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JURISTS BAR REVIEW CENTER™

2014 Pre – Week Notes


Labor Laws and Social Legislations
Atty. Cecilio D. Duka, Ed.D.
Labor Standards Laws
Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations
relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including
occupational, safety and health standards. (Section 7, Rule 1, Rules on the Disposition of Labor Standards
Cases in the Regional Office, dated September 16, 1987 cited in Batong Buhay Gold Mines, Inc., vs. Dela
Serna, et. al., G.R. No. 86963, August 6, 1999) They are covered by Books I to IV of the Labor Code.

Social Legislations
Social legislations are laws, rules, and regulations that promote welfare of all sectors of society. Social
Legislation includes laws that provide particular kinds of protection or benefits to the society, in furtherance
of social justice. Not all social legislations are labor laws. Labor laws directly affect employment they directly
govern effects of employment. All labor laws are social legislations. But not all social legislations are labor
laws.

License and authority


A license is a document issued by the Department of Labor and Employment (DOLE) authorizing a
person or entity to operate a private employment agency, while an authority is a document issued by the
DOLE authorizing a person or association to engage in recruitment and placement activities as a private
recruitment entity.

Illegal Recruitment
Illegal recruitment is committed when two elements concur, namely; (1) the offender has no valid license
or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and
(2) he undertakes either any activity within the meaning of “recruitment and placement” defined under Article
13(b), or any of the prohibited practices enumerated under Article 34 of the Labor Code. (People vs. Gutierrez,
422 SCRA 32)

Economic sabotage
Illegal recruitment when committed by a syndicate or in large scale shall be considered as offense
involving economic sabotage.
Illegal recruitment is deemed committed in large scale if committed against three or more persons
individually or as a group. In this case, five complainants testified against appellant’s acts of illegal
recruitment, thereby rendering his acts tantamount to economic sabotage. Under Section 7 (b) of RA No.
8042, the penalty of life imprisonment and a fine of not less than P500,000.00 nor more than P1,000.000.00
shall be imposed if illegal recruitment constitutes economic sabotage. (People vs. Gasacao, G. R. No.
168445, November 11, 2005)

Syndicated Illegal Recruitment


Illegal recruitment is deemed committed by a syndicate when carried out by a group of three (3) or
more persons conspiring or confederating with one another. (Section 6, Republic Act No. 8042)

Large Scale Illegal Recruitment


It is deemed committed in large scale if committed against three (3) or more persons individually or as
a group. (Section 6, Republic Act No. 8042)
Illegal recruitment in large scale is committed when a person "(a) undertakes any recruitment activity
defined under Article 13 (b) or any prohibited practice enumerated under Article 34 of the Labor Code; (b)
does not have a license or authority to lawfully engage in the recruitment and placement of workers; and (c)
commits the same against three or more persons, individually or as a group. (People of the Philippines vs.
Calonzo, G.R. Nos. 115150-55, September 27, 1996)

Penalties for Illegal Recruitment


The penalties for illegal recruitment today are the ones provided by Section 6, Republic Act No. 10022
which amended Republic Act No. 8042 which provided for higher penalties on illegal recruitment than what
are provided by Article 39 of the Labor Code. Thus:

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Simple illegal recruitment - imprisonment of 12 years and 1 day to 20 years and a fine of 1 million to
2 million pesos.
Illegal recruitment deemed as economic sabotage - life imprisonment and a fine of 2 million to 5
Million pesos.
The maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18)
years of age or committed by a non-licensee or non-holder of authority

Consequences of Conviction for Illegal Recruitment


1. automatic revocation of the license or authority (Art. 39[e]);
2. forfeiture of the cash and surety bonds (Art. 39[e]);
3. conviction for the crime of estafa, if found guilty therefor. (People of the Philippines vs. Calonzo,
G.R. Nos. 115150-55, September 27, 1996)

Prescription of action for illegal recruitment


Illegal recruitment cases under this Act shall prescribe in five (5) years: Provided, however, That illegal
recruitment cases involving economic sabotage as defined herein shall prescribe in twenty (20) years.
(Section 12, Republic Act 8042)

Apprentice
An apprentice is a worker who is undergoing training for an approved apprenticeable occupation
covered by a written apprenticeship agreement with an individual employer.

Apprenticeable Occupation
An apprenticeable occupation means any trade, form of employment or occupation which requires
more than three (3) months of practical training on the job supplemented by related theoretical instruction.

Requirements for an apprentice


1. Must at least be 15 years old as Section 12 – A of Republic Act No. 9231 prohibits the employment
of minor below 15 years old, except those employed in entertainment business where a necessary permit is
issued by the Department of Labor and Employment.
2. Must have the vocational aptitude and capacity for appropriate tests;
3. Must possess the ability to comprehend or follow oral and written instructions.

Features of Apprenticeship Training


1. The apprentice must be paid not less than 75% of the prescribed minimum salary
2. There must be approval from DOLE Secretary for an apprenticeship program (without such one
shall be deemed a regular employee)
3. The employer is not compelled to continue one’s employment attycdduka

4.One-half (1/2) of the value of labor training expenses incurred for developing the productivity and
efficiency of apprentices of the training cost is deducted from the employer’s income tax but it shall not exceed
ten percent (10%) of direct labor wage.
5. If the apprenticeship training is part of the school curriculum, a requirement for graduation, or board
examination, the employer may not pay any wage.

Working scholars
There is no employer-employee relationship between students on one hand, and schools, colleges or
universities on the other, where there is written agreement between them under which the former agree to
work for the latter in exchange for the privilege to study free of charge, provided the students are given real
opportunities, including such facilities as may be reasonable and necessary to finish their chosen courses
under such agreement. (Section 14, Rule X, Implementing Rules and Regulations of Book III, The Labor
Code)

Learners
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 Technical Education and Skills
Development Authority based on the provisions of Republic Act No. 7796.

Features of Learnership

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1. The duration of the learnership period, which shall not exceed three (3) months;
2. If the learnership of 3 months is completed, the employer can be compelled to continue with the
services of the learner as a regular employee
3. There is a commitment from the employer to employ the learners if they so desire, as regular
employees upon completion of the learnership
4. If the learner is dismissed from the service without just and valid cause and without due process
after 2 months of service, he will be deemed as regular employee
5. 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

Disabled persons
Disabled persons are those suffering from restriction or different abilities, as result of a mental,
physical or sensory impairment, to perform an activity in the manner or within the range considered normal
for a human being.

Supervisory Employees are deemed managerial employees in view of Article 82


Officers or members of a managerial staff if they perform the following duties and responsibilities:
(1) The primary duty consists of the performance of work directly related to management policies of
their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3) (i)
Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the
management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general
supervision work along specialized or technical lines requiring special training, experience, or knowledge; or
(iii) execute, under general supervision, special assignments and tasks; and (4) Who do not devote more than
20 percent of their hours worked in a work week to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2) and (3) above. (Rule I, Section 2(c), Labor Code
Implementing Rules and Regulation, Book III)

Bus Drivers and Conductors are not Field Personnel


The driver is under constant supervision while in the performance of this work. He cannot be
considered field personnel. (Auto Bus Transport Systems, Inc. vs. Bautista, G.R. No. 156367, May 16, 2005)

Hours worked
The following shall be considered as compensable hours worked:
(a) All time during which an employee is required to be on duty or to be at the employer's premises or
to be at a prescribed work place; and
(b) All time during which an employee is suffered or permitted to work. (Section 3, Rule I, Labor Code
Implementing Rules and Regulation, Book III)

Working while sleeping


Sleeping while on duty is compensable if the nature of the employee’s work allows sleeping without
interrupting or prejudicing work or when there is an agreement between the employee and his employer to
that effect. For example, a truck helper may sleep after performing his task and while his truck is traveling on
its way to its assignment. But of course, the same may not be done by the driver.
Working while on call is compensable if the employee is required to remain on call in the employer’s
premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose.

Rules on meal periods


Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
compensable working time. Thus, the eight-hour work period does not include the meal break. Nowhere in
the law may it be inferred that employees must take their meals within the company premises. Employees
are not prohibited from going out of the premises as long as they return to their posts on time. Private
respondent's act, therefore, of going home to take his dinner does not constitute abandonment. (Philippine
Air Lines, Inc. vs. National Labor Relations Commission, G.R. No. 132805, February 2, 1999)

Night shift differential


Night shift differential is the amount which every employee is entitled to receive which is equivalent to
ten percent (10%) of his regular wage for every hour he has worked between 10 pm to 6 am. (Section 2 Rule
II, Implementing Rules and Regulation, Book III)

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Those who are assigned to work on the so – called graveyard shift are entitled to night shift differential
pay.

Overtime pay
Overtime pay means the additional compensation for work performed beyond 8 hours.
Premium pay means the additional compensation required by law for work performed within 8 hours
on non-working days, such as rest days and special days.

Entitlement to overtime pay must be proven


Notwithstanding the foregoing discussion, petitioner failed to show his entitlement to overtime and rest
day pay due, to the lack of sufficient evidence as to the number of days and hours when he rendered overtime
and rest day work. Entitlement to overtime pay must first be established by proof that said overtime work was
actually performed, before an employee may avail of said benefit. To support his allegations, petitioner
submitted in evidence minutes of meetings wherein he was assigned to work on weekends and holidays at
Cityland’s housing projects. Suffice it to say that said minutes do not prove that petitioner actually worked on
said dates. It is a basic rule in evidence that each party must prove his affirmative allegations. (Lagatic vs.
National Labor Relations Commission, G.R. No. 121004, January 28, 1998)

Overtime pay of seamen


The correct criterion in determining whether or not sailors are entitled to overtime pay is not,
therefore, whether they were on board and can not leave ship beyond the regular eight working hours a
day, but whether they actually rendered service in excess of said number of hours. (Emphasis supplied)
(Legahi vs. National Labor Relations Commission, G.R. No. 122240, November 18, 1999) attycdduka

To be entitled to two (2) days successive holidays:


1. One must be present on the day immediately preceding the first holiday; or
2. One is on leave with pay

Monthly paid employees are not entitled to holiday pay


Monthly paid employees are not entitled to the holiday pay if their total annual income is divided by
365 days resulting in a wage which is beyond the minimum wage per day because they are considered paid
every day of the year including holidays, rest days and other non-working days. The 365 days are as follows:

Requisites for the Enjoyment of Service Incentive Leave


1. A total of 5 days leave in one year with pay
2. The employee must have been in the service for at least 1 year whether broken or continuous
3. If unused the 5 days are paid their cash equivalent at the end of the year
4. It covers all employees except the general exceptions and establishments already giving sick
leaves/vacation leaves with pay for at least 5 days

Service charge
If the establishments like hotel, motels, restaurants and the likes collect service charges and/or the
customers give tips for their services the following rules must be observed:
1. Services-charges or compensation for service rendered
2. Tips are for the recognition for satisfactory or efficient service
3. The service charges must be pooled
4. The amount collected is divided between the company (15%) and employees (85%)
5. It shall be given twice a month with intervals of not more than 15 days
6. If discontinued, removed, or stopped, the average, share of the employees of their service charge
or tips shall be integrated with their basic wage

Facilities are deductible from wages


Facilities are items of expense necessary for the laborer's and his family's existence and subsistence
so that by express provision of law they form part of the wage and when furnished by the employer are
deductible therefrom, since if they are not so furnished, the laborer would spend and pay for them just the
same. They shall include all articles or services for the benefit of the employee or his family but shall not
include tools of the trade or articles or services, primarily for the benefit of the employer or necessary to the

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conduct of the employer’s business. They form part of the wage and deductible from the wage. (Mabeza vs.
National Labor Relations Commission, G.R. No. 118506, April 18, 1997 (271 SCRA 670)

Supplements are not deductible from wages


Supplements constitute extra remuneration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages. They are independent of the wage and not wage
deductible. More significantly, the food and lodging, or the electricity and water consumed by the petitioner
were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the
employer is not a facility. (Mabeza vs. National Labor Relations Commission, G.R. No. 118506, April 18,
1997)

A company practice favoring employees cannot be withheld unilaterally by the employer


A company practice favorable to the employees had indeed been established and the payments made
pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by
the employees cannot be reduced, diminished, discontinued or eliminated by the employer, by virtue of Sec.
10 of the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of the Labor Code of the Philippines
which prohibit the diminution or elimination by the employer of the employees’ existing benefits. (Sevilla
Trading Co. vs. Semana, G.R. No. 152456, April 28, 2004)

Time of payment of wages


(a) Wages shall be paid not less than once every two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days, unless payment cannot be made with such regularity due to force majeure or
circumstances beyond the employer's control in which case the employer shall pay the wages immediately
after such force majeure or circumstances have ceased. (b) In case of payment of wages by results involving
work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen
days in proportion to the amount of work completed. Final settlement shall be made immediately upon
completion of the work. (Section 3, Rule VIII, Implementing Rules and Regulations of Book III of the Labor
Code)

Job contracting
Specifically, there is "job contracting" where (1) the contractor carries on an independent business
and undertakes the contract work on his own account under his own responsibility according to his own
manner and method, free from the control and direction of his employer or principal in all matters connected
with the performance of the work except as to the results thereof; and (2) the contractor has substantial capital
or investment in the form of tools, equipment, machineries, work premises, and other materials which are
necessary in the conduct of his business. (Baguio, et. al. vs. National Labor Relations Commission, G.R. No.
79004-08, October 4, 1991)

Elements of labor – only contracting


Under the Labor Code, two (2) elements must exist for a finding of labor-only contracting: (a) the
person supplying workers to an employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and (b) the workers recruited and placed by such
persons are performing activities directly related to the principal business of such employer. (Filipinas
Synthetic Fiber Corporation (FILSYN) vs. National Labor Relations Commission, G.R. No. 113347, June 14,
1996)

College Professors are not independent contractors


This Court takes judicial notice that a university controls the work of the members of its faculty; that a
university prescribes the courses or subjects that professors teach, and when and where to teach; that the
professors' work is characterized by regularity and continuity for a fixed duration; that professors are
compensated for their services by wages and salaries, rather than by profits; that the professors and/or
instructors cannot substitute others to do their work without the consent of the university; and that the
professors can be laid off if their work is found not satisfactory. All these indicate that the university has control
over their work; and professors are, therefore, employees and not independent contractors. There are
authorities in support of this view. (FEATI University vs. Hon. Jose Bautista, G.R. No. L-21278, December 27,
1966)

Wage Distortion
The term "wage distortion", under the Rules Implementing Republic Act 6727, is defined, thus:

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Wage Distortion means a situation where an increase in prescribed wage rates results in the
elimination or severe contradiction of intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of differentiation. (Metropolitan Bank
& Trust Company Employees Union-ALU – TUCP, vs. National Labor Relations Commission, G.R. No.
102636, September 10, 1993)

Wage Distortion is a non - strikable issue


The solution to the problem of wage distortions shall be sought by voluntary negotiation or arbitration,
and not by strikes, lockouts, or other concerted activities of the employees or management. "Any issue
involving wage distortion shall not be a ground for a strike/lockout. (Ilaw At Buklod Ng Manggagawa (IBM) vs.
National Labor Relations Commission, G.R. No. 91980, June 27, 1991)

Appeal from the orders of DOLE Regional Director under Art 128
The order of the Regional Director shall be final and executory unless appealed to the Secretary of
Labor and Employment within ten (10) calendar days from receipt thereof. (Section 1, Rule IV, Rules on the
Disposition of Labor Standards Cases in the Regional Offices)

Jurisdiction of the DOLE Regional Director under Art. 129


Under Article 129, the Regional Director or any of the duly authorized hearing officers of DOLE has
jurisdiction over claims for recovery of wages, simple money claims and other benefits, provided that the claim
is filed by an employee or person employed in domestic or household service or househelper and the following
must concur:
1. the claim must arise from employer-employee relationship;
2. the claimant is no longer employed and does not seek reinstatement;
3. the aggregate money claim of each employee does not exceed P5,000.00.
In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original jurisdiction
over all claims arising from employer-employee relations, other than claims for employee's compensation,
social security, medicare and maternity benefits. (Brokenshire Memorial Hospital, Inc., vs. Minister of Labor
and Employment, et. al., G.R. No. 74621, February 7, 1990)

Jurisdiction of DOLE Regional Director if the amount exceeds P5000


But even if the amount of the claim exceeds P5,000.00, the claim is not on that account necessary
removed from the Regional Director's competence. In respect thereof, he may still exercise the visitorial and
enforcement powers vested in him by Article 128 of the Labor Code, as amended, supra; that is to say, he
may still direct his labor regulations officers or industrial safety engineers to inspect the employer's premises
and examine his records. (Brokenshire Memorial Hospital, Inc., vs. Minister of Labor and Employment, et. al.,
G.R. No. 74621, February 7, 1990)

Jurisdiction of DOLE Regional Director if the employer contests the order


The adjudicatory power provided by Article 129 to the DOLE Regional Director may not be exercised
by him where the employer contests the labor regulation officers' findings and raises issues which cannot be
resolved without considering evidentiary matters not verifiable in the normal course of inspection. In such an
event, the case will have to be referred to the corresponding Labor Arbiter for adjudication, since it falls within
the latter's exclusive original jurisdiction. (Brokenshire Memorial Hospital, Inc., vs. Minister of Labor and
Employment, et. al., G.R. No. 74621, February 7, 1990)

Period to file the claims


All money claims arising from employer-employee relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever
barred. (Article 291, Labor Code)

The Anti – Sexual Harassment Law


Sexual harassment abounds in all sick societies. It is reprehensible enough but more so when inflicted
by those with moral ascendancy over their victims. We rule that it is a valid cause for separation from service.
(Villarama vs. National Labor Relations Commission, G.R. No. 106341, September 2, 1994 [Puno])

Mere casual buss on the cheek is not a sexual conduct or favor

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We have reviewed carefully the records of this case and found no convincing evidence to sustain
complainant’s charges. What we perceive to have been committed by respondent judge are casual gestures
of friendship and camaraderie, nothing more, nothing less. In kissing complainant, we find no indication that
respondent was motivated by malice or lewd design. Evidently, she misunderstood his actuations and
construed them as work-related sexual harassment under R.A. 7877. (Atty. Susan M. Aquino vs. Hon. Ernesto
D. Acosta, Presiding Judge, Court of Tax Appeals, A. M. No. CTA-01-1, April 2, 2002)

Maternity Leave under Republic Act No. 8282 (SSS Law)


A female member who has paid at least three (3) monthly contributions in the twelve-month period
immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit
equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-
eight (78) days in case of caesarean delivery.

Paternity Benefit (R.A. 8187)


This benefit shall apply to the first four deliveries or miscarriage of the employee’s lawful wife with
whom he is cohabiting. For this purpose, cohabiting refers to the obligation of the husband and wife to live
together. Where the spouses are not physically living together because of the work station or occupation, the
male employee is still entitled to the paternity leave benefit.
The leave shall be for seven (7) days, with full pay, consisting of basic salary and mandatory
allowances fixed by the Regional Wage Board, if any, provided that his pay shall not be less than the
mandated minimum wage.
Availment of the paternity leave may be after the delivery, without prejudice to an employer’s policy of
allowing the employee to avail of the benefit before or during the delivery, provided that the total number of
days shall not be more than seven (7) days for each covered delivery. (Handbook on Workers’ Statutory
Monetary Benefits, p.38)

A policy prohibiting an employee from having a relationship with an employee of a competitor


company is a valid exercise of management prerogative
Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information from competitors, especially so that it and Astra are rival companies in
the highly competitive pharmaceutical industry.
The prohibition against personal or marital relationships with employees of competitor companies
upon Glaxo’s employees is reasonable under the circumstances because relationships of that nature might
compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to
protect its interests against the possibility that a competitor company will gain access to its secrets and
procedures. (Duncan Association of Detailman-PTGWO vs. Glaxo Wellcome Philippines, Inc., G.R. No.
162994, September 17, 2004)

Republic Act 9710 – Magna Carta of Women


Expulsion and non-readmission of women faculty, due to pregnancy outside of marriage shall be
outlawed.
No school shall turn out or refuse admission to a female student, solely on the account of her having
contracted pregnancy outside of marriage during her term in school. [Section 13 (c)]
A woman employee having rendered continuous aggregate employment service of at least six (6)
months for the last twelve (12) months shall be entitled to a special leave benefit of two (2) months with full
pay based on her gross monthly compensation following surgery caused by gynecological disorders. (Section
18)

Republic Act No. 10028 – Promotion of Breastfeeding


It is hereby mandated that all health and non-health facilities, establishments or institutions shall establish
lactation stations. The lactation stations shall be adequately provided with the necessary equipment and
facilities. The lactation station shall not be located in the toilet.
Employment of Children
Children below fifteen (15) years of age shall not be employed except when a child works directly
under the sole responsibility of his/her parents or legal guardian and where only members of his/her family
are employed provided that his/her employment neither endangers his/her life, safety, health, and morals, nor
impairs his/her normal development, provided further that the parent or legal guardian shall provide the said
child with the prescribed primary and/or secondary education. For purposes of this Article, the term "child"
shall apply to all persons under eighteen (18) years of age. (Section 2, Republic Act No. 9231)

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Hours of Work of a Working Child
(1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours
a week provided that the work shall not be more than four (4) hours at any given day; (2) A child fifteen (15)
years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in
no case beyond forty (40) hours a week; (3) No child below fifteen (15) years of age shall be allowed to work
between eight o'clock in the evening and six o'clock in the morning of the following day and no child fifteen
(15) years of age but below eighteen (18) shall be allowed to work between ten o'clock in the evening and six
o'clock in the morning of the following day. (Section 3, Republic Act No. 9231)

Republic Act No. 10361 – Batas Kasambahay


January 18, 2013. All articles or provisions of Chapter III of Presidential Decree No. 442, as amended and
renumbered by Republic Act No. 10151 are hereby expressly repealed. (Sec. 44). This law governs the
working conditions of all kasambahay.

The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer
to any person, whether male or female, who renders services in and about the employer's home and which
services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer's family. (Section 1, Rule XIII,
Implementing Rules and Regulation of Book III, of the Labor Code)
Republic Act No. 10151 – the night workers law
It repealed Articles 130 and 131 of the Labor Code The new provisions in the Labor Code covering Articles
154 to 161 are brought about by Republic Act No. 10151 which was approved on June 21, 2011.
This law also repealed Articles 130 and 131 of the Labor Code and abolished the provisions of law which
prohibits night work for women.

Labor Relations Law


Labor relations laws are the laws, rules and regulations which govern the relationship between
employees and their employers, promote the right of the employees to self-organization and collective
bargaining, penalize unfair labor practice, and provide modes for the settlement of labor disputes such as
conciliation, mediation, grievance machinery, voluntary arbitration and compulsory arbitration. They are
covered by Books V – VII of the Labor Code.

Composition of the NLRC based on R. A. 9347


The National Labor Relations Commission shall be composed of eight (8) divisions with three
members which shall be chosen only from among the nominees of the workers and employers organizations,
respectively.
The Chairman and the seven (7) members shall come from the public sector, with the latter to be
chosen preferably from among the incumbent labor arbiters.
The Commission may sit en banc or in eight (8) divisions, each composed of three (3) members.
The Commission shall sit en banc only for purposes of promulgating rules and regulations governing
the hearing and disposition of cases before any of its divisions and regional branches and formulating policies
affecting its administration and operations.
Of the eight (8) divisions, the first, second, third, fourth, fifth and sixth divisions shall handle cases
coming from the National Capital Region and other parts of Luzon, the seventh and eighth divisions, cases
from Visayas and Mindanao, respectively
The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their
respective territorial jurisdiction.

Appointees to NLRC not subject to confirmation of the Commission on Appointments


Deciding on what laws to pass is a legislative prerogative. Determining their constitutionality is a
judicial function. The Court respects the laudable intention of the legislature. Regretfully, however, the
constitutional infirmity of Sec. 13 of RA 6715 amending Art. 215 of the Labor Code, insofar as it requires
confirmation of the Commission on Appointments over appointments of the Chairman and Member of the
National Labor Relations Commission (NLRC) is, as we see it, beyond redemption if we are to render fealty
to the mandate of the Constitution in Sec. 16, Art. VII thereof. (Calderon vs. Carale, G.R. No. 91636, April 23,
1992)

Jurisdiction of the Labor Arbiters


1. Unfair labor practice cases;
2. Termination disputes;

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3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in domestic or household
service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
7. Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies

Jurisdiction over Overseas Filipino Workers


The Labor Arbiter has original and exclusive jurisdiction over claims arising out of an employer-
employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment
including claims for actual, moral, exemplary and other forms of damages.

Venue
The venue is the Regional Arbitration Branch where the complainant resides or where the principal
office of the respondent(s) employer is situated, at the option of the complainant (Sec. 1[e], The 2005 Revised
Rules of Procedure of the National Labor Relations Commission)

Computation of the monetary claims of OFWs


The claim for unpaid salaries of overseas workers should salaries for unexpired portion of the contract.
(Serrano vs. Gallant Maritime Services, Inc., March 24, 2009)

Jurisdiction of the BLR


1. “Inter-union disputes” or “representation disputes” which refer to cases involving petition for
certification election filed by a duly registered labor organization which is seeking to be recognized as the sole
and exclusive bargaining agent of the rank-and-file employees in the appropriate bargaining unit of a
company, firm or establishment.
2. “Intra-union disputes” or “internal union disputes” which refer to disputes or grievances arising
from any violation of or disagreement over any provision of the constitution and by-laws of the union, including
any violation of the rights and conditions of union membership provided for in the Labor Code.

The NCMB
The Conciliation, mediation and voluntary arbitration functions of the Bureau of Labor Relations (BLR)
shall be absorbed by NCMB. It is an attached agency under the administrative supervision of the Secretary
of Labor and Employment. It is headed by an Administrator and 2 Deputy Administrators. The NCMB has
jurisdiction over conciliation, mediation and voluntary arbitration cases.

Personality of Labor Union not subject to collateral attack


We rule, however, that such legal personality may not be subject to a collateral attack but only through
a separate action instituted particularly for the purpose of assailing it. This is categorically prescribed by
Section 5, Rule V of the Implementing Rules of Book V. (Laguna Autoparts Manufacturing Corporation vs.
Office of the Secretary, Department of Labor and Employment G.R. No. 157146. April 29, 2005)
Once a labor union attains the status of a legitimate labor organization, it continues as such until its
certificate of registration is cancelled or revoked in an independent action for cancellation. In addition, the
legal personality of a labor organization cannot be collaterally attacked. Thus, when the personality of the
labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes
the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of
registration against either APSOTEU or ALU, and unless and until their registrations are cancelled, each
continues to possess a separate legal personality. (Coastal Subic Bay Terminal Inc. vs. Department of Labor
and Employment – Office of the Secretary, G.R. No. 157117, November 20, 2006)

Republic Act No. 10396


"ART. 228. Mandatory Conciliation and Endorsement of Cases. –
(a) Except as provided in Title VII-A, Book V of this Code, as amended, or as may be excepted by the
Secretary of Labor and Employment, all issues arising from labor and employment shall be subject to

2014 Pre-week Notes on Labor Laws & Social Legislations by Atty. Cecilio Duka for Jurists Bar Review Center
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mandatory conciliation-mediation. The labor arbiter or the appropriate DOLE agency or office that has
jurisdiction over the dispute shall entertain only endorsed or referred cases by the duly authorized officer.
"(b) Any or both parties involved in the dispute may pre-terminate the conciliation-mediation
proceedings and request referral or endorsement to the appropriate DOLE agency or office which has
jurisdiction over the dispute, or if both parties so agree, refer the unresolved issues to voluntary arbitration."

Grounds for cancellation of union registration


(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took
part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of
the election of officers, and the list of voters;
(c) Voluntary dissolution by the members (Republic Act No. 9481, May 25, 2007)
Republic Act No. 9481 which lapsed into law on May 25, 2007 has effectively reduced to just three (3)
the grounds for the cancellation of registration of a legitimate labor organization. Under the old provisions of
Article 239, there were ten grounds for the cancellation of union registration.

Mixture of employees in one union is not a ground for cancellation of its registration
Clearly then, for the purpose of de-certifying a union, it is not enough to establish that the rank-and-
file union includes ineligible employees in its membership. Pursuant to Article 239 (a) and (c) of the Labor
Code, it must be shown that there was misrepresentation, false statement or fraud in connection with the
adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, or
in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to
submit these documents together with the list of the newly elected-appointed officers and their postal
addresses to the BLR. (Air Philippines Corporation vs. Bureau of Labor Relations, G.R. No. 155395 June 22,
2006)

Requisites for the validity of the special assessment


1) authorization by a written resolution of the majority of all the members at the general membership
meeting called for the purpose;
2) secretary's record of the minutes of the meeting; and
3) individual written authorization for check off duly signed by the employees concerned. (Gabriel vs.
Secretary of Labor and Employment, G.R. No. 115949 March 16, 2000).

Employees who do not have the right to self-organization


The following are the groups of people whose right to self-organization is restricted by the labor laws:
high ranking government employees, employees of international organizations enjoying immunity form suits,
managerial employees, members of the AFP, PNP, firemen, jail guards, confidential employees and
employees of the cooperative who are members of that same cooperative.

Security Guards’ Right to Self Organization


The security guards and other personnel employed by the security service contractor shall have the
right to form, join or assist in the formation of a labor organization of their own choosing for purposes of
collective bargaining and to engage in concerted activities which are not contrary to law including the right to
strike. (Section 10, Department Order N0. 14 Series of 2001, December 18, 2001)

Government employees do not have the right to strike


The Court can concede hypothetically that the protest rally and gathering in question did not involve
some specific material demand. But then the absence of such economic-related demand, even if true, did
not, under the premises, make such mass action less of a prohibited concerted activity. For, as articulated
earlier, any collective activity undertaken by government employees with the intent of effecting work stoppage
or service disruption in order to realize their demands or force concessions, economic or otherwise, is a
prohibited concerted mass action and doubtless actionable administratively. xxx “[i]n the absence of statute,
public employees do not have the right to engage in concerted work stoppages for any purpose (Government
Service Insurance System vs. Kapisanan ng mga Manggagawa sa GSIS, G.R. No. 170132, December 6,
2006)

Unfair labor practice


Unfair labor practice refers to acts that violate the workers’ right to organize. The prohibited acts are
related to the workers’ right to self-organization and to the observance of a Collective Bargaining Agreement.

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Without that element, the acts, no matter how unfair, are not unfair labor practices. (Philcom Employees Union
vs. Philippine Global Communications, G.R. No. 144315, July 17, 2006)
Dismissal due to union security clause
It has been the jurisprudential rule for quite sometime that the employer is not considered guilty of
unfair labor practice if it merely complied in good faith with the request of the certified union for the dismissal
of employees expelled from the union pursuant to the union security clause in the CBA (Soriano v. Atienza,
G.R. No. 68619, March 16, 1989, 171 SCRA 284, 289-290). Hence, the company may not be ordered to
grant either backwages or financial assistance in the form of separation pay as a form of penalty. Thus, where
reinstatement is adjudged, the award of backwages and other benefits continues beyond the date of the Labor
Arbiter’s decision ordering reinstatement and extends up to the time said order of reinstatement is actually
carried out. (Olvido, et. al. vs. Court of Appeals, G. R. Nos. 141166 – 67, October 15, 2007)

Jurisdictional preconditions in bargaining


(1)Possession of the status of majority representation by the employees' representative in accordance
with any of the means of selection and/or designation provided for by the Labor Code; (2) proof of majority
representation; and (3) a demand to bargain under Article 251, paragraph (a), of the New Labor Code.
(Associated Labor Unions (ALU) vs. Ferrer –Calleja, G.R. No. L-77282, May 5, 1989)

Boulwarism
In negotiation, Boulwarism is an offer or counter-offer that is not meant to be negotiated. This is a
"take it or leave it" strategy named after Lemuel Boulware a former vice president of General Electric.

Contract Bar Rule


When there is an existing CBA, neither the employer nor the union may terminate nor modify the
Collective Bargaining Agreement during its lifetime. The parties are mandated by law to keep the status quo
and to continue with full force and effect the terms and conditions of the existing CBA. This is known as the
contract bar rule – the existence of the CBA (a contract between the employer and the union) bars the
modification or termination of the CBA except during the freedom period.

Freedom Period
The freedom period refers to the sixty (60) days span prior to the expiration of the CBA. It is the time
when the parties may terminate or modify the terms and conditions of the CBA.

Automatic Renewal Clause


Article 253 provides that the CBA shall remain effective and enforceable even after the expiration of
the period fixed by the parties as long as no new agreement is reached by them and no petition for certification
election is filed.

Lifetime of the CBA


The representation issue or the status of the union who entered into the Collective Bargaining
Agreement has a lifetime of five (5) years from the time of its effectivity. While the other provisions (economic)
shall be effective for a period of three (3) years from its execution.

CBA extended to ten years - valid


We also do not agree that the agreement violates the five-year representation limit mandated by Article
253-A. Under said article, the representation limit for the exclusive bargaining agent applies only when there
is an extant CBA in full force and effect. In the instant case, the parties agreed to suspend the CBA and put
in abeyance the limit on the representation period. In sum, we are of the view that the PAL-PALEA agreement
dated September 27, 1998, is a valid exercise of the freedom to contract. Under the principle of inviolability
of contracts guaranteed by the Constitution, the contract must be upheld. (Rivera, et. al. vs. Espiritu, G.R. No.
135547, January 23, 2002)

The Exclusive Bargaining Status Cannot Go Beyond Five Years


In the event however, that the parties, by mutual agreement, enter into a renegotiated contract with a
term of three (3) years or one which does not coincide with the said five-year term and said agreement is
ratified by majority of the members in the bargaining unit, the subject contract is valid and legal and therefore,
binds the contracting parties. The same will however not adversely affect the right of another union to
challenge the majority status of the incumbent bargaining agent within sixty (60) days before the lapse of the
original five (5) year term of the CBA. (FVC Labor Union-Philippine Transport and General Workers

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Organization vs. Sama-Samang Nagkakaisang Manggagawa Sa FVC-Solidarity Of Independent and General
Labor Organizations, G.R. No. 176249, November 27, 2009)

Substitutionary doctrine
Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer by the simple expedient of changing their
bargaining agent. And it is in the light of this that the phrase "said new agent would have to respect said
contract" must be understood. It only means that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to negotiate with management for the
shortening thereof.

Bargaining Unit
A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer, indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining provisions of the law.” (International
School Alliance of Educators vs. Quisumbing, G.R. No. 128845, June 1, 2000)

Test in determining the appropriate bargaining unit


In order to determine the appropriate bargaining unit the Supreme Court has time and again applied
the four tests to wit:
(1) will of the employees (Globe Doctrine);
(2) affinity and unit of employees’ interest, such as substantial similarity of work and duties, or similarity
of compensation and working conditions;
(3) prior collective bargaining history; and
(4) employment status, such as temporary, seasonal and probationary employees. (University of the
Philippines vs. Hon. Pura Ferrer-Calleja, G.R. No. 96189 July 14, 1992)

Certification election
Certification election refers to the process of determining through secret ballot the sole and exclusive
representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or
negotiation. A certification election is ordered by the Department of Labor and Employment (Department
Order 40 – 03, Rule I, Section 1 [h])

Members of religious groups who do not want to join unions may vote in a certification election
That the INC employees, as employees in the same bargaining unit in the true sense of the term, do
have the right of self-organization, is also in truth beyond question, as well as the fact that when they voted
that the employees in their bargaining unit should be represented by "NO UNION," they were simply
exercising that right of self-organization, albeit in its negative aspect. No law, administrative rule or precedent
prescribes forfeiture of the right to vote by reason of neglect to exercise the right in past certification elections.
In denying the petitioners' right to vote upon these egregiously fallacious grounds, the public respondents
exercised their discretion whimsically, capriciously and oppressively and gravely abused the same. (Reyes
vs. Trajano, G.R. No. 84433, June 2, 1992)

Deadlock bar rule


The Deadlock Bar Rule simply provides that a petition for certification election can only be entertained
if there is no pending bargaining deadlock submitted to conciliation or arbitration or had become the subject
of a valid notice of strike or lockout. The principal purpose is to ensure stability in the relationship of the
workers and the management (National Congress of Unions in the Sugar Industry of the Philippines
(NACUSIP) – TUCP vs. Trajano, G.R. No. L-67485, April 10, 1992)

One – year bar rule / Election year bar


A certification election cannot be held within one (1) year from the date of issuance of declaration of
a final certification election result. The one year bar rule also applies in cases of consent election, run – off
election and voluntary recognition. (R. Transport Corporation vs. Laguesma, G.R. No. 106830, November 16,
1993)

Negotiation Bar Rule

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Once the negotiation for a new CBA has been commenced pursuant to Article 250, a petition for
certification election may no longer be validly entertained by the Department of Labor and Employment.

Appeal bar rule


The filing of the memorandum of appeal from the order or decision of the Med-Arbiter stays the holding
of any certification election (Department Order No. 40 – 03, Rule VIII, Section 21)

Run – Off election


Run-off Election refers to an election between the labor unions receiving the two (2) highest number
of votes in a certification or consent election with three (3) or more choices, where such a certified or consent
results in none of the three (3) or more choices receiving the majority of the valid votes cast; provided that
the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.
(Section 1(ss), Rule I, Department Order 40 – 03)

Voluntary Recognition
Voluntary Recognition refers to the process by which a legitimate labor union is recognized by the
employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional
Office in accordance with Rule VII, Section 2, Department Order 40 – 03 (Department Order 40 – 03, Rule I,
Section 1 [bbb])

Grievance
Grievance refers to any question by either the employer or the union regarding the interpretation or
implementation of any provision of the collective bargaining agreement or interpretation or enforcement of
company personnel policies. (Department Order No. 40 – 03, Rule I, Section 1[u])

Voluntary arbitration
Voluntary arbitration refers to the mode of settling labor-management disputes by which the parties
select a competent, trained and impartial third person who shall decide on the merits of the case and whose
decision is final and executory. (NCMB Revised Procedural Guidelines in the Conduct of Voluntary Arbitration
Proceedings, Section 1 [d], Rule II [Oct. 15, 2004])

Gross Violations of Collective Bargaining Agreement is ULP


Gross violations of Collective Bargaining Agreement under Article 261 means flagrant and/or
malicious refusal to comply with the economic provisions of such agreement. Such gross violations do not fall
within the jurisdiction of the Voluntary Arbitrator or panel of Voluntary Arbitrators because they are considered
as unfair labor practice (ULP) under Article 248 thus, cognizable by the Labor Arbiter and the NLRC. (Isalama
Machine Works Corporation vs. National Labor Relations Commission, G.R. No. 100167, March 2, 1995)

Appeals from the Decisions of Voluntary Arbitrator or Panel of Voluntary Arbitrators – Court of
Appeals
The decisions of a voluntary arbitrator fall within the exclusive appellate jurisdiction of the Court of
Appeals. Indeed, this Court took this decision into consideration in approving the 1997 Rules of Civil
Procedure. (Nippon Paint Employees Union – Olalia vs. Court of Appeals, G.R. No. 159010. November 19,
2004)

Strike
Strike is any temporary stoppage of work by the concerted action of the employees as a result of
industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms or conditions
of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants stand in the
proximate relation of employer and the employee. (Bukluran ng Manggagawa sa Clothman Knitting Corp. –
Solidarity Unions of the Philippines for Empowerment and Reform vs. Court of Appeals, G.R. No. 158158,
January 17, 2005)

The requisites of a valid strike are mandatory


The requisites for a valid strike are as follows: (a) a notice of strike filed with the DOLE thirty days
before the intended date thereof or fifteen days in case of unfair labor practice; (b) strike vote approved by a
majority of the total union membership in the bargaining unit concerned obtained by secret ballot in a meeting
called for that purpose; (c) notice given to the DOLE of the results of the voting at least seven days before

2014 Pre-week Notes on Labor Laws & Social Legislations by Atty. Cecilio Duka for Jurists Bar Review Center
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the intended strike. These requirements are mandatory and failure of a union to comply therewith renders
the strike illegal (Piñero vs. National Labor Relations Commission, G.R. No. 149610, August 20, 2004)
We explained in National Federation of Labor vs. NLRC (G.R. No. 113466, December 15, 1997, 283
SCRA 275, 287-288) that “with the enactment of Republic Act No. 6715 which took effect on March 21, 1989,
the rule now is that such requirements as the filing of a notice of strike, strike vote, and notice given to the
Department of Labor are mandatory in nature. Thus, even if the union acted in good faith in the belief that
the company was committing an unfair labor practice, if no notice of strike and a strike vote were conducted,
the said strike is illegal.” (Samahang Manggagawa sa Sulpicio Lines, Inc. – NAFLU vs. Sulpicio Lines, Inc.
G.R. No. 140992, March 25, 2004)

Assumption of jurisdiction is discretionary


The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized
as an exercise of the police power of the State, with the aim of promoting public good. When the Secretary
exercises these powers, he is granted “great breadth of discretion” in order to find a solution to a labor dispute.
The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if
one has already taken place. The authority of the Secretary to assume jurisdiction over a labor dispute causing
or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to
all questions and controversies arising from such labor dispute. The power is plenary and discretionary in
nature to enable him to effectively and efficiently dispose of the dispute. (Philcom Employees Union vs.
Philippine Global communications, G.R. No. 144315, July 17, 2006 [495 SCRA 214[)
attycdduka

Strike in violation of arbitration – illegal


This Court has held that strikes staged in violation of agreements providing for arbitration are illegal,
since these agreements must be strictly adhered to and respected if their ends are to be achieved. The
rationale of the prohibition under Article 264 is that once jurisdiction over the labor dispute has been properly
acquired by competent authority, that jurisdiction should not be interfered with by the application of the
coercive processes of a strike. Indeed it is among the chief policies of the State to promote and emphasize
the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation, and
conciliation, as modes of settling labor, or industrial disputes. In Alliance of Government Workers v. Minister
of Labor, Chief Justice Fernando declared that the principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by law. Relations between private employers and
their employees rest on an essentially voluntary basis, subject to the minimum requirements of wage laws
and other labor and welfare legislation. (Sukhothai Cuisine and Restaurant vs. Court of Appeals, G.R. No.
150437, July 17, 2006)

Mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination
of his employment, even if a replacement had been hired by the employer during such lawful strike.
In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. this Court explained
that the effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union
officers who participate therein: an ordinary striking worker cannot be terminated for mere participation in an
illegal strike. There must be proof that he or she committed illegal acts during a strike. In all cases, the striker
must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under
the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability
for prohibited acts is to be determined on an individual basis. (Sukhothai Cuisine and Restaurant vs. Court of
Appeals, G.R. No. 150437, July 17, 2006)

Elements of employer – employee relationship


The elements to determine the existence of an employment relationship are: (a) the selection and
engagement of the employee (b) the payment of wages (c) the power of dismissal, and (d) the employer’s power
to control. The most important element is the employer’s control of the employee’s conduct, not only as to the
result of the work to be done, but also as to the means and methods to accomplish it. (Murillo vs. Court of Appeals
and Associated Broadcasting Corporation, et. el., G.R. No. 164652, June 8, 2007)

Full backwages
Finally came our ruling in Bustamante which superseded Pines City Educational Center and allowed
full recovery of backwages without deduction and without qualification pursuant to the express provisions of

2014 Pre-week Notes on Labor Laws & Social Legislations by Atty. Cecilio Duka for Jurists Bar Review Center
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Article 279 of the Labor Code, as amended by Rep. Act No. 6715, i.e., without any deduction of income the
employee may have derived from employment elsewhere from the date of his dismissal up to his
reinstatement, that is, covering the entirety of the period of the dismissal.(Equitable Banking Corporation vs.
Sadac, G.R. No. 164772, June 8, 2006)

Salary increase not included in the computation of backwages


There was no lawful decree or order supporting his claim, such that his salary increases can be made
a component in the computation of backwages. What is evident is that salary increases are a mere
expectancy. They are, by its nature volatile and are dependent on numerous variables, including the
company’s fiscal situation and even the employee’s future performance on the job, or the employee’s
continued stay in a position subject to management prerogative to transfer him to another position where his
services are needed. In short, there is no vested right to salary increases. That respondent Sadac may have
received salary increases in the past only proves fact of receipt but does not establish a degree of
assuredness that is inherent in backwages. From the foregoing, the plain conclusion is that respondent
Sadac’s computation of his full backwages which includes his prospective salary increases cannot be
permitted. (Equitable Banking Corporation vs. Sadac, G.R. No. 164772, June 8, 2006)

Separation pay in lieu of reinstatement


Under the law, an illegally dismissed employee is entitled to reinstatement and backwages, and if
reinstatement is no longer possible, he may be given separation pay in lieu of reinstatement. (Bunagan vs.
Sentinel Watchman & Protective Agency, Inc., G.R. No. 144376, September 13, 2006) attycdduka

Repeated rehiring of project employee


At this time, we wish to allay any fears that this decision unduly burdens an employer by imposing a
duty to re-hire a project employee even after completion of the project for which he was hired. The import of
this decision is not to impose a positive and sweeping obligation upon the employer to re-hire project
employees. What this decision merely accomplishes is a judicial recognition of the employment status of a
project or work pool employee in accordance with what is fait accompli, i.e., the continuous re-hiring by the
employer of project or work pool employees who perform tasks necessary or desirable to the employer’s usual
business or trade. (Maraguinot, Jr. vs. National Labor Relations Commission, G.R. No. 120969, January 22,
1998)

Double probationary period - illegal


The Hotel's system of double probation a transparent scheme to circumvent the plain mandate of the
law and make it easier for it to dismiss its employees even after they shall have already passed probation.
The policy of the Constitution is to give the utmost protection to the working class when subjected to such
maneuvers as the one attempted by the petitioners. This Court is fully committed to that policy and has always
been quick to rise in defense of the rights of labor, as in this case. (Holiday Inn Manila vs. National Labor
Relations Commission, G.R. No. 109114, September 14, 1993)

Probationary Period of Private School Teachers


Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers who
have satisfactorily completed their probationary period shall be considered regular or permanent.
Furthermore, the probationary period shall not be more than six consecutive regular semesters of satisfactory
service for those in the tertiary level. Thus, the following requisites must concur before a private school teacher
acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three
consecutive years of service; and (3) such service must have been satisfactory. (Saint Mary’s University vs.
Court of Appeals, G.R. No. 157788, March 08, 2005)

Distinction between a dismissal just cause and a dismissal for authorized cause
The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for
authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay,
as a rule, is not required, while in the second, the law requires payment of separation pay. (Jaka Food
Processing Corporation vs. Pacot, et. al., G.R. No. 151378, March 28, 2005)

Serious Misconduct
In order to constitute serious misconduct which will warrant the dismissal of an employee under
paragraph (a) of Article 282 of the Labor Code, it is not sufficient that the act or conduct complained of has
violated some established rules or policies. It is equally important and required that the act or conduct must

2014 Pre-week Notes on Labor Laws & Social Legislations by Atty. Cecilio Duka for Jurists Bar Review Center
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have been performed with wrongful intent. (Moreno vs. San Sebastian College – Recoletos, Manila, G.R. No.
175283, March 28, 2008)

Willful disobedience
However, willful disobedience of the employer’s lawful orders, as a just cause for dismissal of an
employee, envisages the concurrence of at least two requisites: (1) the employee's assailed conduct must
have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must
have been reasonable, lawful, made known to the employee and must pertain to the duties which he had
been engaged to discharge. (Bascon vs. Court of Appeals, G.R. No. 144899, February 5, 2004) attycdduka
Abandonment
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is
a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid
finding of abandonment, these two factors should be present: (1) the failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the
second as the more determinative factor which is manifested by overt acts from which it may be deduced that
the employees has no more intention to work. The intent to discontinue the employment must be shown by
clear proof that it was deliberate and unjustified. (Agabon vs. National Labor Relations Commission, G.R. No.
158693 November 17, 2004)

Requisites for dismissal due to loss of trust and confidence


Thus, in order to be a valid cause for dismissal, loss of confidence should not be (a) simulated, (b)
used as a subterfuge for causes which are improper, illegal or unjustified, (c) arbitrarily asserted in the face
of overwhelming evidence to the contrary, and (d) a mere afterthought to justify earlier action taken in bad
faith. While in the termination of services of managerial employees for loss of confidence, employers are given
wider latitude of discretion, there must, however, be substantial proof thereof. The employer’s evidence must
clearly and convincingly establish the facts and incidents upon which the loss of confidence may fairly be
made to rest. (Wah Yuen Restaurant, vs. Jayona, G.R. No. 159448, December 16, 2005)

Twin notice requirement


Procedural due process requires the employer to give the employee two notices. The first is to apprise
him of the particular acts or omissions for which his dismissal is sought, and the second is to inform him of
the decision to terminate him. Failure to comply with these mandatory procedural requirements taints the
dismissal with illegality and any judgment rendered by the employer without compliance therewith can be
considered void and inexistent. It should be emphasized that due process must be observed in effecting an
employee’s dismissal because the dismissal of an employee affects not only his position but also his means
of livelihood and his dependents’ sustenance. Thus, strict adherence to the requirements set forth in the Labor
Code, as amended, is essential. (Wah Yuen Restaurant, vs. Jayona, G.R. No. 159448, December 16, 2005)

Suspension beyond 30 days – constructive dismissal


Clearly, constructive dismissal had already set in when the suspension went beyond the maximum
period allowed by law. Section 4, Rule XIV, Book V of the Omnibus Rules provides that preventive suspension
cannot be more than the maximum period of 30 days. Hence, after the 30-day period of suspension, the
employee must be reinstated to his former position because suspension beyond this maximum period
amounts to constructive dismissal. (Hyatt Taxi Services Inc. vs. Catinoy, G.R. No. 143204, June 26, 2001)

If dismissal is too harsh suspension can be imposed


We cannot but agree that the extreme penalty of dismissal was too harsh and manifestly
disproportionate to the infraction committed, which appears to have been fully explained, and, in fact, to be
not inexcusable under the circumstances. There was no dishonesty, no demonstration of such moral
perverseness as would have justified the claimed loss of confidence attendant to the job. Perhaps, individual
petitioner should first have been given a mere warning, then a reprimand or even a suspension, but certainly
not outright dismissal from employment. One must keep in mind that a worker’s employment is property in
the constitutional sense, and he cannot be deprived thereof without due process and unless it was
commensurate to his acts and degree of moral depravity. (Coca-Cola Bottlers, Phils., Inc. vs. Kapisanan ng
Malayang Manggagawa sa Coca- Cola - FFW, G.R. No. 148205, February 28, 2005)

Valid termination due to retrenchment

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For a valid termination due to retrenchment, the law requires that written notices of the intended
retrenchment be served by the employer on the worker and on the Department of Labor and Employment at
least one (1) month before the actual date of the retrenchment. The purpose of this requirement is to give
employees some time to prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity
to ascertain the verity of the alleged cause of termination. (EMCO Plywood Corporation vs. Abelgas et. al.,
G.R. No. 148532, April 14, 2004)

Amount of separation pay


As to the amount of separation pay, this Court has ruled that separation pay may be computed at one
(1) month pay, or one (1/2) month pay for every year of service, whichever is higher. It is noteworthy that the
separation pay being awarded in the instant case is due to illegal dismissal; hence, it is different from the
amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of
closure or cessation of the employer’s business, in either of which the separation pay is equivalent to at least
one (1) month or one-half (1/2) month pay for every year of service, whichever is higher. (F.F. Marine
Corporation vs. The Honorable Second Division National Labor Relations Commission, G.R. No. 152039,
April 08, 2005)

Disease as a ground for dismissal


The burden of proving the validity of the dismissal rests on the employer. As such, the employer must
prove that the requisites for a valid dismissal due to a disease have been complied with. In the absence of
the required certification by a competent public health authority, this Court has ruled against the validity of the
employee’s dismissal. (Manly Express Inc. vs. Payong, Jr., G.R. No. 167462, October 25, 2005)
No separation pay upon resignation – general rule
The general rule is that an employee who voluntarily resigns from employment is not entitled to
separation pay unless, however, there is a stipulation for payment of such in the employment contract or
Collective Bargaining Agreement (CBA), or payment of the amount is sanctioned by established employer
practice or policy. (Travelaire & Tours Corp. vs. National Labor Relations Commission, G.R. No. 131523,
August 20, 1998)

Retirement
Retirement is a different specie of termination of employment from dismissal for just or authorized
causes under Articles 282 and 283 of the Labor Code. While in all three cases, the employee to be terminated
may be unwilling to part from service; there are eminently higher standards to be met by the employer validly
exercising the prerogative to dismiss for just or authorized causes. In those two instances, it is indispensable
that the employer establishes the existence of just or authorized causes for dismissal as spelled out in the
Labor Code. Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter after reaching a certain age agrees and/or
consents to sever his employment with the former. (Cainta Catholic School vs. Cainta Catholic School
Employees Union, G.R. No.151021, May 4, 2006, 489 SCRA 468[2006])

Qualification for retirement


In case of retirement, the employee shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining agreement and other agreements: Provided,
however, That an employee’s retirement benefits under any collective bargaining and other agreements shall
not be less than those provided herein.
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the
establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65)
years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the
said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six (6) months being considered as one whole
year.
Unless the parties provide for broader inclusions, the term one half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five
(5) days of service incentive leaves. (Sta. Catalina College vs. National Labor Relations Commission, G.R.
No. 144483, November 19, 2003)

Computation of retirement pay


For the purpose of determining the minimum retirement pay due an employee under this Rule, the
term “one-half month salary” shall include all the following: (a) Fifteen (15) days salary of the employee based
on his latest salary rate. (b) The cash equivalent of not more than five (5) days of service incentive leave; (c)

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One-twelfth of the 13th month pay due an employee; (d) All other benefits that the employer and employee
may agree upon that should be included in the computation of the employee’s retirement pay. The foregoing
rules are clear that the whole 5 days of SIL are included in the computation of a retiring employees’ pay.
(Enriquez Security Services, Inc. vs. Cabotaje, G.R. No. 147993, July 21, 2006)

Retirement of underground miners


On February 26, 1998, Republic Act No. 8558 was signed into law and amended Article 287 of the
Labor Code and provided for the retirement benefits of underground miners. Based on R.A. 8558, “n
underground mining employee upon reaching the age of fifty (50) years or more, but not beyond sixty (60)
years which is hereby declared the compulsory retirement age for underground mine workers, who has served
at least five (5) years as underground mine worker, may retire and shall be entitled to all the retirement benefits
provided for in this Article.

Prescription
Article 290 Offenses penalized under this Code and the rules and regulations issued pursuant thereto
shall prescribe in three (3) years.
The Labor Code, however, does not contain any provisions on the mode of computation of the three-
year prescriptive period it established.
Prescription shall begin to run from the day of the commission of the violation of the law, and if the
same be not known at the time, from the discovery thereof and institution of judicial proceedings for its
investigation and punishment.
It is relevant to note that the same result would be reached by giving supplemental effect to provisions
of the Revised Penal Code in the application of Article 290 of the Labor Code. Article 91 of the Revised Penal
Code reads as follows:
Art. 91. Computation of the prescription of offenses. The period of prescription shall commence to run
from the day on which the crime is discovered by the offended party, the authorities, or their agents, and shall
be interrupted by the filing of the complaint or information, and shall commence to run again when such
proceedings terminate without the accused being convicted or acquitted, or are unjustifiably stopped for any
reason not imputable to him.
The term of prescription shall not run when the offender is absent from the Philippine Archipelago.
(People of the Philippines vs. Duque, G.R. No. 100285, August 13, 1992)

Prescription period for money claims


Article 291 of the Labor Code which provides that all money claims arising from employer-employee
relationship shall be filed within three (3) years from the time the cause of action accrued. (Central Negros
Electric Cooperative (CENECO), Inc. vs. National Labor Relations Commission, G.R. No. 106246, September
1, 1994)

Prescription for all money claims


What rules on prescription should apply in cases like this one has long been decided by this Court. In
illegal dismissal, it is settled, that the ten-year prescriptive period fixed in Article 1144 of the Civil Code may
not be invoked by petitioners, for the Civil Code is a law of general application, while the prescriptive period
fixed in Article 292 of the Labor Code [now Article 291] is a SPECIAL LAW applicable to claims arising from
employee-employer relations. The language of Art. 291 of the Labor Code does not limit its application only
to "money claims specifically recoverable under said Code" but covers all money claims arising from an
employee-employer relations" (Citing Cadalin vs. POEA Administrator, 238 SCRA 721, 764 [1994]; and Uy
vs. National Labor Relations Commission, 261 SCRA 505, 515 [1996]). . . .
It should be noted further that Article 291 of the Labor Code is a special law applicable to money
claims arising from employer-employee relations; thus, it necessarily prevails over Article 1144 of the Civil
Code, a general law. Basic is the rule in statutory construction that "where two statutes are of equal theoretical
application to a particular case, the one designed therefore should prevail."
We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription period
at three (3) years and which governs under this jurisdiction. (Laureano vs. Court of Appeals, G.R. No. 114776,
February 2, 2000)

Prescription period for illegal dismissal


Verily, the dismissal without just cause of an employee from his employment constitutes a violation of
the Labor Code and its implementing rules and regulations. Such violation, however, does not amount to an
"offense" as understood under Article 291 of the Labor Code. In its broad sense, an offense is an illegal act

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which does not amount to a crime as defined in the penal law, but which by statute carries with it a penalty
similar to those imposed by law for the punishment of a crime.
Indeed there is, merit in the contention of petitioner that the four [4]-year prescriptive period under
Article 1146 of the New Civil Code, applies by way of supplement, in the instant case, to wit: Art. 1146. The
following actions must be instituted within four years. [1] Upon an injury to the lights of the plaintiff.
Clearly then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one's dismissal from employment constitutes, in essence, an action
predicated "upon an injury to the rights of the plaintiff," as contemplated under Art. 1146 of the New Civil
Code, which must be brought within four [4] years. (Callanta vs. Carnation Philippines, Inc., G.R. No. 70615
October 28, 1986)

In illegal dismissal cases, the employee concerned is given a period of four years from the time of his
dismissal within which to institute a complaint. This is based on Article 1146 of the New Civil Code which
states that actions based upon an injury to the rights of the plaintiff must be brought within four years. Clearly
then, when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of one's dismissal from employment constitutes, in essence, an action predicated "upon
an injury to the rights of the plaintiff," as contemplated under Art. 1146 of the New Civil Code, which must be
brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a
cause of action of the worker. It is settled that in illegal dismissal cases, the cause of action accrues from the
time the employment of the worker was unjustly terminated. Thus, the four-year prescriptive period shall be
counted and computed from the date of the employee's dismissal up to the date of the filing of complaint for
unlawful termination of employment. (Victory Liner, Inc. vs. Race, G.R. No. 164820, March 28, 2007)

13th month pay for certain types of employees


Presidential Decree No. 851 mandating all employers to pay their rank and file employees regardless
of the nature of their employment and irrespective of the method by which their wages are paid provided they
worked for at least one (1) month during a calendar year. The 13th Month Pay must be given to the employees
not later than December 24 of every year. The 13th Month Pay is computed by dividing the total basic salary
earned for the year exclusive of overtime, holiday, and night shift differential pay divided by 12.
(a) Employees Paid by Results. — Employees who are paid on piece work basis are by law entitled
to the 13th month pay.
Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the
mandated 13th month pay, based on their total earnings during the calendar year, i.e., on both their fixed or
guaranteed wage and commission.
(b) Those with Multiple Employers. — Government employees working part time in a private
enterprise, including private educational institutions, as well as employees working in two or more private
firms, whether on full or part time basis, are entitled to the required 13th month pay from all their private
employers regardless of their total earnings from each or all their employers.
(c) Private School Teachers. — Private school teachers, including faculty members of universities
and colleges, are entitled to the required 13th month pay, regardless of the number of months they teach or
are paid within a year, if they have rendered service for at least one (1) month within a year.
attycdduka

Solo Parent Welfare Act (Republic Act No. 8972)


The employer shall provide for a flexible working schedule for solo parents provided that the same
shall not affect individual and company productivity
No employer shall discriminate against any solo parent employee with respect to terms and conditions
of employment on account of his/her status. In addition to leave privileges under existing laws, parental leave
of not more than seven (7) working days every year shall be granted to any solo parent employee who has
rendered service of at least one (1) year.

Books Authored by Atty. Duka


1. Labor Laws and Social Legislations: A Barrister’s Companion (Rex Bookstore, 2011)
2. Constitutional Law: A Barrister’s Companion (Rex Bookstore, 2010)
3. RIZAL, His Legacy to the Philippine Society (Anvil Publishing House, 2010)
4. The Struggle for Freedom: A Textbook in Philippine History (Rex Bookstore, 2008)
5. The Law and the Teaching Profession in the Philippines (C and E Publishing, 2008)
6. Philosophy of Education (Rex Bookstore, Inc., 2006, 1999)
7. Reviewer for the Civil Service Examination (Manila Review Institute, Inc., 2001)
8. World Geography (Rex Bookstore, Inc., 2006, 2001)

2014 Pre-week Notes on Labor Laws & Social Legislations by Atty. Cecilio Duka for Jurists Bar Review Center
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9. Introduction to Asia: History, Culture and Civilization (Rex Bookstore, 2005)
10. Reviewer for the Licensure Examination for Teachers (MRI, 2006, 1998)
11. Historical, Philosophical and Legal Foundations of Education
(Phoenix Publishing House, 1997)

Give and it will be given to you. A good measure, pressed down, shaken together and running
over, will be poured into your lap. For with the measure you use, it will be measured to you. (Luke
6:38)
Those who are in possession of this review material have the obligation to share it with others.
God bless you as you take the Bar Examinations – Atty. Cecilio D. Duka

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