates his desire to resume his work not later than
1 month from the resumption of operations of his #$ or from his relief from
the military or civic duty.
. It is settled that when the bona fide suspension of operations of a
business undertaking e&ceed < months! then the worker%s employment
shall be deemed terminated. (&"c(# -e@tile vs. )&C)
Section %. Retire(ent
)rt. ,@ : Bny ## may be retired upon reaching the retirement age established in
the C/B or other applicable employment contract.
In case of retirement! the ## shall be entitled to receive such retirement
benefits as he may have earned under e&isting laws and any C/B agreement
and other agreements: Provided! however! "hat an ##%s retirement benefits
under any C/B and other agreements shall not be less than those provided
therein.
In the absence of a retirement plan or agreement providing for retirement
benefits of ##%s in the establishment! an ## upon reaching the age of <J years
or more! but not beyond <; years which is hereby declared the compulsory
retirement age! who has served at least ; years in the said establishment! may
retire and shall be entitled to retirement pay e6uivalent to at least S month salary
for every year of service! a fraction of at least < months being considered as 1
whole year.
98
?nless the parties provide for broader inclusions! the term S month salary
shall mean 1; days plus 1I1
th
of the 12
th
month pay and the cash e6uivalent of
not more than ; days of service incentive leaves.
$etail! service and agricultural establishments or operations employing not
more than 1J ##%s or workers are e&empted from the coverage of this provision.
0iolation of this provision is hereby declared unlawful and subject to the
penal provisions under Brt. '' of this Code.
$bligation
1. "he law does not impose any obligation upon #$%s to set up a retirement
scheme for their ##%s over and above that already established under
e&isting laws. (&lora %otors vs. $rilon)
. #ntitlement of ##%s to retirement benefits must be specifically granted
under e&isting laws! a C/B or employment contract or an established ##
policy. ('1% vs. )&C)
&enefit
1. $etirement benefits are intended to help the ## enjoy the remaining years
of his life! lessening the burden of worrying for his financial support! and
are a form of reward for his loyalty and service to the #$. (*9"ino vs.
)&C)
. "he C/B between a university and its faculty members provided that in
case of unusual circumstances! faculty members whose services are
terminated shall be granted retirement benefits. Bre faculty members
affected by an unusual circumstance! such a phase(out! and who are
given separation pay pursuant to law also entitled to retirement benefitsF
Mes. "here is no provision in the C/B to the effect that termination benefits
received under the law shall preclude the ## from receiving other benefits
under the agreement. *eparation arising from a forced termination of
employment and benefits given as a contractual right due to many years of
faithful service and are not necessarily antagonistic to each other. (U/ vs.
%inister of &a!or)
1)R< II
S$!I)L S'!HRI<J
*. 1 Social Security Law A**1D $B 11<1 Aas amended by $B ''D
Section 1, SSL : "he Bct shall be known as the *ocial *ecurity Bct of 1778.
*. 1olicy of t0e State
1. Section , SSL : It is a policy of the *tate to establish! develop! promote
and perfect a
promote social justice and
provide meaningful protection to members and their beneficiaries
against the ha9ardous of disability! sickness! maternity! old age!
death! and other contingencies resulting in loss of income or
financial burden.
99
. "he law imposes upon #$%s and ##%s the obligation to become members
of and make contributions to the *ocial *ecurity *ystem. Is such a legal
imposition valid and constitutionalF
-embership in the *** is not the result of a bilateral! consensual agreement
where the rights and obligations of the parties are defined by and the subject
to their will. "he law re6uires compulsory coverage of #$%s and ##%s!
designed to provide security to the working men. -embership in the *** is!
therefore! in compliance with a lawful e&ercise of the police power of the
*tate! to which the principle of non(impairment of the obligation of contract is
not a proper defense. (P0% vs. SSS)
*." Definitions
'R
1. Section ,, SSL : K'RN any person! natural or juridical! domestic or
foreign! who carries on in the Philippines any trade! business industry!
undertaking or activity of any kind and uses the services of another person
who is under his orders as regards the employment.
*elf employed is both #$ and ## at the same time.
. What ,R-s are e$empted from the SSS LawF Novernment and any of
its political subdivisions! branches or instrumentalities! including NGCC%s
controlled by the government.
''
Section ,, SSL + K''N Bny person who performs services for an #$ where
either mental and physical efforts are used and who receives compensation for
such services and where there is an #$(## relationship.
De6endent
1. Section ,, SSL : 1egal spouse entitled by law to from member to receive
support.
!0ild +
legitimate
legitimated
legally adopted
illegitimate
who is unmarried! and not gainfully employed
and not reached 1 or over 1 is congenitally
or while still minor permanently incapacitated
and incapable of self(support! physically or
mentally.
1arent+ Eho is receiving regular support from member.
&eneficiaries
). 1RIM)RJ
1. Sec. ,, SSL :
+ependent spouse until remarriage
+ependent legitimate! legitimated or legally adopted and illegitimate
children provided that the illegitimate children shall be entitled to
;JQ of the share of the legitimate! legitimated and legally adopted
children.
100
. Bfter : years of marriage! the spouses *almonte broke up. "he wife left
the conjugal home. "hereafter! the husband 0 lived with another woman.
Ehen 0 died! who is entitled to his death benefitsF
Bny legitimate children of 0 and illegitimate children A;JQ of the share of the
legitimate childrenD. "he wife of 0 is not entitled since she does not 6ualify
anymore as beneficiary since she is not dependent upon the husband.
(Salmonte vs. Salmonte)
&. S'!$=D)RJ
Sec. ,
+ependent parents
!. $<#'RS
1. Sec. , : Bbsent primary and secondary beneficiaries any other person
designated be members as secondary beneficiary.
. *! a bachelor dies. His death benefits are claimed by 1! his girlfriend
whom he designated as beneficiary. "he claim is contested by 0! *%
brother. Eho is preferredF
1! 0 is not among the primary and secondary beneficiaries provided under the
law. "hus! 1! the designated beneficiary is preferred. (*lcantara)
2. #. a widower! designated - as his beneficiary. "he unemployed married
children of # contests the payment of death benefits to -. Is the
contention validF
3o. #ddie%s legitimate children are not considered dependents since they are
already married. (*lcantara)
*.% !o2erage
). !$M1HLS$RJ
I. ,numerate the *inds of employment under compulsory coverage under
the SSL:
1. Bll ##%s not over <J years of age on date of employment and #$%s on 1
st
day of operation. "Sec% F and BG0 SSL'
. *elf(employed as determined by the commission but not limited to self(
employed professionals@ partners and single proprietors of businesses!
actors! actresses! directors! scriptwriters! news correspondents who are
not ##%s@ professional athletes! coaches! trainers! and jockeys and
individual farmers and fisherman. "Sec% F0 SSL'
II. ,numerate the *inds of employment which are e$cepted from
compulsory coverage under the SSL?
1. #mployment purely casual and not for the purpose of occupation or
business of the #$. A*ec. '! **1D
. *ervice performed on or in connection with alien vessel if ## employed
when such vessel is outside of the Philippines. AId.D
101
2. ##%s of the Philippine government! instrumentality or agency thereof. AId.D
:. *ervice performed in the employ of a foreign government! or international
organi9ations or wholly(owned instrumentality. AId.D
;. *ervices performed by temporary ##%s e&cluded by *** regulation. AId.D
<. +omestic helpers who are <J years of age and below with a monthly
income of not less than P1!JJJ.JJ on the date of their employment. A*ec.
7D
8. Individual farmers and fishermen under *** rules and regulations. AId.D
III. Bs sacristan in the Catholic Church! / cleaned the premises of the church!
tolled its bells! and assisted the priests in the masses and other church services.
In consideration of these services! he received ;Q of the monthly income of the
church. Is / subject to compulsory coverageF
Mes. He is considered an ##. "he Brchbishop as corporation sole! to whom a
share of the income or collection is sent! is considered his #$. (0asc"na vs.
oman Catholic *rch!ishop)
&. D$LH=<)RJ
,numerate the *inds of employment under the SSL?
1. 4ilipinos recruited by foreign #$%s for employment abroad. "Section F0
SSL'
. ## separated from employment "Sec% BB0 SSL'
2. *pouse who devote full time managing household and family affairs
unless specifically mandatorily covered. "Sec% F0 SSL'
!. &J )RR)=G'M'=<
When can coverage be by arrangement? Bny foreign government!
international organi9ation or wholly owned instrumentality employing workers in
the Philippines or employing 4ilipinos outside of the Philippines may enter into an
agreement with the Philippines for the inclusion of such ##%s in the *** e&cept
those already covered by their respective civil service retirement system. "Sec%
A0 SSL'
*.* 'ffect of Se6aration fro( '(6loy(ent or Interru6tion of &usiness of
1rofessional Inco(e
I. What are the effects of separation from employment of an ,,
compulsorily covered?
1. #$ contribution shall cease at the end of the month of separation an ##
not re6uired to pay contributions.
. ## credited with all contributions paid and entitled benefits according to
**1.
2. ## may continue to pay total contribution to maintain right to full benefit.
&$ec. .., $$L'
II. What are the effects if self)employed realizes no professional or
business income?
1. He shall not be re6uired to pay contributions.
102
. He may be allowed to continue to pay contributions under the same rules
as a separated ##. A*ec. 11! **1D
III. Bfter working for ; years! P was fired without cause. His dismissal effected
him so much that months after he suffered a stroke. Is he entitled to disability
benefits at the time of his strokeF
Mes. Blthough an ## is separated from service and has ceased to pay premiums!
he shall be entitled to contributions and to benefits available under the law. Bs P
was a member of ***! he remained an *** member. (*lcantara)
*.: Re6orting Re>uire(ents
1. Sec. %, SSL : #ach #$ shall immediately report ##%s names! ages! civil
status! occupations! salaries and dependents.
. Sec. %A) : #ach covered self(employed shall within 2J days from the 1
st
day he started practice register and report to the *** his name! age! civil
status! occupation! average monthly net income and his dependents.
*.@ Cunding
I. What are the different sources of funding for the SSS?
1. ''E s contribution : "he #$ shall deduct and withhold from such ##%s
monthly salary! wage! compensation or earnings! the ##%s contribution.
A*ec. 1'D )=Compensation> an actual remuneration as well as cash value
of any remuneration paid in any medium other than cash. A*ec. 'D.
. 'REs contribution : #$ shall pay! with respect to such covered ##! the
#$%s contribution in accordance with the schedule indicated in *ection 1'
of this Bct.
2. Go2ern(ent contributions : Bppropriation of necessary sums to meet
the estimated e&penses of the *** for each ensuing year.
%. !ontributions fro( t0ose 2oluntarily co2ered by t0e SSS.
II. "he funds contributed to the *ystem belong to the members who will receive
benefits! as a matter of right! whenever the ha9ards provided by the law occur.
(C%S /state vs. SSS)
'ffects of =onAre(ittance
Sec. , SSL : 4ailure of refusal of the #$ to pay or remit contributions shall not
prejudice the right of the covered ## to the benefits of coverage.
*. , &enefits
I. What are the different types of benefits under the SSL?
1. -onthly pension. A*ec. 1! **1D
-inimum pension of P1!JJ.JJ for members with at least 1J
credited years of service and P!:JJ.JJ for those with J credited
years of service.
. +ependents pension A*ec. 1(B! **1D
2. $etirement A*ec. 1(/! **1D
103
paid at least 1J monthly contributions
monthly pension for as long as he lives
:. +eath A*ec. 12! **1D
paid at least 2< monthly contributions
lump sum of 2< monthly pensions
;. Permanent disability A*ec. 12(B! **1D
<. 4uneral A*ec. 12(/! **1D
8. *ickness A*ec. 1:! **1D
payment of at least 2 monthly contributions in the 1(month period
immediately preceding the sickness.
Confinement for more than 2 days
3otice to #$ within ; calendar days of sickness
#&haustion of sick leaves with full pay.
'. -aternity A*ec. 1:(B! **1D
B female member who has paid at least 2 monthly contributions in
the 1
(month
period immediately preceding the semester of her
childbirth or miscarriage shall be paid a daily maternity benefit
e6uivalent to 1JJQ of her average daily salary credited for <J days
or 8' in case of caesarian delivery for the 1
st
: deliveries or
miscarriages.
These are all ta$)e$empt%
II. Section >0 Paternity Leave +ct of BFF=: 3otwithstanding any law! rules and
regulations on the contrary! every male ## in the private and public sectors shall
be entitled to a paternity leave of 8 days with a full pay for the 1
st
four deliveries
of the legitimate spouse with whom he is cohabiting. "he male ## applying for
paternity leave shall notify his #$ of the pregnancy of his legitimate spouse and
the e&pected date of such delivery.
III. Gn his way home from work! $ went to a movie house to watch. He is
stabbed by an unknown assailant while watching. "he *** denied his claims on
the ground that the injury is not work(connected. Is the denial validF
3o. It is not necessary for the enjoyment of benefits that there be casual
connection between the injury and the work of the ##. Ehat is re6uired is
membership in the ***.
1rescri6tion 1eriods
)rt. 11%% : 1J years from the time the right of action accrues since this is an
obligation created by law.
&enefit 1rotection
1. Sec. 1*, SSL : /enefits are not transferable. 3o power of attorney or other
documents e&ecuted as beneficiary in favor of any agent! attorney or other
person for the collection of their behalf shall be recogni9ed e&cept which
beneficiary is physically unable to collect.
. Sec. 1*, SSL : Ehen /eneficiary is a national of a foreign country which
does not e&tend benefits to 4ilipino beneficiary residing in the Philippines
or which is not recogni9ed by the Philippines.
104
General Rule : He is not entitled to benefit.
'?ce6tion: *ocial *ecurity Commission may authori9e payment
where the best interest of the *** will be served.
2. Sec. 1:, SSL : Bll benefit payments made by *** shall be e&empt from
all kinds of ta&es! fees or charges and shall not be liable to attachment!
garnishments! levy or sei9ures by or under any legal or e6uitable process
whatsoever! either before or after receipt e&cept to pay any debt of
member to ***.
:. Sec. 1@, SSL : 3o fees shall be payable to agent! attorney! other person(
in(charge of preparation! filing or pursuing any claim and any stipulation to
the contrary is void. -embers of the /ar who appear as counsel in any
case heard by the Commission shall be entitled to attorney%s fees not
e&ceeding 1JQ of the amount collected! any stipulation of the contrary
shall be null and void.
*.3 Dis6ute Settle(ent
Jurisdiction and 1eriod of Dis6ute Settle(ent
Sec. * : +isputes involving coverage! benefits! contribution! penalties and any
related matter shall be decided by the *ocial *ecurity Commission or duly
designated member! or duly authori9ed hearing officers and should be decided
within the mandatory period of J calendar days from submission. +ecision shall
be final 1; days after date of notification.
'?ecution of Decisions
Sec. *! : "he Commission motu proprio or on motion of any interest party may
issue order of e&ecution of decision after same is final and e&ecutory.
)66eal
Sec. * : Bppeal to CB on law and facts. Bppeal to the *C on pure 6uestions of
law.
Section :. .or/(enEs !o(6ensation B ''Es !o(6ensation and State
Insurance Cund 5'!SIC7
:.1 Law
1olicy $b8ecti2e
)rt. 1:: : "o promote and develop a ta& e&empt ##%s compensation program
whereby ##%s and their dependents! in the event of work(connected disability or
death! may secure ade6uate income benefit! and medical or related benefit.
Rationale
"he primary purpose of a workmen%s compensation act is to provide
compensation for disability or death resulting from occupational injuries or
diseases or accidental injury@ the statute is a remedial one! to compensate
reasonably those who are injured while in the employment of others! as part of
the natural! necessary cost of production. (*."cena)
=ature of t0e State Insurance Cund
105
1. "he law establishes a state insurance fund built by the contribution of #$%s
based on the salaries of their ##%s. "he injured worker does not have to
litigate his right to compensation. "he worker simply files a claim with the
#CC. "he payment of benefits is more prompt. "he cost of administration
low. (Sarmiento vs. /CC)
>% 8ive the characteristics of the ,,-s #ompensation Program
"a& e&empt.
+esigned to ensure promptitude in cases of work(connected
disability or death in the award of benefits.
4unded by monthly contributions of all covered #$%s.
Compulsory on all #$%s and their ##%s not over <J years of age.
/enefits are e&clusive and in place of all other liabilities of the #$ to
the ##.
Has its own adjudicative machinery with original e&clusive
jurisdiction on any matter related thereto! independent of other
tribunals e&cept the *C. (S%C vs. )&C)
Inter6retation
Bs agent charged by the law to implement social justice guaranteed and secured
by the Constitution! the #CC should adopt a liberal attitude in favor of the ## in
deciding claims for compensability! especially where there is some basis in the
facts inferring a work connection to the accident. (&a.o vs. /CC)
:. Definitions
'R
)rt. :: : Bny person! natural or juridical! employing the services of an ##.
De6endent
What are the dependents under the ,#S(F?
1. 1egitimate
. 1egitimated
2. Bcknowledged natural child
who is unmarried! and not gainfully employed! and not over 1
years of age! or over 1 provided he is incapable of self(support
due to physical or mental defect which is congenital or ac6uired
during minority.
:. *pouse : 1egitimate and living with the ##.
;. Parents : of ## wholly dependent upon ## for regular support. ABrt. 1<<D
&eneficiaries
.0o are t0e beneficiaries under t0e '!SIC9
B% Primary
a. *pouse dependent spouse until remarriage
b. Children dependent@ provided dependent acknowledged natural
children shall be considered as primary beneficiary when there are
no other dependent children who are not eligible and 6ualified for
monthly income benefit.
>% Secondary
a. Parents dependent subject to restrictions imposed on dependent
children.
106
b. Children illegitimate subject to restrictions imposed on dependent
children
c. 1egitimate descendants.
:." !o(6ensability
1. What is an in9uryF Harmful change in the human organism from any
accident arising out of and in the course of the employment. 5)rt. 1:@7
. If a soldier is killed by an accidental discharge of his companion%s rifle
while an overnight pass to a rebel infested area! is the death of a soldier
compensableF
Mes. "he death arose out of and in the course of the employment since the
soldier was not on vacation leave and he had lawful permission to go to the
place and the other soldier was authori9ed to carry a firearm. (Hinog"in vs.
/CC)
2. What are the re!uisites for an in9ury to be considered as wor*)
related?
"he injury must be the result of an employment accident satisfying all of the
following grounds:
a. "he ## must have been injured at the place where his work
re6uires him to be.
b. "he ## must have been performing his official functions.
c. If the injury is sustained elsewhere! the ## must have been
e&ecuting an order for the #$. 5Sec. 1, Rule III, &oo/ I, IRREs7
1ro?i(ate !ause
"he right to compensation e&tends to disability due to disease supervening
upon and pro&imately and naturally resulting from a compensable injury. Ehere
the primary injury is shown to have arisen in the course of employment! unless it
is the result of an independent intervening cause attributable to claimant%s own
negligence or misconduct i.e. condition of classroom floor caused /elarmino to
slip and fall and suffer injury as a result! hence all medical conse6uences flowing
from it! the premature delivery of her baby! and her death are compensable.
(0elarmino vs. /CC)
Going to or !o(ing fro( .or/ Rule
1. Ehat is the Kgoing and co(ing ruleNF
In the absence of special circumstances! an ## injured while going to or
coming from his place of work is e&cluded from the benefits of workmen%s
compensation acts! except:
a. Ehere the ## is proceeding to or from his work on the premises of
the #$.
b. Ehere the ## is about to enter or about to leave the premises of
his #$ by way of the e&clusive or customary means of ingress and
egress.
107
c. Ehere the ## is charged! while on his way to or from his place of
employment or at his home! or during his employment with some
duty or special errand connected with his employment.
d. Ehere the #$ as an incident of the employment provides the
means of transportation to and from the place of employment.
. Ehat is the ingress or egressF6ro?i(ity ruleF
#mployment includes not only the actual doing of the work! but a reasonable
margin of time and space necessary to be used in passing to and from the
place where the work is to be done. Bs a general rule! employment may be
said to begin when the ## reaches the entrance to the #$%s premises where
the work is to be done@ but it is clear that in some cases the rule e&tends to
include adjacent premises used by the ## as a means of ingress and egress
with the e&press or implied consent of the #$. (2loilo $oc( vs. WCC)
Incidents of '(6loy(ent
It is settled that injuries sustained in connection with acts which are reasonably
incidental to the employment are deemed arising out of such employment.
Nenerally! such incidents of work include:
1. Bcts of personal ministration for the comfort and convenience of the ##
i.e. answering a call of nature.
. Bcts for the personal benefit of the #$ i.e. special errand rule.
2. Bcts done to further the goodwill of the business.
:. *light deviations from work! from curiosity or otherwise.
;. Bcts in emergencies i.e. death of an ## while attempting to rescue a co(
## (*."cena)
Li2ing, &oarding, Lodging on 1re(ises of 'R, or at .or/ing 1lace
Compensable if living on the #$%s premises or at the place of work is an e&press
or implied re6uirement of the contract of hiring and when the injury results from a
risk or danger which is reasonably incidental to the employment. (*."cena)
.0ile <ra2elling
Compensation depends upon whether the injury results from a risk inherent in
the nature of the employment! or reasonably incidental incidental thereto! and
upon whether the ## was engaged in the e&ercise of some functions or duties
reasonably necessary or incidental in the performance of the contract of
employment! or whether he was authori9ed or re6uired by such contract to be.
(*."cena)
)ssault
If there is a causal relation between the assault and the employment! the assault
is compensable. (2loilo $oc( vs. WCC)
Sic/ness DefinedO $ccu6ation or !o(6ensable Disease
108
1. efine sic*nessF
Bny illness
a. definitely accepted as an occupational disease listed by the
Commission! or
b. any illness caused by employment subject to proof that the risk of
contracting the same is increased by working conditions. ABrt. 1<8D
If the illness are not occupational diseases! the claimant must present
proof that he contracted them in the course of his employment.
('alanida vs. /CC)
. What is occupational diseaseF
+isease due wholly to causes and conditions which are normal and
constantly present and characteristic of the particular conditions which are
normal and constantly present and characteristic of the particular occupation.
(%ene. vs. /CC)
). <#'$RJ $C <#' I=!R')S'D RISL
If an ailment is not included in the list of occupational diseases as drawn up by
the Commission! the claimant has the burden of proving that the nature of the
work increased the risk of contracting the disease. ($a!atian vs. 'S2S) "o
establish compensability under the increased risk theory! the claimant must show
proof of reasonable work(connection! not necessarily direct causal relation. "he
degree of proof is merely substantial evidence as will support a decision! or clear
and convincing evidence. ()ara.o vs. /CC)
).1 S6ecific Illnesses
8ive e$amples of diseases which are not listed as occupational diseases6
1. Peptic ulcer
. Cancer. /ut in some cases! it is
2. /angungot
:. Incomplete abortion
;. *chistomiasis
<. $heumatoid Brthritis
8. Bdenocarcinoma
'. Cirrhosis of the liver
7. Prolapsed uterus.
:.% !o2erage and Liability
!o(6ulsory !o2erage
)rt. 1:, : Bll #$%s and their ##%s not over <J years of age! provided! an ## who
is over <J and paying contribution to 6ualify for retirement or life insurance
benefits shall be subject to compulsory coverage.
Coreign '(6loy(ent
)rt. 1@4 : "he Commission shall ensure ade6uate coverage of 4ilipino ##%s
employed abroad. Compulsory coverage of the #$ shall take effect on the 1
st
day
of operation! and that of the ## on the date of employment.
'?clusions
109
1. )rt. 1@ : "he *tate Insurance 4und shall be liable for compensation to
the ## or his dependents! e&cept when the disability or death was
occasioned by the:
a. ##%s into&ication!
b. Eillful intention to injure or kill himself or another!
c. 3otorious negligence! or
d. Gtherwise provided under this "itle.
>% What defenses may be interposed by the ,#S(F against a claim for
compensation made by a covered ,,?
a. "he injury is not work(connected or the sickness is not
occupational.
b. "he disability or death was occasioned by the ##%s into&ication!
willful intention to injure or kill himself or another! or his notorious
negligence. ABrt. 18D
c. 3o notice of sickness! injury or death was given by #$. ABrt. J<D
d. "he claim was filed beyond 2 years from time of cause of action.
ABrt. J1D
). I=<$-I!)<I$= $R DRH=L'=='SS
It has been held that even if it could be shown that a person drank
into&icating li6uor it is incumbent upon the person invoking drunkenness as a
defense to show that said person was e&tremely drunk. "hus! into&ication which
does not incapacitate the ## from following his occupation is not sufficient to
defeat the recovery of compensation! although into&ication may be a contributory
cause to his injury. It must be shown that the into&ication was the pro&imate
cause of death or injury and the burden of proof lies on him who raises
drunkenness as a defense. ()it"ra vs. /CC)
&. S'LCAI=CLI!<'D I=JHRI'S
Bccording to Bmerican authorities! suicide is compensable in the following cases:
1. Ehen it results from insanity from compensable work injury or disease.
. Ehen it occurs during a delirium resulting from compensable disease.
()*/SS Shipping vs. )&C)
!. =$<$RI$HS ='GLIG'=!'
3otorious negligence has been defined as something more than mere or simple
negligence or contributory negligence@ it signifies a deliberate act of the ## to
disregard his own personal safety. +isobedience to rules! orders! andIor
prohibition does not in itself constitute notorious negligence! if no intention can be
attributed to the injured to end his life. ()it"ra vs. /CC)
:.* Cunding
What are the sources of funding of the ,#S(F? Contribution shall be paid in
their entirety by the #$ and any contract or device for the deductions of any
portion thereof from the wages or salaries of the ##%s shall be null and void. ABrt.
1'2D ##%s do not have any contribution. "he government accepts general
110
responsibility for the solvency of the #C*I4. Bny deficiency will be covered by the
supplemental appropriations from the 3ational Novernment. ABrt. 1':D
'ffects of =onARe(ittance
)rt. 13: : 4ailure or refusal of the #$ to pay or remit the contributions shall not
prejudice the right of the ## or dependent to benefits.
:.: &enefits
.0at are t0e different ty6es of benefits under t0e '!SIC9
1. Medical benefits consisting of medical services and rehabilitation
services. ABrt. 1';D
. Disability
a. "emporary total ABrt. 171D
b. "emporary permanent ABrt. 17D
c. Partial permanent ABrt. 172D
2. Deat0 and Cuneral minimum death benefit shall be P1;! JJJ.JJ and
funeral benefit shall be P'!JJJ.JJ ABrt. 17:D
+ll the benefits are ta$)e$empt.
&enefit 1rotection
)rt. 1@* : #&cept as otherwise provided under this "itle! no contract !regulation
or device whatsoever shall operate to deprive the ## or his dependents of any
part of the income benefits and medical or related services granted under this
"itle. #&isting medical services being provided by the #$ shall be maintained and
continued to be enjoyed by their ##%s.
1rescri6ti2e 1eriods
)rt. 41 : 2 years from the time the cause of action accrued.
'?clusi2ity of &enefits
1. )rt. 1@" : 1iability of the #C*I4 shall be e&clusive and in place of other
liabilities of #$ to ##! dependents or anyone otherwise entitled to receive
damages on their behalf. "he payment of compensation shall not bar the
recovery of benefit provided in other laws i.e. payment bars recovery for
damages arising from the death of the member.
. Bs a result of a cave(in! several miners were buried alive. "he heirs filed
an action with the $"C for damages against the company on grounds of
breach of contract. "he company moved to dismiss the suit on grounds of
e&clusive liability of the #C*I4. Is the motion meritoriousF
3o. "he ## or his heirs has the right of selection or choice of action. He
cannot however pursue both courses of action simultaneously. (+loresca vs.
Phile@)
Liability of <0ird 1arties
)rt. 1@% : Ehen disability or death is caused by circumstances creating a legal
liability against a 2
rd
party! the system shall still pay for the benefits. However! the
system shall be subrogated to the rights of the disabled ## or dependents in
case of death in accordance with the general law. Ehere the system recovers
111
damages in e&cess shall be delivered to the disabled ## or other persons
entitled! after deducting the costs of the proceedings and e&penses of the
system.
&enefit 1rotection
1. )rt. 13, : Bs a general rule! no claim for compensation is transferable or
liable to ta&! attachment! garnishment! levy or sei9ure by or under any
process whatsoever! either before or after receipt! e&cept if it is to pay any
debt of the ## to the system.
. )rt. 4" : 3o agent! attorney! or other person pursuing or in(charge of
preparation of filing any claim shall demand or charge any fee and any
stipulation to the contrary shall be null and void. "he retention or
deduction of any amount from any benefit for the payment of such fee or
such services is prohibited.
:.@ Dis6ute Settle(ent
)rt. 1,4 : Novernment service insurance system or the social security system
shall have original and e&clusive jurisdiction to settle any dispute with respect to
coverage! entitlement of benefits! collection of contributions and penalties and
other related matters.
)66eal
)rt. 1,1 : +ecisions or orders shall be reviewable by the *C on 6uestion of law.
Section @+ Go2ern(ent Ser2ice Insurance Syste(
8. 1 Re2ised Go2ern(ent Ser2ice Insurance )ct of 133@
8. Definitions
'R
Sec. , GSIS )ct of 133@ + <0e 'R includes +
1. "he national government! its political subdivisions! branches! agencies or
instrumentalities.
. NGCC%s.
2. 4inancial institutions with original charters.
:. Constitutional commissions and the judiciary.
''
Sec. , GSIS )ct of 133@ : ## shall include :
1. Bny person receiving compensation while in the service of #$ whether by
election! or appointment! irrespective of the status of appointment.
. /arangay officials.
2. *anggunian officials.
De6endents
Who are considered dependents under the 8S(S Law?
1. Child
a. 1egitimate.
b. 1egitimated.
c. 1egally adopted.
d. Illegitimate.
112
who is unmarried! not gainfully employed! and not over the
age of majority! or is over the age of majority but is
incapacitated and incapable of self(support due to mental
or physical defect! ac6uired prior to age of majority.
. *pouse legitimate and dependent for support upon member or
pensioner.
2. Parents legitimate parent dependent upon member for support. A*ec. !
N*I* Bct of 1778D
&eneficiaries
Eho are the beneficiaries under the N*I* 1awF
1. 1ri(ary :
a. 1egal dependent spouse until remarriage.
b. +ependent children.
. Secondary :
a. +ependent parents.
b. 1egitimate descendants subject to restrictions of dependent
children.
8.2 !o(6ulsory !o2erage
Sec. ", GSIS )ct of 133@ : Coverage shall be compulsory for all ##%s receiving
compensation who have not reached compulsory retirement age! irrespective of
the employment status.
8.: 'ffect of Se6aration of '(6loy(ent
Sec. %, GSIS )ct of 133@ : B member separated from the service shall continue
to be a member and entitled to whatever benefits he has 6ualified! in event of
any contingency compensable under this Bct.
8.; Re6orting Re>uire(ents
Sec. :, GSIS )ct of 133@ : "he #$ shall report to the N*I* the names of all
##%s! corresponding employment status! positions! salaries and other pertinent
information.
8.< Cunding
.0at are t0e different sources of funding of t0e GSIS9
1. #$ and member contributions. &$ec. D, J$%$ ct of .66B'
. Novernment guarantees the fulfillment of the obligations of the N*I* to
members. &$ec. H, J$%$ ct of .66B'
8.8 &enefits
What are the benefits provided by the 8S(S?
1. )ll (e(bers
a. 1ifetime insurance.
b. $etirement at least <J years of age! and 1; years of service.
however! ## is allowed to continue to work to complete
the 1;(year service re6uirement. (Cana vs. CSC)
. Disability Provided :
he has paid at least 2< monthly contributions within the ;(
year period immediately preceding his disability! or he has
paid a total of at least 1'J monthly contributions prior to
his disability@ and his disability is not compensable under
any other law.
113
a. *urvivorship ( dependent spouse shall be entitled to
survivorship benefits for life or until she remarries. +ependent
children are entitled to benefit while still minors and unmarried.
b. *eparation
c. ?nemployment.
2. Judiciary B 1ife insurance only. A*ec. 2! N*I* Bct of 1778D
HHH +ll are ta$ e$empt%
1rescri6ti2e 1eriod
Sec. ,, GSIS )ct of 133@ : Bll claims! e&cept for life and retirement benefits
shall prescribed within : years from date of contingency.
&enefit 1rotection
Sec. "3, GSIS )ct of 133@ :
1. Bll benefits paid shall be e&empt from ta&es.
. Bll benefits shall be e&empt from attachment! garnishment! e&ecutions!
levy or other processes! issued by courts! 6uasi(judicial agencies or
administrative bodies including CGB disallowances and all forms of
financial obligations of members! including pecuniary accountability arising
from or caused or occasioned by e&ercise of performance or official
functions or duties! or incurred relative to or in connection with his position
or work e&cept when monetary liability! contractual or otherwise! is in favor
of the N*I*.
8.' Dis6ute Settle(ent
Sec. "4, GSIS )ct of 133@ : Novernment *ervice Insurance *ystem shall have
original and e&clusive jurisdiction to settle any dispute arising under act or any
laws administered by the N*I*. "he /oard may designate any member of the
/oard or official of the N*I* who is a lawyer as hearing officer to receive
evidence! make findings of fact and submit recommendations.
)66eals
Sec. "1, GSIS )ct of 133@ : Bppeals of decisionsIawards of the /oard shall be
governed by $ules :2 and :; of the 1778 $ules of Civil Procedure. Bppeal shall
not stay orders unless stayed by orders of the /oard! CB or the *C.
Section ,. =ational #ealt0 Insurance )ct of 133*
'.1 Law B =ational #ealt0 Insurance )ct of 133* B R) @,@*
'. 1ur6osesF$b8ecti2es
1. Section , =ational #ealt0 Insurance )ct : "he *tate shall adopt an
integrated and comprehensive approach to health development which
shall endeavor to make essential goods! health and other social services
available to all the people at affordable cost.
114
AbD *niversality "he 3ational Health Insurance Program shall give the
highest priority to achieving coverage of the entire population with at least at a
basic minimum package of health insurance benefits.
. Section ", =ational #ealt0 Insurance )ct : "his Bct seeks to :
a. Provide all citi9ens of the Philippines with the mechanism to gain
financial access to health services@
b. Create the 3ational Health Insurance Program! hereinafter referred
to as the Program to serve as the means to help the people pay for
health care services@ and
c. #stablish the Philippine Health Insurance Corporation! that will
administer the Program at central and local levels.
2. Section *, =ational #ealt0 Insurance )ct : "here is hereby created the
3ational Health Insurance Program which shall provide health insurance
coverage and ensure affordable! acceptable! available and accessible
health care services for all the citi9ens of the Philippines! in accordance
with the policies and specific provisions of this Bct. "his social insurance
program shall serve as the means for the healthy to pay for the care of the
sick and those who can afford medical care to subsidi9e those who
cannot. It shall initially consist of Programs I and II of -edicare and be
e&panded progressively to constitute one universal health insurance
program for the entire population. "he Program shall include a sustainable
system of the funds constitution! collection! management and
disbursement for financing of the availment of a basic minimum package
and other supplementary packages of health insurance benefits by a
progressively e&panding proportion of the population.
C% The Program shall be limited to6
a. paying for the utili9ation of health services by covered beneficiaries
or
b. to purchasing health services in behalf of such beneficiaries.
(t shall be prohibited from6
c. providing health care directly
d. from buying and dispensing drugs and pharmaceuticals!
e. from employing physicians and other professionals for the purpose
of directly rendering care! and from
f. owning or investing in health care facilities.
'.2 !o2erage
1. Section @, =ational #ealt0 Insurance )ct : Bll citi9ens of the Philippines
shall be covered! provided! the Program shall not be made compulsory in
certain provinces and cites until the Corporation shall be able to ensure
the members in such localities shall have reasonable access to ade6uate
and acceptable health care services.
>% Who are the legal dependents of a member?
a. 1egitimate spouse who is not a member.
b. ?nmarried and unemployed legitimate! legitimated! illegitimate!
acknowledged children! legally adopted or stepchildren
below 1 years of age or years old and above but suffering from
congenital disability! either physical or mental! or any disability
ac6uired that renders them totally dependent on member for
support.
115
c. Parents who are over <J years of age whose monthly income is
below an amount to be determined by the Corporation. &$ec. @,
>ational :ealth %nsurance ct'
'.: Cunding
.0at are t0e sources of funding of t0e =#IC9
1. -embers contributions.
. Current balance of the Health Insurance 4unds of the *** and the N*I*
2. Gther appropriations earmarked by the national and local governments
purposely for the implementation of the Program.
:. *ubse6uent appropriations.
;. +onations and grant(in(aid.
<. Bccruals.
8. Contributions by 1N?%s for indigent members.
'.; #ealt0 !are 1ro2iders
I. What are the minimum accreditation re!uirements of health care
providers
1. Human resource! e6uipment and physical structure in conformity with the
standards of the relevant facility! as determined by the +ept. of Health.
. Bcceptance of formal program of 6uality assurance and utili9ation review.
2. Bcceptance of the payment mechanisms specified in the following section.
:. Bdoption of referral protocols and health resources sharing arrangements.
;. $ecognition of the right of patients.
<. Bcceptance of information system re6uirements and regular transfer of
information.
II. 8ive the categories of personal health services to be granted under the
&7(P 6
1. Inpatient hospital care i.e. room and board services of health care
professionals.
. Gutpatient care i.e. diagnostic! laboratory and other medical e&aminations
services and personal preventive services.
2. #mergency and transfer services.
:. *uch other health services that the Corporation shall determine to be
appropriate and cost(effective.
III. 8ive the services that are e$cluded 6
1. 3on(prescription drugs and devices.
. Gutpatient psychotherapy and counseling for mental disorders.
2. +rug and alcohol abuse or dependency treatment.
:. Cosmetic surgery.
;. Home and rehabilitation services.
<. Gptometric *ervices.
8. 3ormal Gbstetrical delivery. A*ec. 11! 3ational Health Insurance BctD
,.: Grie2ance and )66eal
I. Section %4, =ational #ealt0 Insurance )ct : "he following acts shall
constitute valid grounds for grievance action:
1. 0iolation of the rights of patients.
. Eillful 3eglect of duties of program implementers that results in the loss or
non(enjoyment of benefits by members or their dependents.
2. ?njustifiable delay in actions or claims.
:. +elay in the processing of claims that e&tends beyond the period agreed
upon.
116
;. Bny other Bct or neglect that tends to undermine or defeat the purposes of
this Bct. A0B3?+D
II. Section %1, =ational #ealt0 Insurance )ct : B member! his dependent! or a
health care provider may file a complaint for grievance based on any of the
above grounds! in accordance with the following procedure :
1. B complaint for grievance must be filed with the Gffice which shall rule on
the complaint within 7J calendar days from receipt thereof.
. Bppeals from Gffice decisions must be filed with the /oard within 2J days
from receipt of notice of dismissal or disallowance by the Gffice.
2. "he Gffice shall have no jurisdiction over any issue involving the
suspension or revocation of accreditation! the imposition of fines! or the
imposition of charges on members or their dependents in case of
revocation of their entitlement.
:. Bll decisions by the /oard as to entitlement of benefits of members or to
payments of health care providers shall be considered final and e&ecutory.
Section 3. !)RL, R) ::*@
B% 8ive the provisions of the BFAI #onstitution of agrarian reform?
"he *tate shall promote comprehensive rural development and
agrarian reform. "Sec% >B0 +rt% ((0 #onst%'
"he *tate shall by law! undertake an agrarian reform program
founded on the right of farmers and regular farmworkers! who are
landless! to own directly or collectively the lands they till or! in the
case of other farmworkers! to receive a just share of the fruits
thereof. "o this end! the *tate shall encourage and undertake the
just distribution of all agricultural lands! subject to such priorities
and reasonable retention limits as the Congress may prescribe!
taking into account ecological! developmental and e6uity
considerations! and subject to the payment of just compensation. In
determining retention limits! the *tate shall respect the right of
small landowners. "he *tate shall provide incentives of voluntary
land(sharing. "Sec% C0 +rt% J(((0 #onst%'
. Define agrarian refor(.
Bgrarian reform means the redistribution of lands regardless of crops or fruits
produced to farmers and regular farmworkers who are landless! irrespective
of tenurial arrangement! to include the totality of factors and support services
designed to life the economic status of the beneficiaries and all other
arrangements alternative to the physical redistribution of lands! such as
production or profit sharing! labor administration and distribution of shares of
stock! which will allow the beneficiaries to receive a just share of the fruits of
the lands they work. "Sec% D0 #+RL'
". Lands co2ered by t0e !)RL.
Bll alienable and disposable lands of the public domain devoted to
or suitable for agriculture. 3o reclassification of forest or mineral
lands to agriculture lands shall be undertaken after the approval of
this Bct until Congress! taking into account ecological!
developmental and e6uity considerations! shall have determined by
law! the specific limits of the public domain.
117
Bll lands of the public domain in e&cess of the specific limits as
determined by Congress in the preceding paragraphs.
Bll other lands owned by the Novernment devoted to or suitable for
agriculture@ and
Bll private lands devoted to or suitable for agriculture regardless of
the agricultural products raised or that can be raised thereon. A*ec.
:! CB$1D
U7I2JIJY
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