LABOR LAW
CHAPTER 1: The Constitution & Protection to Labor
Principles of Social and Distributive Justices as found in
the Constitution
1. Article II (State Policies), Section 9:
SECTION 9. The State shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation and
free the people from poverty through policies
that provide adequate social services, promote
full employment, a rising standard of living, and
an improved quality of life for all.
2. Article XII (National Economic Patrimony),
Sections 1,6 and 12:
SECTION 1. The goals of the national economy
are a more equitable distribution of
opportunities, income, and wealth; a sustained
increase in the amount of goods and services
produced by the nation for the benefit of the
people; and an expanding productivity as the key
to raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural
development and agrarian reform, through
industries that make full and efficient use of
human and natural resources, and which are
competitive in both domestic and foreign
markets. However, the State shall protect
Filipino enterprises against unfair foreign
competition and trade practices.
In the pursuit of these goals, all sectors of the
economy and all regions of the country shall be
given optimum opportunity to develop. Private
enterprises, including corporations,
cooperatives, and similar collective
organizations, shall be encouraged to broaden
the base of their ownership.
SECTION 6. The use of property bears a social
function, and all economic agents shall
contribute to the common good. Individuals and
private groups, including corporations,
cooperatives, and similar collective
organizations, shall have the right to own,
establish, and operate economic enterprises,
subject to the duty of the State to promote
distributive justice and to intervene when the
common good so demands.
SECTION 12. The State shall promote the
preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt
measures that help make them competitive.
3. Art. XIII (on Social Justice and Human Rights),
Sec. 1:
SECTION 1. The Congress shall give highest
priority to the enactment of measures that
protect and enhance the right of all the people
to human dignity, reduce social, economic, and
political inequalities, and remove cultural
inequities by equitably diffusing wealth and
political power for the common good.
4. Art. XIII (on Labor), Sec. 3:
SECTION 3. The State shall afford full protection
to labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and decision-
making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to
foster industrial peace.
The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production
and the right of enterprises to reasonable
returns on investments, and to expansion and
growth.
5. Art. 3, Labor Code: Declaration of Policy
ART. 3. Declaration of basic policy. - The State
shall afford protection to labor, promote full
employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the
relations between workers and employers. The
State shall assure the rights of workers to self-
organization, collective bargaining, security of
tenure, and just and humane conditions of work.
CONSTITUTIONAL RIGHTS OF WORKERS
1. Right to property and due process of law
 Employment is not merely a contractual
relationship
 It is considered a property right
 Under the Constitution, employment is a
property right because it will determine whether
or not a family will have food on their table, roof
over their heads and education for their children
2. Right to self-organization
3. Right to security of tenure, collective bargaining,
strike, and to concerted activities
4. Right to just and humane conditions of work,
such as:
a. Right to regular workdays/hours
b. Right to overtime work/premium pay
c. Right to weekly rest periods
d. Right to service incentive leave pay
e. Right to holiday pay/ 13th month pay
5. Right to a living wage
Living wage: the amount of family income needed
to provide for the family’s food and non-food
expenditures with sufficient allowance for
savings/investments for social security.
Purpose: to enable the family to live and maintain a
decent standard of human existence beyond mere
subsistence level.
6. Right to participate in policy and decision making
 DOCTRINE OF CO-DETERMINATION –
Employees have the right to participate
in policy-making affecting their rights,
duties, welfare and benefits
7. Right to just share in the fruits of production
(profit)
LABOR CONTRACTS ARE IMPRESSED WITH PUBLIC
INTEREST
 Courts Must be vigilant in protecting the rights of
the working class
 Labor is entitled to humane conditions of work
and equality of employment opportunity
PRINCIPLES OF SOCIAL DISTRIBUTIVE JUSTICE:
BALANCING OF INTEREST IN CASE THE WORKERS’ AND
MANAGEMENT’S RIGHTS COLLIDE
General Rule: Worker’s right must be favored
 The Constitution provides that the State must
afford full protection to labor
 Thus, when conflicting interests arise between
labor and capital- labor must be favored
Exception to the General Rule:
 Constitutional policy of providing full protection
to labor is not intended to oppress or destroy
management or the capital
 Thus, when the Employer is right- the court will
always favor him
CHAPTER 2: GENERAL LABOR CONCEPTS
CONSTRUCTION (interpretation) IN FAVOR OF LABOR
 In interpreting the provisions of the Labor Code
– the workingman’s welfare must be primordial
and paramount consideration
Re: Employment Contracts
 Most Employment Contracts are Contracts of
Adhesion
- Therefore, all doubts and ambiguities must
be resolved in favor of labor
Contract of Adhesion, meaning:
An adhesion contract is a contract drafted by one party
(usually a business with stronger bargaining power) and
signed by another party (usually one with weaker
bargaining power, usually a consumer in need of goods
or services).
The second party typically does not have the power to
negotiate or modify the terms of the contract. Adhesion
contracts are commonly used for matters involving
insurance, leases, deeds, mortgages, automobile
purchases, and other forms of consumer credit.
MANAGEMENT PREROGATIVES IN RELATION TO
TERMINATION OF EMPLOYMENT
 In termination cases, the burden of proof rests
on the employer to show that the dismissal is for
just cause
- When there is no showing of a clear, valid
and legal cause for the rumination of
employment, the law considers the matter a
case of illegal dismissal.
Note: in case an employee files a case against illegal
dismissal, he must prove first that there was really a
dismissal made by the employer.
“NO WORK NO PAY” PRINCIPLE
 If there is no work performed by the employee,
there can be no wage or pay
“No work No pay” principle, when not applicable?
 when the laborer was able, willing and ready to
work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from
working
 thus, the principle does not apply when the
employee himself was forced out of job.
 In such case, the employee is entitled to back
wages and other economic benefits
“LAST IN, FIRST OUT” (LIFO) RULE
 When there are 2 or more employees occupying
the same position in the company affected by
retrenchment program, the lase one employed
will necessarily be the first to go.
 This rule applies to termination of employment
in the line of work
Note: this rule is not absolute. The employer/company
can validly create rules and regulations involving
retrenchment.
“ONE UNION- ONE COMPANY” POLICY
General Rule: there should only be one union in one
employer unit
 Reason: ends of unionism are better served if all
the rank-and-file employee, with substantially
the same interests and who invoke their right to
self-organization, are part of a single unit so that
they can deal with their employer with just ONE
YET POTENT VOICE.
Exception: when there are compelling reasons which
would deny a certain class of employees the right to self
-organization
“EQUAL PAY FOR EQUAL WORK” PRINCIPLE
 Persons who work with substantially equal
qualifications, skill, effort and responsibility,
under similar conditions, should be paid similar
salaries
 If an employer accords his employees the same
position and rank, the presumption is that these
employees perform equal work.
NON- DIMUNUTION OF BENEFITS
Art. 100, Labor Code. Prohibition against elimination or
diminution of benefits. — Nothing in this Book shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed
at the time of promulgation of this Code.
General Rule:
No diminution of salary or benefits
Exceptions:
(a) When employee consents to the deduction
(b) To correct an error
Exception to the exception:
If the error is left uncorrected for a reasonable period of
time, it ripens into a company policy and employees can
demand for it as a matter of right.
Requisites for voluntary employer practice such that the
same cannot be unilaterally withdrawn anymore:
1. It should have been practiced over a long period
of time; and
2. It must be shown to have been consistent and
deliberate.
As to length of time required to ripen into a corporate
policy:
the test of long practice has been enunciated thus: where
the company agreed to continue giving a benefit knowing
fully well that said employees are not covered by the law
requiring payment of said.
Elements for diminution of benefits:
(1) the grant or benefit is founded on a policy or has
ripened into a practice over a long period of time;
(2) the practice is consistent and deliberate;
(3) the practice is not due to error in the construction or
application of a doubtful or difficult question of law; and
(4) the diminution or discontinuance is done unilaterally
by the employer.
CHAPTER 3: EMPLOYER-EMPLOYEE RELATIONSHIP
CONCEPT OF EMPLOYER-EMPLOYEE (EE) RELATIONSHIP
 This relationship is contractual in nature
 It arises from the agreement of the parties
  This relationship is impressed with public
interest that labor contracts must yield to
common good
“FOUR-FOLD TEST” – to determine the existence of
Employer-employee (EE) relationship
In determining whether an EE relationship exists, the
following must be considered:
1. Who has the power to select and engage the
employee?
2. Who pays the wages?
3. Who hold the power of dismissal?
4. Who has the power to control the employees’
conduct?
Control Test
 This is one of the most important factors in the
four-fold test
 Under this, an employer-employee relationship
exists where the employer has a right to control
the conduct of the employee in relation to his
work
Economic reality test
 The economic realities prevailing within the
activity or between the parties are examined,
taking into consideration the totality of
circumstances surrounding the true nature of
the relationship between the parties.
 This test is appropriate when there is no written
agreement or contract on which to base the
relationship.
Note:
1. Insurance agents are not employees of the
insurance companies
- In the absence of evidence that rules or
regulations were promulgated or issued
which effectively controlled or restricted the
agent’s choice of methods or the methods
themselves of selling insurance
2. Caddies are not employees in absence of control
CHAPTER 4: JOB CONTRACTING AND LABOR ONLY
CONTRACTING ARRANGEMENTS
JOB CONTRACTING
Article 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person for
the performance of the former’s work, the employees of
the contractor and of the latter’s subcontractor, if any,
shall be paid in accordance with the provisions of this
Code.
In the event that the contractor or subcontractor fails to
pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees
to the extent of the work performed under the contract,
in the same manner and extent that he is liable to
employees directly employed by him.
Elements of a valid Job Contracting
1. Contractor carries a valid, distinct and
independent business and undertakes the job or
service on his own account, under his own
responsibility and using his own manner and
method.
- He must be free from the control and
direction of the principal in relation to the
performance of the work or service
2. Contractor has his own substantial capital or
investment in the form of tools, equipment,
machinery, work and premises, and
3. The agreement between the principal and
contractor assures the contractual employees
entitlement to ALL rights and benefits.
TRILATERAL RELATIONSHIP in legitimate contracting
(1) the principal which decides to farm out a job or
service to a contractor or subcontractor,
(2) contractor or subcontractor which has the capacity to
independently undertake the performance of the job,
work or service, and
(3) the contractual workers engaged by the contractor or
subcontractor to accomplish the job work or service.
“LABOR ONLY” Contracting
Where the contractor or sub-contractor merely recruits,
supplies or places worker to perform a job, work or
service for a principal
For labor-only to exist , either of the following must
exist:
1. Contractor or sub-contractor does not have
substantial capital or investment to actually
perform the job, work or service under its own
account and responsibility; and the employees
recruited or placed by such contractors are
performing activities which are DIRECTLY
RELATED to the main business of the principal
OR
 2. The contractor has no control over the conduct
or the work to be done by his employees
In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
 This is prohibited by law
Effect of labor-only contracting and valid job
contracting agreements
1. Labor-only contracting
- Illegal
- Employer is deemed the DIRECT employer
and is made liable to the employees of the
contractor for a more comprehensive
purpose (wages, benefits, etc.)
Note: a finding that a contractor is “labor-only”
contractor is equivalent to declaring that there is an EE
relationship between the principal and the employees of
the “labor-only” contractor.
2. Job Contracting
- Legal
- The employer is considered an INDIRECT
employer
- Indirect employer is made solidarily liable
with the contractor t the employees of the
latter for a more limited purpose (payment
of UNPAID wages, 13th month pay, service
incentive leave pay).
- No EE relationship between the owner
(indirect employer) and the employees of
the contractor.
When are the workers deemed to be performing
activities which are directly related to the main business
of the principal?
 Where the duties performed by the workers are
dependent and integral steps in or aspects of
essential operations of the principal
Note: if you are confused to whom an employee has an
EE relationship, always apply the CONTROL TEST.
CHAPTER 5: MANAGEMENT PREROGATIVES
MANAGEMENT PREROGATIVE, meaning
 Employer’s highly discretionary right to manage
all aspects of employment.
 These are acts by which one directing a business
is able to control the variables thereof so as to
enhance the chances of making a profit
 An owner of a business is given considerable
leeway in managing his business
ELEMENTS FOR A VALID EXERCISE OF MANAGEMENT
PREROGATIVE
1. Exercised in good faith
2. For the advancement of the employer’s interest
3. Not for the purpose of defeating or
circumventing the rights of the employees under
special laws or under valid agreements
Note: Exercise of management prerogative is not
unlimited. It may be limited by law, contracts or
agreements.
Examples of exercise of management prerogative
1. Hiring of personnel and size of workforce
2. Terms and conditions upon hiring
Ex:
a. Stipulations against
marriage and/or other
qualifications
b. Non-compete and
exclusivity clauses
c. Qualifications
3. Discipline of employees
4. Transfer of employees
TRANSFER OF EMPLOYEES
General Rule: the employer has the right to transfer or
assign an employee in pursuance of its legitimate
business interest subject only to the condition that it is
not motivated by discrimination or bad faith
 It is the prerogative of the management to
transfer an employee where he can be most
useful to the company
Note: an employee who refuses to be transferred when
such transfer is valid, is guilty of INSUBORDINATION
Is there an instance where a transfer is considered
constructive dismissal?
 Yes
 When the transfer is unreasonable, inconvenient
or prejudicial to the employee, and
 Involves a demotion of rank or diminution of
salaries, benefits, and other privileges
 However, the mere fact that the transfer is
inconvenient does not make the transfer illegal
Note: Transfer, even if due to promotion cannot be done
without employee’s consent
Abolishment of positions and/or downsize personnel
complement
 This is a management prerogative
 However, the management must prove that the
abolished positions were unnecessary
 It is an act of generosity
 A bonus is not demandable and enforceable
obligation, except when it is made part of the
wage, salary or compensation
 But, if the bonus is integrated in the CBA, it
becomes a demandable right
- It becomes a contractual obligation

Adoption of redundancy/ retrenchment program to

streamline operations resulting in the reduction of
Change of working hours
manpower complement in order to minimize or avert
losses  Within the management prerogative
 Working hours may be changed at the discretion
of the company
Redundancy

 as when the position of the EE has been found to

be excessive or unnecessary in the operation of CHAPTER VI: CLASSIFICATION OF EMPLOYMENT
the enterprise; NOTE: classification of employees for compensation
 a reasonably redundant position is one rendered purposes is essentially an exercise of management
superfluous by any number of factors, such as prerogative.
overhiring of workers, decreased volume of
business, dropping of a particular product line Classification as to nature of employment
previously manufactured by the company, or
 Pertains to the job or work rendered by the
phasing out of service activity previously
employee in relation to the usual trade or
undertaken by the business.
business of the employer
Retrenchment 1. Regular
2. Probationary
 It is the termination of employment effected by 3. Project
management during periods of business 4. Term
recession, industrial depressions, seasonal 5. Seasonal
fluctuations, lack of work or considerable 6. Casual
reduction in the volume of the employer’s
business. Classifications as to rank

 Pertains to the hierarchy in the positions of the

employees
General standards for when retrenchment is preventive 1. Managerial
rather than curative — 2. Supervisory
(a) Losses expected are substantial and not merely de 3. Rank-and-file
minimis in extent;

(b) Apprehended losses are reasonably imminent, can be General rule:

perceived objectively and in good faith;
 Employment is deemed regular, absent any
(c) Retrenchment must be reasonably necessary to evidence to the contrary
prevent the expected losses—measure of last resort; and
Exception:
(d) Expected or actual losses must be proved by sufficient
and convincing evidence. 1. Probationary
2. Term
Note: Reduction of work days may be considered 3. Project
constructive retrenchment 4. Seasonal
5. Casual

Grant of Bonuses is a management prerogative Exception to the exception:

Bonus – is an amount granted and paid to an employee  Probationary employee allowed to work after
for his industry and loyalty which contributed to the the probationary period
success of the employer’s business and made possible  Casual workers rendering services for more than
the realization of profits one year
When is a casual employee considered a regular
employee?
 He has rendered at least ONE YEAR of service
 Whether such service be continuous or broken
REGULAR EMPLOYMENT
 Those who are hired for activities which are
necessary or desirable in the usual trade or
business of the employer
When is an employee considered a regular employee?
 When the employee has been engaged to
perform activities, which are usually necessary
or desirable to the usual trade or business of the
employer
 This is regardless to any contract or agreement
entered into by the parties
Exceptions:
 Where the employment has been fixed for a
specific project or undertaking, the completion
of which has been determined at the time of the
engagement of the worker; or
 Where the job, work or services to be performed
is seasonal in nature, and the employment if for
the duration of the season
Test in determining regular employment: reasonable
connection rule
 Primary test is the reasonable connection
between the particular activity performed by the
employee in relation to the usual business or
trade of the employee
 The test is whether the particular activity is
usually necessary or desirable in the usual trade
or business of the employer.
 The connection can be determined by
considering of the work performed and its
relation to the scheme of the particular business
or trade in its entirety
Probationary employees
 Those who are hired generally for regular
positions but are placed on a probationary status
for a period of 6 months
 He may become regular once he has qualified as
such in accordance with the reasonable
standards made known to him at the time of
hiring
 They are considered regular if they are allowed
to work beyond the probationary period.
Elements
1. The employee, upon his engagement is made to
undergo a trial period
2. During which the employer determines his
fitness to qualify for regular employment based
on the standards made known to him at the time
of his engagement
General rule:
 Probationary period is 6 months
Exceptions:
1. Learnership/apprenticeship period
2. Three years in case of teachers
3. When parties agree to a longer term by virtue of
company policy or when the same is required by
nature of the work
Extension to the 6 months probationary period
General Rule:
An employee who is allowed to work after the
probationary period shall be considered a regular
employee
Exceptions:
1. Agreement between the employer and the
employee to extend the probationary period
2. Longer period stipulated in employment
contract. Provided that such longer period is
established to be company policy or necessary
because of the nature of the work
Training Period with Probationary period
 This results to double probation
 Thus, the probation period may exceed 6 months
 In such case, when an employee’s services are
continued after the training, the employer in
effect recognized that she had passed probation
and was qualified to be regular employee
Apprentices/apprenticeship
Apprenticeship - is a training within employment with
compulsory related theoretical instruction involving a
contract between an apprentice and an employer on an
approved apprenticeable occupation.
Apprentice - is a person undergoing training for an
approved apprenticeable occupation during an
apprenticeship agreement.
Apprenticeship Agreement - is a contract wherein a
prospective employer binds himself to train the
apprentice who in turn accepts the terms of training for
a recognized apprenticeable occupation emphasizing the
rights, duties and responsibilities of each party
Apprenticeable Occupation - is an occupation officially
endorsed by a tripartite body and approved to be
apprenticeable by the authority.
Qualifications of apprentice
1. At least 15 years of age [as amended by R.A.
7610], provided that if he is below 18 years, he
shall not be eligible for hazardous occupation;
2. Possess vocational aptitude and capacity for
appropriate tests;
3. Possess the ability to comprehend and follow
oral and written instructions.
4. Physically fit for occupation
Apprenticeship terms and conditions
 Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules
issued by the Secretary of Labor and
Employment.
 The period of apprenticeship shall not exceed six
months.
 Apprenticeship agreements providing for wage
rates below the legal minimum wage
 75% below minimum wage
Learners
 refers to persons hired as trainees in semi-skilled
and other industrial occupations which are non-
apprenticeable. Learnership programs must be
approved by the authority.
 which may be learned through practical training
on the job in a relatively short period of time
which shall not exceed three (3) months.
When learners may be hired
1. No experienced workers are available;
2. The employment of learners being necessary to
prevent the curtailment of employment
opportunities; and
3. The employment will neither create unfair
competition in terms of labor costs nor impair
working standards.
Terms and conditions of employment
Any employer desiring to employ learners shall enter into
a learnership agreement with them, which agreement
shall include:
1. The names and addresses of the learners;
2. the duration of the learnership period, which
shall not exceed three (3) months;
3. The wages or salary rates of the learners which
shall begin at not less than seventy-five percent
(75%) of the applicable minimum wage; and
4. (4) A commitment to employ the learners if they
so desire, as regular employees upon completion
of the learnership. All learners who have been
allowed or suffered to work during the first two
(2) months shall be deemed regular employees if
training is terminated by the employer before
the end of the stipulated period through no fault
of the learners.
5. (5) The learnership agreement shall be subject to
inspection by the Secretary of Labor and
Employment or his duly authorized
representative.
Three-year probationary period for teachers
 This is provided in the manual of regulations for
private school
Teachers on probationary status on fixed term
contracts
 The lapse of an employee’s probationary
employment for a fixed term, without the
latter’s subsequent appointment as a regular
employee, will effectively sever the EE
relationship between the parties
Standards and quality required from the probationary
employee
 This is a management prerogative
 The management has all the right to determine
who are qualified or not
 The employer must inform the employee of such
standards and qualifications at the time of hiring
 In the absence of such, the employee may be
considered a regular employee at the time when
the employee was dismissed by the company
Security of Tenure of Probationary employees
 Within the 6 months period, probationary
employees are entitled to security of tenure
 This is limited to the period of probation
Note: A probationary employee if found unfit for the job,
may be dismissed for cause at any time before the
expiration of the period, provided there is due process
The probationary employees may be terminated only
on two grounds
1. for just cause
2. when he fails to qualify as a regular employee
TERM or fixed term EMPLOYMENT
Nature
 a contract of employment for a definite period
terminates by its own terms at the end of such
period
Criteria or Elements
1. the fixed period or employment was knowingly
and voluntarily agreed upon by the parties
- without force or intimidation
2. it satisfactorily appears that the employer and
employee dealt with each other on more or less
equal terms
- with no moral dominance being exercise by
the employer to the employee
Note: even if a fixed term employment is allowed, it
won’t be held legal if it appears that the period has been
imposed to preclude the acquisition of tenurial security
by the employee.
 This occurs when tenure is made at the pleasure
or the employer, and
 When the parties were not on equal footing
- Thus, there is a presumption that the term
contract was entered into to circumvent the
right to security of tenure
Termination of term employee, nuances:
1. Lack of notice or termination is not necessary
- Remember that the contract of employment
is for a definite term
2. Non-renewal of appointment for a definite and
renewable period does not involve dismissal but
an expiration of term
3. If the contract is for a fixed term and the
employee is dismissed without just cause prior to
the expiration of said contract,
- The employee is entitled to the payment of
his salaries corresponding to the unexpired
portion of the employment contract
PROJECT EMPLOYMENT
Test for determining project employment
 Whether or not the employee was assigned to
carry out a specific project or undertaking, the
duration of which were specified at the time the
employee was engaged for that project
Note: there must be a proof that the employee was duly
informed of his status as project employee. Without
such, he shall be considered a regular employee.
PROJECT EMPLOYEE REGULAR EMPLOYEE
The services are Legally entitled to remain
coterminous with the in the service of his
project and may be employer until the service
terminated upon the end is terminated by one or
or completion of the another of the recognized
project for which he was modes of termination of
hired service under the Labor
code
Meaning and scope of the term “PROJECT”
Two types of activities
1. It could refer to a particular job or undertaking
- Which is within the regular or usual business
of the employer
- But which is distinct and separate and
identifiable as such from the other
undertakings of the company
Ex. Particular construction job or project of a
construction company
2. It could also refer to a particular job or
undertaking that is not within the regular
business of the corporation
- Such job or undertaking must also be
identifiably separate and distinct from the
ordinary or regular business operations of
the employer
Ex. A steel making company hires for a
coconut harvesting project
o Obviously, it is not ordinary or usual
for a steel company to harvest
coconuts
Indicators of project employment
Either one or more of the following circumstances:
1. Duration of the specific undertaking for which
the worker is engaged is reasonably determined
2. Such duration, as well as the specific work or
service to be performed, is defined in an
employment agreement and is made clear to the
employee at the time of hiring
3. The work or service is in connection with the
particular project for which he is engaged
4. The employee, while not employed and
engagement, is free to offer his services to other
employers
5. Termination of his employment is reported to
DOLE
6. An undertaking in the employment contract by
the employer to pay completion bonus to the
project employee
IMPORTANT MATTERS IN RELATION TO THE
CONSTRUCTION INDUSTRY
Two kinds of employees (construction):
1. Purely project employees of the construction
company, who are hires on a project-to-project
basis
2. Those part of the construction corporation’s
labor pool.
Purely Project Employees
Effects:
 1. Not entitled to separation pay if terminated as a
result of completion of the project or any phase
thereof in which they are hired;
- But: they are entitled to separation pay in
case their services are terminated before the
completion of the project
2. No prior clearance for termination is necessary,
but termination must be reported to DOLE
Employees from Labor Pool
 Those employed without reference to any
particular project.
Note: they me further classified into regular and/or
probationary
Effects:
1. They have the right to organize and to
collectively bargain, or join rank and file union of
the construction company;
2. Completion of project or phase will not sever EE
relationship, as they are to be considered
employees for an indefinite term.
Requirement to qualify as a member of a work/labor
pool
 The worker must still be considered an employee
if the construction company while in the work
pool
- In other words, there must be a proof that
the employee was under an obligation to be
always available on call and that he was not
free to offer his services to other employers.
Length of service
 The length of service or the re-hiring of
construction workers on a project-to-project
basis does not confer upon them regular
employment status
 Their rehiring it only a natural consequence of
the fact that experienced construction workers
are preferred
Note: evidence of gaps in worker’s employment
histories, may prove that the employment is solely for
specific projects.
Ex. Employee was hired on an “off and on basis”
In addition: Failure of the employer to report to the
nearest employment office the termination of workers
every time a project is completed proves that the
employees are not project employees
- Hence, they are considered regular
- Employers are required by law to submit a
report of termination to DOLE every time
services of an employee is terminated due to
the completion of each project
Project employee becomes a regular employee, when:
1. There is a continuous rehiring of project
employees even after the cessation of a project
and
2. The tasks performed by the employee are vital,
necessary and indispensable to the usual
business or trade of the employer
SEASONAL EMPLOYEMENT
Nature
 Those who are called to work from time to time
according to the occurrence of varying need
during a season, and are laid off after completion
or the required phase of work for the season
Seasonal worker when deemed regular employee?
 If worked for more than one season
 Thus, you are only a seasonal worker if you only
work for ONE season
Seasonal workers during the off-season are merely
considered on leave
 The fact that workers do not work continuously
for one whole year but only for the duration of
the season does not detract from considering
them in regular employment
Note: Seasonal employees are entitled to separation pay
CASUAL EMPLOYMENT
 not regular, project or seasonal employee.
Requirements to become Regular employee:
1. one (1) year service, continuous or broken
2. with respect to activity employed
3. employment shall continue while such activity
exists
note: the status of regular employment attaches to the
casual employee on the day immediately after the end of
his first year of service
When is there casual employment?
 When it is irregular, unpredictable, sporadic and
brief in nature, and outside the usual business of
the employer
 Supervisory Employees

Are seafarers casual or regular employees?
 They are contractual employees for a fixed term
 This is governed by the contracts they sign
Supervisory employees are those who, in the interest of
the employer, effectively recommend such managerial
actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of
independent judgment.

EMPLOYEE CLASSIFICATION AS TO RANK  A supervisor is deemed a member of the

managerial staff
Managerial  Reason: he oversees the operation of the
 Those vested with powers or prerogatives to lay business of the company and the performance of
down and execute management policies, and the workers
 To hire, transfer, suspend, lay-off, recall Note: a foreman is a supervisor
employees.
- The term FOREMAN implies that the
employee is the representative of the
Employees are considered of managerial level and not management over the workers and the
entitle to benefits relating to hours of work and other operation of the management
conditions of employment if they meet all of the Rank-and-file employees
following conditions:
 refers to an employee whose functions are
1. Their primary duty consists of the management neither managerial nor supervisory in nature.
of the establishment in which they are
employed, or of a department or subdivision
thereof;
2. They customarily and regularly direct the work
od two or more employees therein
3. They have the authority to hire or fire other
employees of lower rank or their suggestions as
to the hiring, firing and promotion or any other
change of status of other employees are given
particular weight

Officers or members of a managerial staff shall likewise

be exempted from benefits relating to hours of work
and other conditions of employment if they perform the
following:

1. Primary duty consists of the performance of

work directly related to the management
policies of their employer
2. Customarily and regularly exercise discretion
and independent judgement
3. Regularly and directly;
a. Assist a proprietor or managerial employee
whose primary duty consists of the
management of the establishment in which
they are employed, or of a department or
subdivision thereof or
b. Execute under general supervision work
along specialized or technical lines requiring
special training, experience or knowledge; or
c. Execute under general supervision
assignments and tasks, and
4. Who do not devote more than 20% of their hours
worked in a workweek to activities which are not
directly and closely related to the performance
of the work described under the LABOR CODE