1

The Labor Code of the Philippines

a Brief History: began in 1968 under Blas Ople to address needs of economic
development and justice.
b Name of Decree (Art 1) Labor Code of the Philippines PD 442
c Date of Effectivity (2) 6 mos. After promulgation which was on (May 1,
1974) therefore, Nov 1, 1974
d Declaration of Basic Policy (3) Full employment, Equal work opportunity,
Security of Tenure, etc.
e Construction in Favor of Labor (4) in favor of safety and decent living of the
laborer however, it must be noted that the management also has rights
(management prerogatives)
Reyes v. CA

Dr. Pedrito demanded PhilMalay for separation payment similar to its employees as well as for
underpayment of salary, a new car, life insurance policy, office rentals and legal service costs he
incurred. The LA claimed that the retrenchment of PhilM is valid. NLRC reduced the awards. His appeal
was dismissed by CA for failure to attach position paper, decision by Labor Arbiter and Memorandul of
Appeal.
Leniency should be applied. If the rules of procedure are applied very rigidly, justice would be
defeated. Labor laws mandate speedy disposition of cases without sacrificing fundamental requisites
of due process

Salinas Jr. v.NLRC

Constant renewals by AG&P of Salinas etc. contracts as cement workers etc. as project based
employees but did not comply with department order which requires them to submit to DOLE the
notice and reason of termination upon the end of the project. It would be prejudicial and would run
counter to the constitutional mandate on social justice and protection to labor

Technical Rules not binding (221) Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts
in each case speedily and objectively and without regard to technicalities of
law as well as due process.
Huntington Steel Products, Inc. v. NLRC
Complaint for illegal dismissal by Orbase and 11 other employees against Huntington Steel Products
was dismissed due to the lack of a certificate of non-forum shopping required by Circular No. 28-91
with the petitioners commenting that the complaint was a mere scrap of paper.
Labor cases must be supported by evidence. Disregarding technical rules of procedure will not sacrifice
the fundamental requisites of due process ALSO the complaint form supplied by the LA were just filled
up by them and therefore, respondents should not be faulted.
CA ruled that technical rules shall not be applied strictly if the result would be detrimental to the
working man REMEDIED BY A POSITION PAPER.

Industrial Timber Corp v. Ababon (2 petitions are consolidated as one)

Industrial Plywood Group Corporation did not continue to lease the plant to ITC (herein petitioner)
which led to ITC to close its operations. ITC posted a final notice of closure of business and asked its
workers to collect the benefits due them. Ababon is one of the 387 workers laid off due to the plants
shutdown and thus he and 96 of his co-workers filed a case of illegal dismissal. LA required (1/2 mo)
separation pay, reinstatement etc. ITC filed with the NLRC who reinstated the LAs decision. Ababon
filed with the SC and was referred to the CA which ruled that retrenchment was valid because of proof
on non-renewal of license HOWEVER, ITC did not properly notify its employees (1 month before) 50k as
damages was awarded.
ITC: they were 3 days late in filing the MoR and thus, CA cannot validly overturn NLRCs decision.
Apply liberality in applying technical rules. Substantial Justice is best served by allowing the petition
for relief despite the procedural defect of PETITIONERS of filing the motion for reconsideration 3 days
late INJUSTICE TO EMPLOYER.
Art 218 (c), LC: it is within power of commission to correct, amend, or waive any error, defect or
irregularity whether in substance or in form

Rules and Regulations or Limitation (5)

Department of Labor and Employment shall promulgate necessary regulations which shall
have the force of law and is entitled to great respect + ANY OTHER (TO ADMINISTER, ENFORCE
AND IMPLEMENT)

EXCEPT if its in the excess of authority

Kapisanan ng mga manggagawang Pinagyakap v. NLRC

The negotiated daily wage increase of P. 1.33 could be credited to and deducted from the P60/monthly
living allowance which in effect, nullified the P 1. 33 increase. The LA ruled according to Sec 1(k) of the
Labor departments rules implementing PD 1123 (made to protect wages against inflation) which
exempts those that have granted the 60-peso monthly allowance from paying for anything extra. ALL
DOUBTS SHALL BE RESOLVED IN FAVOR OF LABOR.
In the Philippine Apparel case, this paragraph was already declared void for contravening the statutory
authority granted to the secretary of Labor., Due to facts as well as the ruling with regard to dismissal
for lack to serve a Memorandum of Agreement as being inconsistent with the requirement of social
justice to terminate employee of his employment on a mere technicality, the petition is granted
h Applicability (6) All rights and benefits granted to workers under this Code shall, except as
may otherwise be provided herein, apply alike to all workers, whether agricultural or
nonagricultural.
276: Government employees. The terms and conditions of employment of all government
employeesshall be governed by the Civil Service Law, rules and regulationsHowever, there shall be
no reduction of benefits and other terms and conditions of employment being enjoyed by them at
the time of the adoption of this Code.
Consti Art IX- B Sec (2) 1: The civil service embraces all branches, subdivisions, instrumentalities,
and agencies of the Government, including government-owned or controlled corporations with original
charters.

PNOC Energy Development Corp v. NLRC

Danilo Mercado was dismissed for alleged acts of dishonesty (negotiating cost then pocketing the
money)
1. The decision was made when the 1987 constitution was in effect and not the 1973 constitution
therefore it is already the Labor Code and not the Civil Service Decree that it in effect. The test is the
manner of its creation, those under the civil service law, CS. Those created under the General
Corporation Law, are under the Labor Code. ALSO case arose in 1973 but it was promulgated on July
1987, therefore under the 1987 constitution.
2. Also, there was no evidence of the alleged violations, in fact the testimony as well as the
explanations provided by Mercados affidavit is satisfactory for the Labor Arbiter.

Enforcement and sanctions

217 a Labor Arbiters Jurisdiction

128 Visitorial and enforcement power.
129 Recovery of wages, simple money claims and other benefits.
288 Penalties.
289 Who are liable when committed by other than natural person.
290 Offenses.
291 Money claims
292 Institution of Money claims
Art III Constitution
Sec 11 Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be
denied to any person by reason of poverty.
16 All persons shall have the right to a speedy disposition of their cases before all judicial, quasijudicial, or administrative bodies.

2 Work Relationship

Supreme Court rules denies death benefits as seafarer dies outside of

employment; Supreme Court further denied award of disability benefits as this
was not claimed during the proceedings
Philippine Shipping Update Manning Industry[Download]
By: Ruben Del Rosario, President, Del Rosario Pandiphil Inc., May 21, 2015 (Issue 2015/12)
Del Rosario & Del Rosario is more or less unrivalled when it comes to maritime work in the
Philippines from Asia-Pacific, The Legal 500, 2014, p. 497

In this issue:
Supreme Court rules denies death benefits as seafarer dies outside of employment; Supreme Court
further denied award of disability benefits as this was not claimed during the proceedings
Supreme Court rules that restitution is implied in the event of a reversal of an executed judgment
and there is no need for a categorical order from the court for the claimant to return the money
------------------------

Supreme Court denies death benefits as seafarer dies outside of employment; denies award of
disability benefits as this was not claimed during the proceedings

Seafarer was employed as a motorman by the company on board their vessel for a period of 11
months. Seafarer finished his contract and was repatriated to the Philippines after completion
thereof. Upon reporting to the manning agents, seafarer did not report any illness or medical
condition.
Almost a year and a half after repatriation, seafarer died of cardio-respiratory arrest brought about by
complications of lung cancer. This prompted the seafarers heirs to file a claim for death benefits
before the NLRC alleging that the death is compensable because its cause was aggravated by
tuberculosis, an illness the seafarer acquired during the existence of his contract.
The Labor Arbiter agreed with the arguments of the heirs and awarded death benefits to the heirs.
However, the NLRC reversed the Labor Arbiter and held that the complaint should be dismissed
considering that the death was not suffered during employment and it was readily proven that the
seafarer did not suffer any medical condition during employment.
With the Court of Appeals, the claim for death benefits was also denied but the appellate court
instead awarded disability benefits to the heirs on the reasoning that the right to disability benefits
already accrued to the seafarer and it would be unfair to deny this just because the seafarer died
already.
The Supreme Court agreed that death benefits should be denied but disagreed with the award of
disability benefits.
On the death benefits

The Court held that it is clear that for the death of a seafarer to be compensable, the same must
occur during the term of his contract of employment. If the seaman dies after the termination of his
contract, his beneficiaries are not entitled to death benefits.
In this case, seafarer's employment contract ended on November 23, 1999. He died on April 25,
2001, more than one (1) year and five (5) months from the time his employment contract expired. It,
therefore, follows that the heirs of the seafarer, are not entitled to death benefits.
Even if the Court were to consider the possibility of compensation for the death of the seafarer after
the termination of his employment contract on account of a work-related illness, the heirs,
nonetheless, did not present evidence to prove that seafarer acquired lung cancer during his
employment and that the said disease, which caused his death, was the reason for the termination
of his contract. On the contrary, the heirs claimed that Padrones was afflicted only with tuberculosis
during his employment. In fact, they even failed to present substantial evidence to show that
seafarer acquired this illness while he was employed nor were they able to prove their contention
that it contributed to his death.
On disability benefits
The Court held that the appellate court erred in awarding disability benefits to the heirs.
During the proceedings before the Labor and the NLRC, the heirs never claimed for payment of
disability benefits. No issue was raised regarding the issue of entitlement to disability benefits. The
resolution of this issue requires the admission and calibration of evidence and since the heirs did not
specifically raise this matter in the proceedings before the Labor Arbiter and the NLRC, these
tribunals were not given a chance to pass upon it in their decisions. Hence, the issue of whether or
not the seafarer or his beneficiaries are entitled to disability benefits cannot be passed upon on
appeal because it was not raised in the tribunals a quo. Well-settled is the rule that issues not raised
below cannot be raised for the first time on appeal as to do so would be offensive to the basic rules
of fair play and justice.

Wallem Philippines Services, Inc., and Wallem Ship Management Ltd. vs. Heirs of the Later Peter
Padrones; G.R. No. 183212, March 16, 2015; Third Division; Associate Justice Diosdado Peralta,
Ponente.

Supreme Court rules restitution is implied in the event of a reversal of an executed judgment and
there is no need for a categorical order form the Court for the claimant to return the money

By way of background, in 2011, the NLRC Rules of Procedure included for the first time a rule on
restitution where an executed judgment of the NLRC is reversed or modified by the appellate courts.
The initial version of the rule merely states that in the event the executed judgment is reversed or
modified by the appellate courts, the Labor Arbiter shall issue such orders of restitution of the
executed award. This rule was amended in 2014 wherein the NLRC will allow restitution if so
ordered by the appellate courts. This change made it more difficult than it already is for the
employer to obtain a writ of restitution.
In Wallem Maritime Services, Inc. v. Donabelle Pedrajas and Sean Jade Pedrajas, we found the
opportunity to question the wisdom of the amendment of the NLRC rule before the Supreme Court.
In said case, the Supreme Court held that even if there is no express order of restitution by the
appellate court, it does not mean that the claimants cannot be compelled to return the amount paid
by the employer. It is common sense that since the judgment of the NLRC was reversed by the
Supreme Court, the claimants are required to return to the company the amount paid to them by way
of restitution without need from a categorical order from the Court. Restitution is necessarily implied
when the executed judgment is reversed and all that is needed is to file a motion to this effect with
the Labor Arbiter.

RAUL C. COSARE v. BROADCOM ASIA, INC., ET AL., G.R. No.

201298, February 5, 2014
Labor law; When the dispute involves a charge of illegal dismissal, the action may fall under the
jurisdiction of the Labor Arbiter upon whose jurisdiction, as a rule, falls termination disputes and
claims for damages arising from employer-employee relations as provided in Article 217 of the Labor
Code. Consistent with this jurisprudence, the mere fact that Cosare was a stockholder and an officer
of Broadcom at the time the subject controversy developed failed to necessarily make the case an
intra-corporate dispute.
Corporate officer as distinguished from a regular employee. There are two circumstances which must
concur in order for an individual to be considered a corporate officer, as against an ordinary
employee or officer, namely: (1) the creation of the position is under the corporations charter or bylaws; and (2) the election of the officer is by the directors or stockholders. It is only when the officer
claiming to have been illegally dismissed is classified as such corporate officer that the issue is
deemed an intra-corporate dispute which falls within the jurisdiction of the trial courts.

Constructive dismissal occurs when there is cessation of work because continued employment is
rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or
diminution in pay or when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee leaving the latter with no other option but to quit.
G.R. No. 201298, 05 February 2014

Complainant Raul C. Cosare instituted a labor complaint primarily for constructive dismissal
against his employer defendant Broadcom Asia, Inc., and its president defendant Dante Arevalo.
Complainant claimed that sometime in April 1993, he was employed as a salesman by Arevalo,
who was then in the business of selling broadcast equipment needed by television networks and
production houses. In December 2000, Arevalo set up the company Broadcom, still to continue
the business of trading communication and broadcast equipment. Cosare was named an
incorporator of Broadcom In October 2001, Cosare was promoted to the position of Assistant
Vice President for Sales (AVP for Sales) and Head of the Technical Coordination, having a
monthly basic net salary and average commissions of P18,000.00 and P37,000.00, respectively.
Thereafter, sometime in 2003, Alex F. Abiog (Abiog) was appointed as Broadcoms Vice
President for Sales and thus, became Cosares immediate superior. On March 23, 2009, Cosare
sent a confidential memo to Arevalo to inform him of the following anomalies which were
allegedly being committed by Abiog against the company: (a) he failed to report to work on time,
and would immediately leave the office on the pretext of client visits; (b) he advised the clients
of Broadcom to purchase camera units from its competitors, and received commissions therefor;
(c) he shared in the under the-table dealings or confidential commissions which Broadcom
extended to its clients personnel and engineers; and (d) he expressed his complaints and disgust
over Broadcoms uncompetitive salaries and wages and delay in the payment of other benefits,
even in the presence of office staff. Cosare ended his memo by clarifying that he was not
interested in Abiogs position, but only wanted Arevalo to know of the irregularities for the
corporations sake.
There appears to be no response from Defendant Arevalo regarding the above accusations.
Cosare claimed that he was instead called for a meeting by Arevalo on March 25, 2009, wherein
he was asked to tender his resignation in exchange for financial assistance in the amount of
P300,000.00. Cosare refused to comply with the directive, as signified in a letter dated March 26,
2009 which he sent to Arevalo.
Thereafter, on 30 March 2009, Complainant received a memo charging him with serious
misconduct and willful breach of trust and required him to respond within forty-eight (48) hours.
The memo was signed by Defendant Arevalo. Complainant was also suspended from having
access to any and all company files/records and use of company assets effective immediately.
Thus, on the following day, he was refused entry. On the 4th day from receipt of the memo,
Complainant furnished his employer his reply but it was refused to be received on the ground of
late filing. Thus, Complainant sent it via registered mail. As a result, Complainant instituted this
labor complaint for constructive dismissal.
HELD: Defendant Corporation and Individual Arevalo are jointly and solidarily liable.
Constructive and illegal dismissal were present. Constructive dismissal occurs when there is
cessation of work because continued employment is rendered impossible, unreasonable, or
unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter
with no other option but to quit.

Citing jurisprudence, the test of constructive dismissal is whether a reasonable person in the
employees position would have felt compelled to give up his position under the circumstances.
It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal
is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the coercive acts of the employer.
Based on the records, [defendants] already rejected Cosares continued involvement with the
company. Even their refusal to accept the explanation which Cosare tried to tender on April 2,
2009 further evidenced the resolve to deny Cosare of the opportunity to be heard prior to any
decision on the termination of his employment. The [defendants] allegedly refused acceptance of
the explanation as it was filed beyond the mere 48-hour period which they granted to Cosare
under the memo dated March 30, 2009. However, even this limitation was a flaw in the memo or
notice to explain which only further signified the [defendants] discrimination, disdain and
insensibility towards Cosare, apparently resorted to by the [defendants] in order to deny their
employee of the opportunity to fully explain his defenses and ultimately, retain his employment.
Evidently, defendants were already resolute on a severance of their working relationship with
Cosare, notwithstanding the facts which could have been established by his explanations and the
respondents full investigation on the matter. In addition to this, the fact that no further
investigation and final disposition appeared to have been made by the respondents on Cosares
case only negated the claim that they actually intended to first look into the matter before making
a final determination as to the guilt or innocence of their employee. This also manifested from
the fact that even before Cosare was required to present his side on the charges of serious
misconduct and willful breach of trust, he was summoned to Arevalos office and was asked to
tender his immediate resignation in exchange for financial assistance.
As for abandonment, there is no merit to the claim. Abandonment is the deliberate and
unjustified refusal of an employee to resume his employment. To constitute abandonment of
work, two elements must concur: (1) the employee must have failed to report for work or must
have been absent without valid or justifiable reason; and (2) there must have been a clear
intention on the part of the employee to sever the employer-employee relationship manifested by
some overt act.
Here, complainants failure to report to work beginning April 1, 2009 was neither voluntary nor
indicative of an intention to sever his employment with Broadcom. It was illogical to be
requiring him to report for work, and imputing fault when he failed to do so after he was
specifically denied access to all of the companys assets.
As there is constructive dismissal in this case, an illegally or constructively dismissed employee
is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer
viable; and (2) backwages. The award of exemplary damages was also justified given the
NLRCs finding that the respondents acted in bad faith and in a wanton, oppressive and
malevolent manner when they dismissed Cosare. It is also by reason of such bad faith that
Arevalo was correctly declared solidarily liable for the monetary awards.

Related