Beruflich Dokumente
Kultur Dokumente
( 2007 EDITION )
10 Principles in Labor:
1.not all labor for another is compensable
2.not all compensable labor is demandable
3.labor is a property right (except government employment)
4.prohibition vs involuntary servitude
5.living wage
6.state intervention in labor
7.validity of labor legislation cannot be challenge as unjust legislation or cla
ssification
8.waiver of labor rights can be effected by government intervention
9.interpretation of labor contracts in favor of labor (except: union security cl
ause and strikes)
10.prohibition vs diminution of benefits.
Policy Declaration
Art. 3: The State shall
1.Afford protection to labor
2.Promote full employment
3.Ensure equal work opportunities regardless of sex, race or creed
4.Regulate the relations between workers and ER s.
5.Assure the rights of workers to self-organization, collective bargaining, secu
rity of tenure, and just humane conditions of work.
6.Art 12,Sec 1 1987 Constitution states the Equitable distribution of opportunit
ies and wealth and increase in amount of goods and services provided by nation f
or people s benefit and expanding productivity.
2006 notes: principle of protection extends to EEs who is abused by ER or Union
leadership or their respective representatives.
2005 notes:Rule on construction in favor of labor applies only in case there is
doubt.
2006 notes: in private entity, labor is a property right; while in government ,l
abor is not property right since public office is a public trust, so it must be
traceable to a law, if you cannot trace it ,then no employment in government ev
en if how long (ex: if you have been mixing coffee in office of mayor for 10 yrs
, it will not prescribe)
Law Classification
1. Labor Standards Law That which sets out the minimum terms, conditions and ben
efits of employment that ER s must provide or comply with and to which EE s are enti
tled as a matter of legal right.
Ex. 8-hour labor law
2. Labor Relations Law That which defines
* the status, rights and duties
* and the institutional mechanisms
that govern the individual and collective interaction of ER s and EE s or their repr
esentatives.
Ex. Book V of Labor Code
3. Welfare Legislation designed to take care of contingencies which may affect w
orkers, e.g. where there is loss of income for research beyond the worker s contro
l. BENEFITS
* Social Security Law.
Labor and social legislation are enacted pursuant to the police power of the Sta
te. This is its inherent power to enact wholesome and reasonable laws to promote
order, safety, health, morals and general welfare of society. In its exercise t
he state may interfere with personal liberty, with property and with business an
d occupation. (Calalang vs. Williams).
No longer may the due process clause and the freedom of contract be invoked to c
hallenge labor and social legislation. This has long been discarded since the 19
37 case of West Coast Hotel vs. Parish (US) and the 1924 case of Pp. vs. Pomar (
RP).
Labor relation laws enable workers to obtain from their employers more than the
minimum benefits set by labor standard laws
EMPLOYER (ER) and EMPLOYEE(EE) RELATIONSHIP
ER includes any person,natural or juridical, acting directly or indirectly in the
interest of the ER in relation to an EE and shall include the Government and al
l its branches, subdivisions and instrumentalities, all GOCC s and institutions, a
s well as non-profit private institutions, or organizations.
EE includes any person in the employ of an ER. The term shall not be limited to t
he EE s of a particular ER, unless this Code explicitly states. It shall include a
ny individual whose work has ceased as a result or in connection with any curren
t labor dispute or because of unfair labor practice if he has not obtained any o
ther substantially equivalent or regular employment.
purchaser of the assets of an ER corporation is not considered a successor ER o
f the latter s EE since Labor contracts are not enforceable against a transferee
of an enterprise, labor contracts being in personam, thus binding only between p
arties.
The existence of ER-EE relationship is determined by the following elements name
ly: The existence of an ER-EE relationship is a question of law and being such,
it cannot be made the subject of an agreement. (Tabas vs. CMC)
a. the Selection and engagement of the EE s
b. the payment of Wages
c. the power of Dismissal; and
d. the power to control the EE s conduct
particular form of evidence is required to prove the existence of an ER-EE relat
ionship. Any competent and relevant evidence to prove the relationship may be ad
mitted (Opulencia vs. NLRC)
CONTROL TEST
*** There is an ER-EE relationship where the ER controls or has reserved the rig
ht to control the EE not only as the result of the work but also as to the means
by which said work is to be accomplished (Paradise vs. Ng). The test merely cal
ls for the existence of the right to control the manner of doing the work not th
e actual exercise of the right. (Ruga vs. NLRC) The line should be drawn between
rules that merely serve as guidelines towards the achievement of the mutually d
esired results without dictating the means or methods employed in attaining it,
and those that control or fix the methodology and bind or restrict the party hir
ed to the use of such means. The first , which aim only to promote the result, c
reate no ER-EE relationship unlike the second, which addresses both the result a
nd the means to achieve it. (Insular Life vs. NLRC) The control test calls merel
y for the existence of the right to control and manner of doing work, not the ac
tual exercise of the right. (Dy Keh Beng)
ECONOMIC TEST
The absence of ER-EE relationship may be determined through economic tests like
the inclusion of the EE in the payrolls, having irregular compensation and havin
g a personal stake in the business. (Sevilla vs. NLRC)
2006 notes:ER-EE is a question of fact if no question as to indirect ER nor 105,
106 and 107 but it becomes a question of law if there s another party beyond ER-EE
or there s indirect ER or 105,106, and 109.
Way of answering--- law itself says it
Is there an ER-EE relationship on the following?
* Workers under a pakiao agreement arranged by G whom PRC considered as an indep
endent contractor. ER gives orders to G, on where to store the copra, when to br
ing out, how much to load and where, and what class of copra to handle. The equi
pment used is owned by PRC. Yes. PRC has direct control over the handling of th
e copra. The control test is satisfactorily met.
* Piece workers subject to specifications. Yes. The fact that the making of the
basket is subject to Dy s specifications indicates the existence of control. (Dy K
oh Beng vs. ILMU)
* Tailors, pressers, stitchers and similar workers employed by COD on a piece-wo
rk basis. The EE s are governed by the company s regulations i.e. 8-hour workday, re
cording of attendance etc Furthermore, a master cutter distributes job orders equ
ally, supervises the work and sees to it that they were finished as soon as poss
ible. Yes. The worker s conduct in the performance of their work was controlled by
the company (Rosario vs. Ople)
* Cargadores and pahinantes recruited by SMC through a labor contractor who are
governed by the regulations of the SMC whose work consisted of loading, unloadin
g, pilling or palleting empty bottles and wooden shells from company trucks and
warehouses. Yes. The evidence firmly establishes the control exercised by the SM
C. (BLUM vs. Zamora)
* Shoe shiners who had their own customers but shared proceeds with company. No.
The company does not exercise any degree of control or supervision over his wor
k. The shoe shiner is a partner in trade. (Besa vs. Trajano)
* Vendees of cigarettes who are governed by the regulations of the vendor compan
y i.e. definite sales territory, requirement to submit daily, weekly and monthly
reports, etc. Yes. Vendor company had control over the vendee. (SSS vs. CA)
2006 notes: the moment there is a surety bond, ER-EE do not exist.
*I. S, a prominent social figure, had an agreement with TWS to act as branch mana
ger; The agreement provided that she would be entitled to a part of the commissi
on on sale of tickets; and that she would share in the expenses of maintaining t
he office. She was also a signatory to a lease agreement covering the branch s pre
mises, holding herself solidarily liable for the prompt payment of rentals. No.
I. S was not subject to the control by TWS. The services rendered by I.S must ha
ve been done by her pursuant to a contract of agency. (Sevilla vs. CA)
* A plant manager hired by a marble company which was about to close in a few mo
nth s time due to business losses. The company had no control over the former, eit
her as to hours of work or method of accomplishing the work. The former was enti
tled to a percentage of the net profits of the company for that period. No. Mana
ger was merely a party to a joint venture. (CMC vs. NLRC)
* Fishermen-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 f
ishing port, etc Yes. (Ruga vs. NLRC)
* Tailors, seamstresses and other workers of a haberdashery who were paid on a p
iece-rate basis. They were directed by the proprietor of the establishment as sp
ecified by the customers. They were required to finish jobs orders in one day be
fore due date. Yes. They did not exercise independence in their own methods, but
on the contrary were subject to the control of the establishment from the begin
ning of their task to their completion. They also had to rely on the tools and e
quipment supplied by the haberdashery. (Makati Haberdashery vs. NLRC)
* The power of control refers merely to the existence of the power and not the a
ctual exercise thereof.
* Caddles who are not under the control and supervision of the golf club as to w
orking hours, manner of carrying out their services, etc. No. The club did not h
ave the measure of control over the incidents of the caddy s work and compensation
that the ER would possess. (Manila vs. IAC)
* College teachers. Yes. The Court takes judicial notice that a university cont
rols the work of the members of its faculty; that it prescribes the courses or s
ubjects that they teach and the time and place for teaching. (Feati vs. Bautista
)
* Jeepney drivers working under the boundary system. Yes. The driver does not ha
ve any interest in the business because he did not invest anything in the acquis
ition of jeeps and did not participate in the management thereof. (Citizen s Leagu
e of Free Workers vs. Abbas)
In Agency, it is civil law, so regular courts has jurisdiction and not the labor
arbiter
In tenancy:
1.Farmworker(ER-EE): 1 enterprise and that is of the ER ,no right of possession
of EE
Tenancy: joint production agreement (so it is partnership), tenant has right of
possession.
2.T:compensation is conditional(less harvest, no share)
F: compensation is unconditional ,meron harvest or wala, may sweldo.
3.T: service is that entire family may help
F:only hired EE is obliged to render service
4.T:landowner has little control since it is the tenant that decides how to plan
t
2006 notes:Even if there s ER-EE rel, the ff are still immune from suit: embassy,c
onsul and int organization.
INDEPENDENT CONTRACTOR AND LABOR CONTRACTOR
* Dealership : A contract whereby one engages to purchase and sell soft drinks o
n trucks supplied by the manufacturer but providing that the other party (peddl
er) 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 thi
rd person, shall obtain the necessary licenses and permits and bear the expenses
incurred in the sale of the soft drinks. (Mafinco vs. NLRC)
Another dealership agreement wherein the dealer: handles the products in accorda
nce with existing laws and regulations; sends his orders to the factory plant; i
s supplied by the factory with a delivery truck and all expenses 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 pr
ice agreed upon between the parties; and posts a surety bond of not less than P1
0,000.00. (La Suerte vs. Director of Labor Relations)
* Security Agency : Shipping company entered into an agreement with a security a
gency 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 di
rectly with the agency, and a payment of a lump sum to the agency who in turn pa
id the compensation of the individual watchmen. Under the circumstances, the gua
rds cannot be considered EE s of the shipping company. It is the security agency t
hat recruits, hires and assigns the work of the watchmen. It is the wages to whi
ch 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 watc
hmen, on matters, pertaining to the contracted task, it stands to reason that th
e company does not exercise any power or control over the watchmen s conduct. (APL
vs. Clave)
* Collection Agency : Singer entered into a collection agency agreement with colle
ctors providing among others that the collector is to be considered at all times
to be an independent contactor; he was required to comply with certain rules an
d regulations (i.e. use of authorized receipts, monthly collection quota, cash b
ond, and submission of report of all collections at least once a week); and his
services can be terminated in case of failure to satisfy these regulations. Howe
ver, the agent was not required to observe office hours or to report to Singer e
xcept for remitting his collections. He did not have to devote his time exclusiv
ely for Singer and the manner and method of collection were left solely to the d
iscretion of the agent, and he shouldered his transaction services. (
* Messengerial/Janitorial Services : Janitors were hired by CSI and assigned to
La Union Carbide. They drew their salaries from CSI. CSI exercised control over
them through a SCI EE who gave orders and instructions. Moreover, CSI had the po
wer to assign its janitors to various clients and pull them out. CSI was a regis
tered service contractor and did business with a number of known companies in th
e country. It maintains its own office and had its own office equipment. It furn
ishes its janitors the cleaning equipment. (Rhone-Poulene vs. NLRC)
BCC, capitalized at P1 million fully subscribed and paid for provided janitorial
and other services to various firms. It hired A and B and assigned them to work
for FEBTC. The two reported for work wearing the prescribed uniform of the BCC
; their leave of absences were filed directly with BCC; and their salaries drawn
only from BCC. FEBTC however issued a job description which detailed the functi
ons of two. Applying the control test, BCC is the ER of the two. Furthermore, it
had substantial capital. The guidelines in the job description were laid down
merely to ensure the desired result was achieved. It did not, however, tell how
the work should be performed. (Neri vs. NLRC)
* Repair and Maintenance Service : F doing business, was hired by Shell to con
duct a hydro-pressure test. He was paid a lump sum for the work he and his men a
ccomplished. He utilized his own tools and equipment. He accepted business from
other companies. He was not controlled by Shell with regard to the manner in wh
ich he conducted the test. (Pilipinas Shell vs. CA)
Examples of Labor-Only Contracting
* Agency hiring : PBC and CESI entered into an agreement under which the latter
undertook to supply the former with 11 messengers. The agreement provided that t
he messengers would remain EE s of CESI; PBC remitted to CESI amount equivalent to
the wages of the messengers; CESI in turn paid them and their names are not inc
luded in the PBC s payroll; the bank, in cases of dismissal would request CESI, an
d CESI would in fact withdraw such messenger, and the messengers performed their
functions within the bank s premises. CESI cannot be considered a job contractor
because its undertaking is not the performance of a specific job; it merely unde
rtook to provide the bank with a certain number of persons able to carry out the
work of messengers. (PBC vs. NLRC)
Under the Work Contract between A and a motorshop, A undertook to supply labor a
nd supervision in the performance of automotive body painting work. A and his me
n were paid lump sum, the company supplied the tools, equipment, machineries and
materials and moreover, the jobs were done in the premises of the motor shop. A
side from the fact that the company exercised control and direction over the wor
k done by A and his men, the line of work-automobile painting was directly relat
ed to, if not an integral part of the regular business of the motor shop. (Broad
way Motors vs. NLRC)
LS provided helpers, janitors, mechanics to NP, a corporation engaged in garment
manufacturing. The agreement between the two provided that LS shall provide NP
with workers, NP shall pay LS a fee based on rates fixed by the agreement, there
is no ER-EE relationship between the two and LS shall have exclusive direction
in the selection, engagement and discharge of its personnel and the latter shall
be within is full control. LS is a labor-only contractor since it is merely an ag
ent to procure workers for the real ER.
* Security Guard Hiring : Hyatt and VSS entered into a contract of services whe
rein VSS agreed to protect the properties and premises of Hyatt by providing sec
urity guards. The security guards filled up Hyatt employment application forms a
nd submitted the forms to the Security Department of the hotel. Their wages were
paid directly by Hyatt and their assignments, promotions, supervisions and dism
issal were approved by the Chief Security Officer of Hyatt. (Vallum Security vs.
NLRC)
2006 notes: since Hilton is the one doing the training ,assigning and hiring, so
Vallum is only a labor only contractor.
2006 notes:liability of indirect ER under labor code cannot apply in causes of a
ction arising from quasi-delict (ex: guard playing gun tapos nakabaril, the agen
cy is liable but not the hotel)
Rights of Contractual Employees:
1.safe and healthful working conditions
2.labor standards such as service incentive leave, rest days..
3.social security and welfare benefits
4.self-organization, collective bargaining and peaceful concerted action
5.security of tenure
Summary of Prohibited Labor Contracting:
1.Labor Contracting
2.Contracting that terminates the employment of regular employees ,or reduces t
heir work hours ,or reduces or splits a bargaining unit, if such contracting out
is not done in good faith and not justified by business exigencies.
Workers Fees
Art. 32 : Any 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
2. he has actually commenced employment. Such fee shall be always covered with t
he appropriate receipt clearly showing the amount paid. The Secretary of Labor s
hall promulgate the schedule of allowable fees.
Reports Submission
* Art. 33 : Whenever the public interest requires, the Secretary of Labor may di
rect all persons or entities within the coverage of this Title to submit a repor
t on the status of employment, including job vacancies, details of job requisiti
ons, separation from job, wages, other terms and conditions, and other employmen
t data.
GOVERNMENT TECHNIQUES OF REGULATION PRIVATE RECRUITMENT AND PLACEMENT BUSINESS
Licensing, Citizenship, Capitalization, Duration, Transferability and Fees
Citizenship Requirement:
A.Only Filipino citizens or
B.Only corporations, partnerships or entities at least 75% of the authorized and
voting capital stock of which is owned and controlled by Filipino citizens shal
l be permitted to participate in the recruitment and placement of workers, local
ly or overseas.
Capitalization Substantial capitalization as determined by the Secretary of Labo
r. (P2 M 2006 Revision)
Dapat may license and authority from DOLE, if license only but no authority, th
en they cannot hire workers for overseas employment.
-- authority must be both authority to conduct and authority to operate and not
one from the other, dapat both!!
Non-transferability of License or Authority
No license or authority shall be used directly or indirectly by any other person
other than the one in whose favor it was issued; or
at any place other than that stated in the license of authority
nor such license or authority be transferred, conveyed or assigned to any other
person or entity.
Any transfer of business address, appointment or designation of any agent or rep
resentative including the establishment of additional offices everywhere shall b
e subject to the prior approval of the DOLE.
Art. 31 : All applicants for license or authority shall post such cash and suret
y bonds as determined by the Secretary of Labor to guarantee compliance with pre
scribed recruitment procedures, rules and regulations, and terms and conditions
of employment as appropriate.The purpose of bonds is to insure that if the right
s of these overseas workers are violated by their ER s recourse would still be ava
ilable to them against the local companies that recruited them for the foreign p
rincipal. (Stronghold vs. CA)
(BAR), Filipina, was recruited by a local private employment agency for a tutori
ng job abroad. Upon arrival in the place of employment, she was made to work as
a housemaid. What advice will you give her? I will advice the Filipina to commen
ce a criminal action against the employment agency for violation of Art. 34 of t
he Labor Code. She was recruited under false pretense.
PHILIPPINE OVERSEAS EMPLOYMENT AGENCY (POEA):
(such is appeallable to the office of the Secretary)
RA 8042 (July 15,1995) not only transferred from POEA to the Labor Arbiter
(appeallabe to the NLRC) the jurisdiction over money claims, but it also invo
lved money claims for overseas deployment (period of deployment and before depa
rture for abroad ) unlike in POEA where it covers only workers for overseas em
ployment
2006 notes: POEA may hear ,but the decision part lies with the DOLE.
TERMS:
Contract Worker - Any person working or who has worked overseas under a valid emp
loyment contract.
Manning agency Any person or entity recruiting seamen for vessels plying internati
onal waters and fore related maritime activities.
Name Hire Worker who is able to secure employment overseas on his own without the
assistance or participation of an agency.
Overseas employment Employment of a worker outside the Philippines, including empl
oyment on hoard vessels plying international waters covered by a valid employmen
t contract.
Placement fee Amount charged by a private employment agency from a worker for its
services in securing employment.
Service fee Amount charged by a license from its foreign ER as payment for actual
services rendered in relation to the recruitment and employment of workers for s
aid principal.
SANCTIONS
Suspension and/or Cancellation of License or Authority The Secretary of Labor sh
all have the power to suspend or cancel any license or authority to recruit EE s f
or overseas employment for violations of rules and regulations by the DOLE, the
POEA, or for violation of the provisions of this, and other applicable laws . .
Penalties Violations of any provisions of this Tile or IRR s by license or holder
of authority :
a. imprisonment of not less than 2 years nor more than 5 years
b. or a fine of not less than P10,000.00 nor more than P50,000.00
c. or both such imprisonment and fine, at the discretion of the court.
Violation of any of the provisions thereof or its implementing rules and regulat
ions by a non-license or non-holder of authority
a.imprisonment of not less than 4 years nor more than 8 years
b.or a fine of not less than P20,000.00 nor more than P100,000.00
c.or both such imprisonment and fine, at the discretion of the court.
If the offender is a corporation, partnership, association or entity, the penalt
y shall be imposed upon the officer or officers of the corporation, partnership,
association or entity responsible for violation; and if such officer is an alie
n, he shall in addition to the penalties herein prescribed, be deported without
further proceedings:
Illegal recruitment:
a.imprisonment of not less than 6 years and 1 day but not more than 12 years and
b.a fine of not less than P200,000.00 nor more than P500,000.00.
Illegal recruitment constituting Economic Sabotage:
a.life imprisonment; and
b.a fine of not less than P500,000.00 nor more than P1,000,000.00.
The maximum penalty shall be imposed if:
a . the person illegally recruited is less than 18 years of age; or
b. committed by a non-license or non-holder of authority.
* The Secretary of Labor or his duly authorized representative may order the clo
sure of illegal recruitment establishments.
Art. 38 (c) of the Labor Code granting the Secretary of Labor the power to issue
search or arrest warrants is declared unconstitutional and null and void. (Sala
zar vs. Achacoso)
--money claims arising from ER-EE relationship prescribes in 3 years
--strict rules of evidence are not applicable in claims for compensation and dis
ability benefits
In case of breach of the employment contract by a foreign-based ER, may the priv
ate employment agency or recruitment entity be held liable? What is the nature o
f the liability of the recruitment and placement agency and its principal? Yes.
The agency or entity undertakes under oath to assume full and complete responsib
ility for all claims and liabilities which may arise in connection with the use
of the license or authority. The agency is jointly severally liable with the pri
ncipal or foreign-based ER for any of the violations of recruitment agreement co
ntract of employment. (Ambraque vs. NLRC; Pp vs. Catan)
ILLEGAL RECRUITMENT
Recruitment and Placement - Act of
a. Canvassing
b. Enlisting
c. Contracting
d. Transporting
e. Utilizing
f. Hiring or
g. Procuring workers and
h. Includes referrals, contracts services, promising or advertising for employme
nt, locally or abroad, whether for profit or not.
Provided
That any person or entity which, in any manner, offers or promises for a fee emp
loyment to 2 or more persons shall be deemed engaged in recruitment or placement
. [The number of persons dealt with is not, an essential ingredient of the act o
f recruitment or placement. The provision merely lays down a rule of evidence th
at where a fee is collected in consideration of a promise or offer of employment
to 2 or more prospective workers, the individual or entity dealing with them sh
all be deemed to be engaged in the act of recruitment or placement. (Pp vs. Pani
s)
2006 Pointers:
-even if a manning agent in Philippines is jointly and severally liable with
principal-foreign corporation
-A sister of a maltreated DH in Hongkong can file case here in the Philippines
in behalf of the latter.
-illegal recruitment prescribed in 5 years, but if with eco.sabotage, then 20 y
ears
-advertising already constitutes as illegal recruitment and falsity of notice
is immaterial for prosecution of case
Sec. 8, Migrant Workers Act : A criminal action arising from illegal recruitment
as defined herein shall be filed with the RTC 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, That the court where the criminal ac
tion is first filed shall acquire jurisdiction to the exclusion of other courts.
The crime of illegal recruitment has 2 elements:
i. That the offender is a non-license or non-holder of authority to lawfully eng
age in the recruitment and placement of workers; and
j. That the offender undertakes any of the recruitment activities defined under
Art. 13 (b) of the Labor Code or any of the prohibited practices enumerated unde
r Art. 34 of the same Code.
G convinced F and S, that they could be employed for France for a fee. G was als
o able to persuade A that he could give A a working visa. Nothing happened to F,
S and A. G did not have any license to recruit or authority to recruit? A may b
e charged and convicted of a large-scale illegal recruitment since he did not ha
ve the license or authority to recruit, and yet recruit at least 3 persons. (Pp
vs. Turda) Furthermore, he can also be convicted and charged of estafa since the
latter is a malum in se while the former is a malum prohibium
NATO, a national union of teachers was able to find jobs abroad for its member b
y directly contacting other teachers organizations in foreign countries, without
charging additional fees. Is this legal? No. Only persons or entities with appr
opriate license or authority can engage in recruitment and placement of workers.
Contact services are activities that fall within the scope of recruitment and p
lacement of workers.
A 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. No license or
authority is necessary. The company is not engaged in the business of recruitmen
t and placement of workers, it is not recruiting workers to be employed by other
s. It does not represent a principal. It is recruiting its own workers.
ALIEN EMPLOYMENT
Art. 40 : Employment Permit of Non-resident Aliens Any alien seeking admission t
o the Philippines for employment purposes and any domestic or foreign ER who des
ires to engage an alien for employment in the Philippines shall obtain an Alien
Employment permit from the DOLE .
For an enterprise registered in preferred areas of investments, said alien emplo
yment permit must be issued upon recommendation of the government agency charged
with the supervision of the registered enterprise.
Sec. 7, Rule XIV, Book I, IRR s : The Alien Employment permit shall be valid for a
minimum period of 1 year.
Who are subjected to it:
1.ALL foreign nationals seeking admission to the Philippines for employment
2.Missionaries or religious workers who intend to engage in gainful employment
3.holder of special investors resident visa ,special retirees resident visa, tre
aty trades visa or special non-immigrant visa who occupy an executive/technical
position in any establishment.
4.agnencies whether public/private who secure service of foreign property to pra
ctice their profession in Philippines under reciprocity and other international
agreements
5.non-indo Chinese refugees who are asylum seekers and given refugee status by t
he UN.
6.resident foreign nationals seeking employment in the Phil.
Exempted are: Diplomatic officials, consular officials and national organization
.
Art. 41 : Prohibition Against Transfer of Employment (a) After the issuance of
an employment permit, the alien shall not transfer to another job or change his
ER without prior approval of the Secretary of Labor.
Art. 288 : Any alien found guilty shall be summarily deported upon completion of
service of sentence(other grounds are misrepresentation, failure to renew and p
ersons non grata)
May an ER in the Philippines employ a worker who is not a Filipino citizen? Yes,
except to nationalized activities such as:
a. public utility to develop, exploit and utilize natural resources 60% Filipino
;
b. Mass media 100% owned by Filipino citizens
c. Advertising 70% Filipino owned
d. Retail Business 100% Filipino owned
e. Financing business 60% Filipino owned
Are there exceptions to the prohibition against employment of aliens in entities
engaged in nationalized activities? Yes, when (a) the Secretary of Justice spec
ifically authorizes the employment of technical personnel; or (b) where aliens a
re elected members of Board of Directors in proportion to their allowable partic
ipation in the capital; or (c) when allowed under certain special laws.
2006 notes: A resident alien need not obtain an employment permit in order to be
employed in the Philippines. (Almodiel vs. NLRC) what they are required ,toget
her with resident immigrants are Alien Employment registration certificate.
Alien Employment Permit Conditions for Grant
Art. 40 : The employment permit may be issued to a non-resident alien or to the
applicant ER after a determination of
-competent
-able and
-willing
at the time of the application to perform the services for which the alien is de
sired. [The DOLE is the agency vested with jurisdiction to determine the questio
n of availability of the local workers. (General Milling vs. Torres)
Sec. 5, Rule XIV, Book I, IRR s : Requirements for Employment Permit Applicants T
he applicant for an employment permit shall be accompanied by the following:
a. Curriculum vitae signed by the applicant indicating the educational backgroun
d, his work experience and other data showing that he possesses technical skills
in his trade or profession.
b. Contract of employment between the ER and the principal, which shall embody t
he following, among others:
> That the non-resident alien shall comply with all applicable laws and rules an
d regulations;
> That the non-resident alien worker and ER shall bind themselves to train at le
ast 2 Filipino understudies; and
> A designation by the ER of at least 2 understudies which must be the most rank
ing regular EE s in the section or department for which the expatriates are being
hired to ensure actual transfer of technology.
ER s right to hire labor is not absolute since the legislature has power to make r
egulation subject only to the condition that they pass the reasonableness and pu
blic interest test.
POEA (summary)
Appeal to secretary of DOLE within 10 calendar days for cancellation/revocation/
supervision of license or authority
Appeal to NLRC within 10 days for violation of overseas employment contracts,or
disciplinary cases filed against overseas contract workers
Original and exclusive jurisdiction over all claims arising out of an er-ee rela
tionship by virtue of any law or contract involving including:
-disciplinary cases
-pre-employment cases w/c are administrative in character
-violations of conditions for issuance of license or authority to recruit worker
s.
DEVELOPMENT OF HUMAN RESOURCES
EMPLOYER
a. habitual absentism
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. (Sec. 25, Rule VI, Book II, IRR s)
* employer must make a commitment to employ the business
B. LEARNERS
- Learnership programs must be approved by TESDA
* Art. 74 : Learners may be employed when:
1. no experienced worker is available
2. the employment of learners is necessary to prevent curtailment of employment
opportunities
3. and the employment does not create unfair competition in terms of labor costs
or impair or lower working standards.
Art. 75 :
1. Duration of the learnership period shall be 3 months;
2. Wages and salary rates begin at not less than 75% minimum wage; and
3. A commitment to employ learners if they so desire, as regular EE s upon complet
ion of the learnership.
> All learners who have been allowed or suffered work during the first 2nd month
s to be deemed EE s training is terminated by the ER before the end of the stipula
ted period though no fault of the learner.
Art. 76 : Learners employed in piece or incentive-rate jobs during training shal
l be paid in full for the work done.
J entered into a learnership agreement with employer A. Before the end of 2 mon
ths, A terminated the agreement. When J requested for a chance to let him finish
the 3 months period. At the end of 3 months, A refused to hire J. Is the stand
of A sustainable? No. A has a commitment under the learnership agreement to empl
oy J as a regular worker upon the completion of the learnership.
C. HANDICAPPED WORKERS
Art. 79 : Handicapped workers may be employed when their employment
2. is necessary to prevent curtailment of employment opportunities; and
3. when it not create unfair competition in labor costs or lower working standar
ds.
Conditions of Employment
- not exceed 8 hours
- allowed overtime
Art. 80 : Rates to be paid to handicapped workers shall not be less than 75% of
the applicable minimum wage.
Employment agreement must state the duration of the employment period and the wo
rk to be performed.
Art. 81 : Handicapped workers may be hired as apprentices or learners if their h
andicap is not such as to effectively impede the performance of job operations i
n the particular occupations for which they are hired.
Ratio of theoretical vs. on the job training > 100: 2000
- may work overtime duly credited as his training time
* Art. 72 : The Secretary of Labor may authorize the:
2. hiring of apprentices without compensation whose training on the job is requi
red by the school or training program curriculum as a requisite for graduation o
r board examination. There is no ER-EE relationship between students on one hand
, and schools, where there is written agreement between them under which the fo
rmer agree to work for the latter in exchange for the privilege to study free o
f charge. (Sec. 14, Rule X, Book III, IRR s)
3. A clerk in the College of Law of a University worked without pay but was allo
wed to take up no more than 3 units per semester free of charge. The clerk resig
ned and demanded payment of unpaid wages. Is the clerk entitled to unpaid wages?
Yes. Sec. 14, Rule X, Book III, IRR s : only applies in instances where the stude
nts are given real opportunity, including such facilities as may be reasonably n
ecessary 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 3 units per semester. There is therefore an ER-EE relation
ship between the clerk and the university. (Alcantara)
Enforcement
1. Art. 66 : Appeal to the Secretary of Labor - The decision of the authorized
agency of the DOLE may be appealed to the Secretary of Labor within 5 days from
receipt of the decision. The decision of the Secretary of Labor shall be final a
nd executory.
2. Art. 67 : Exhaustion of Administative Remedies No person shall institute any
action for the enforcement of any apprenticeship agreement or damages for breach
of any such agreement, unless he has exhausted all available administrative rem
edies.
CONDITIONS OF EMPLOYMENT
HOURS OF WORK
Normal Hours
The 8-hour labor law was designed not only to safeguard the health and welfare o
f the laborer but in a way to minimize unemployment by forcing ER s, in cases, whe
re more than an 8-hour operations is necessary, to utilize different shifts of l
aborers working only for 8 hours each. (Manila Terminal vs. CIR)
2006 notes: if agreed by parties, instead of 8 hrs pwede 7 hours ang duty.
Art. 83 : The normal of hours of work of any EE shall not exceed 8 hours a day.
Waiting Time
1. Sec. 5, Rule I, Book III, IRR s : Waiting time spent by an EE shall be consider
ed as working time if waiting is an
a. integral part of his work, or
b. the EE is required to engage by an ER to wait
The controlling factor is whether waiting time spent in idleness is so spent pre
dominantly for the ER s benefit or for the EE s. (Azucena)
2. S, a company driver has the following work schedule: 8:30 a.m. - fetches G.M
.; 9:00 a.m. 12:00 noon does nothing on call for G.M. at the company premises ;
12 noon 1:00 p.m. lunch; 1:00 p.m. 5:00 p.m. drives the G.M. to conferences; 5:0
0 p.m. goes home. The company refuses to pay him for the 9:00 a.m. to 12:00 noon
period. Is this valid? No. S 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 tim
e he may be called to drive for the G.M. (Alcantara)
3. 30 minutes prior to the start of the scheduled working hours, the workers of
an enterprise assembled at a designated area to answer roll call. As their house
s are situated right where the farms are located, the workers can go back in the
ir houses after roll call to do some chores. Is the assembly time working time?
No. The works are not subject to the absolute control of the company during the
period. The workers were not deprived of the time to attend to other personal pu
rsuits. (Aria vs. NLRC)
Idle Time
1. A laborer need not leave the premises of the factory, shop or boat in order t
hat his period of rest shall not be counted, it being enough that he cease to wor
k , may rest completely and leave or may leave at his will the spot where he actua
lly stays while working, or go somewhere else, whether within or without the fac
tory, shop or boat. (Luzon Stevedoring vs. Luzon Marine Dept. Union)
2. A, an accountant in the manufacturing firm, has idle time in her work schedul
e, waiting for company papers to work on. She dovotes this time working on papers
of other firms for which she receives remuneration. Is the firm obligated to pa
y her for this time? Yes. Although she is working on the papers of other compani
es, she has no absolute control over her time. Her ER may at any time require he
r to do some work. She cannot furthermore leave the place of work during her wor
k schedule. (Alcantara)
3. T, a machine operator was forced to stop operating his machine for 1 hour dur
ing a brownout. Is this working time? Yes. The interruption was not due to the f
ault of T. Besides 1 hour is too brief to be utilized effectively and gainfully
for his own interest.
2006 notes: if made to work, example 8 am dapat magstart ang duty, pero 7 pa lan
g ginapatrabaho na it is compensable.
2006 notes:for non-productive, like taking shower (which is integral to company s
SOP) then it is compensable
-- also, kahit dismissal na but cement mixer is still grinding cement, alangan n
aman iwanan mo yan, so it is still compensable.
--but if you are a carpenter and after work you have to baid your tools, it is n
ot compensable coz its your own tools.
Meal Time
Sec. 7, Rule I, Book III, IRR s : Every ER shall give his EE s not less than 1 hour
time-off for regular meals, except in the following cases where a meal period of
not less than 20 minutes may be given by the ER provided
> Where work is Non-manual in nature or does not involve strenuous physical exer
tion;
> Where the establishment regularly Operates less than 16 hours a day;
> In cases of actual or impending Emergency or there is urgent work to be perfor
med on machineries and equipment to avoid serious loss which the ER would otherw
ise suffer; and
> Where the work is necessary to Prevent serious loss of perishable goods.
That such shorter meal period (provided above) is credited as compensable hours
worked of the EE
But if it is the EE who requested for the shorter meal time, then such shortened
meal period is not compensable.
Rest periods or coffee breaks running from 5 to 20 minutes shall be considered a
s compensable working time.
Where during the so-called meal period, the laborers are required to stand by fo
r emergency work, or where said meal hour is not one of complete rest, such peri
od is considered overtime. (Pan Am vs. Pan Am EE s Association)
On Call
1. Sec. 5, Rule I, Book III, IRR s : An EE while he is required to remain on call
in the ER s premises or so close thereto that he cannot use the time effectively a
nd gainfully for his own purpose shall be considered as working hours while on c
all. An EE who is not required to leave word at his own or with company official
s where he may be reached is not working while on call.
2. If an EE is kept within reach through a cellular phone. Is it on call? No. (A
zucena)
3. GenRule: You are not compensable but the moment you are called then it is com
pensable. In PanAM case, SC rules that even while waiting,it is compensable.
Travel Time
Principles which determine whether or not time spent in travel is working time:
Travel from Home to Work Normal travel from home to work is no work time but an
emergency call outside of regular working hours requiring him to go to his regul
ar place of business is working time.
Travel that is all in the day s work Time spent by an EE in traveling from one job
site to another, during the workday, must be counted as hours worked.
Travel away from home Travel away from home is clearly worktime when it cuts acr
oss the EE s workday, except during meal period or when EE is permitted to sleep i
n adequate facilities furnished by the ER. The time is not only hours worked on
regular workdays but also during corresponding working hours on non-working days
. Outside of these regular working hours, travel away from home is not considere
d working time. (Azucena)
Semestral Break
Regular full-time teachers are entitled to salary and COLA during semestral brea
k. (U.Pang. Faculty Union vs. U. Pang.)
The following are not entitled to OVERTIME PAY, PREMIUM PAY FOR REST/HOLIDAYS,
NIGHT SHIFT DIFFERENTIALS, HOLIDAY PAY,SERVICE INCENTIVE LEAVE, WEEKLY REST PER
IODS and SERVICE CHARGE
1.Government EE s
whether employed by the National Government or any of its political subdivisions
, including those employed in GOCC s with original charters BUT IF GOVT EMPLOYEES A
RE UNDER LABOR CODE(NOT UNDER CIVIL SERVICE since no original charter) THEN THEY A
RE GOVERNED BY THIS TITLE.
2.Managerial (Power to hire and fire) Employees AND Other officers or members of
the managerial staff if they perform the following duties and responsibilities
3.Field personnel
Non-agricultural EE s
who regularly perform their duties away from the principal place of business or
branch office of the ER and
whose actual hours of work in the field cannot be determined with reasonable cer
tainty.
2006 notes: not field personnel are fishermen and linemen.
2006 notes:field personnel are sales rep and med rep
4.Members of the family of the ER who are dependent on him for support
5.Domestic helpers
Minister to a natural family. So if it minister to a bachelor(binata) ,then that
is not domestic helper but it is personal service of another like a bodyguard a
nd a chauffer.
2006 notes: DH cannot self-organized and they cannot be assigned to commercial o
r industrial area, coz if they will be, then it will be converted to industrial/
commercial worker (which includes the family driver)
6.persons in the personal service of another (like guards and private nurses).
However, house personnel hired by a ranking company official, but paid for the c
ompany itself, to maintain a staff house provided for the official, are not the
latter s domestic helpers but regular EE s of the company. (Cadiz vs. Philippine Sin
ter)
7.And workers who are paid by results. [Including those who are paid on piece-wo
rk, takay , pakiao , or task basis if their output rates are in accordance with the st
andards prescribed.]
2006 notes: pc rate workers are entitled to COLA and 13th month pay while task b
asis workers are not entitled to COLA and 13th month pay.
1Foremen, inspectors and supervisors given the power to recommend hiring and fir
ing of EE s but where ultimate power to hire or fire rested with personnel manager
? No. Where such recommendatory powers are subject to evaluation and review, the
same are not effective and not an exercise of independent judgment as required
by law. ( Franklin Baker Company vs. Trajano)
2.Cutter in tailoring shop was assigned chore of distributing work to shop s tailo
rs when the shop s manager were absent. He saw to it that work conformed with patt
ern he had prepared and if not, had them redone, repaired or sewn. No. He did no
t participate in policy-making. It is true that in the absence of the manager an
d assistant manager, he distributes and assigns work to EE s but such duty though
involving discretion is occasional and not regular and customary. (Villuga vs. N
LRC)
3.In TIMEX case, there is quota, but quota is purpose of discipline so it is sti
ll considered pc rate ,however, if your given time ,then you are not a pc rate w
orker.
9.Health Personnel
Entitled to rest day after 5 working days, if you have him work on 6th day ,you
have to pay him a premium.
Built-In Compensation
The employment contract may provide for a built-in overtime pay. Because of this,
non-payment of overtime pay by the ER is valid. (Engineering equipment vs. Minis
ter of Labor)
2006 notes:if started undertime, kahit lampas na 5:00 if in total is not more th
an 8 hrs, not entitled to overtime.
2006 notes: in shifts, the 1st day is included in your overtime since you count
24 hours (Phil based work on a 24 hour basis unlike in US whereby it is based on
working hour.)
2006 notes:May the right to overtime pay be waived? As a general rule, the right
cannot be waived. (Cruz vs. Yes Sing) However, when the waiver is exchange for
certain benefits and privileges, which may be more than what will accrue to them
in overtime pay, the waiver may be permitted. (MERALCO Workers Union vs. MERALC
O)
Art. 91 : It shall be for the duty of every ER, whether operating for profit or
not, to provide EE a rest period of not less than 24 consecutive hours after eve
ry 6 consecutive normal working days.
The ER shall determine and schedule the weekly rest day of his EE s.However, the E
R shall respect the preference of EE s as to their weekly rest day when such prefe
rence is based on religion grounds.
Sec. 4, Rule III, Book III, IRR s : Where however the choice of the EE s as to their
rest day based on religious grounds will inevitably result in serious prejudi
ce or obstruction to the operation of the undertaking, the ER may so schedule th
e weekday rest day of their choice at least 2 days in a month.
Art. 92 : When ER may require Work on rest day
a. In case of actual or impending emergency caused by serious accident, fire, fl
ood, typhoon, earthquake, epidemic, or other Disaster or calamity to prevent los
s of life, or imminent danger to public safety.
b. In case of Urgent work, to avoid serious loss which the ER would otherwise su
ffer;
c. In the event of Abnormal pressure of work due to special circumstances, where
the ER cannot ordinarily be expected to resort to other measures;
d. To prevent or damage to Perishable goods;
e. Where the Nature of work requires continuous operations and stoppage of the w
ork may result in irreparable injury or loss to the ER; and
f. Analogous (avail of favorable weather) or similar circumstances
NIGHT WORK
Art. 86 : Every EE shall be paid night shift differential of not less than 10% o
f his regular wage for each hour of work performed between 10:00 p.m. and 6:00 a
.m.
This rule shall apply to all EE s except:
1.Those of the government and any of its political subdivisions, including GOCC s.
2.Retail and service establishments regularly employing not more than 5 workers
(2005 Pointers:NEWEST ADDITION!!!).
3.Domestic helpers and persons in the personal service of another.
4.Managerial EE s.
5.Field personnel and other EE s whose time and performance is unsupervised by the
ER.
6.Includes task and contract basis
X works at a gasoline station which has only 5 EE s. Is he entitled to night shift
differential? No. He works in a retail establishment employing not more than 5
workers. (2004 Azucena)
What if X works at King s Minimarts, a retail store chain with 10 outlets of 2 EE s
each outlet. Is he entitled to night shift differential? Yes. The total number o
f EE s of the ER exceeds 5. It is at least 20. (Id)
HOLIDAY PAY
2006 notes: dapat present in the immediately preceeding day (before holiday) in
order to avail of regular holiday pay.
If required to work on regular holidays---regular rate x 2
If not required ,then x 1
Art. 94 : Every worker shall be paid his regular daily wage during holidays, exc
ept
.in retail and service establishments regularly employing less than 10 workers (2
005 Pointers: ADDITIONAL!!!!)
2006 notes:an hourly rate employee is not entitled to regular holiday but is ent
itled to a special holiday pay.
Art. 94 : The ER may require an EE to work on a holiday but such EE shall be pai
d a compensation equivalent to twice his regular rate.
To receive holiday pay, the EE should not have been absent without pay on the wo
rking day preceding the regular holiday. (Azucena)
1. A legal holiday falling on a Sunday creates no legal obligation for the ER to
pay extra to the EE who does not work on that day, aside from the usual holiday
pay, to its monthly-paid EE s. (Wellington vs. Trajano)
2. X was told by ER to work during a legal holiday which fell on a Sunday. How m
uch is he entitled to? X will get 200% of his daily rate plus premium pay pf 30%
of the holiday pay = regular daily rate * 230%.
3. If X works overtime during that day, how much will he earn? Holiday pay rate/
8 plus overtime pay of 30% of the holiday hourly rate = holiday pay rate/8 * 130
%.
4. R was absent without pay on December 24. Is he entitled to holiday pay for Ch
ristmas day? No. An EE may not be paid on holiday pay if he was absent on the da
y preceding holiday, or in the case of Maundy Thursday and Good Friday, if he wa
s absent on the day preceding the first holiday. It would be different if the da
y preceding the legal holiday was the EE s rest day. Then he is entitled to holida
y pay. (Alcantara)
> On leave with pay
5. Can monthly pay under employment contract already include pay for any unworke
d regular holiday within the month? Yes. This is management prerogative provided
that the monthly pay comply with the least minimum rates prescribed under minim
um wage laws.
> What an employer has voluntarily given cannot be unilaterally withdrawn
> If the employees are already paid for all non-working days, the divisor should
be 365 and not 251
Monthly paid EE s are not excluded from the benefits of holiday pay. (Mantrade vs.
Bacungan)
X is a manicurist in the D Style Barbershop which has 20 barbers and manicurists.
Is she entitled to holiday pay? Yes. X is an EE who is paid by results ad she wo
rks in a service establishment employing more than 10 persons. (Sec. 8, Rule IV,
Book III, IRR s)
basic salary: For purposes of computing the 13th month pay, basic salary
-include remuneration or earnings paid by this ER 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 equivalen
t or unused vacation and sick leave credits, overtime, premium, night-differenti
al 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 13th month pay if the individual or collective
agreement, company practice or policy, the same are treated as part of the basic
salary of the EE s.
Bonus
A bonus is an amount is an amount granted and paid to an EE for his industry and
loyalty which contributed to the success of the ER s business and made possible t
he realization of profits. (Azucena)
From the legal point of view, a bonus is not a demandable and enforceable obliga
tion. But it is so when it is made part of the wage or salary or compensation. I
n such case, the latter would be a fixed amount and the former would be a contin
gent one dependent upon the realization of profit. (Azucena) Furthermore, 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. (L
iberation Steamship vs. CIR)
Sec 4 Revised Guidelines on the 13th Month Pay Law:
Amount : of the total basic salary earned by an EE within a calendar year.
The 13th month pay is to be paid only to rank-and file employees regardless of t
he amount of their basic salary.
Time of Payment: Not later than December 24.
From 1991 to 1997, DFC included in the computation of this 13th month pay, the E
E s sick, vacation and maternity leaves, In 1998, the company discontinued the inc
lusion of the aforementioned items in the 13th month pay. Is this valid?The cons
iderable length of time the questioned items had been included by the company in
dicates a unilateral and voluntary action on its part, sufficient in itself to n
egate any claim of mistake. A company practice favorable to the EE s had been esta
blished, and the payments made pursuant thereto ripened into benefits enjoyed by
them. Any benefit and supplement being enjoyed by the EE s cannot be reduced, dim
inished, discontinued or eliminated by the ER. (Alcantara)
Sec. 7, Revised Guidelines on the 13th Month Pay Law: The mandated 13th month pa
y need not be credited as part of the regular wage of EE s for purposes of determi
ning overtime and premium pays, fringe benefits as well as contributions to the
state insurance fund, Social Security, Medicare and private retirement plans.
Basic Wage
Are the sales commission of a salesman paid a guaranteed wage plus commissions i
ncluded in the computation of this 13th month pay? It depends on what kind of co
mmissions may properly be considered part of the basic salary, they should be in
cluded in computing the 13th month pay. If the commission are not an integral pa
rt of the basic salary, then they should be excluded. (2004 Azucena) Sales commi
ssions 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-percen
tage type should be included in the 13th month pay computation. On the other han
d, commission in the form of productivity bonuses which closely resembles profit
-sharing payments and have no clear direct or necessary relation to the amount o
f work actually done by each individual EE, or the profit-sharing or bonus-type,
should be excluded from the computation of the 13th month pay. (Philippine Dupl
icators vs. NLRC)
Substitute Payment
Benefits in the form of food or free electricity not proper substitute for the 1
3th month pay. (Framanlis vs. Minister of Labor)
14th Month Pay
The grant of the 14th month pay is a management prerogative, gratuitous in natur
e and therefore it cannot be forced. (Kamaya Hotel vs. NLRC)
* Art. 95 : 5 days incentive leave with pay for at least 1 year of service.
[The term at least 1 year of service shall mean service within 12 months, whether
continuous or broken, reckoned from the date the EE started working, including a
uthorized absences and paid regular holidays unless the working days in the esta
blishment as a matter of practice or policy, or that provided in the employment
contract are less than 12 months, in which case said period shall be considered
as 1 year. (Sec. 3, Rule V, Book III, IRR s)
15 day vacation and sick leave must be claimed otherwise waived
- cannot be converted into cash unless allowed by employer
- employer must still bind himself in CBA or grant it unilaterally
- not granted by law
SERVICE CHARGES
Section 1, Rule V, Book III, IRR s : This rule shall apply only to establishments
collecting service charges such as hotels, restaurants, lodging houses, night cl
ubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and si
milar enterprises, including those entities operating primarily as private subsi
diaries of the Government.
Section 2, Rule VI, Book III
This rule shall apply to all EE s of covered ER s except to managerial EE s.
Managerial EE
a.powers of prerogatives to lay down, and execute management to lay don and exec
ute management policies and/or
b.hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline EE s
or to effectively recommend such managerial actions.
> Collection of service charges is a management decision and not a requirement o
f law
Art. 96 : To be distributed at the rate of 85% for covered EE s [distributed equal
ly among them] and 15% for management.
X a waiter at DC Diner was receiving a share in the restaurant s service charges.
Later, the restaurant discontinued the collection of service charges. The take-h
ome pay of X was reduced by the value of the discontinued service charges. May X
ask his ER to continue paying the service charges? Yes. In case the service cha
rge is abolished, the share or the covered EE s shall be considered integrated in
their wages. (Art. 96) The employees share in the service charges is part of th
e other benefits to which he is entitled, in addition to full backwages
SUMMARY
1.)Overtime Pay -Regular day 25% per hr
-Rest or Holiday 30% per hr
2.)Compensation for work (Premium Pay)
on rest day additional 30% to basic wage
on special holiday
-if falls on working day of EE= 30% on regular wage
-if falls on regular day of EE= 50%
a. if CBA provides for higher pay--enforceable
3.)Night Shift Differential = 10% for each hr.
(so get per hour Daily Wage/ 8)
4.)Health Personnel/6th day= 30%
5.)Holiday Pay
if EE not work= 100%
if EE work= 200%
if EE work overtime on holiday= HOLIDAY WAGE X 130%
8
if work on Holiday w/c is his scheduled rest day= 300 x 130%
if EE works OT on holiday w/c is his rest day
=holiday pay on rest day/8 x 130%
6.)Service Incentive Leave= 5 days w/ pay provided has rendered at least 1 yr. s
ervice
7.)Service Charges 85% to EE, 15% for Mgt.
PAYMENT OF WAGES
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 f
or a lower and less responsive character of employment.
Salary Denotes a higher degree of employment, or a superior grade of services, a
nd implies a position of office; by contrast, the term wages , while salary is sugges
tive of a larger and more important service. (Gaa vs. CA)
Wage Payment
Art. 102 : Forms of Payment : No ER shall pay the wages of an EE by means of pro
missory notes, vouchers, coupons, tokens, tickets, chits or any object other tha
n legal tender, even when expressly requested by the EE (except FACILITIES).
The laborer s wage shall be paid in legal currency. (Art. 1705, NCC)
Art. 103 : Time of Payment Generally : Once every two weeks or twice a month at
intervals not exceeding 16 days. No ER shall make payment with less frequency th
an once a month.
-Force Majeure : Immediately after the force majeure or the circumstances have
ceased.
-Task cannot be completed in 2 weeks in the absence of a CBA or arbitration awar
d:
a.The payments are made at intervals not exceeding 16 days, in proportion to the
amount of work completed;
b.That final settlement is made upon completion of work;
Art. 104 : Place of Payment : Payment of wages shall be made at or near the plac
e of undertaking, except as otherwise provided by such regulations as the Secret
ary of Labor may prescribe under conditions to ensure greater protection of wage
s.
1.deterioration of peace and order conditions
2.actual or impending emergencies calamity
-ER must provide or reimburse transportation back and forth
-Time spent collecting wages considered compensable his work
Facilities Items of expense necessary for the laborer s and his family s existence a
nd subsistence. They form part of the wage and when furnished by the ER are dedu
ctible therefrom since if they are not furnished, the laborer would spend and pa
y for them just the same i.e. meals; housing for dwelling purposes; fuel includi
ng electricity, gas, water for the non-commercial personal use of the EE; and ot
her articles and services given primarily for the benefit of the worker or his f
amily.for the benefit of the worker and his family
Facilities are allowed when:
1.customarily furnished (ex- meal of the chef)
2.accepted in writing
3.fair and reasonable value
MINIMUM WAGE
Art. 99 : The minimum wages for agricultural and non-agricultural EE s and workers
in each and every region of the country shall be those prescribed by the Region
al Tripartite Wages and Productivity Boards.
Explain the rule a fair day s wage for a fair day s labor ? Unless specifically require
d by law, contract or established policy, the ER is not bound to pay wages to a
worker who has not actually rendered any service.
Worker Preference-Bankruptcy
Art. 110. In the event of bankruptcy or liquidation of an ER s business, his worke
rs shall enjoy first preference as regards their wages and other monetary claims
, any provisions of law to the contrary notwithstanding. Such unpaid wages and m
onetary claims shall be paid in full before claims of the government and other c
reditors may be paid.
2006 notes: this article establishes merely a rule of preference and does not cr
eate a lien in favor of the workers and workers claim for unpaid wages and other
monetary benefits cannot prevail over a mortgages lien
The right or preference has to be asserted in distribution proceedings such as i
nsolvency where all the creditors convened, their claims ascertained and invento
ries and the preferences determined.
A declaration of bankruptcy or a judicial liquidation must be present before the
worker s preference may be enforced. The said article cannot be viewed in isolati
on; it must always be read in relation to the provisions of the Civil Code conce
rning the classification, concurrence and preference of the credits. (DBP vs. Sa
ntos) The aforesaid provisions of the Civil Code, including Art. 110 requires ju
dicial proceedings in rem in adjudication of creditor s claims against the debtor s
assets to become operative. (Alcantara)
Atlas Textile mortgaged its assets to DBP. DBP foreclosed the asset. The EE s file
d a complaint against Atlas and DBP for the wage differentials. The labor arbite
r and the NLRC held that the worker s preference under Art. 110 does not create a
lien? No. Art. 110 does not create a lien in favor of the workers.
2006 notes: worker preference cannot be superior to government claims that sprin
g from sovereignty (like taxes)
2006 notes:workers preference covers only FREE property, it is not subject to su
perior claim like mortgage.
GARNISHMENT/ATTACHMENT
Under Art. 1708 of the NCC, laborers wages shall not be subject to execution or at
tachment, except for debts incurred for food, shelter, clothing and medical atte
ndance (Pacific Customs vs. Inter-Island Dockmen and Labor Union)
Art 1708 which exempts laborers wage from attachment or execution does not apply
to a responsibly placed EE, supervisory or managerial EE, but only to the rank-a
nd-file. (Gaa vs. CA)
(BAR)A meat processing company gives a 25% discount to EE s for purchase on credit
of its product. However, said purchases on credit will be considered payment of
his wages. An EE purchases 10 cans of the product but objects to the applicatio
n of his purchases as part of his wages. Is the objections valid?
Yes. The application of his purchases on credit as part of his wages the product
s in lieu of legal tender.
10. In court awards, wages may be the subject of execution or attachment, but on
ly for debts incurred for food, shelter, clothing and medical attendance. (Art.
1708)
11. Deductions for value of meals and others.
CHECK-OFF
* An ER may be compelled to check-off union dues from the wages of his EE when the
ER has been authorized to do so by the EE. This is upon the theory that it is n
ecessary to promote the welfare and integrity of the union to which he belongs.
(Manila Trading vs. Manila Trading Labor Association)
4.Prohibition against Deposits for Loss or Damage
(this is part of the allowable deductions of the previous page)
Art. 114 : Deposits for Loss or Damage : No ER shall require his worker to make
deposits from which deductions shall be made for the reimbursement for loss or d
amage to tools, materials or equipment supplied by the ER except:
a. When the ER is engaged in such trades, occupations or business where the prac
tice of making deductions or requiring deposits is a recognized one, or
b. is necessary or desirable as determined by the Secretary of Labor in appropri
ate rules and regulations.
2006 notes: this is required in industry/works like the banktellers, cashier and
delivery boy/conductor where they deposit a bond.
2006 notes:the basis is not the asset value but the value less depreciation(ex:d
elivery boy nanakaw ang motor,based it on the book value of the motor)
(BAR)A marketing firm retains 5% of the weekly salary of its collectors as a dep
osit to answer for any shortage in their collections. These are refunded at the
end of the month, if no shortages are incurred. Is the practice legal? It depend
s. If it is a recognized practice of ER s to require such deposits, then such is l
egal, since the sum retained is not excessive and is kept by the ER only for a r
easonable period.
(BAR)A taxicab company requires its drivers to make deposits to defray boundarie
s and to cover car wash payments. Is this legal? Art. 114 does not permit deposi
ts for deficiency in the remittances of drivers boundary but the requirement for d
eposit for car wash payments is lawful since car washing after a tour of duty is
a practice in the taxi industry and in fact dictated by fair play, if drivers w
ant to save their P20 deposit for car wash, there is nothing to prevent them fro
m cleaning the taxi themselves. (5-J Taxi vs. NLRC)
Art. 118 : It shall be unlawful for an ER to reuse to pay or reduce the wages an
d benefits, discharge or in any manner discriminate against any EE who has filed
any complaint or instituted any proceedings under this Title or has testified o
r is about to testify in such proceedings.
2006 notes: Both articles 118 and 248(F) prohibit retaliation or reprisal agains
t such employee. The difference is that under 118 the subject of testimony is wa
ges ,thereby ,making the ER s act unlawful but not constituting a ULP while under
248 (f) it is ULP.
Therefore, 118 is not strikeable.
Art. 119 : It shall be unlawful for any person to make any material false statem
ent, report or record filed or kept pursuant to the provisions of this Code.
RECORD KEEPING
The records shall be kept and maintained in or about the premises of workplace o
r in the branch where the EE is regularly assigned, the keeping of the records i
n any other place is prohibited. (South Motorists vs. Tosoc)
WAGE RATIONALIZATION (RA 6727)
It is hereby declared the policy of the State to rationalize the fixing of mini
mum wages and to promote productivity-improvement and gain-sharing measures:
1. To ensure Decent standard of living for the workers and their families;
2. To guarantee the rights to its Just share in the fruits of production;
3. To enhance Employment generation in the countryside through industry dispersa
l; and
4. To Allow business and industry reasonable returns on investment, expansion an
d growth.
1.Advisory agency
National Wages and Productivity Commission
attached to the DOLE the policy and program coordination.
Give at least 5 major powers and functions of the National Wages and Productivit
y Commission :
a. To act as the national consultative and advisory body to the President and Co
ngress on matters relating to wages, incomes and productivity.
b. To formulate policies and guidelines on wages, incomes and productivity impro
vement at the enterprise, industry and national levels.
c. To prescribe rules and guidelines for the determination of appropriate minimu
m wage and productivity measures at the regional, provincial or industry levels.
d. To review regional wage levels set by the Regional Tripartite Wages and Produ
ctivity Boards .
Art. 126 : No preliminary or permanent injunction or temporary restraining order
may be issued by any court, tribunal or any entity against any proceedings befo
re the Commission or the regional Boards.
1. Give at least 3 major powers and functions of the Regional Tripartite and Pro
ductivity Boards within their territorial jurisdiction:
a.To develop plans, programs and projects relative to wages, incomes and product
ivity improvement for their respective regions.
b.To determine and fix minimum wage rates applicable in their region, provinces
or industries therein and to issue the corresponding wage orders, subject to gui
delines by the Commission.
c.To receive, process and act on applications for exemption from prescribed wage
rates as may be provided by law or any Wage Order. [Implementation of the plans
shall be through the respective offices of the DOLE but the Regional Boards sha
ll have technical supervision over the said DOLE offices.]
2. Art. 126 : No preliminary or permanent injunction or temporary restraining or
der may be issued by any court, tribunal or other entity against any proceedings
before the Commission or the regional Boards.
> The ECOLA now forms part regular wage
> Employees paid by results should receive not less than the applicable wage rat
es provided for 8 hours workday
Wage Order
Art. 123 : Whenever conditions in the region so warrant, the Regional Board shal
l investigate and study pertinent facts and, based on the standards and criteria
herein prescribed, shall proceed to determine whether a Wage Order should be is
sued.
In the performance of its wage-determining functions, the Regional Board shall c
onduct public hearings, consultations, giving notices to EE s and ER s groups, provi
ncial, city and municipal officials and other interested parties.
Any party aggrieved by the Wage Order issued by the Regional Board may appeal su
ch order to the Commission within 10 calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such appeal within 60
calendar days from the filing thereof.
Methods of Fixing
The determination of wages has generally involved two methods, the floor-wage meth
od and the salary-ceiling method.
The 1st method involves the fixing of determinate amount that would be added to
the prevailing statutory minimum wage.
In the 2nd method, the wage adjustment is applied to EE s receiving a certain deno
minated salary ceiling. (ECOP vs. NWPC)
2006 notes: the shift from the first method to the second method was brought abo
ut by labor disputes arising from wage distortions, a consequence of the impleme
ntation of the said wage orders. With the establishment of the second method as
a practice in minimum wage fixing ,wage distortion were minimized.
A severe contraction of the wage or salary differences is enough
Wage Distortion
Distortion where an increase in the prescribed wage rates results in the elimina
tion or severe contraction of intentional quantitative differences in wage salar
y rates between and among EE groups in an establishment as to effectively oblite
rate the distinctions embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation.
How is a wage distortion corrected? Any dispute arising from wage distortions s
hall be resolved through the grievance procedures under their CBA, and if it rem
ains unresolved, through arbitrary arbitration.
If there is no recognized labor union or there are no collective bargaining agre
ements, the dispute shall be settled through the National Conciliation and Media
tion Board, or if unresolved after 10 days of conciliation, through the NLRC whi
ch shall decide the dispute within 20 calendar days. (Art. 24) The law recognize
s the validity of negotiated wage increases to correct wage distortions. The leg
islative intent is to encourage the parties to seek solution to the problems of
wage distortions through voluntary negotiation or arbitration, rather than strik
es, lockouts, or other concerted activities of the EE s or management. (ALU-TUCP v
s. NLRC) In a case where a union went on strike over a salary distortion dispute
, the Court held the strike illegal. (Ilaw at Buklod ng Manggagawa vs. NLRC)
Wage Recovery
Art. 129 : Recovery of wages, simple money claims and other benefits
The Regional Director of the DOLE or any of the duly authorized hearing officers
of the Department is empowered, through summary proceedings and after due notic
e, to hear and decide any monetary claims and benefits, including legal interest
to a person employed in domestic or household service; Provided
a. Such complaint does not include claim for reinstatement
b. Aggregate money claims of each househelper does not exceed P5,000
> The complaint shall be resolved within 30 days from the date of filing of the
same.
Article 128
1.offshoot inspection
2.labor legislation in general
3.inspection of establishments and the issuance of order to compel compliance wi
th labor standards ,wage orders and other labor law regulations
2006 notes: regional director cannot enforce results of visitorial power when
Er contest the findings
Issues raised requires examination of evidentiary
matters
such matters not verifiable in the normal course of inspection.
Committed when:
In work/employment environment:
1.sexual favor is made as a condition in hiring or in the employment,re-employme
nt or continued employment or in granting favorable compensation,promotions or p
rivilege
2.Or the grant of sexual favor results in limiting,segregating the ee w/c in any
way would discriminate, deprive or diminish employment opportunities or otherwi
se adversely affect the ee.
3.above act results in an intimidating,hostile ,or offensive environment for the
employee
2006 notes: HOSTILE ,INTIMIDATING ENVIRONMENT ex: short skirt, or that table of bos
s filled with filthy pictures.
4.and such would impair employee s rights or privileges under existing labor laws.
4blue 95:it shall be the duty of employer or head to deter the acts of sexual ha
rassment and to provide procedures for the settlement and prosecution of acts of
sexual harassment.
Employer shall:
a.promulgate rules in consultation w/ and jointly approved by ee or students thr
ough their representative prescribing the procedure for investigation of sexual
harassment cases and adm sanctions.
b.create a committee on decorum and investigation of cases on sexual harassment
(w/c shall be composed of atleast 1 rep each from mgt,union, ee or students)
4blue 95:the employer or head shall be solidarily liable for damages arising fro
m acts of sexual harassment committed in the employment,education or training en
vironment if the er or head is informed of such acts by offended party and no im
mediate action is taken thereon.
2006 notes:the offended party may institute a separate and independent action fo
r damages and other affirmative relief
MARRIAGE
Art. 136 : Stipulation against marriage It shall be unlawful for an ER to :
a.Require as a condition of employment or continuation of employment that a woma
n EE shall not get married;
b.Stipulate expressly or tacitly that upon getting married a woman shall be deem
ed resigned or separated;
c.Actually dismiss, discharge, discriminate or otherwise prejudice a woman EE me
rely by reason of her marriage.
Duncan v Glaxxo Wellcome( Sept 2004)
Company may stipulate that ee s could not marry an ee of the competitor company si
nce there might exist a conflict of interest between company and the employee.
Such constitutes proper exercise of management prerogative since company has a r
ight to protect its trade secrets and EE cannot contend that is a violation of t
heir equal protection since such right can only be invoke against the State.
2006 notes: company may also stipulate in their policy that after ee resign, baw
al mag-apply sa competitor for 2 years (non competition clause)
company policy may also dictate that in case employee not follow contract, emplo
yee will pay (damage clause).
-- however, if no corporate secret is being protected, the above two clauses is
not necessary then if such clauses exist ,such would constitute involuntary ser
vitude.
MATERNITY
It is not obligation of ER to grant maternity benefits but employer has obligat
ion to enroll employee to SSS.
GRULE: Employee is granted 60 calendar days for maternity
Except(more than 60):
1.Ceasarean Delivery 78 calendar days
2.extension requested by EE with pay but shall be deducted from her unused vacat
ion and sick leave
3.in absence of such leave or no leave credits is available since ee exhausted i
t already, she may extend her leave whenever:
-extended leave is due to illness
-medically certified
-illness arises out of pregnancy, miscarriage,abortion
100% of daily average credit for 60 days (or 78 days) with ff conditions:
1.contribution for 3 months preceding
2.EE notify ER of pregnancy of probable delivery
3.full payment shall be advanced by ER within 30 days
4.during time collecting maternity, cannot collect sick benefits
--however, if still sick beyond 60 days, EE can now ask for sick leave benefit
--if you exhausted sick leave, go to SSS and ask for sick benefit.
2006 notes: Paternity leave(RA 8187) leave of 7 days with full pay to all married
male employees which is valid for 4 deliveries of legitimate spouse with whom he
is cohabiting.
GENERAL
Art. 137 : It shall be unlawful for any ER to
a.Deny any woman EE the benefits provided for in this Chapter or to discharge an
y woman employed by him for the purpose of preventing her from enjoying any of t
he benefits provided under this Code;
b.Discharge such woman on account of her pregnancy, or while on leave or in conf
inement due to her pregnancy;
c.Discharge or refuse the admission of such woman upon returning to her work for
fear that she may again be pregnant.
In L s contract of employment with Club E, it was stipulated that her employment a
s a dancer would cease once she gets pregnant. When L got pregnant, L was no lon
ger allowed to dance and since there were no other work available for which her
talents were suitable, her employment was terminated. Is the action legal? Yes.
It is both awkward and dangerous for her to dance during her pregnancy. Of cours
e the ER has the obligation to give her another job, but as stated in the proble
m there is no other work for which her talents are suited. It is not fair to req
uire the ER to continue employing her. (Alcantara)
A pharmaceutical company rejected the applications of 5 pregnant women as sales
representatives for contraceptive pills and family planning devices. Is this val
id?Yes. The company has the prerogative to select its EE s. What is unlawful is fo
r the ER to discriminate against or dismiss a woman by reason of their pregnancy
. (Alcantara)
Facilities
Art. 132 : The Secretary of Labor shall establish standards that will ensure the
safety and health of women EE s. In appropriate cases, he shall, by regulations,
require ER 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 t
he position without detriment to efficiency.
b.To establish a nursery in a workplace.
c.To determine appropriate minimum age and other standards for retirement or ter
mination in special occupations such as those of flight attendants and the like.
Art. 134 : (a) Establishments which are required by law to maintain clinic or in
firmary shall provide free family planning services to their EE s.
Is the ER required by law to give maternity benefits to its female workers? No.
Maternity benefits are to be paid in appropriate instances by the SSS. The only
obligation of the ER is to advance the benefit subject to reimbursement by the S
SS. (Alcantara)
Special classification Special Women Workers
X works as a hostess in a nightclub, she is paid a percentage of the lady s drink
ordered by customers. There are nights when she does not earn anything because t
here are no customers. Is X an EE of the nightclub? Yes. Any woman who is permit
ted or suffered to work, with or without compensation, in any nightclub, cocktai
l lounge, massage clinic, bar, or similar establishment, under the effective con
trol or supervision of the ER for a substantial period of time as determined by
the Secretary of Labor shall be considered an EE of such establishment for purpo
ses of labor and social legislation. (Art. 138)
Hospitality girls may ask for SSS from their employers.
MINORS
Art. II, Sec. 13, Const. : The State recognized the role of the youth in nation-
building and shall promote and protect their physical, moral spiritual, intellec
tual, and social well-being. It shall inculcate in the youth patriotism and nati
onalism, and encourage their involvement in public and civic affairs.
Section 1, Rule XII, Book III, IRR s : This Rule shall apply to all ER s except
1.to the Government and GOCC s and
2.to ER s of household helpers and persons in their personal service insofar as su
ch workers are concerned.
Discrimination
Art. 140 : Prohibition against child discrimination No ER shall discriminate aga
inst any person in respect to terms and conditions of employment on account of h
is age.
Would a company rule providing for lower wages for workers below 18 years who ar
e inexperienced violate the prohibition? No. The payment of lower wages is by re
ason of the worker s inexperience, not his age. There is no discrimination on acco
unt of the worker s minority. (Alcantara)
Employable Age
Section 12, RA 7610 as amended by RA 7658 :General rule: Children below 15 years
of age shall not be employed.
Exceptions:
1. Child works directly under the sole responsibility of his parents or legal gu
ardian and where only members of the ER family are employed, provided:
a. his employment neither endangers his life, safety, health and morals, nor imp
airs his normal development:
b. the parent or legal guardian shall provide the said minor child with the pres
cribed primary and/or secondary education.
2. Child is employed in entertainment or information through cinema,
theater, radio or television, provided:
c. Employment contract is concluded by the child s parents or legal guardian, with
the expressed agreement of the child concerned, if possible, and the approval o
f the DOLE.
d. The ER shall ensure the protection, health, safety and morals of the child;
e. The ER shall institute measures to prevent the child s exploitation or discrimi
nation.
f. The ER shall formulate and implement, subject to the approval and supervision
of competent authorities, a continuing program for training and skills acquisit
ion of the child.
g. The ER shall first secure, a work permit from the DOLE which shall ensure obs
ervance of the above requirements.
2006 notes: No child below 15 shall be employed except when he works directly un
der the sole responsibility of his parents/guardian and his employment does not
in any way interfere w/ his schooling.
Art. 139 : Any person, between 15 and 18 may be employed in any non-hazardous w
ork. In any hazardous work, the employable age is 18 and up.
Art. 141 : This chapter shall apply to all persons rendering services in househo
lds for compensation
Domestic or household service : Service in the ER s home which is usually necessar
y or desirable for the maintenance and enjoyment thereof and includes ministerin
g to the personal comfort and convenience of the member s of the ER s household, inc
luding services of family drivers. (Art. 141)
C was employed by A company to work as a maid in the cottages of its Baguio min
ing site to attend to the needs of its executives or guests who now and then vis
it the site. Is S a househelper or domestic servant? No. The services of a house
helper is rendered exclusively for the personal comfort and enjoyment of the fam
ily of the ER and are performed in the latter s home. Services rendered in an exec
utive cottage cannot be considered domestic. S must be considered a regular EE o
f the mining company. (Apex Mining vs. NLRC)
Non-Household Work Assignment
T lives in a compound where he operates a modest candy business. Sometimes, 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 rend
ered in connection with the candy business be compensated? For work rendered by
the maids and the family driver, they should be paid at the rate prescribed by l
aw for non-agricultural workers. (Alcantara) No household helper shall be assign
ed to work in a commercial industrial or agricultural enterprise at a wage or sa
lary rates lower than that provided for agricultural or non-agricultural workers
as prescribed therein. (Art. 145)
Conditions for Employment
M, 15 years old, worked as a maid in the house of L. She was paid in advance for
3 years and she agreed that she will work for L for the said period. Is there a
ny legal infirmity in the said agreement? Yes. The period contract exceeds the m
aximum set by the law. Art. 142 provides that the original contract of domestic
service shall not last for more than 2 years, although it may be renewed for suc
h periods as may be agreed upon by the parties. M s contract will therefore be goo
d for only 2 years. (Alcantara)
What are the minimum wages for househelpers?
Aside from the rights to minimum wage, what other rights are enjoyed by a househ
elper
a. Opportunity for elementary education if a househelper is less than 18 years o
ld (Art. 146)
b. Just and human treatment (Art. 147)
c. Board, lodging and medical attendance (Art. 148)
d. Indemnity for unjust termination of services of 15 days plus the compensation
already earned.
e. Funeral benefits if the househelper has no relatives with sufficient means in
the place where the head of the family lives. (Art. 1696, NCC) [F I B E J]
f. If househelper is unjustly dismissed,
> pay wages already earned + 15 days wages (Indemnity)
g. If househelper leaves without justifiable cause,
> forfeits any unpaid salary not exceeding 15 days
M works as a live-in labandera in the house of T somewhere in Quezon City. She w
orks for 11 hours a day. Based on their contract, she is paid P800.00. Is she en
titled to additional compensation? Yes. Although she is merely a househelper, sh
e should not be allowed to work more than 10 hours a day. (Art. 1695, NCC) Since
she worked for 11 hours daily, she should be paid an additional compensation be
yond the minimum wage of P800.00 set by the law.
Art. 150 : If the duration of the household service is not determined either in
the stipulation or by the nature of the service, the ER or the househelper may g
ive notice to put an end to the relationship of the service.
BAR: The weekly work schedule of a driver is as follows: Monday, Wednesday ,Fri
day is to drive car to bring and fetch the children to and from school.
Tuesday, Thursday and Saturday is to drive the family van to fetch merchandise f
rom suppliers and deliver the same to a boutique in a mall owned by the family.
Is the driver a househelper?
Held: NO, the driver is not a househelper since the driver renders driving servi
ces connected with the business of his employer, he is not to be considered as a
househelper and should be paid minimum daily wage for Tuesday, Thursday and Sat
urday of a driver of a commercial establishment.
HOMEWORKERS
Art. 155 : ER of homeworkers includes any person, natural or artificial, who for h
is account or benefit, or on behalf of any person residing outside the country,
directly or indirectly or though any EE, agent, contractor, sub-contractor or an
y other person:
a. Delivers 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. Sells any goods, articles or materials to be processed or fabricated in or ab
out a home then rebuys them after such processing or fabrication, either himself
or through some other person.
2006 notes: if mali and paggawa ,ER may ask for such worker to redo it without c
harge.
2006 notes:example of homeworkers are handicraft workers
ER Liability
Section 8, Rule XIV, Book III, IRR s : The ER shall be jointly and severally liabl
e to the EE s or homeworkers of the contractor or sub-contractor, in the same mann
er as if the EE s or homeworkers were directly engaged by the ER.
S represents in the Philippines the Sears chain of department stores in the US.
She sells wood and leather to housewives who makes these into wooden clogs accor
ding to the patterns and specifications of S. Is there an ER-EE relationship bet
ween S and the housewives? Yes. The housewives are considered homeweorkers and S
is their ER. (Alcantara)What is the liability of Sears? Sears is jointly and se
verally liable if S is not able to pay the wages of the homeworkers. (Sec. 8, R
ule XIV, Book III, IRR s)
Terms and conditions of employment involving money claims of homeworker shall be
heard by the Regional Director of the DOLE. Beyond that, the case falls under t
he jurisdiction of the Labor Arbiter.
Section 1, Rule I, Book VI, IRR s : This Rule shall apply to all establishments an
d undertakings, whether operated for profit or not, including educational, medic
al, charitable and religious institutions and organizations, in cases of regular
employment with the exception of the Government and its political subdivisions
including GOCC s.
EE Classification
1. Art. 280
a. Regular EE s
b. Project EE s
c. Casual EE s
d. Seasonal EE s
2. Art. 281
> Probationary EE
3. Others
> Contract-fixed period
ER Determination
What determines whether a certain employment is regular or casual is not the wil
l and words of the ER, much less the procedure of hiring the EE 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 case
s the length of time of its performance and its continued existence. (De Leon vs
. NLRC)
Tucor Industries, a company engaged in moving and storage of foods hired packers
and drivers pursuant to employment contracts which provided that the workers we
re employed on as-needed basis and considered daily-hired . Are they considered regul
ar EE s? Yes. Packing and driving activities are usually necessary and desirable i
n Tucor s usual business. They are entitled to security of tenure, the provisions
of the written agreement to the contrary notwithstanding. (Tucor vs. NLRC)
1.REGULAR EE S
1.Those who have been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the ER, their employment not bein
g fixed for a specific project or undertaking the completion or termination of w
hich has been determined at the time of the engagement, or seasonal nature and t
he employment is for the duration of the season. (Art. 280)
2.Casual EE s who have rendered at least 1 year of service is continuous or broken
; they are considered regular EE s with respect to the activities in which they ar
e employed; their employment shall continue while such activity exists. (Id.)
3.A probationary EE who is allowed to work after the probationary period. (Art.
281)
4.Learners who have been allowed or suffered work during the first 2 months if t
raining is terminated by the ER before the end of the stipulated period through
no fault of the learner. (Art. 75)
H applied for employment with Holiday Inn and was accepted for On-the-job trainin
g as telephone operator for 3 weeks. After the completion of the training she was
employed on a probationary basis for 6 months. Four days before the said period,
she was dismissed by the hotel on the ground that she failed to meet the standar
ds of the hotel. Is the dismissal valid?No. At the time of her dismissal, she wa
s already a regular EE since the on-the-job training was already her probationary p
eriod. She was not dropped after that period. Even granting that the probation di
d not end with the training, there is no reason why that period should not be in
cluded in the stipulated 6-month period probation. (Holiday Inn vs. NLRC)
L was hired as a component mechanic by a manufacturing firm for a probationary p
eriod for 6 months. Management decided not to hire her after the probationary pe
riod. After a month, the company again hired L for another 6-month probationary
period. After the 2nd 6-month probationary period, she was dismissed. Is L a reg
ular EE? Yes. The nature of her job required her to perform activities which are
necessary and desirable in the usual business of her ER. She was also rehired a
fter the probationary employment extended to her. This fact of rehiring negates
any claim that she failed to qualify as a regular EE. Successive hirings and fir
ings cannot be resorted to by the ER to avoid obligations imposed by law for the
protection and benefit of probationary EE s. (Octaviano vs. NLRC)
J is employed on a probationary period for 3 months. Although the ER was not sat
isfied with his performance, he is allowed to work after the end of the 3-month
period. Has J become a regular EE? Yes. An EE is allowed to work after a probati
onary period shall be considered a regular EE. (Alcantara)
Nature of Work
The primary standard to determine a regular employment is the reasonable connect
ion between the particular activity performed by the EE in relation to the usual
business or trade of the ER. (De Leon vs. NLRC) The connection can be determine
d by considering the nature of the work performed and its relation to the scheme
of a particular business or trade in its entirety. Also, if the EE has been per
forming 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 t
hat activity to the business. Hence, the employment is also considered regular,
but only with respect to such activity and while such activity exists. (Id.)
2005 notes:GRule is that, if lampas 1 year, then EE is deemed regular except if
project EE (or private school teacher see illustration on page 4) an exception to
exception is that whenever such project EE is constantly rehired, then ,he will
be a regular EE.
1.B, was hired by a Buddhist Temple as secretary and interpreter. She also atten
ded personally to some needs of the Head Monk. Is B a regular EE or a domestic h
elper? B is a regular EE. Her functions were essential and important to the oper
ation and religious function of the temple; they could not be categorized as mer
e domestic work.
2.Stevedores were employed by corporation engaged in deep-sea fishing to unload
the tuna fish catch from latter s vessels into refrigerated vans. Their work was i
ntermittent depending on the arrival of fishing vessels. There were also times w
hen the stevedores worked on vessels belonging to other companies. Are the steve
dores regular EE s? Yes. They were engaged to perform activities usually necessary
or desirable in the usual business or trade of their ER s. The activity of catchi
ng fish is a continuous process; it cannot be considered as a specific project o
r a seasonal activity. Their working on other vessels does not militate against
the existence of the ER-EE relationship since it is but natural for the worker t
o seek other employment during the periods of temporary la-off. (RJL Martinez vs
. NLRC)
3.An electric cooperative only extended permanent appointments to linemen, secre
taries, clerks and electricians after 6 months from the date of their hiring. Ma
y the ER treat these workers as regular EE s only from the date they were extended
permanent appointments? No. Their services are usually necessary or desirable i
n the usual trade or business of the cooperative. (Central Negros Electric vs. N
LRC)
1.A company engaged in construction hired carpenters and issued them some notice
s of employment that they were hired for specific projects and their employment
shall be deemed automatically terminated at the completion of the project. Howev
er, when the project to which they were assigned were completed, they would be i
mmediately assigned to the next project. Considering that they have been working
for a number of years, are they regular EE s? Yes. They perform activities usuall
y necessary or desirable in the usual business of the company. They are consider
ed non-project EE s of the construction company. (Fegurin vs. NLRC)
2.F, a skilled welder was hired by DM Consunji for several projects wherein he w
as assigned. There 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 service
s to other ER s. Is he a regular EE? No. F is a project EE. (Fernandez vs. NLRC)
Contract to Contract
1.P was hired by a textile firm as a machine operator. P s employment contract sti
pulates that the company shall make an annual assessment of his performance and
his continued employment shall depend on said evaluation. Is the stipulation val
id?No. It determines the security of tenure enjoyed by P who is a regular EE. Hi
s continued employment is made to depend upon the whims of the ER. (Alcantara)
2.M Co., is engaged in the manufacture of furniture for export. It has regular c
ustomers but also receives special orders. It hires temporary workers for special
orders. These are made to sign temporary contracts. Are these workers considered
regular workers? Yes. They are engaged in activities which are usually necessar
y of desirable in the usual business or trade of the ER. Significantly, the spec
ial orders are not seasonal but more or less regular, requiring the continuous s
ervices of the temporary workers. The temporary employment contracts have little
probative value. (Mehitabel Furniture vs. NLRC)
3..M 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 assi
gned to work outside the plant of the ER. Every 3 months, he was made to fill up
and sign an employment contract relating to a particular phase of a work in a s
pecific project. Is M a regular EE?Yes. He was assigned to perform tasks which a
re usually necessary or desirable in the usual trade or business of the ER. Desp
ite the signing of employment contracts, the work did not end on a project to pr
oject basis. He continued to perform the same kind of work throughout his period
of employment. (Magante vs. NLRC)
2.SEASONAL EE S
2005 notes: employment depends on season, usually occurring in agricultural area
.
Agricultural workers were hired by the owners of a rice and sugar land to perfor
m particular phases of agricultural work necessary in rice production, after whi
ch they were free to render services. Considering that they rendered services fo
r many years, in their employment, though seasonal, deemed regular? No. They are
considered project or seasonal EE s .their employment legally ends upon the compl
etion of the project or the season. (Mercado vs. NLRC)
3.CASUAL EE S
An employment is casual when the EE is engaged to perform tasks or activities wh
ich are not usually necessary or desirable in the usual business or trade of the
ER. (Art. 280)
Jai Alai Manila hired a mason and plumber to do renovation work on its building.
The work lasted for 11 months. Are the mason and plumbers regular EE s? No. They
were engaged for a specific project or undertaking. They are casual EE s and as su
ch do not enjoy the security of tenure since they work for only 11 months. (Phil
ippine Jai Alai vs. Clave)
4.CONTRACT-FIXED PERIOD
A was engaged as athletic director by Brent School for a fixed term of 5 years.
She was not rehired after that term. Is she a regular EE? No. A s employment was f
or a fixed period, her employment ended. It does not necessarily follow that whe
re the duties of the EE s entail activities which are usually necessary or desirab
le in the usual trade or business of the ER, the parties should not be forbidden
to stipulate any period of time for these activities. There is nothing essentia
lly contradictory between a definite period of employment and the nature of the
EE s duties. (Brent vs. Zamora)
Give the criteria under the fixed period contracts of employment cannot be said
to be in circumvention of the worker s security of tenure.
1.The fixed period of employment was knowingly and voluntarily agreed upon by t
he parties, without any force, duress or improper pressure being brought to bear
upon the EE and absent any other circumstances vitiating his consent; or
2.It satisfactorily appears that the ER and EE dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former
on the latter. (Pantranco vs. NLRC)
3.When such stipulations were not designed to circumvent the laws on security of
tenure. (Brent vs. Zamora)
C was engaged by a trucking company to work as a truck driver for a period of si
x months. It appears that all drivers of the company were hired on fixed contrac
t basis. The company merely filled in the blanks in a mimeographed form with the
corresponding driver s data. After the 6-month period, C s services were terminated
. Was this a valid termination? No. The contract for a fixed period was a clever
scheme to prevent its EE s from becoming regular EE s. he should be considered a re
gular EE. (Cielo vs. NLRC)
15 years after his dismissal for cause. A was re-hired as a driver for 1 month.
Did such re-hiring result in his reacquisition of his former regular status?No.
The contract specifically provided for a fixed term. (Pantranco vs. NLRC)
5.PROJECT EE S
2005 notes: It is coterminous with a project, that s why their employment is fixed
for a specific project.
A project EE is one whose employment has been fixed for a specific project or un
dertaking, the completion or termination of which has been determined at the tim
e of the engagement of the EE or where the work or service to be performed is se
asonal in nature and the employment is for the duration of the season. (Art. 280
)
Test of Project EE s
The test is whether or not the project EE s are assigned to carry out a specific p
roject or undertaking the duration and scope of which are specified at the time
the EE s are engaged for that project. (ALU-TUCP vs. NLRC)
PPI, a company providing construction supervision of the Manila Expressway hired
R for a term of 24 months. After the expiration of the period, he was hired for
another term of 10 months, and then for 19 months. All these were entered durin
g various stages prior to the completion of the construction project. Was R a re
gular EE of PPI? No. He was hired in a specific project or undertaking as a driv
er. He was a project EE whose employment terminated upon the expiration of his e
mployment contract or upon the completion of the project. (Rada vs. NLRC)
A 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 r
egular?No. They are project EE s whose work is co-terminus with the project for wh
ich they are hired. (Sandoval Shipyards vs. Leogardo)
Consumer Pulse hired field interviewers on specified project basis for a definit
e period of time. Many of the interviewers worked for several projects. Generall
y, 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 co
ntracts. Are the filed interviewers considered regular EE s? No. The interviewers
were hired for specific projects the completion or termination of which are dete
rmined at the start of their employment. (Manansag vs. NLRC)
A construction firm hired as project EE s several workers. Instead of being assign
ed solely to the job sites, they were also made to work as inventory clerk or wa
rehouseman in the company s central shop. Are they project EE s? No. Their work did
not end upon the completion of a project. They perform their jobs even after a j
ob had been finished. Since they performed tasks vital and indispensable to the
efficient administration and completion of the company s various projects, they ar
e considered regular EE s. (Capitol Industrial vs. NLRC)Project EE s are not entitle
d to separation pay as their work was coterminous with the completion of the pro
ject. (Sandoval Shipyards vs. Leogardo)
6.PROBATIONARY EE S
What is a probationary employment? It is employment for a specified period gene
rally no exceeding 6 months for the purpose of determining whether the EE can qu
alify for regular employment in accordance with reasonable standards prescribed
by the ER.
Purpose
Justify the rights of the ER to fix a probationary period of employment? The ER
has the right to select his EE s that the ER may set or fix a probationary period
within which the latter may test and observe the conduct of the former before hi
ring him permanently. (Grand Motors vs. Minister of Labor) A probationary appoin
tment is made to afford the ER the opportunity to observe the fitness of a proba
tioner while at work, and to ascertain whether he will become a proper and effic
ient EE. (International Catholic Migration Commission vs. NLRC) It is necessary
for the probationary EE to undergo a period of probation to test his qualificati
ons, skills and experience. (Grand Motors)
Duration/Exception
May a company impose a longer probationary period than 6 months? Yes. Generally,
the probationary period of employment is limited to 6 months. The exception to
this general rule is when the parties to an employment contract may agree otherw
ise, such as when the same is established by company policy or when the same is
required by the nature of the work to be performed by the EE i.e. where a probat
ionary period was set for 18 months, especially where the EE must learn a partic
ular kind of work such as selling or when the job requires certain qualification
s, skills, experience or training. (Buiser or Leogardo)
Absorbed EE s
Private respondents could not be considered probationary EE s because they were al
ready well-trained in their respective positions. (Cebu Stevedoring vs. Regional
Director)
2006 notes: school could not terminate part time teachers between term or semest
er, but after such term or semester, school has no obligation to hire them again
.
2006 notes: with regard insurance broker who could not pass exam even though out
standing in his sales, he cannot insist on continuing work that he is not offici
ally qualified (he could not invoke that probationary ee who work beyond the per
iod would be considered as regular)
2006 notes: after period of probationary work, it turned out that ee has a tb, a
nd he is terminated SC ruled that disease is not considered as a just cause for te
rmination, unless there is a finding of public health that it cannot be cured an
d it is there for 6 months ,so such ee would then be terminated with pay for 1 m
onth.
-- except, if you are made to work beyond the probationary period, then if you h
ave illness and if you can show an approval from public health officer that you
are cured, then you are deemed regular.
SUMMARY
GRULE: Regular Employee- engage to perform activities usual and necessary to tra
de of ER
Exceptions( at the start of employment, ee is told by the er about his status):
1.Project Worker
employment has been fixed for a specific project which has been determined at th
e time of engagement of the ee as such, the period is not the determining factor
so that even if the period is more than 1 yr, ee does not become regular (like
the carpenter since only for a particular duration or project).
2006 notes:becomes regular if job is usually necessary or desirable in the usual
business or trade and repeated rehiring (for similar tasks w/c is vital and ind
ispensable to the business)
Non-Project: engage in a non-project endevour and enjoys fullness of security of
tenure.
2.Probationary
conditional employment (if you re not told about your status, then you are regular
)
Not exceed 6 months
2006 notes:if allowed to work after the period, he shall be considered as regula
r ee.
Except:
a.covered by apprenticeship agreement stipulating a longer period (if your appre
ntice and you were hired by same ER ,you don t have to undergo probation)
b.voluntary agreement of parties (especially when nature of work requires longer
period)
c.employer gives the ee a second chance to pass the standards set
3.Seasonal
Work to be performed is seasonal and employment is for the duration of the seaso
n.
He may be industrial if it is with retail (like in Xmas where more workers are h
ired, they are doing usual and necessary work for er but not regular since they
are informed) and natural (agriculture).
4.Casual
Activity performed is not usually necessary/desirable in the usual business of e
r, not project and not seasonal.
Except:
rendered at least 1 yr of service whether such service is continous or broken, h
e is considered REGULAR ee with respect to the activity in which he is employed
and his employment shall continue while such activity exist.
Retired EE who was ask to return, cannot be deemed as regular since he did retir
e, but casual.
5.Managerial Worker
Moment you don t meet sales target, you can be terminated since your part of a man
agerial team(however ,SC is lenient with regard rank and file)
6.Fixed Term Worker (board director or chairman)
Period is agreed upon knowingly and voluntarily by the parties without force, du
ress or improper pressure exerted on the employee.
And such term is not resorted to defeat the rights of the workers.
After a term you can be dismissed, so long as term not used to circumvent labor
laws, such term shall be upheld.
TERMINATION OF EMPLOYMENT
Art. 278 : The provisions of this Title shall apply to all establishments or und
ertakings, whether for profit or not.
Confidential and managerial are also entitled to security of tenure, fair standa
rds of employment and the protection of labor laws. (Inter-Orient Maritime vs. N
LRC) Probationary and contractual EE s enjoy security of tenure but only to a limi
ted extent. That is, they remained secure in their employment during the period
of time their respective contracts remained in effect. (Labajo vs. Alejandro)
Pakiao workers who by the nature of their work are considered regular workers en
joy security of tenure. (Dy Keh Beng vs. ILMU) However, if the circumstances ind
icate that they are in reality independent contractors, then they do not enjoy s
ecurity of tenure. (Alcantara)
Security of Tenure
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. (Alcantara)
Is there an express constitutional guarantee of the security of tenure of an EE?
Yes. Art. XIII, Sec. 3, Const. (Rance vs. NLRC)
Nature of Rights
Termination of employment is not anymore a mere cessation or severance of contra
ctual relationship but an economic phenomenon affecting members of the family. T
his explains why under the board principles of social justice the dismissal of E
E s is adequately protected by the laws of the state. (Alhambra vs. NLRC) However,
the worker s right to security of tenure is not an absolute right for the law pro
vides that he may be dismissed for cause. The law in protecting the rights of th
e laborers, authorizes neither oppression nor self-destruction of the ER. (MERAL
CO vs. NLRC)
Rationale Regulation
The right of ER to freely select or discharge his EE s is regulated by the State,
because the preservation of the lives of citizens is a basic duty of the State,
more vital than the preservation of the corporate profit. (Llosa-Tan vs. Silahi
s)
MANAGEMENT RIGHTS
1. Right to manage people in general : Except as limited by special laws, an ER
is free to regulate, according to his own discretion and judgment, all aspects o
f employment. (San Miguel vs. Ople)
2. Right to just share in the fruits of production : Every business enterprise e
ndeavors to increase its profits. In the process it may adopt or devise means d
esigned toward the goal. The free will of management to conduct its own business
affairs to achieve its purpose cannot be denied. (Id.)
3. Right to discipline : The ER has the prerogative to instill discipline in his
EE s and to impose reasonable penalties, including dismissal, on erring EE s pursua
nt to company rules and regulations. (San Miguel vs. NLRC)
4. Right to transfer EE s : It is management prerogative to transfer an EE from on
e office to another within the business establishment, provided there is no demo
tion in rank or diminution of his salary, benefits and other privileges. (Yuco C
hemical vs. Minisrty of Labor) An EE s right to security of tenure does not give h
im such a vested right in his position as would deprive the company of its prero
gative to change his assignment or transfer him where he will be most useful. (P
TTC vs. NLRC) The managerial prerogative, however, to transfer personnel, must b
e exercised without grave abuse of discretion and putting to mind the basic elem
ents of justice and fair play. It cannot be used as a subterfuge by the ER to ri
d himself of an undesirable worker. Nor where the real reason is to penalize an
EE for his union activities and thereby defeat his right to self-organization. (
Id.)
5. The right to demote : It is management prerogative to tranfer, demote, discip
line and even dismiss an EE to protect its business, provided it is not tainted
with unfair labor practice (Petrophil vs. NLRC)
6. Right to dismiss : The right of the company to dismiss its EE s is a measure of
self-protection. (Reyes vs. Minister of Labor) An ER cannot legally be compelle
d to continue with the employment of a person who admittedly was guilty of malfe
asance towards his ER, and whose continuance in the service of the latter is pat
ently inimical to his interests. (Manila Trading vs. Zulueta)
2006 notes: there is no obligation for NLRC to award financial assistance for se
rious misconduct, but for other causes, you can have financial assistance.
2006 notes:in just causes, usually court penalize offender ee with only a mere 3
0-day suspension rather than termination since there must be a reasonable propor
tionality between the offense and the penalty imposed therefor so if di naman masy
ado mabigat ang ginawa niya, masyado namang disproportionately heavy ang termina
tion eh suspension na lang.
B. JUST CAUSE : WILLFUL DISOBEDIENCE
What are the requisites in order that willful disobedience may constitute a just
cause for terminating employment?
The orders, regulations, instructions of the ER or his representative must be:
a.Reasonable and lawful has reference not only to the kind and character of dire
ctions, but also the manner in which they are made.
b.Sufficiently known to the EE.
c.In connection with the duties which the EE has been engaged to discharge.
The ER s conduct must have been willful or intentional, willfulness being characte
rized by a wrongful and perverse mental attitude rendering the EE s act inconsiste
nt with proper subordination.
1. Not every case of insubordination or willful disobedience by an EE of a lawfu
l work-connected order of the ER or its representatives is reasonably penalized
with dismissal. There must be a reasonable proportionality between the offense a
nd the penalty imposed therefor. (Gold City vs. NLRC) Past infractions, to which
the EE was already meted out disciplinary measures cannot be used as a justific
ation for EE s dismissal from service of the current infraction does not suffice a
s a ground for just termination. (Filipino vs. Ople)
2. M, an EE of Tritran was told by the personnel manager to see right away the p
resident to apologize for his past misdeeds. He was dismissed because he failed
to see the company president. Is the dismissal justified?No. The directive to se
e the company president was neither reasonable nor one connected with his duties
. (Mancho vs. NLRC)
F. OTHERS
1. Other examples of just termination:
> Courtesy resignation (Batongbacal vs. Associated Bank)
> Faculty members of a school whose appointments as department heads are termina
ted. (La Sallette vs. NLRC)
Fraud has been defined as any act, omission, or concealment which involves a bre
ach of a legal duty, trust or confidence justly reposed and is injurious to anot
her. To constitute a just cause for terminating the EE s services, the fraud must
be committed against the ER, or representative and in connection with the EE s wor
k. Thus, fraud committed by an EE against 3rd persons not in connection with his
work and which does not in any way involve his ER not a ground for the dismissa
l of the EE. (DOLE, Manual)
1. Example of Dishonesty
> Falsification of time cards. (SMC vs. NLRC)
> Theft of company property. (Firestone vs. Lariosa) However, the penalty must b
e proportional to the offense committed i.e. EE should not be dismissed for thef
t of used motor oil of minimal quantity if the EE has no previous record. (Gelma
rt vs. NLRC); EE should not be dismissed for theft of lead pipe to be used for p
ersonal use if the EE has no previous record. (PAL vs. PALEA); president of unio
n should not be dismissed for leading an unexpected strike which lasted for 2 days
and which resulted in a loss to the company of only P3,000.00 (Sampang vs. Inci
ong); counter clerk of PLDT should not be dismissed for tampering with a phone b
ill where the worth of the tampering only amounted to P30.00 and it was the firs
t offense in 7 years (PTTC vs. NLRC). Note that the length of time the EE is emp
loyed and the fact that it was the EE s 1st offense is an important factor in many
of these cases wherein the penalty of dismissal was deemed to harsh. Where a pe
nalty less punitive would suffice, whatever missteps may be committed by the wor
ker should not be visited with the supreme penalty of dismissal. (Almira vs. BF
Goodrich)
> Circulating fake tickets. (Ibarrientos vs. NLRC)
2. Explain loss of confidence as a ground for just termination : The basic premi
se for dismissal on the ground of loss of confidence is that the EE concerned h
olds a position of trust and confidence. (Quezon Electric vs. NLRC) Mere existen
ce of basis for believing that the EE has breached the trust of ER is sufficient
and does not require proof beyond reasonable doubt. (Kwikway vs. NLRC) However,
to constitute as valid ground, it must be substantial and not arbitrary, and mu
st be founded on clearly established facts sufficient to warrant the EE s separati
on from work. (Labor vs. NLRC)
3. Examples of loss of confidence as ground for just termination :
> GM of hotel found to have anti-Filipino tendencies, who did not perform his f
unctions properly and who requisitioned wines for personal use. (Riker vs. Ople)
> Director who represented to the company that machinery brought were brand-new
when in fact they were second-hand. (Pepsico vs. NLRC)
> Bank teller s act allowing encashment of checks over the counter without verific
ation of drawer s signature. (Allied Bank vs. Castro)
> Violation of the company sales policy of distributing its goods to as many cus
tomers as possible by a salesman who made it appear that they were sold to many
customers. (Filipro vs. NLRC)
> Engaging in business other than that of ER, if the activities tend to injure o
r endanger the business of the ER or the EE is unable to give time and attention
to the discharge of his duties. (Azucena)
> Competing with ER s business. (Azucena)
> Repeated shortages incurred by a bill collector, although resulting in no mate
rial damage as the amounts were returned. (Piedad vs. Lanao del Norte Electric C
ooperative)
5 EE 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 EE s held no position involving trust and confidence, is loss
of confidence a ground to dismiss them? No. The offense they committed is not w
ork-related. The pilferage could have been effected even if they were not EE s of
the cooperative. (Quezon Electric Cooperative vs. NLRC) Compare this with the ca
se of Flores vs. NLRC, where the same act constituted a ground of serious miscon
duct and breach of trust.
J, a checker, was dismissed by San Miguel for breach of trust due to possible in
volvement in a burglary incident. The dismissal was effected despite J s acquittal
in a criminal case for the said offense. Is the dismissal lawful?No. The termin
ation of rank and file EE s due to breach of trust requires proof of actual involv
ement in the acts constituting the offense. (SMC vs. NLRC)
Art. 283 : The ER may also terminate the employment of the EE due to:
1. the Installation of labor saving device(automation).
2. redundancy
3. retrenchment to prevent losses.
4. closing or cessation of operation of the establishment or undertaking.
5. ailment
Art. 284: EE who has been found to be suffering from and Disease and whose conti
nued employment is prohibited by law or is prejudicial to his health as well as
to the health of his co-EE s.
Separation Pay
2006 notes:as such if it is closure due to serious losses, the employee is not
entitled to a separation pay.
REDUNDANCY
Redundancy exists where the services of an EE are in excess of what is reasonabl
y demanded by the actual requirements of the enterprise; a position is redundant
when it is superfluous, and superfluity of a position or positions may be the o
utcome of a number of factors such as:
1. the overthrowing of workers
2. decreased volume of business or
3. the dropping of a particular product line or
4. service activity previously manufactured or undertaken by the enterprise.
Redundancy is an ER s personnel force, however does not necessarily or even ordina
rily refer to duplication of work. That no other person was holding the same pos
ition which the dismissed EE held prior to the termination of his services does
not show that his position had not become redundant. (Escareal vs. NLRC)
CLOSURE OF BUSINESS
The burden of proving that the termination was for a valid or authorized cause s
hall rest on the ER by showing its audited financial statement. (Indino vs. NLRC
)
Is the ER required to pay separation pay for closure of business due to the seri
ous business losses?No. The cases of State Investment House vs. CA, Mendoza vs.
NLRC, and the Mindanao Terminal vs. Minister of Labor provide that the rule in A
rticle 283 with respect to separation pay applies only to closure not due to bus
iness reverses.
2006 notes: if closure is not voluntary on part of ER , like when a law is impos
ed so as for the employer to close, then no separation pay to ee is needed.
2006 notes: if an employee is dismissed for just cause, he is not entitled to te
rmination pay, however, in case of closure of establishment, the ee is always gi
ven termination pay.
2006 notes:separation pay need not be paid to employees if the business has clos
ed or ceased operations due to serious losses or financial reverses duly proven.
2006 notes: if closure is involuntary on part of ER, then no benefits is paid to
workers.
RETRENCHMENT
What are the general standards to determine whether the retrenchment is valid?
1. The losses expected should be substantial and not merely de minimis in extent
.
2. The substantial loss apprehended must be reasonably imminent, as such imminen
ce can be perceived objectively and in good faith by the ER.
3. It must be reasonably necessary and likely to prevent the expected losses.
4. The ER should have taken other measures prior or parallel to the retrenchment
to forestall losses. I. e. ; cut other costs other than labor costs.
5. Alleged losses if already realized, and the expected minimum losses sought to
be forestalled, must be proved by sufficient and convincing evidence. (evidence
is using comparative figure not audited financial statement)
Distinguish redundancy from retrenchment? Redundancy means that the position of
the EE has become superfluous, an excess over what is actually needed, even if t
he business reduction or reverses.
2006 notes:moment it is serious loss like bankruptcy no need to pay ee anymore
2006 notes:fire burned down ee cannot ask for separation, kasi 6 months cessation
of operation do not constitute closure.
3 basic Requisites of Valid Retrenchment:
1.necessary to prevent losses and such losses are proven
2.written notice to the employees and to the Dept of Labor at least one month pr
ior to the intended date of retrenchment (mandatory)
3.payment of separation pay
AILMENT OR DISEASE
If the EE suffers from a disease and his continued employment is prohibited by l
aw or prejudicial to his health or to the health of his co-EE s, the ER shall not
terminate his employment unless there is a certification by a competent public h
ealth authority that the disease is of such nature or at such a stage that it ca
nnot be cured within a period of 6 months even with proper medical treatment. (S
ec. 8, Rule 1, Book VI, IRR s)
A medical certificate issued by the company s own physician, is not a competent pub
lic health authority.
2006 notes:even if there is no illegal dismissal, there may be an award for sepa
ration pay provided that he is paid separation pay equivalent to at least one mo
nth salary or to one-half month salary for every year of service whichever is gr
eater, a fraction of atleast 6 months being considered as one whole year.
2006 notes: even voluntary resignation due to ill health may be paid termination
pay for reasons analogous to those contemplated.
Other Causes for termination:
1.disease,
2.retirement,
3.filing of certificate of candidacy,
4.conflict of interest,
5.permanent disability,
6.continuation of employment is prohibited,
7.conviction of a crime,
8.CARL if closure is involuntary on part of ER since imposed by law (CARL), so no
benefits for ee.
PROCEDURE TO TERMINATE EMPLOYMENT
TWO FACETS OF VALID TERMINATION
1. THE LEGALITY OF THE ACT OF DISMISSAL WHICH CONSTITUTES DISCHARGE WITH JUST(AU
THORIZED) CAUSE (SUBSTANTIVE DUE PROCESS);
2006 notes: investigation is a must however it can be do away if EE admits his
fault or if there s an investigation handled by the piscal so it eliminates purpos
e of trial, but if it is the wife of the accused ee who nag makaawa, still there
is a need for investigation.
2. THE LEGALITY IN THE MANNER OF DISMISSAL WITH DUE PROCESS( PROCEDURAL DUE PROC
ESS)
2006 notes: substantive due process mandates that an employee can only be dismis
sed based on just or authorized causes.
Procedural due process requires that the ee can only be dismissed after he has b
een given an opportunity to be heard.
2006 notes:the import of due process necessitates the compliance of these two fa
cets.
3.if termination is brought about by the completion of the contract or phase the
reof, no prior notice is required.
If termination is brought about by the failure of an employee to meet the standa
rds of the employer in case of probationary employment, it shall be sufficient t
hat a written notice is served the employee within a reasonable time from the ef
fective date of termination
Burden of Proof
Art. 277 : The burden of proving that the termination was for a valid or authori
zed cause shall rest on the ER.
Degree of Proof
In administrative or quasi-judicial proceedings, proof beyond reasonable doubt i
s not required as basis for a judgment of the legality of an ER s dismissal of an
EE, nor even preponderance of evidenced, substantial evidence being sufficient.
(MERALCO vs. NLRC)
Condonation
Having condoned the misconduct of the EE and pardoned the latter, he is deemed t
o have lost or waived his right to insist on the ER s acts as a ground for dismiss
al. (2004 Azucena)
PROCEDURAL DUE PROCESS
1.) 2 Notice Rule
The law requires that the ER must furnish the worker sought to be dismissed with
two written notices before termination of employment can be legally effected:
1. Notice which apprises the EE of the particular acts or omissions for which hi
s dismissal is sought; and
2. Subsequent notice which informs the EE of the ER s decision to dismiss him. Fai
lure to comply with the requirements taints the dismissal with illegality. (Peps
i-Cola vs. NLRC)
2.) Opportunity to be Heard
1. An EE must be given ample opportunity prior to his dismissal to adequately pr
epare for his defense. By ample opportunity is meant every kind of assistance that
management must be accord to the EE to enable him to prepare adequately for his
defense. Under the rules, indeed workers may be provided with a representative
. (Ruffy vs. NLRC) The requirement of hearing affords the EE the opportunity to
answer his ER s charges against him and accordingly to defend himself therefrom be
fore dismissal is effected. (Salaw vs. NLRC)
2. No hearing is required if the grounds for dismissal or termination of service
are based on authorized causes.. (Witshire vs. NLRC)
.
3. W was called to the Office of the General Manager and was told that she was b
eing charged with discourtesy and insubordination. During that time, she was als
o called to explain her side. As she could not give an explanation, she was dism
issed. Is the dismissal valid? No. She was denied procedural due process. She wa
s not given ample opportunity to be heard and to defend herself.
4. 36 conductors of a bus were dismissed after investigations conducted by the J
ago and the fiscal found out that they defrauded the company. Is the dismissal v
iolative of due process? No. For the company to conduct its own investigation is
a duplication of the JAGO and the city fiscal s investigation. (BLTB vs. NLRC)
5. D was dismissed by his ER 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 process?Yes. As compared to the BLTB case, the findings of the
city fiscal were based solely on the affidavit of the accused-turned state witne
ss. The substantial evidence requirement is not present. (China City Restaurant
vs. NLRC)
6. S was dismissed by his ER due to his well documented involvement in pilferage
. Prior to dismissal, he was called to a meeting of all delivery personnel to di
scuss pilferage incidents. He denied involvement therein. Later he was dismissed
. Is the dismissal violative of due process? Yes. The meeting called by the ER d
oes not qualify as the hearing required by law. (Segismundo vs. Montalvo)
CONSEQUENCES OF TERMINATION
4 REMEDIES OF AN EMPLOYEE:
1. reinstatement
2. separation pay
3. full backwages
4. damages
REINSTATEMENT
Reinstatement is a restoration to a state which one has been removed or separate
d. It is the turn to the position from which he was removed and assuming again t
he functions of the office already held. Reinstatement presupposes that the prev
ious position from which one had been removed still exists, or that there is an
unfilled position more or less of a similar nature as the one previously occupie
d by EE (NATU vs. Secretary of Labor)
EFFECT- RECEIPT
EE s who received their separation pay are not barred from contesting the legality
of their dismissal. The acceptance of those would not amount to estoppel. (San
Miguel vs. Javate)
BACKWAGES
Backwages in general are granted on grounds of equity which a worker has lost du
e to his illegal dismissal. (Torillo vs. Leogrardo) As a general rule, an EE is
entitled to backwages only where his dismissal is due to the unlawful act of the
ER or to the latter s bad faith. (Reyes vs. Minister of Labor) While generally an
order of reinstatement carries with it an award of backwages, the court may not
only mitigate, but also absolve the ER from liability fro backwages where good
faith is evident. (Durabilt vs. NLRC)
Separation pay is the amount that an EE receives at the time of his severance fr
om the service and is designed to provide the EE with the wherewithal during the
period that he is looking for another employment. (Torillo vs. Leogardo) Backwag
es represent compensation that should be earned but not controlled because of th
e unjust dismissal. (Lim vs. NLRC) The basis of computing the two are different,
the 1st being usually the length of the EE s service and the 2nd the actual perio
d when he was lawfully prevented from working. (Id.)
COMPUTATION OF BACKWAGES
Art. 279 : An EE who is unjustly dismissed from work shall be entitled to full b
ackwages, inclusive of allowances, and to his other benefits or their monetary e
quivalents computed from the time his compensation was withheld from him up to t
he time of his actual reinstatement.
2005 notes: However, in the case of Retuya v NLRC, reinstatement is no longer fe
asible since Insular Builders has ceased operations. Absent any showing that its
business was deliberately stop to avoid reinstatement, the EEs amount of backw
ages shall be computed from time of illegal termination(even if work in the sist
er company) upto time of cessation of business operation. (aside from that, he
is also entitled to separation pay)
2005 notes:An illegally dismissed employee is also entitled to reinstatement wit
hout lose of seniority right and payment of full backwages without any deduction
corresponding to the period of the employee s illegal dismissal upto actual reins
tatement.
4BLUE 95 lecture:As provided under the labor code, an illegally dismissed emplo
yee is entitled to the twin reliefs of:
a.reinstatement or separation pay(if reinstatement no longer feasible)
b.backwages
relief a and b are distinct and separate reliefs given to alleviate the economic
setback brought by the EEs dismissal, therefore AWARD OF ONE DOES NOT BAR THE O
THER. Backwages may be awarded without reinstatement and reinstatement may be aw
arded without backwages.
2006 notes: The effects of extraordinary inflation are not to be applied withou
t an agreement between the parties and without an official declaration thereof b
y competent authorities. (Lantion vs. GAUF)
2006 notes: OFW: there is no such thing as full backwages since they are entitle
d to 3 months for every yr of service or entire unexpired portion of contract w/
c ever is lesser + placement fee + 12% interest from time it was paid.
Backwages as a general rule is upto the time of actual reinstatement.
Exceptions(2006 revision):
1.if reinstatement is not feasible, backwages must be computed upto FINALITY of
Court s decision.
2.if ceased operation of business, its upto CESSATION of business.
3.if EE died, its upto EE s DEATH
4.if retired, upto RETIREMENT Date
DAMAGES
Any award of damages by the Labor Arbiter obviously cannot be based on the Labo
r code but would be grounded on the Civil Code.
Such an award is premised that ER fired EE w/o just cause or due process.
Moral damages
Employer is liable for moral damages for breaches of contract where the employer
acted fraudulently or in bad faith. The sum of P5000 each in favor of the termi
nated workers in the concept of moral damages may be given.
Moral damages is recoverable only where the dismissal or suspension was attended
by bad faith (conscious or intended design) or fraud or constituted an act oppr
essive to labor or was done in a manner contrary to morals ,good customs or publ
ic policy.
Exemplary damages
Award of moral and exemplary damages in favor of the employee who was illegally
dismissed shall be upheld where the employee had been harassed by the employer.
Where employee s dismissal was effected without procedural fairness ,an award of
exemplary damages in her favor can only be justified if her dismissal was effect
ed in a wanton, oppressive or malevolent manner.
II. TERMINATION BY EE AND SUSPENSION OF OPERATION
Termination by EE Just Causes
Art. 285 : An EE may put an end to the relationship without serving any notice o
n the ER for any of the following just causes:
1. Serious insults by the ER and or his representative on the honor and person o
f the EE;
2. Ihuman and unbreakable Treatment accorded the EE by the ER or his representat
ive;
3. Commission of a crime or offense or his representative against the person of
the EE,or any immediate members of his family, and Analogous cases.
Without Just Cause Requisites
Art. 285(a) : An EE may terminate without just cause the ER-EE relationship by
serving a written notice on the ER at least 1 month in advance. The ER upon whom
no such notice has been served may hold the EE liable for damages.
A. RESIGNATION
a voluntary act of an EE who finds himself in a situation where he believes that
personal reasons cannot be sacrificed in favor of the exigency of the service, t
hen he has no other choice but to disassociate himself from his employment. The
ER has no control over resignation and so, in order to ensure that no disruptio
n of work would be involved by reason of resignation. This practice has been rec
ognized because every business enterprise endeavors to increase its profits by ad
opting a device or means designed towards that goal. Resignation once accepted a
nd being the sole act of the EE may not be withdrawn without the consent of the
ER. ( Intertrod Maritime vs. NLRC)
B. CONSTRUCTIVE DISCHARGE
A constructive discharge is a quitting because continued employment is rendered
impossible, unreasonable or unlikely; as, an offer involving a demotion in rank
and diminution in pay. (Philippine Japan Active Carbon vs. NLRC) This is not a c
ase of voluntary resignation. It is in the nature of a contrivance to effect to
dismissal without cause. (Rizal Memorial vs. NLRC)
2006 notes: Constructive dismissal means ee s employment become impossible that he
is force to resign.
(BAR)Z was hired as a production recorder by a tobacco company. After 14 years o
f occupying the position, she was demoted to picker by reason of inefficiency du
e to alleged frequent mistakes in her report. Z refused to report for work and f
iled a complaint for illegal dismissal. Was the dismissal justified?No. The mana
gement based its action merely on communications between officers of the company
. She was not notified in advance of the company s actions. The demotion done in b
ad faith constitute constructive dismissal.
Suspension of Operations
Art. 286 : The bona fide suspension of the operation of a business or undertakin
g for a period not exceeding 6 months, or the fulfillment by the EE of a militar
y or civic duty shall not terminate employment. In all such cases, the ER shall
reinstate the EE 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 resumpti
on of operations of his ER or from his relief from the military or civic duty.
It is settled that when the bona fide suspension of operations of a business und
ertaking exceed 6 months, then the worker s employment shall be deemed terminated.
(Lucky Textile vs. NLRC)
RETIREMENT
Art. 287 : Any EE may be retired upon reaching the retirement age established in
the CBA or other applicable employment contract.
2006 notes: if mining worker ,it is 50 yrs or more but not beyond 60.
2006 notes:er may provide retirement age at 40 when there exist an optional reti
rement at option of the ER or the EE.
In case of retirement, the EE shall be entitled to receive such retirement benef
its as he may have earned under existing laws and any CBA agreement and other ag
reements: Provided, however, That an EE s retirement benefits under any CBA and o
ther agreements shall not be less than those provided therein.
2006 notes:In the absence of a retirement plan or agreement providing for retire
ment benefits of EE s in the establishment, an EE upon reaching the age of 60 year
s or more, but not beyond 65 years which is hereby declared the compulsory retir
ement age, who has served at least 5 years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least month salary for
every year of service, a fraction of at least 6 months being considered as 1 wh
ole year.
Unless the parties provide for broader inclusions, the term month salary shall m
ean 15 days plus 1/12th of the 13th month pay and the cash equivalent of not mor
e than 5 days of service incentive leaves.
2006 notes:Retail, service and agricultural establishments or operations employi
ng not more than 10 EE s or workers are exempted from the coverage of this provisi
on.
Violation of this provision is hereby declared unlawful and subject to the penal
provisions under Art. 288 of this Code.
Obligation
1. The law does not impose any obligation upon ER s to set up a retirement scheme
for their EE s over and above that already established under existing laws. (Llora
Motors vs. Drilon)
2. Entitlement of EE s to retirement benefits must be specifically granted under e
xisting laws, a CBA or employment contract or an established EE policy. (GVM vs.
NLRC)
Benefit
Retirement benefits are intended to help the EE enjoy the remaining years of his
life, lessening the burden of worrying for his financial support, and are a for
m of reward for his loyalty and service to the ER. (Aquino vs. NLRC)
The CBA between a university and its faculty members provided that in case of un
usual circumstances, faculty members whose services are terminated shall be gran
ted retirement benefits. Are faculty members affected by an unusual circumstance
, such a phase-out, and who are given separation pay pursuant to law also entitl
ed to retirement benefits?Yes. There is no provision in the CBA to the effect th
at termination benefits received under the law shall preclude the EE from receiv
ing other benefits under the agreement. Separation arising from a forced termina
tion of employment and benefits given as a contractual right due to many years o
f faithful service and are not necessarily antagonistic to each other. (UE vs. M
inister of Labor)