Labstan E1 Ampp TSN

First Exam
AMPP LABOR STANDARDS Based on the Lectures of

Notes 1st Semester SY 2017-2018 Atty. Maria Christina Sagmit
July 14, 2017 | Peroy
PART ONE: INTRODUCTION
It’s very easy for you to understand what type of framework we will be using for
the class. That would be part of the outline that I will be giving you.
PART TWO: GENERAL PROVISIONS – 3, 4, 6
A. Art. 3 in relation to Art. II, Sec. 18 & Art. XIII Sec. 3 of the Constitution
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.
Constitution
Art. II Declaration of Principles and State Policies
SECTION 18. The State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare.
Art. III Social Justice and Human Rights

Labor
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.
Alcomendras | Manligoy | Pahayahay | Peroy 1

Contributors: Apura | Barrios
First Exam
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.
Q: How is it related to the provision of the constitution of the role of labor and the
role of the employer or management?
A: Constitution explicitly recognized shared responsibility of employers and
workers and the right of enterprise to reasonable returns on investment and to
expansion and growth. [Source: Book]
Q: So, you’re basically saying that the LC is a reiteration of the constitution?
Q: Is the LC provision the same as the Constitutional provision?
Q: Is the role played by the employer present in the LC provision? Is there any
mention of the right given to the employer?
A: No such statement in Sec. 3 (LC)
Comment: When I ask you to compare provisions, you analyze what is lacking in
one provision, what is emphasized in another provision, and what has been
mentioned in the provision.
Q: Which is the more extensive discussion of the rights of the employees?

A: Constitutional provision
Q: Does the LC mention the right to collective bargaining (CB), self-organization,

strike?
A: Strike, no. Self-organization and CB, yes.
Q: When you take a look at the Consti provision, it seems that there is a recognition
of the role of the worker as a primary social economic force in the country. At the
same time, it also recognizes rights given to the employer. What are these

First Exam
management rights? Limit yourself to the provisions only. Can you see any rights
of the management there?
A: “right of enterprises to reasonable returns on investments, and to expansion
and growth” [Source: Provision]
The Consti recognizes the rights of the management. It does. You are supposed to
be familiar with the provisions of the Consti and the LC regarding this because this
is very straightforward. If you are asked in the bar, “what is the policy on labor and
management as provided in the constitution? 5%” So, may 5% na kayo. You are
supposed to be familiar with that.
B. Construction in favor of labor – 4
Q: What is the rule with respect to construction?

Art. 4. Construction in favor of labor. All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.
Q: We mean to say that all labor legislations will be following that rule on
construction?
A:
Q: Basis? All labor agreements and all labor legislations? What does Art. 4 provide?
Go back to the provision.
Q: In the case of Arco Metal was there an interpretation of the provision of the labor
code? What was the complaint all about?
Arco Metal v. Samahan

G.R. No. 170734, May 14, 2008
Facts:
Arco prorated the monetary benefits (13th month pay, bonus and leave
encashment) of employees who did not serve full 12 months.
Respondent protested the prorated scheme, claiming that on several occasions

petitioner did not prorate the payment of the same benefits to seven (7) employees
who had not served for the full 12 months. The payments were made in 1992,
1993, 1994, 1996, 1999, 2003, and 2004.

First Exam
Issue:
W/N the grant of 13th month pay, bonus, and leave encashment in full regardless
of actual service rendered constitutes voluntary employer practice.
Held:
Yes.
Any benefit and supplement being enjoyed by employees cannot be reduced,
diminished, discontinued or eliminated by the employer. The principle of non-
diminution of benefits is founded on the Constitutional mandate to "protect the
rights of workers and promote their welfare," and "to afford labor full protection."
Said mandate in turn is the basis of Article 4 of the Labor Code which states that
"all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations shall be rendered in favor of labor."
In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a
policy of freely, voluntarily and consistently granting full benefits to its
employees regardless of the length of service rendered. True, there were only a
total of seven employees who benefited from such a practice, but it was an
established practice nonetheless. Jurisprudence has not laid down any rule
specifying a minimum number of years within which a company practice must be
exercised in order to constitute voluntary company practice. Thus, it can be six (6)
years, three (3) years, or even as short as two (2) years. Petitioner cannot shirk
away from its responsibility by merely claiming that it was a mistake or an error.
Q: What provision of the LC was being interpreted in this case?

C: I asked, are we limited to applying Art. 4 to provisions of the LC? You said yes,
that only provisions of the LC shall be construed in that way. My question is, in the
Arco case, was the provision being interpreted an LC provision?
A: No. The CBA provisions vis-à-vis Art. 100 of the LC regarding the diminution of
benefits.
Q: What were the subject matters of the complaint?

A: 13th month pay, bonus, and leave encashment
Q: As to the allegation that there were some workers who received prorated
benefits. What did the SC say?

First Exam
C: SC said if there were really people who received prorated benefits before then
management should have presented evidence which they failed to do.
Q: Was there any distinction as to the benefits with respect to the ruling? Or was
it a general statement that “well you did not show any evidence of prorating before
so they are entitled to the full benefits?” How did the SC rule?
A: Emergency Leave and 13th month pay and bonus - CBA does not provide that
employees does not have to be employed for 1 year. Sick Leave – CBA provided for
1 year employment.
Q: How did the SC use the principle under Art. 4 (LC) in making the ruling? How
did the SC use Art. 4?
C: We are discussing this under the rules of construction of the labor code. I
assigned this under Art. 4. With respect to the 13th month pay, the provision is
clear.
Q: But what is not clear in terms of the leaves? Saan nagkaroon ng vagueness which
then was the occasion for the SC to apply Art. 4. Diba there was doubt as to
implementation and interpretation of the CBA provision with respect to what
benefits?
C: The SC didn’t say na maling-mali lahat ang Arco Metal.
Q: Ang sinabi nya, basta may vagueness as to what benefits?

A: 13th month pay.
Q: Bakit may vagueness?

A: CBA does not indicate that that 13th month indicates a 1 year requirement.
C: Okay, diba, dun nagkaron ng duda. Are we supposed to prorate with respect to
leaves and bonuses, and leave encashment? Or are we supposed to prorate? There
was vagueness because the CBA itself did not provide for that. Using Art. 4, SC said,
we will interpret it in favor of the worker. This is very basic, which you would have
learned in StatCon.
StatCon, you do not use the rules of construction when there is nothing to
interpret. When the law is clear, you do not interpret, you just apply it. And in this
case, there was vagueness in the CBA provision regarding the encashments and
bonuses. So, in case of doubt, you resort to Art. 4.

First Exam
But with respect to 13th month, there was prorating because it was clear in the
CBA and even in the PD 851 which is the 13th month pay law.
Which brings me to my point earlier, we do not limit ourselves to applying Art. 4

to LC provisions. It is generally used in all labor legislations and labor agreements.
In other words, Pro Worker tayo.
Duty Free v. Tria

G.R. No. 174809, June 27, 2012
Facts:
Petitioner Duty Free Philippines Services, Inc. is a manpower agency that provides
personnel to Duty Free Philippines(DFP). On March 16, 1989, respondent Manolo
Tria was employed by Petitioner and was seconded to DFP as a Warehouse
Supervisor.
In an Audit Report, dated January 16, 1998, it was revealed that 1,020 packs of
Marlboro bearing Merchandise Code No. 020101 under WRR No. 36-04032 were
not included in the condemnation proceedings held on December 27, 1996 and
that there were glaring discrepancies in the related documents which indicate a
malicious attempt to conceal an anomalous irregularity.The relevant Request for
Condemnation was found to have been fabricated and all signatories therein,
namely, Ed Garcia, Stockkeeper; Catherino A. Bero, DIU Supervisor; and
Constantino L. Cruz, were held accountable for the irregular loss of the
unaccounted Marlboro KS Pack of 5
After further investigation, it was discovered that the subject merchandise was
illegally brought out of the warehouse and it was made to appear that in all the
documents prepared said goods were legally condemned on December 27, 1996.
Ed Garcia, one of the respondents in the Audit Review, implicated [respondent] and
[two] others. Garcia claimed that he was unaware of the illegality of the
transaction as he was only obeying the orders of his superiors who included
[respondent]. Garcia disclosed that it was respondent who ordered him to look for
a van for the supposed direct condemnation of the subject merchandise.
Consequently, the Discipline Committee requested respondent to submit a written

reply/explanation regarding the findings in the Audit Report and the allegations
of Garcia. Unsatisfied with his denial, the DFP Discipline Committee [DFPDC]

First Exam
issued a Joint Resolution holding respondent GUILTY OF DISHONESTY for (his)

direct participation in the fake condemnation and pilferage of the missing 1,020
Marlboro Pack of 5s cigarettes and orders his DISMISSAL from the service for cause
and for loss of trust and confidence, with forfeiture of all rights and privileges due
them from the company, except earned salaries and leave credits.
On September 18, 1998, Petitioner sent respondent a memorandum terminating

his employment with Petitioner and his secondment to DFP on the basis of the
findings and recommendation of the (DFPs) Discipline Committee.
Aggrieved, respondent filed a Complaint against Petitioner for Illegal Dismissal

and for payment of backwages, attorney’s fees and damages.
On May 31, 1999, the Labor Arbiter (LA) rendered a Decision finding respondent
to have been illegally dismissed from employment. On appeal, the NLRC affirmed
the LA decision, but deleted the award of attorneys fees. Petitioners motion for
reconsideration was also denied.
When petitioner elevated the case to the CA, it denied for the first time the
existence of employer-employee relationship and pointed to DFP as respondent’s
real employer. The appellate court, however, considered said defense barred by
estoppel for its failure to raise the defense before the LA and the NLRC.It
nonetheless ruled that although DFPDC conducted the investigation, petitioner’s
dismissal letter effected respondent’s termination from employment. On the
validity of respondent’s dismissal from employment, the CA respected the LA and
NLRC findings and reached the same conclusion that respondent was indeed
illegally dismissed from employment. Petitioners motion for reconsideration was
likewise denied in a Resolution.
Issue:
1. W/N Tria is DFP’s employee. YES. 
2. W/N DFPS convincingly proved evidence to warrant Tria’s dismissal. NO.
Held:
1. It was only in petitioners Petition for Certiorari before the CA did it impute
liability on DFP as respondent’s direct employer and as the entity who conducted
the investigation and initiated espondents termination proceedings. Obviously,
petitioner changed its theory when it elevated the NLRC decision to the CA. The

First Exam
appellate court, therefore, aptly refused to consider the new theory offered by
petitioner in its petition. It is a matter of law that when a party adopts a particular
theory and the case is tried and decided upon that theory in the court below, he
will not be permitted to change his theory on appeal. The case will be reviewed and
decided on that theory and not approached and resolved from a different point of
view.
We cannot permit petitioner to change its theory on appeal. It would be unfair to
the adverse party who would have no more opportunity to present further
evidence, material to the new theory, which it could have done had it been aware
earlier of the new theory before the LA and the NLRC.
2. We agree with the appellate court that DFPDCs conclusions are not supported
by clear and convincing evidence to warrant the dismissal of respondent. In illegal
dismissal cases, the employer is burdened to prove just cause for terminating the
employment of its employee with clear and convincing evidence. This principle is
designed to give flesh and blood to the guaranty of security of tenure granted by
the Constitution to employees under the Labor Code. In this case, petitioner failed
to submit clear and convincing evidence of respondent’s direct participation in the
alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions,
accusations, and conclusions of employers do not provide for legal justification for
dismissing employees. In case of doubt, such cases should be resolved in favor of
labor, pursuant to the social justice policy of labor laws and the Constitution.
Q: What was the ground for the dismissal?

A: Alleged pilferage of Marlboro packs. 1,020 packs.
Q: What was the defense of the worker?

A:
C: He ordered someone to put it in the truck.
Q: How did the SC apply Art. 4 in this case?

C: In other words, the burden of proving that the dismissal was for just causes rests
on the employer. In this case, SC said the employer failed to establish substantial
evidence that there was substantial evidence to terminate the employee.
Q: What was the ruling of the SC that there was no employer-employee

relationship between Duty Free because the worker is actually a worker of the
agency?

First Exam
A: Principle of Estoppel was applied here.
C: In fact, it even defended its action in terminating the employee. And then
belatedly claiming that it was not the real employer, that it was the agency.
PART THREE: PRE-EMPLOYMENT
A. Recruitment and placement of workers
1. State Policy – 12
Q: What is the state policy on the recruitment and placement provide?
Art. 12. Statement of objectives. It is the policy of the State:

1. To promote and maintain a state of full employment through improved
manpower training, allocation and utilization;
2. To protect every citizen desiring to work locally or overseas by securing for him
the best possible terms and conditions of employment;
3. To facilitate a free choice of available employment by persons seeking work in

conformity with the national interest;
4. To facilitate and regulate the movement of workers in conformity with the

national interest;
5. To regulate the employment of aliens, including the establishment of a

registration and/or work permit system;
6. To strengthen the network of public employment offices and rationalize the

participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;
7. To insure careful selection of Filipino workers for overseas employment in order

to protect the good name of the Philippines abroad.
Q: What is the policy of the state with regard to recruitment and placement of
workers?

First Exam
A: Art. 12
Policy number 1:
1. To promote and maintain a state of full employment through improved
manpower training, allocation and utilization;
Q: What is full employment? What do you mean by that?

A:
C: When you say full employment, all those qualified to be employed is given the
opportunity to work and to be productive. It doesn’t necessarily mean
permanency but at least the opportunity is there. Kumbaga, sa 10 graduates, all 10
have the opportunity for productivity and for being employed. If there is a margin
or unemployment, then that is not a state of full employment.
Q: Security of tenure, which means?

A:
Another aspect of course if underemployment. A person may be employed but,

Q: What is underemployment?
A:
C: If a person has the qualification but has no position, then he is not working, that
is unemployment, not underemployment.
A: There is an apparent mismatch there when we talk about underemployment,

the educational attainment of a person is not fully utilized in the position that he
is occupying. If the present position requires less skill, there is underemployment.
Example:
1. Teacher working as a domestic helper.
2. Law graduate working as a call center agent. [Ma’am tells the story of her
student who worked as a call center agent]
In other words, full employment is not the same as security of tenure.

Underemployment, when everybody is underemployed, that is not a state of full
employment either. Dapat fit ka sa iyong qualifications.

First Exam
If you take a look at the provisions of Art. 12, this will explain the succeeding
provisions of the LC. There are provisions on alien employment, there are
provisions on recruitment and placement of Filipinos for work abroad. There are
provisions on equal employment opportunities. But if you take a look at the
provisions of the LC and even the Consti, there is no firm law on equal employment
opportunities.
That is why we have employers preferring to hire male than female employees.
You have people who prefer single compared to married women. Unfair noh? You
also have people who will not hire members of specific religions. And the flipside
is you have employers who will hire members of specific religions. Tapos meron
pa jan ang iha-hire ko lang, Ilonggo, ang iha-hire ko lang lahat taga Bohol.
There is no firm equal opportunity law in the Philippines. Even if you see an
advertisement stating: Waitress, female, 25 years of age, pleasing personality. Di
tayo protected against discrimination. But the succeeding provisions will tell you
that this will […] whatever policy is provided under Art. 12.
2. Definition - 13
Q: What is recruitment and placement?

A: Art. 13 (2)
"Recruitment and placement" refers to any act of: (CECTUHP-RCP)
1. canvassing,
2. enlisting,
3. contracting,
4. transporting,
5. utilizing,
6. hiring or
7. procuring workers, and includes
8. referrals,
9. contract services,
10. promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers
or promises for a fee, employment to two or more persons shall be deemed
engaged in recruitment and placement.
Art. 13. Definitions.

First Exam
1. "Worker" means any member of the labor force, whether employed or

unemployed.
2. "Recruitment and placement" refers to any act of canvassing, enlisting,

contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not: Provided, That
any person or entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed engaged in
recruitment and placement.
3. "Private fee-charging employment agency" means any person or entity

engaged in recruitment and placement of workers for a fee which is
charged, directly or indirectly, from the workers or employers or both.
4. "License" means a document issued by the Department of Labor

authorizing a person or entity to operate a private employment agency.
5. "Private recruitment entity" means any person or association engaged in

the recruitment and placement of workers, locally or overseas, without
charging, directly or indirectly, any fee from the workers or employers.
6. "Authority" means a document issued by the Department of Labor

authorizing a person or association to engage in recruitment and
placement activities as a private recruitment entity.
7. "Seaman" means any person employed in a vessel engaged in maritime

navigation.
8. "Overseas employment" means employment of a worker outside the

Philippines.
9. "Emigrant" means any person, worker or otherwise, who emigrates to a

foreign country by virtue of an immigrant visa or resident permit or its
equivalent in the country of destination.
Classic case, in the case of Fernandez.

First Exam
People v. Hernandez
G.R. Nos. 141221-36, March 07, 2002
Facts:
In April 1993, eight (8) informations for syndicated and large scale illegal
recruitment and eight (8) informations for estafa were filed against accused-
appellants, spouses Karl and Yolanda Reichl, together with Francisco Hernandez.
There were different stories from different aggrieved parties, to sum up, Karl and
Yolanda Reichl told the aggrieved parties that they could find them a job as
domestic helper in Italy. They, however, required them to pay money for the
processing of their papers and travel documents.
The defense interposed denial and alibi.

Karl Reichl, an Austrian citizen, claimed that he entered the Philippines on July 29,
1992. Prior to this date, he was in various places in Europe. He came to the
country on July 29, 1992 to explore business opportunities in connection with the
import and export of beer and sugar. He also planned to establish a tourist spot
somewhere in Batangas. Upon his arrival, he and his wife, Yolanda Reichl, stayed
at the Manila Intercontinental Hotel. On August 3, 1992, they moved to Manila
Midtown Hotel. They stayed there until August 26, 1992. After they left Manila
Midtown Hotel, they went to another hotel in Quezon City. Karl Reichl returned to
Vienna on September 19, 1992.
Mr. Reichl stated that he first met Francisco Hernandez through Jimmy Pineda
around August 1992 at Manila Midtown Hotel. Francisco Hernandez was allegedly
looking for a European equipment to be used for the quarrying operation of his
friend. Realizing that said business would not be viable, Karl Reichl advised
Francisco Hernandez to instead look elsewhere. He never saw Francisco
Hernandez again until he left for Vienna in September 1992.
Karl Reichl denied any knowledge about Francisco Hernandez's recruitment

activities. He said that Francisco Hernandez merely told him that he wanted to
help his relatives go to Europe. He further denied that he promised private
complainants that he would give them overseas employment.[19] As regards the
document where Mr. Reichl undertook to pay P1,388,924.00 to private
complainants, he claimed that he signed said document under duress. Francisco

First Exam
Hernandez allegedly told him that private complainants would harm him and his
family if he refused to sign it. He signed the document as he felt he had no other
option. Yolanda corroborated the testimony.
Issue:
1. WON there was illegal recruitment? Yes.
2. WON there was large scale illegal recruitment? No.
Held:
1. In the case at bar, the prosecution was able to prove beyond reasonable doubt
that accused-appellants engaged in activities that fall within the definition of
recruitment and placement under the Labor Code. The evidence on record shows
that they promised overseas employment to private complainants and required
them to prepare the necessary documents and to pay the placement fee, although
they did not have any license to do so. There is illegal recruitment when one who
does not possess the necessary authority or license gives the impression of having
the ability to send a worker abroad.
2. We note that each information was filed by only one complainant. We agree
with accused-appellants that they could not be convicted for illegal recruitment
committed in large scale based on several informations filed by only one
complainant. The Court held in People vs. Reyes:
"x x x When the Labor Code speaks of illegal recruitment 'committed against three
(3) or more persons individually or as a group,' it must be understood as referring
to the number of complainants in each case who are complainants therein,
otherwise, prosecutions for single crimes of illegal recruitment can be
cummulated to make out a case of large scale illegal recruitment. In other words,
a conviction for large scale illegal recruitment must be based on a finding in each
case of illegal recruitment of three or more persons whether individually or as a
group."
This, however, does not serve to lower the penalty imposed upon accused-
appellants. The charge was not only for illegal recruitment committed in large
scale but also for illegal recruitment committed by a syndicate. Illegal recruitment
is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined under the first

First Exam
paragraph of Article 38 of the Labor Code. It has been shown that Karl Reichl,
Yolanda Reichl and Francisco Hernandez conspired with each other in convincing
private complainants to apply for an overseas job and giving them the guaranty
that they would be hired as domestic helpers in Italy although they were not
licensed to do so. Thus, we hold that accused-appellants should be held liable for
illegal recruitment committed by a syndicate which is also punishable by life
imprisonment and a fine of one hundred thousand pesos (P100,000.00) under
Article 39 of the Labor Code.
Note: Memorize Art. 13.
Q: What is the defense of the couple?

Q: Who was Hernandez?
A: Victims allege that Hernandez was working with the Reichl spouses.
C: He was an accused, in connivance with the Reichl spouses.
Q: What was the defense of the accused?
Q: Aside from the alibi, what was the defense? Were they merely facilitating the
processing of Austrian visas?
Q: Based on your definition without reading the code, were they engaged in
recruitment and placement?
C: Hindi sya papasa ng recruitment and placement kung kulang ang definition mo.
Otherwise, may lulusot dyan.
Referral is part of recruitment and placement. Kung nakalusot sa inyo yung word
na yun, kulang definition nyo, you won’t get full credit. Before you could analyze
in my class you have to be familiar with the law. You cannot analyze blindly. It is
important to know.
Lalli is a very sensitive case.
People v. Lalli
G.R. No. 195419, October 12, 2011
Facts:

First Exam
Lolita Sagadsad Plando met Ronnie Masion Aringoy and Rachel Aringoy Cañete.
Rachel asked Lolita if she is interested to work in Malaysia.
Lolita was interested so she gave her cellphone number to Ronnie. After their
conversation, Lolita proceeded to her grandfather's house.
Lolita received a text message from Ronnie Aringoy inviting her to go to the latter's
house. At 7:30 in the morning, they met at Tumaga on the road near the place
where they had a conversation the night before. Ronnie brought Lolita to the
house of his sister in Tumaga. Lolita inquired what job is available in Malaysia.
Ronnie told her that she will work as a restaurant entertainer. All that is needed is
a passport. She will be paid 500 Malaysian ringgits which is equivalent to
P7,000.00 pesos in Philippine currency.
On June 6, 2005, Lolita went to Zamboanga City wharf. She met Hadja Jarma Lalli,
Ronnie Aringoy, Honey and Michele. Ronnie gave to Lolita her boat ticket for the
vessel M/V Mary Joy bound for Sandakan, Malaysia.
She became a sex worker in Malaysia.
Issue:
W/N the accused are guilty of illegal recruitment committed by a syndicate. YES.
Held:
In People v. Gallo, the Court enumerated the elements of syndicated illegal
recruitment, to wit:
1. the offender undertakes either any activity within the meaning of "recruitment
and placement" defined under Article 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code;
2. he has no valid license or authority required by law to enable one to lawfully
engage in recruitment and placement of workers; and
3. the illegal recruitment is committed by a group of three (3) or more persons
conspiring or confederating with one another.
Article 13(b) of the Labor Code of the Philippines defines recruitment and
placement as "any act of canvassing, enlisting, contracting, transporting, utilizing,
hiring or procuring workers, and includes referrals, contract services, promising
or advertising for employment, locally or abroad, whether for profit or not,

First Exam
provided, that any person or entity which, in any manner, offers or promises for a
fee, employment to two or more persons shall be deemed engaged in recruitment
and placement."
Clearly, given the broad definition of recruitment and placement, even the mere
act of referring someone for placement abroad can be considered recruitment.
Such act of referral, in connivance with someone without the requisite authority
or POEA license, constitutes illegal recruitment. In its simplest terms, illegal
recruitment is committed by persons who, without authority from the
government, give the impression that they have the power to send workers abroad
for employment purposes.
In this case, the trial court, as affirmed by the appellate court, found Lalli, Aringoy
and Relampagos to have conspired and confederated with one another to recruit
and place Lolita for work in Malaysia, without a POEA license. The three elements
of syndicated illegal recruitment are present in this case, in particular: (1) the
accused have no valid license or authority required by law to enable them to
lawfully engage in the recruitment and placement of workers; (2) the accused
engaged in this activity of recruitment and placement by actually recruiting,
deploying and transporting Lolita to Malaysia; and (3) illegal recruitment was
committed by three persons (Aringoy, Lalli and Relampagos), conspiring and
confederating with one another.
Aringoy claims and admits that he only referred Lolita to Lalli for job opportunities
to Malaysia. Such act of referring, whether for profit or not, in connivance with
someone without a POEA license, is already considered illegal recruitment, given
the broad definition of recruitment and placement in the Labor Code.
Q: What specific acts under the definition were done by the accused?
A: Referral.
C: Nagrefer sya, referral. May enlisting. Transporting, transported to Malaysia.
Based on the definition, there was an act of recruitment and placement. This is an
important case.
Q: What was the ruling of the SC?
A: Guilty of illegal recruitment by a syndicate.
Q: What other cases?

C: Human trafficking and illegal recruitment.

First Exam
Q: Double jeopardy?
A: No. The constitutional right against double jeopardy only applies to risk of
punishment twice for the same offense, or for an act punished by a law and an
ordinance.[51] The prohibition on double jeopardy does not apply to an act or
series of acts constituting different offenses. [Source: Case]
C: Of course there are cases where there is a case for illegal recruitment at the
same time estafa.
Q: Is there double jeopardy?
A: No. Estafa is under the RPC. Human trafficking is under special laws. They can
be filed without violation of the double jeopardy rule.
July 21, 2017 | Apura
The moment that someone is applying for a job, he now goes into the processes of
recruitment and placement. If a person is doing such activities without the benefit
of a license then we have a case of illegal recruitment.
What do you mean when you say a contract is a contract of adhesion?

A: It is prepared, drafted by the employer. While the employee merely affixes his
signature. He is not given any choice to agree or disagree or negotiate.
If we are interpreting a vague provision, the vagueness is caused by the one who
prepared. So it is interpreted strictly against the employer because he caused the
vagueness and liberally in favor of the employee.
Aside from the fact that it is a contract of adhesion, what else is the policy
behind that rule of construction?
A: For the protection of labor because those who have less in life should have more
in law. They are supposed to be protected from the claws of the capitalists.
So, those are the 2 basic principles behind the rule on construction of labor laws.
What was the basic ruling in the Pulli case?

A: Referral of someone for possible employment is part of recruitment and
placement.

First Exam
Aside from that?

A: there is no double jeopardy in this case, one charge is for illegal recruitment and
the other, for human trafficking.
They relate that to other similar cases, where a person can be held liable for illegal
recruitment and estafa. One is malum prohibitum, the other is mala in se. In this
case human trafficking and illegal recruitment are both malum prohibitum.
What is the power and authority of the Secretary with respect to recruitment and
placement?
A: Under Article 14 of the Labor Code
Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority:
1. To organize and establish new employment offices in addition to the
existing employment offices under the Department of Labor as the need
arises;
2. To organize and establish a nationwide job clearance and information

system to inform applicants registering with a particular employment
office of job opportunities in other parts of the country as well as job
opportunities abroad;
3. To develop and organize a program that will facilitate occupational,

industrial and geographical mobility of labor and provide assistance in the
relocation of workers from one area to another; and
4. To require any person, establishment, organization or institution to submit

such employment information as may be prescribed by the Secretary of
Labor.
Pursuant to the role of the Secretary of Labor in relation to Article 14, the
Regional Offices of DOLE usually require establishments to submit an
establishment report, registration yun. So kung kayo mag ha-hire ng tao, kahit
na maliit na tindahan or stall sa mall, you are supposed to be registered sa
DOLE. Ang problema lang dun if registered kayo nasa radar na kayo ng DOLE so
your company will be one of those inspected yearly. For some unfortunate

First Exam
clients of mine, the inspection even happens twice a year. So inspectionin,

titingnan kung tama pa pasweldo mo, so that’s one of the tools given to the
regional offices delegated by the Secretary of Labor pursuant to the mandate to
control recruitment and placement.
Who is supposed to be the primary force in terms of recruitment and

placement? Is it the public sector or the private sector?
A: The public sector. Under Article 16:
Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no

person or entity other than the public employment offices, shall engage in the
recruitment and placement of workers.
Under the Civil Service Rules, there is no prohibition on the contractualization.

There are many policies against contractualization but the bottom line is, at the
end of the day, we have so many unemployed people. The move toward
eradicating contractualization is good on paper, it is good on …. (inaudible) but the
reality is our people are getting hungry now. The capitalists is not always the
company ha, today most often than not, it is the law firm who is the kontrabida.
Sabi mo dapat public ang dapat nag re-recruit and nag pi-place, through what
offices?
A: Public employment offices.
Saan ang public employment offices? Where did you find your work? Did you
find it in the public employment service office or did you try to search in the
internet or job opening? FB or jobstreet.com? If you had a choice would you go
to the public employment service?
Do you know what the PESO is? Public Employment Service Office, nasa
munisipyo yan. For each LGU, may PESO yan. And year after year may mga
outstanding PESO based on the number of people they get employed.
Primarily under the law it should be the public employment service office which
should undertake recruitment and placement. Paano na momonitor ang private
employment offices?

First Exam
A: They shall operate under the rules and regulations of the Secretary of Labor. And
there must be license to engage in recruitment and placement.
What is the participation of the private sector in terms of overseas employment?

Art. 25. Private sector participation in the recruitment and placement of
workers. Pursuant to national development objectives and in order to harness and
maximize the use of private sector resources and initiative in the development and
implementation of a comprehensive employment program, the private
employment sector shall participate in the recruitment and placement of workers,
locally and overseas, under such guidelines, rules and regulations as may be issued
by the Secretary of Labor.
Where do we see the guidelines for overseas recruitment? RA 8042. Prior to

that? Labor Code.
What are the agencies involved in the overseas recruitment and placement?
National Seaman Board, The OEDB, Bureau of Employment Services.
But today? Pursuant to EO 797, the functions of the 3 agencies were consolidated
with POEA.
In terms of jurisdiction, what is the important date that we should bear in

mind? The date of effectivity of RA 8042. July 15, 1995
In the case of Eastern vs. POEA, what was the issue? What was the complaint all
about? Widow was claiming for death benefits.
In terms of jurisdiction, what was her allegation? That POEA has jurisdiction
over the case. Eastern contended that the employee was not an OFW, thus POEA
has no jurisdiction.
What was the basis for that allegation? That the Eastern Shipping is registered
under Ph jurisdiction so it is not an overseas employer.
Tama ba ang Eastern? No.

First Exam
What is Overseas Employment? Overseas Employment-means employment of a

worker outside the Philippines, including employment on board vessels plying
international waters, covered by a valid employment contract.
We note that the statute and the relevant regulations refer to employment of
Filipino workers overseas, i.e., outside the Philippines. The statute and regulations
do not limit their coverage to non-Filipino employers. Filipinos working overseas
share the same risks and burdens whether their employers be Filipino or foreign.
It does not matter that the registration of the vessel is of Filipino descent. What
matters is work is being rendered in international seas or outside the jurisdiction
of the Ph.
How about the case of Eastern vs Surio? In this case RA 8042 has already been
enacted.
Where would you file the case? NLRC specifically the Labor Arbiter.
Under RA 8042, ano ang jurisdiction ng POEA? POEA has jurisdiction over
administrative and disciplinary cases. Meron pa rin naiwan na money claims sa
POEA. If you are claiming for refund of fees from the employer. But generally
money claims are already lodged before the Labor Arbiter.
In Asian Center case, what is the issue? W/N ACCESS is liable only for 3 months
salary or the unexpired portion of his contract.
What is the material date as to the issue of jurisdiction? When the cause of
action accrues or when the employee is illegally dismissed.
What is your definition of Cause of Action? Elements?

1. A legal right to security of tenure
2. Obligation of employer to terminate only for just cause
3. There is a violation of such right
What was the allegation regarding the continuing jurisdiction? According to

employer, the correct date is the date the decision was rendered.
What was the right date? Date of illegal dismissal

First Exam
What do you mean by administrative cases? Cases involving violations relating

to licensing and registration of recruitment agencies. The grant, revocation and
suspension of licenses.
Disciplinary? Sample of cases for land-based disciplinary cases? What are the
categories?
No categories. Embezzlement of company funds.
Who can be the subject of cases filed before POEA? Both employers and
employees
What cases can be filed against employers for land-based? (Check the rules and
regulations)
Is it the same in case of seafarers-employers? There are similarities.
How about Seafarer’s Disciplinary cases? 2 categories. (Recital of the different

grounds)
The employer has in its possession the passport, visa and then for very
justifiable reasons, the employees are unable to proceed with their
employment and the agency refuses to release the documents? What can be
filed against the agency, assuming land-based? Withholding or denying of the
worker’s travel and other pertinent documents.
Same with seafarers? Withholding of the seafarer’s travel and other pertinent
documents.
Kung si worker nahuli nagsusugal on board the ship while on duty, can there be
a case filed against him?
If the person, was not on duty while he was not gambling?
Nag-qualify ang worker to work as Medtech in hospital abroad, but then she got
pregnant and she did not push through with her employment. Can there be a
case filed?

First Exam
Nagnakaw while working as a factory worker in Taiwan, can there be a case

filed against him?
If the employer asked the worker to skip the mandatory seminar, pre-departure
orientation seminar?
QUIZ!
1. What are the grounds for disciplinary action for seafarers?
2. Disciplinary action against land-based employees?
3. Cases that can be filed against employer for both land-based and seafarer.
4. Definition of recruitment and placement
___________________
July 8, 2017 (Part I) | Manligoy
The jurisdiction over money claims … and the jurisdiction of the POEA is given ….
Review:
What’s that date? The important date is July 15, 1995.
The jurisdiction of POEA is now pertaining to what matters?
a. all cases which are administrative in character, involving or arising out of

violations of Rules and Regulations relating to licensing and registration,
including refund of fees collected from the workers and violation of the
conditions for issuance of license to recruit workers; (Based on jurisdictional
areas under the POEA Charter or E.O. 247, as amended.)
b. disciplinary action cases and other special cases, which are administrative
in character, involving employers, principals, contracting partners and
OFWs processed by the POEA.
What is recruitment and placement?
Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or

procuring workers, and includes referrals, contract services, promising or
First Exam
advertising for employment, locally or abroad, whether for profit or not; provided
that any person or entity which, in any manner, offers or promises for a fee
employment to two or more persons, is considered engaged in recruitment and
placement.
What is the 2nd part?
“provided that any person or entity which, in any manner, offers or promises for a
fee employment to two or more persons, is considered engaged in recruitment and
placement.”
Okay. So that is only a presumption which means that even if only one person is
involved, there are many recruitment agents involved.
What are the disciplinary action cases for land based workers? What are the main
classifications?
Questions/Situations:
1. A is an office clerk in Iran. When war erupted, there was an order of the DFA
cascaded to the Philippine Overseas Labor Office (POLO) that the employees
there should come home. However, A refuses because he has a girlfriend in
Iran. Can there be a disciplinary action case filed against A?
What is the ground under the POEA rules?
2. What if D is a cashier in a corporation in Saudi Arabia and based on the audit

report there is a missing amount of 1M. Can there be a case filed against him?
Presumption is failure to account of money gives rise to a presumption of

misappropriation or embezzlement.
3. If in Jeddah, C who is a manager OFW in a trucking company, when he went

there, he brought with him some pornographic materials. Is there a ground
to file a case against him?

First Exam
There is an express provision: contraband, drugs, pornographic materials.

There is an express provision prohibiting it.
What is the difference between the prohibition on pornographic materials on land

based and seafarers? Is there any difference?
There is a different provision on child pornography.
What is an example of grave misconduct of an overseas worker? Where does it say

that it is a ground for disciplinary conduct? Land based? Seafarers or both?
Can there be a ground for disciplinary action against either the employee or
employer in case of sex slaves?
Will your answer be the same if the sex slave is on board a ship and then made to
serve as a sex slave? Basis?
Is there an express violation of the express declaration of the law?
B is a seaman. One day he felt like taking some goods from the duty free shop and
he was discovered. Is there a legal ground for the case?
V is a worker in a casino on-board a ship. While he was rendering a duty, his

favorite customer invited V to drink with him. So they drank. Is there any ground
for disciplinary action?
F is a casino worker in the Caribbean ship and during his off-duty, he went to the
casino and used the slot machine. Can there be a ground for disciplinary action?
G is an officer worker. It was discovered that G was able to bring with her her
brother who was doing something illegal. The brother stayed there even if his visa
already expired. Can there be a ground for dismissal? Will it matter if the sibling is
21 years old?
Will your answer be the same if G is a seafarer and his able to bring the sibling on
board the ship without the needed document?

First Exam
Kent is an engineer. He placed in his resume that he has been a police or informer
for the last 5 years. Later on, it was established that before he went to SG, he styed
with his employer for 5 months. Is there a disciplinary action?
If the employer deducts insurance premiums from a seafarer, is there any ground
or a cases? What kind of case is this?
Will your answer be the same if the employer is a teacher in the US?
Let’s say the owner of the agency here is a sole proprietor and he was convicted for
a crime of oral defamation. Is there any case that may be filed against the person?
What is the definition of moral turpitude? Can there be a case filed against that
employer?
A was hired to work for ABC shipping as a seafarer. When he arrived, he was made
to work for CDE shipping. Can there be a case filed against the employer?
B, janitor, working in China was caught bringing alcohol in the company premises.
Can there be a ground for disciplinary action?
What is the required capitalization for those single proprietorship and corporation
engaged in local recruitment?
Who are disqualified in engaging in local recruitment?
Section 2. Disqualification. — The following are not qualified to engage in the

business of recruitment and placement of Filipino workers overseas:
a. Travel agencies and sales agencies of airline companies;
b. Officers or members of the Board of any corporation or members in a

partnership engaged in the business of a travel agency;
c. Corporations and partnerships, when any of its officers, members of the

board or partners, is also an officer, member of the board or partner of a
corporation or partnership engaged in the business of a travel agency;

First Exam
d. Persons, partnerships or corporations which have derogatory records, such

as but not limited to the following:
a. Those certified to have derogatory record or information by the

National Bureau of Investigation or by the Anti-Illegal Recruitment
Branch of the POEA;
b. Those against whom probable cause or prima facie finding of guilt for
illegal recruitment or other related cases exists;
c. Those convicted for illegal recruitment or other related cases and/or

crimes involving moral turpitude; and
d. Those agencies whose licenses have been previously revoked or

cancelled by the Administration for violation of RA 8042, PD 442 as
amended and their implementing rules and regulations as well as
these rules and regulations.
All applicants for issuance/renewal of license shall be required to

submit clearances from the National Bureau of Investigation and
Anti-Illegal Recruitment Branch, POEA, including clearances for their
respective officers and employees.
e. Any official or employee of the DOLE, POEA, OWWA, DFA and other
government agencies directly involved in the implementation of R.A. 8042,
otherwise known as Migrant Workers and Overseas Filipino Act of 1995
and/or any of his/her relatives within the fourth civil degree of
consanguinity or affinity; and
f. Persons or partners, officers and Directors of corporations whose licenses

have been previously cancelled or revoked for violation of recruitment laws.
(Section 2, Rule I, Part II, Ibid.).
What is the main rationale behind the prohibition?

First Exam
Recruitment and placement is imbued with national interest because you don’t
want to employ people in areas where they are not supposed to be or where they
are unsafe or their rights won’t be binding.
If the private interest of the travel agency is to have sales they will not even care if
recruitment is done properly as long as they are able to gain profit.
Recruitment agencies here are mere agents of principals abroad. So, they prioritize
na may mapalipad sila, meron silang negosyo sa kanilang travel agency rather
than giving the employer fit employees.
A is a sole proprietor wanting to become a recruitment agency for overseas

employment but it just so happens that he committed reckless imprudence
resulting to damage to property. Can he be given registration or certificate of
authority to recruit?
B is a sole proprietor engaged in the overseas employment and a case for estafa is
filed against him. It is on the level of the fiscal. Can there be a disqualification based
on the rules? Will your answer be the same if the case is already pending in court?
Pag nasa Court may prima facie presumption of probable cause nay an.
D is currently an employee of OWWA. Can there be a recruitment and placement

agency put up by B? Will your answer be the same if the employee is an employee
of the Bureau of Customs? How about if the sole proprietor is an employee of DFA?
Yes, pwede magregister or no, disqualified siya?
In the first place, being a government employee there has to be a prohibition

against engaging in any private business but specifically if the person is an
employee of a government agency involved in recruitment then you are …
disqualified.
What are the allowable fees that can be collected from seamen? 1:00:00
___________________
July 28, 2017 (Part II) - Peroy

First Exam
6. Fees Paid by Workers [2nd syllabus]
Question: What fees can be collected from the seafarer?
2016 REVISED POEA RULES AND REGULATIONS GOVERNING THE

RECRUITMENT AND EMPLOYMENT OF SEAFARERS
SECTION 50. Chargeable Fees and Costs 

a. Fees Chargeable to Principal/Employer:
1. Manning Fees - Licensed manning agencies shall charge from their
principal/employer a manning fee to cover services rendered in the
recruitment and deployment of seafarers.
2. Processing Fees - All processing fees required for deployment such as pre-
employment medical examination in the principal’s/employer’s designated
clinic, POEA and OWWA fees, visas, principal’s/employer’s flag State ship
requirements, principal’s/employer’s required trainings and other
requirements.
However, in case of seafarer’s failure or unjustified refusal to join ship after

all processing fees have been incurred by the principal/employer, the said
fees shall be refunded by the seafarer within thirty (30) days from demand.
b. Costs Chargeable to the Seafarer. Documentation costs of all statutory

requirements such as, but not limited to, passport, seafarer’s identification and
record book (SIRB), NBI/police/barangay clearance, Seafarer’s Registration
Certificate (SRC) and birth certificate.
Costs Chargeable to the Seafarer:

Documentation costs of all statutory requirements such as, but not limited to,
1. passport,
2. seafarer’s identification and record book (SIRB),
3. NBI/police/barangay clearance,
4. Seafarer’s Registration Certificate (SRC) and
5. birth certificate.
Q: How about visa fees? Basis?

Answer: Chargeable to the principal. [Refer above to Sec. 50, a, 2].

First Exam
Q: Are the costs chargeable to principals of seafarers and land based the same?
A: No.
Landbased Seafarers
SECTION 53. Costs and Fees SECTION 50. Chargeable Fees and
Chargeable Against the Costs a. Fees Chargeable to
Principal/Employer. — The costs of Principal/Employer:
recruitment and placement shall be the 1. Manning Fees - Licensed manning
responsibility of principal/employer, agencies shall charge from their
which cover payment for the principal/employer a manning fee to
following: cover services rendered in the
a. Visa, including the stamping recruitment and deployment of
fee;   seafarers.
b. Work permit and residence
permit;   2. Processing Fees - All processing fees
c. Round trip airfare;   required for deployment such as pre-
d. Transportation from the airport employment medical examination in
to the jobsite;   the principal’s/employer’s designated
e. POEA processing fee;   clinic, POEA and OWWA fees, visas,
f. OWWA membership fee; and   principal’s/employer’s flag State ship
g. Additional trade requirements, principal’s/employer’s
test/assessment, if required by required trainings and other
the principal/employer.   requirements.
However, in case of seafarer’s failure or

unjustified refusal to join ship after all
processing fees have been incurred by
the principal/employer, the said fees
shall be refunded by the seafarer
within thirty (30) days from demand.
Q: If there are fees that are collected from OFWs which should not have been
collect from them, what is the cause of action? For? Where?
A: Administrative action before the POEA.
Comment: with the POEA
Q: Would your answer be the same if we are talking about unpaid wages?

First Exam
A: Yes. [inaudible]
C: No, your answer will not be the same.
7. Prohibited Practices, Liability [2nd syllabus]
Q: What is illegal recruitment?

A:
RA 8042
Sec. 6. DEFINITIONS. - For purposes of this Act, illegal recruitment shall mean
any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
procuring workers and includes referring, contact services, promising or
advertising for employment abroad, whether for profit or not, when undertaken
by a non-license or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of
the Philippines. Provided, that such non-license or non-holder, who, in any
manner, offers or promises for a fee employment abroad to two or more persons
shall be deemed so engaged. It shall likewise include the following acts, whether
committed by any persons, whether a non-licensee, non-holder, licensee or
holder of authority.
a. To charge or accept directly or indirectly any amount greater than the
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay any amount greater than
that actually received by him as a loan or advance;  
b. To furnish or publish any false notice or information or document in
relation to recruitment or employment;  
c. To give any false notice, testimony, information or document or commit
any act of misrepresentation for the purpose of securing a license or
authority under the Labor Code;  
d. To induce or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed
to liberate a worker from oppressive terms and conditions of
employment;  
e. To influence or attempt to influence any persons or entity not to employ
any worker who has not applied for employment through his agency;  
f. To engage in the recruitment of placement of workers in jobs harmful to
public health or morality or to dignity of the Republic of the Philippines;  

First Exam
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor

and Employment or by his duly authorized representative;  
h. To fail to submit reports on the status of employment, placement
vacancies, remittances of foreign exchange earnings, separations from
jobs, departures and such other matters or information as may be required
by the Secretary of Labor and Employment;  
i. To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties up to
and including the period of the expiration of the same without the
approval of the Department of Labor and Employment;  
j. For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel
agency or to be engaged directly on indirectly in the management of a
travel agency;  
k. To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those
authorized under the Labor Code and its implementing rules and
regulations;  
l. Failure to actually deploy without valid reasons as determined by the
Department of Labor and Employment; and  
m. m. Failure to reimburse expenses incurred by the workers in connection
with his documentation and processing for purposes of deployment, in
cases where the deployment does not actually take place without the
worker's fault. Illegal recruitment when committed by a syndicate or in
large scale shall be considered as offense involving economic sabotage.
Illegal recruitment is deemed committed by a syndicate carried out by a group

of three (3) or more persons conspiring or confederating with one another. It is
deemed committed in large scale if committed against three (3) or more persons
individually or as a group.
The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having
control, management or direction of their business shall be liable.
Labor Code

First Exam
Article 34. Prohibited practices. It shall be unlawful for any individual, entity,
licensee, or holder of authority:
a. To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of Labor,
or to make a worker pay any amount greater than that actually received by
him as a loan or advance;  
b. To furnish or publish any false notice or information or document in relation
to recruitment or employment;  
c. To give any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or
authority  under this Code.  
d. To induce or attempt to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed
to  liberate the worker from oppressive terms and conditions of employment;  
e. To influence or to attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency;  
f. To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;  
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by
his duly authorized representatives;  
h. To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs,
departures  and such other matters or information as may be required by the
Secretary of Labor.  
i. To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties  up
to and including the periods of expiration of the same without the approval of
the Secretary of Labor;  
j. To become an officer or member of the Board of any corporation engaged in
travel agency or to be engaged directly or indirectly in the management of  a
travel agency; and  
k. To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those
authorized  under this Code and its implementing rules and regulations.  
Q: If the entity is licensed by the POEA it is legal recruitment?

A:
C: It is possible that there is a license pero may ginagawang prohibited activity.

First Exam
6. Ban on Direct Hiring [1st syllabus]
Q: What is the ban on direct hiring?

A:
Omnibus Rules Implementing the Labor Code

Rule III Recruitment and Placement
SECTION 2. Ban on direct hiring. — No employer may hire a Filipino worker for
overseas employment except through the person or entities enumerated in the
preceding section or as authorized by the law or by the Secretary. Direct hiring
by members of the diplomatic service, officials and employees of international
organizations and such other employers as may be authorized by the Secretary
is exempted from this provision. Such hirings shall be processed by the Overseas
Employment Development Board.
Q: What are name hires?

A:
Omnibus Rules Implementing the Labor Code

Rule I Recruitment and Placement
SECTION 1. Definition of terms.
(gg) Name Hire. — is a worker who is able to secure employment overseas on his
own without the assistance or participation of any agency or entity.
Q: Is (name hire) prohibited?

A: No.
Q: Not prohibited but there is a ban on direct hiring. How do you reconcile that?
A: They still need to secure employment contract, valid passport, employment
visa, […], certificate of […] payment, certificate of attendance[?]
C: They still have to be documented OFWs. The processing of their employment
abroad would still have to go through the POEA as ordinary OFWs. It’s just that
hindi sila dumaan sa isang recruitment and placement agency in the Philippines.

First Exam
So si A, pag nakahanap sya ng pwedeng employer na pwedeng pasukan sa New

Zealand, sila nag-usap, okay yun. As long as everything has to be coursed through
the POEA to ensure the safety of the employee.
Q: How about a person who will be hired by UNICEF in the USA? What is the rule?
Yes, they can still hire, but give me the conditions.
A: [Refer to Sec. 2, Ban on Direct Hiring]
C: They can hire directly. Direct hiring is banned except for international
organizations. UNICEF is not a diplomatic corps. Diplomatic corps are embassies,
consulates.
Q: With respect to domestic workers, is there any payment of placement fee?

A:
C: Actually, placement fees should be collected from everyone except (1) domestic
helpers and (2) if they are to be employed in countries with existing policy not to
collect direct/indirectly any placement fee.
Q: What was the issue in the case of Wallem? What was the basis of the
dismissal? What was the ruling?
Wallem Shipping v. Mole 

GR L-500734-37, February 20, 1981
Facts:
Respondents were hired by petitioner sometime in May 1975 to work as seamen
for a period of ten months on board the M/V Woermann Sanaga, a Dutch vessel
owned and operated by petitioner's European principals. While their
employment contracts were still in force, private respondents were dismissed
by their employer, petitioner herein, and were discharged from the ship on
charges that they instigated the International Transport Federation (ITF) to
demand the application of worldwide ITF seamen's rates to their crew.
Petitioner defended the dismissal by alleging that the seamen had conspired
with the ITF in coercing the ship authorities to pay the seamen and worldwide
rate, instead of the lower Far East rate as provided in their contracts of
employment. It further charged that the seamed threatened the ship authorities
that unless they would agree to the increased wages, the ship would not be able
to leave port; it would be picketed or boycotted and declared as a “hot” ship by
the ITF.

First Exam
Issue: W/N Respondent was illegally dismissed.
Held:
YES. The records fail to establish clearly the commission of any threat. But even
if there had been such a threat, respondents' behavior should not be censured
because it is but natural for them to employ some means of pressing their
demands for petitioner, who refused to abide with the terms of the Special
Agreement, to honor and respect the same. They were only acting in the exercise
of their rights, and to deprive them of their freedom of expression is contrary to
law and public policy. There is no serious misconduct to speak of in the case at
bar which would justify respondents' dismissal just because of their firmness in
their demand for the fulfillment by petitioner of its obligation it entered into
without any coercion, especially on the part of private respondents.
On the other hand, it is petitioner who is guilty of breach of contract when they
dismissed the respondents without just cause and prior to the expiration of the
employment contracts. As the records clearly show, petitioner voluntarily
entered into the Special Agreement with ITF and by virtue thereof the crew men
were actually given their salary differentials in view of the new rates. It cannot
be said that it was because of respondents' fault that petitioner made a sudden
turn-about and refused to honor the special agreement.
C: They are fighting for their rights. They were just claiming what they are
entitled to.
Q: What was the issue and ruling in Chavez?
Chavez v. Bonto-Perez 
GR March 1, 1995
Facts:
On December 1, 1988, petitioner, an entertainment dancer, entered into a
standard employment contract for overseas Filipino artists and entertainers
with Planning Japan Co., Ltd., through its Philippine representative, private
respondent Centrum Placement & Promotions Corporation. The contract had a
duration of two (2) to six (6) months, and petitioner was to be paid a monthly
compensation of One Thousand Five Hundred Dollars (US$1,5000.00).

First Exam
On December 5, 1888, the POEA approved the contract. Subsequently, petitioner

executed the following side agreement with her Japanese employer through her
local manager, Jaz Talents Promotion, decreasing her salary to $750, with a
managerial commission agreement of $250. On December 16, 1988, petitioner
left for Osaka, Japan, where she worked for six (6) months, until June 10, 1989.
She came back to the Philippines on June 14, 1989. Petitioner instituted the case
at bench for underpayment of wages with the POEA on February 21, 1991. She
prayed for the payment of Six Thousand U.S. Dollars (US$6,000.00),
representing the unpaid portion of her basic salary for six months.
Issue: W/N the side agreement executed by Chavez with her Japanese employer
was valid.
Held:
NO. The managerial commission agreement executed by petitioner to authorize
her Japanese Employer to deduct Two Hundred Fifty U.S. Dollars (US$250.00)
from her monthly basic salary is void because it is against our existing laws,
morals and public policy. It cannot supersede the standard employment
contract of December 1, 1988 approved by the POEA with the following
stipulation appended thereto:
It is understood that the terms and conditions stated in this Employment

Contract are in conformance with the Standard Employment Contract for
Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series
of 1986. Any alterations or changes made in any part of this contract without
prior approval by the POEA shall be null and void
Clearly, the basic salary of One Thousand Five Hundred U.S. Dollars
(US$1,500.00) guaranteed to petitioner under the parties' standard employment
contract is in accordance with the minimum employment standards with respect
to wages set by the POEA, Thus, the side agreement which reduced petitioner's
basic wage to Seven Hundred Fifty U.S. Dollars (US$750.00) is null and void for
violating the POEA's minimum employment standards, and for not having been
approved by the POEA. Indeed, this side agreement is a scheme all too frequently
resorted to by unscrupulous employers against our helpless overseas workers
who are compelled to agree to satisfy their basic economic needs.

First Exam
C: In fine, there should be no revision of the original employment contract. We saw

this also on the grounds for disciplinary action against the employer. Any revision
after the POEA approved the contract is null and void.
_______________________
August 11, 2017 | Alcomendras
If you take a look at the provisions, some pertain to local recruitment and others
to overseas. You look at the land based and overseas rules for purposes of overseas.
I’d like you to remove your wrong notion that recruitment is the same as
contracting. Contracting kasi, your supposed to be providing services for your
client. Ang recruitment, ikaw ang nag-hire ng tao for another entity. So this is in
HR parlance yung headhunter. If you need for instance a manager and you cannot
hire someone, you go to a recruitment agency. Does it mean na it provides the
manager? No. Siya lang nag-rerecruit. At piniplace niya sa entity na kailangan ng
manager.
So what does Article 26 provide? Based on 26, what’s the only prohibition?
Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of
airline companies are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for profit or not.
Do we see a similar provision when we go to overseas recruitment? Yes. Under

POEA rules. What else?
SECTION 3. Who are Disqualified. — The following persons and entities are
disqualified to participate or engage in the recruitment and placement of workers
for overseas employment:
a. Travel agencies and sales agencies of airline companies; 
A corporation may not be a travel agency but one of its officers is involved in the
business of a travel agency. Example San Miguel Corporation’s director is a
stockholder of travel agency. Bawal iyun. The main purpose of the prohibition is
because recruitment and placement is impressed with public interest. The main
objective here is to find good employment for the workers and not for profit.
First Exam
Who are disqualified under Seafarers?
disqualified to participate or engage in the recruitment and placement of seafarers
for overseas employment:
a. Travel agencies and sales agencies of airline companies;
b. Officers or members of the Board of any corporation or partners in a partnership

engaged in the business of a travel agency;
c. The applicant is presently an incorporator, director or key officer of at least five

(5) licensed manning agencies;
d. Corporations and partnerships, where any of its officers, members of the board
or partners is also an officer, member of the board or partner of a corporation or
partnership engaged in the business of a travel agency;
e. Individuals, partners, officers or directors of an insurance company who make,

propose or provide an insurance contract under the compulsory insurance
coverage for seafarers.
f. Sole proprietors, partners or officers and members of the board with derogatory
records, such as, but not limited to the following:
h. Those convicted, or against whom probable cause or prima facie finding of

guilt is determined by competent authority, for illegal recruitment, or for
other related crimes or offenses committed in the course of, related to, or
resulting from, illegal recruitment, or for crimes involving moral turpitude;  
i. Those agencies whose licenses have been revoked for violation of RA 8042
(Migrant Workers and Overseas Filipinos Act of 1995), as amended, PD 442
(Labor Code of the Philippines), as amended, and RA 9208 (Trafficking in
Persons Act of 2003), as amended, and their implementing rules and
regulations;  
j. Those agencies whose licenses have been cancelled, or those who, pursuant to
the Order of the Administrator, were included in the list of persons with
derogatory record for violation of recruitment laws; and

First Exam
g. Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC,
NLRC, TESDA, CFO, NBI, PNP, Civil Aviation Authority of the Philippines (CAAP),
MARINA, international airport authorities, and other government agencies
directly involved in the implementation of RA 8042, as amended, and/or any of
his/her relatives within the fourth civil degree of consanguinity or affinity.
Who are disqualified for Land based?
disqualified to participate in the recruitment and placement of workers for
overseas employment:
a.Travel agencies and sales agencies of airline companies; 
b.Officers or members of the Board of any corporation or partners in a partnership

engaged in the business of a travel agency; 
c.Corporations and partnerships, where any of its officers, members of the board
or partners is also an officer, member of the board or partner of a corporation or
partnership engaged in the business of a travel agency; 
d.Individuals, partners, officers or directors of an insurance company who make,

propose or provide an insurance contract under the compulsory insurance
coverage for agency-hired Overseas Filipino Workers; 
e.Sole proprietors, partners or officers and members of the board with derogatory
records, such as, but not limited to the following:
1. Those convicted, or against whom probable cause or prima facie finding of guilt
is determined by a competent authority, for illegal recruitment, or for other
related crimes or offenses committed in the course of, related to, or resulting from,
illegal recruitment, or for crimes involving moral turpitude;  
2. Those agencies whose licenses have been revoked for violation of RA 8042
(Migrant Workers and Overseas Filipinos Act of 1995), as amended, PD 442 (Labor
Code of the Philippines), as amended, and RA 9208 (Trafficking in Persons Act of
2003), as amended, and their implementing rules and regulations;  
3. Those agencies whose licenses have been cancelled, or those who, pursuant to
the Order of the Administrator, were included in the list of persons with

First Exam
derogatory record for violation of recruitment laws and regulations; and  
f. Any official or employee of the DOLE, POEA, OWWA, DFA, DOJ, DOH, BI, IC,
NLRC, TESDA, CFO, NBI, PNP, Civil Aviation Authority of the Philippines (CAAP),
international airport authorities, and other government agencies directly
involved in the implementation of RA 8042, as amended, and/or any of his/her
relatives within the fourth civil degree of consanguinity or affinity.
What is the policy behind letter F? Undue influence, conflict of interest. Even if
the person is not fit for a position he will be deployed. Maybe he did not pass the
PDOS but nakakalampas na siya. Again it is imbued with public interest so it’s
important to regulate.
What’s the policy behind prohibiting insurance agencies? Again the bottomline
is that it’s imbued with public interest. The same principle behind prohibiting
travel agencies. Kung recruitment agency ka, diyan ka lang. Wag ka nang umisip
ng iba.
True or false, the prohibited persons in sea based are the same as those in land
based? False.
Under seabased, it includes a manning agency.
What is a manning agency? It refers to a person, partnership or corporation duly

licensed by the Secretary or his/her duly authorized representative to engage in
the recruitment and placement of Filipino seafarers for a ship plying international
waters and for related maritime activities.  
It’s basically a headhunter for seafarers. That’s the reason why you don’t have it
for land based.
So what else?
For seafarers, MARINA officers or employees are also prohibited to engage in

recruitment and placement.
What’s the citizenship requirement? True or false we have the same citizenship
requirement for local and overseas recruitment? Basis.
There are also entities that are prohibited for local to engage in recruitment.
Andyan iyan nakalista DO 141-14
First Exam
Section 5. Disqualification
a. those who are convicted of illegal recruitment, trafficking in persons, anti-child

labor violation, or crimes involving moral turpitude;
b. those against whom probable cause or prima facie finding of guilt for illegal
recruitment or other related cases exist particularly to owners or directors of
agencies who have committed illegal recruitment or other related cases
c. those agencies whose licenses have been previously revoked or cancelled by the
Department
d. cooperatives whether registered or not under the Cooperative Act
e. Law enforcers and any official and employee of the DOLE
f. sole proprietors of duly licensed agencies are prohibited from securing another
license to engage in recruitment and placement
g. sole proprietors, partnerships or corporations licensed to engage in private

recruitment and placement for local employment are prohibited from engaging in
job contracting or sub contracting activities.
Principle behind cooperatives ay because they are supposed to be bonded by a

common activity like farming or fishing. To operate as a recruitment agency, hindi
nila kaya. Liability is also an issue kasi hahabulin mo lahat ng members ng COOP.
Art. 27. Citizenship requirement. Only Filipino citizens or corporations,

partnerships or entities at least seventy-five percent (75%) of the authorized and
voting capital stock of which is owned and controlled by Filipino citizens shall be
permitted to participate in the recruitment and placement of workers, locally or
overseas.
What’s the required capitalization for local recruitment agencies?
The sole proprietor and partnership shall have a minimum capitalization of One
Million Pesos (PhP1,000,000.00) and a minimum paid up capital of One Million
Pesos (PhP1,000,000.00) in case of a corporation.
For land based and seafarers?

First Exam
SECTION 2. Who may participate; Required Capitalization. — Any Filipino citizen

acting as a sole proprietor or a partnership, or a corporation at least seventy-five
percent (75%) of the authorized and voting capital stock of which is owned and
controlled by Filipino citizens, may engage in the business of recruitment and
placement of Filipino workers.
The sole proprietor and partnership shall have a minimum capitalization of Five
Million Pesos (PhP5,000,000.00) and a minimum paid up capital of Five Million
Pesos (PhP5,000,000.00) in case of a corporation.
Those with existing licenses shall, within four (4) years from effectivity hereof,
increase their capitalization or paid up capital, as the case may be, to Five Million
Pesos (PhP5,000,000.00) at the rate of Seven Hundred Fifty Thousand Pesos
(PhP750,000.00) every year.
What do you mean by paid up capital? Value of the stocks that were sold by the
corporation. In corporations when you look at the capitalization, the entire 5
million is subscribed and issued to stockholders and actually paid up. So dapat
andyan ang 5 million sa bangko.
What is the rule on transferring of licenses?
Art. 29. Non-transferability of license or authority. No license or authority shall be

used directly or indirectly by any person other than the one in whose favor it was
issued or at any place other than that stated in the license or authority be
transferred, conveyed or assigned to any other person or entity. Any transfer of
business address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be subject to the
prior approval of the Department of Labor.
What is the rule on bonds? What’s the purpose for the bond?
Art. 31. Bonds. All applicants for license or authority shall post such cash and
surety bonds as determined by the Secretary of Labor to guarantee compliance
with prescribed recruitment procedures, rules and regulations, and terms and
conditions of employment as may be appropriate.
In what kinds of recruitment do we have the bond recruitment? It applies to all.

First Exam
What is the mechanics of the bond? How does it work when there is liability?
All claims for the bond you go to the NLRC, true or false? False. For refund of
placement fees you go to the POEA.
Do you have to go to the regular courts for the proceeds of the bond? Give me
the case.
FINMAN VS INOCENCIO
Pan Pacific Overseas Recruiting Services, Inc. ("Pan Pacific") is a private, fee-
charging, recruitment and employment agency. T in accordance with the
requirements of Section 4, Rule II, Book II of the Rules and Regulations of the
Philippine Overseas Employment Administration (POEA), Pan Pacific posted a
surety bond issued by petitioner Finman General Assurance Corporation
("Finman") and was granted a license to operate by the POEA.
William Inocencio, Perfecto Palero, Jr., Edwin Cardones and one Edwin Hernandez
filed with the POEA separate complaints against Pan Pacific for violation of
Articles 32 and 34 (a) of the Labor Code, as amended and for refund of placement
fees paid to Pan Pacific. The complainants alleged that Pan Pacific charged and
collected such fees from them but did not secure employment for them.
POEA Administrator motu proprio impleaded petitioner Finman as party

respondent in its capacity as surety for Pan Pacific. Finman filed an answer
denying liability and arguing that: (1) the POEA had no "jurisdiction over surety
bonds," that jurisdiction being vested in the Insurance Commission or the regular
courts.
Issue: WON jurisdiction is with the Insurance Commission or regular courts
Held: No. There appears nothing so special or unique about the determination of a
surety's liability under its bond as to restrict that determination to the Office of
the Insurance Commissioner and to the regular courts of justice exclusively. The
exact opposite is strongly stressed by the second paragraph of Article 31 of the
Labor Code.
We believe and so hold that to compel the POEA and private respondents the
beneficiaries of Finman's bond-to go to the Insurance Commissioner or to a regular

First Exam
court of law to enforce that bond, would be to collide with the public policy which
requires prompt resolution of claims against private recruitment and placement
agencies. Cash and surety bonds are required by the POEA and its predecessor
agencies from recruitment and employment companies precisely as a means of
ensuring prompt and effective recourse against such companies when held liable
for applicants or workers' claims.
Clearly that public policy will be effectively negated if POEA and the Department
of Labor and Employment were held powerless to compel a surety company to
make good on its solidary undertaking in the same quasi-judicial proceeding
where the liability of the principal obligor, the recruitment or employment
agency, is determined and fixed and where the surety is given reasonable
opportunity to present any defenses it or the principal obligor may be entitled to
set up.
Petitioner surety whose liability to private respondents and the POEA is neither
more nor less than that of Pan Pacific, is not entitled to another or different
procedure for determination or fixing of that liability than that which Pan Pacific
is entitled and subject to.
Rules:
1. Refund for a fee paid by the OFW – POEA.
2. Money Claim that’s not refund for placement fee – Labor Arbiter.
In both cases, you do not need to go to the regular courts to enforce the bond.
The purpose for having a bond is to provide a facility to claim the bond. You don’t
need to go to the regular courts.
In case of illegal dismissal, where do you go? Labor Arbiter as provided by RA 8042.
SAMEER VS CABILES
Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency.

Respondent Joy Cabiles was hired thus signed a one-year employment contract for
a monthly salary of NT$15,360.00. Joy was deployed to work for Taiwan Wacoal,
Co. Ltd. (Wacoal) on June 26, 1997. She alleged that in her employment contract,

First Exam
she agreed to work as quality control for one year. In Taiwan, she was asked to
work as a cutter.
Sameer claims that on July 14, 1997, a certain Mr. Huwang from Wacoal informed
Joy, without prior notice, that she was terminated and that “she should
immediately report to their office to get her salary and passport.” She was asked to
“prepare for immediate repatriation.” Joy claims that she was told that from June
26 to July 14, 1997, she only earned a total of NT$9,000.15 According to her,
Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint for illegal dismissal with the NLRC
against petitioner and Wacoal. LA dismissed the complaint. NLRC reversed LA’s
decision. CA affirmed the ruling of the National Labor Relations Commission
finding respondent illegally dismissed and awarding her three months’ worth of
salary, the reimbursement of the cost of her repatriation, and attorney’s fees.
Issue: WON she was entitled to the unexpired portion of her salary due to illegal
dismissal.
Held: Yes. Respondent Joy Cabiles, having been illegally dismissed, is entitled to
her salary for the unexpired portion of the employment contract that was violated
together with attorney’s fees and reimbursement of amounts withheld from her
salary.
The award of the three-month equivalent of respondent’s salary should, however,

be increased to the amount equivalent to the unexpired term of the employment
contract.
In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc.,82 this
court ruled that the clause "or for three (3) months for every year of the unexpired
term, whichever is less"83 is unconstitutional for violating the equal protection
clause and substantive due process. We are aware that the clause "or for three (3)
months for every year of the unexpired term, whichever is less"was reinstated in
Republic Act No. 8042 upon promulgation of Republic Act No. 10022 in 2010.
When a law is passed, this court awaits an actual case that clearly raises
adversarial positions in their proper context before considering a prayer to declare
it as unconstitutional. However, we are confronted with a unique situation. The

First Exam
law passed incorporates the exact clause already declared as unconstitutional,

without any perceived substantial change in the circumstances.
We observe that the reinstated clause, this time as provided in Republic Act. No.
10022, violates the constitutional rights to equal protection and due process. We
reiterate our finding in Serrano v. Gallant Maritime that limiting wages that
should be recovered by anillegally dismissed overseas worker to three months is
both a violation of due process and the equal protection clauses of the
Constitution.
Putting a cap on the money claims of certain overseas workers does not increase
the standard of protection afforded to them. On the other hand, foreign employers
are more incentivizedby the reinstated clause to enter into contracts of at least a
year because it gives them more flexibility to violate our overseas workers’ rights.
Their liability for arbitrarily terminating overseas workers is decreased at the
expense of the workers whose rights they violated. Meanwhile, these overseas
workers who are impressed with an expectation of a stable job overseas for the
longer contract period disregard other opportunities only to be terminated earlier.
They are left with claims that are less than what others in the same situation
would receive. The reinstated clause, therefore, creates a situation where the law
meant to protect them makes violation of rights easier and simply benign to the
violator.
Along the same line, we held that the reinstated clause violates due process rights.
It is arbitrary as it deprives overseas workers of their monetary claims without any
discernable valid purpose.
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her
contract, in accordance with Section 10 of Republic Act No. 8042. The award of the
three-month equivalence of respondent’s salary must be modified accordingly.
Since she started working on June 26, 1997 and was terminated on July 14, 1997,
respondent is entitled to her salary from July 15, 1997 to June 25, 1998. "To rule
otherwise would be iniquitous to petitioner and other OFWs, and would, in effect,
send a wrong signal that principals/employers and recruitment/manning
agencies may violate an OFW’s security of tenure which an employment contract
embodies and actually profit from such violation based on an unconstitutional
provision of law."

First Exam
When you file an illegal dismissal case in the LA and you’re a local employee,
habang tumatakbo ang kaso, you get the backwages during that period. Kung
tumakbo nang ten years iyan, the employer will pay the backwages for that year.
Now, if a local employee is able to enjoy that and you have an OFW severely limited
by Section 10, that is a violation of the equal protection clause. Ang difference lang
in an OFW situation, you cannot claim reinstatement dahil may fixed term
employment contract iyan. In local, you can reinstate.
So pag-file ng illegal dismissal ang OFW, you give the unexpired portion of the
term.
What fees are to be paid by the workers for land based?
SECTION 50. Fees and Costs Chargeable to the Overseas Filipino Workers. — The
Overseas Filipino Worker shall pay the following fees and costs:
Documentation costs:
Passport;  
NBI/Police/Barangay Clearance;  
NSO authenticated birth certificate;  
Transcript of Records and diploma issued by the school, certified by the CHED
and authenticated by the DFA;  
Professional license issued by the PRC, authenticated by the DFA;  
Certificate of Competency issued by TESDA or other competent certifying body

for the job applied for; and  
DOH prescribed medical/health examination, based on the host country  medical

protocol.  
Membership with Philhealth, Pag-Ibig and the Social Security System.  
SECTION 51. Placement Fee.— A placement fee may be charged against the
Overseas Filipino Worker equivalent to one (1) month basic salary specified in
the POEA approved contract, except for the following:

First Exam
Domestic workers; and  
Workers to be deployed to countries where the prevailing system, either by law,

policy or practice do not allow, directly or indirectly, the charging and collection
of recruitment/placement fee.  
Who pays for the transportation cost going to the country? Is it the same with
land based and seabased? In both cases, the principal. For visa? Also the same.
So kung titingnan niyo, mas maraming binabayaran ang Principal for Seabased.
EASTERN VS SECRETARY OF LABOR
In connection with the application with the Philippine Overseas Employment

Administration (POEA) of J & B Manpower Specialist, Inc. for a license to engage in
business as a recruitment agency, a surety bond was filed on January 2, 1985 by
the applicant and the Eastern Assurance and Surety Corporation
From June 1983 to December 1985 thirty three (33) (persons) applied for overseas
employment with (J & B). In consideration of promised deployment, complainants
paid respondent various amounts for various fees. Most of' the receipts issued
were sighed by Mrs. Baby Bundalian, Executive Vice-President of (J & B).
Because of non-deployment (the applicants) filed separate complaints with the

Licensing and Regulation Office of POEA against (J & B) for violation of Articles 32
and 34 (a) of the Labor Code between the months of April to October 1985.
EASCO essentially disclaimed liability on the ground that the claims were not
expressly covered by the bond, that POEA had no jurisdiction to order forfeiture of
the bond, that some of the claims were paid beyond or prior to the period of
effectivity of the bond. EASCO contends that the POEA had no "adjudicatory
jurisdiction" over the monetary claims in question because the same "did not arise
from employer-employee relations."
ISSUE: WON POEA HAS JURISDICTION
HELD: YES. The penalties of suspension and cancellation of license or authority are
prescribed for violations of the above quoted provisions, among others. And the
First Exam
Secretary of Labor has the power under Section 35 of the law to apply these
sanctions, as well as the authority, conferred by Section 36, not only, to "restrict
and regulate the recruitment and placement activities of all agencies," but also to
"promulgate rules and regulations to carry out the objectives and implement the
provisions" governing said activities. Pursuant to this rule-making power thus
granted, the Secretary of Labor gave the POEA 9 "on its own initiative or upon filing
of a complaint or report or upon request for investigation by any aggrieved person,
. . . (authority to) conduct the necessary proceedings for the suspension or
cancellation of the license or authority of any agency or entity" for certain
enumerated offenses including —
1) the imposition or acceptance, directly or indirectly, of any amount of money,

goods or services, or any fee or bond in excess of what is prescribed by the
Administration, and
2) any other violation of pertinent provisions of the Labor Code and other relevant
laws, rules and regulations.
The Administrator was also given the power to "order the dismissal of the case or
the suspension of the license or authority of the respondent agency or contractor
or recommend to the Minister the cancellation thereof."
Implicit in these powers is the award of appropriate relief to the victims of the
offenses committed by the respondent agency or contractor, specially the refund
or reimbursement of such fees as may have been fraudulently or otherwise
illegally collected, or such money, goods or services imposed and accepted in
excess of what is licitly prescribed. It would be illogical and absurd to limit the
sanction on an offending recruitment agency or contractor to suspension or
cancellation of its license, without the concomitant obligation to repair the injury
caused to its victims. It would result either in rewarding unlawful acts, as it would
leave the victims without recourse, or in compelling the latter to litigate in another
forum, giving rise to that multiplicity of actions or proceedings which the law
abhors.
A licensee can be charged with illegal recruitment? False.
A non licensee can only be charged with illegal recruitment for commission of
prohibited activities? False.

First Exam
Why? A non-licensee, when he commits any of the acts of recruitment and

placement, is committing illegal recruitment.
A licensee, when it commits any of the prohibited acts can also be charged with
illegal recruitment.
So the three forms are:
1. Non-licensee who commits illegal recruitment.

2. Non-licensee who commits the prohibited activities
3. Licensee who commits prohibited activities
Are the prohibited acts in land based are the same in sea based? No. Mas
madami sa seabased. Familiarize yourself with those. Marami iyan.
What was the issue in the case of Cruz?
CRUZ VS NLRC
Clarita V. Cruz** went abroad pursuant to an employment contract that she hoped
would improve her future. Although a high school graduate, she agreed to work as
a domestic helper in Kuwait in consideration of an attractive salary and vacation
leave benefits she could not expect to earn in this country. But her foreign
adventure proved to be a bitter disappointment. On March 18,1988, after
completing her two-year engagement, she was back home in the Philippines with
her dead dreams and an angry grievance.
On March 23,1988, she filed a complaint against EMS Manpower and Placement
Services (Phil.) and its foreign principal, Abdul Karim Al Yahya, for underpayment
of her salary and non-payment of her vacation leave. She also claimed that she was
charged a placement fee of P7,000.00 instead of the legal maximum of only
P5,000.00. She alleged that her foreign employer treated her as a slave and
required her to work 18 hours a day. She was beaten up and suffered facial
deformity, head trauma and decreased sensation in the right portion of her body.
On top of all this, she was paid only $120 per month and her total salaries were
given to her only three hours before her flight back to Manila. This was after the
plane she was supposed to take had left and she had to stay in the airport for 24
hours before her employer finally heard her pleas and delivered her passport and
ticket to her.

First Exam
In its answer and position paper, the private respondent raised the principal
defense of settlement as evidenced by the Affidavit of Desistance executed by the
complainant. On the basis of this affidavit, the Philippine Overseas Employment
Administration dismissed her complaint.
Now, Cruz argues that she was inveigled into signing the Affidavit of Desistance
without the assistance of counsel. The "Attorney" Alvarado who assisted her was
not really a lawyer but only a helper in the Overseas Workers Welfare
Administration.
Issue: WON the Affidavit of Desistance is valid
Held: No. The Court is convinced that the petitioner was not fully aware of the
import and consequences of the Affidavit of Desistance when she executed it,
allegedly with the assistance of counsel. Except for the disputable presumptions
invoked by the private respondent, such assistance has not been established
against the petitioner's allegation that the "Attorney" Alvarado who supposedly
counseled her was not even a lawyer. Indeed, even assuming that such assistance
had been duly given, there is still the question of the intrinsic validity of the
quitclaim in view of the gross disparity between the amount of the settlement and
the petitioner's original claim. It is difficult to believe that the petitioner would
agree to waive her total claim of P88,840.00 for the unseemly settlement of only
P2,400.00. And even if she did, the waiver would still be null and void as violative
of public policy.
It remains to state that, contrary to the contention of the private respondent in the
proceedings below that it has no privity of contract with the petitioner, we have
held in a long line of cases that the local recruiter is solidarily liable with the
foreign principal for all damages sustained by the overseas worker in connection
with his contract of employment. Such liability is provided for in Section 1, Rule
II, Book II, of the POEA Rules and Regulations, which we have consistently
sustained.
This decision demonstrates once again the tenderness of the Court toward the
worker subjected to the lawless exploitation and impositions of his employer. The
protection of our overseas workers is especially necessary because of the

First Exam
inconveniences and even risks they have to undergo in their quest for a better life
in a foreign land away from their loved ones and their own government.
True or False, all quitclaims are null and void. False. Not all waivers and quitclaims
are invalid as against public policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that
the waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the
questionable transaction.
If the settlement is at least 50% of the claim, it is a reasonable settlement.
__________________________
August 25, 2017 part 1 | Peroy
Is it possible for an entity to be a licensed recruitment agency but at the same time
be charged with illegal recruitment because of the commission of any of the
prohibited acts. So, it’s very important that you know what are prohibited acts. It’s
also possible for a licensee to commit any of the acts and become liable for illegal
recruitment. But of course, the more layman definition of illegal recruitment is
when an entity engaged in any act of recruitment and placement without the
required registration for certificate of authority.
8. Suspension and/or cancellation of license or authority
Q: What does Art. 35 provide.
ARTICLE 35. Suspension and/or cancellation of license or authority.

The Minister of Labor shall have the power to suspend or cancel any license or
authority to recruit employees for overseas employment for violation of rules
and regulations issued by the Ministry of Labor, the Overseas Employment
Development Board, or for violation of the provisions of this and other
applicable laws, General Orders and Letters of Instructions.
Rules for Landbased OFWs Rules for Seafarers

First Exam
Part VI, Rule V, Section 170. Part V, Rule VII, Section 154.
SECTION 170. Effects of Orders of SECTION 154. Effects of Orders of
Preventive Suspension and Suspension Preventive Suspension and Suspension
or Cancellation of License. — An Order or Cancellation of License. — An Order
of Preventive Suspension, Suspension of Preventive Suspension, Suspension
or Cancellation of License shall have or Cancellation of License shall have
the effect of suspending or the effect of suspending or
terminating all activities of the terminating all activities of the
recruitment agency which fall under licensed manning agency which fall
the definition of recruitment and under the definition of recruitment
placement, including the processing of and placement, including the
pending contracts of applicant processing of pending contracts of
workers. The suspension or applicant seafarer. The suspension or
cancellation shall not, however, affect cancellation shall not, however, affect
the transfer of accreditation of the the transfer of accreditation of the
principal/employer to another principal/employer to another
licensed recruitment agency. licensed manning agency.
Q: Does Art. 35 cover also cover local recruitment? Basis?

A: Yes.
C: Of course, the one who has the authority to grant the license also, necessarily,
has the authority to revoke/cancel or suspend the license.
TRANS ACTION v. SEC. OF LABOR

September 5, 1997
FACTS:
A group of individuals sought employment as domestic helpers and paid
placement fee ranging from P1,000 to P14,000 but Trans Action Overseas
Corporation failed to deploy them. Their demands for refund proved unavailing,
thus they were constrained to institute complaints against petitioner for violation
of Art. 32 and 34(a) of the Labor Code, as amended.
Petitioner denied having received the amounts allegedly collected from

respondents and averred that the company’s employee whose only duty was to
pre-screen and interview applicants and was not authorized to collect fees from

First Exam
the applicants. Petitioner maintains that it even warned respondents not to give
any money to unauthorized individuals.
Petitioner contends that Secretary; Confesor acted with grave abuse of discretion
in rendering the assailed orders on alternative grounds, viz.: (1) it is the Philippine
Overseas Employment Administration (POEA) which has the exclusive and
original jurisdiction to hear and decide illegal recruitment cases, including the
authority to cancel recruitment licenses, or (2) the cancellation order based on the
1987 POEA Schedule of Penalties is not valid for non-compliance with the Revised
Administrative Code of 1987 regarding its registration with the U.P. Law Center.
ISSUE:
W/N the Secretary of Labor has jurisdiction to cancel or revoke the license of
petitioner. YES.
HELD:
The penalties of suspension and cancellation of license or authority are prescribed
for violations of the above quoted provisions, among others. And the Secretary of
Labor has the power under Section 35 of the law to apply these sanctions, as well
as the authority, conferred by Section 36, not only to "restrict and regulate the
recruitment and placement activities of all agencies," but also to "promulgate rules
and regulations to carry out the objectives and implement the provisions"
governing said activities. Pursuant to this rule-making power thus granted, the
Secretary of Labor gave the POEA, 6 "on its own initiative or upon filing of a
complaint or report or upon request for investigation by any aggrieved person, . .
(authority to) conduct the necessary proceedings for the suspension or
cancellation of the license or authority of any agency or entity" for certain
enumerated offenses.
The power to suspend or cancel any license or authority to recruit employees

for overseas employment is concurrently vested with the POEA and the
Secretary of Labor.
Q: What are the main allegations of TransAction?

A: It is the POEA who has the exclusive and original jurisdiction to hear and decide
illegal recruitment cases.
Q: Why was TransAction subjected to possible revocation of title in the first place?
Why was it exposed to that?
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A:
Q: What did Sec. Confessor do in this case?

A: He moved for the cancellation of license of TransAction.
Q: And then, what did he do after that?

A: Reversed her decision upon the appeal of TransAction.
C: She lifted the cancellation.
Q: For what? What was the basis for the lifting?

C: Aralin natin yan ha, kasi importante yung process na yun. Cancellation yun
diba. Cancellation is not the same with revocation.
Q: Ni-lift, bakit?
A:
C: There was an offer to post a bond. Nag-offer sya to post a bond. In the event that
na ma-approve yung ruling ng Usec, e ‘di kunin nyo yun. In the meantime, allow
us to conduct our business.
Q: With respect to the issue, as to whether the minister/secretary of labor has the
power to revoke or suspend the license, what did the SC say?
A: Yes. [Refer to the case digest]
Q: There was an allegation that since this is an overseas case, it should be POEA
which should suspend or cancel the license. How did SC rule on that?
A: “The power to suspend or cancel any license or authority to recruit employees for
overseas employment is concurrently vested with the POEA and the Secretary of
Labor.”
C: They have concurrent jurisdiction. Naturally and logically, you cannot ask the
POEA to revoke that license of a local recruiter. But the Secretary of Labor has the
authority to grant the authority to recruit and concomitantly the power to revoke
or to suspend the license.
9. Illegal recruitment – local
Q: In the case of Salazar v. Achacoso, of course we have the definition of illegal

recruitment in local employment. And what’s the definition according to Art. 38
and 39?

First Exam
A:
Labor Code
Art. 38. Illegal recruitment.
1. Any recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-
licensees or non-holders of authority, shall be deemed illegal and
punishable under Article 39 of this Code. The Department of Labor and
Employment or any law enforcement officer may initiate complaints
under this Article.
2. Illegal recruitment when committed by a syndicate or in large scale shall

be considered an offense involving economic sabotage and shall be
penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a

group of three (3) or more persons conspiring and/or confederating with
one another in carrying out any unlawful or illegal transaction, enterprise
or scheme defined under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more
persons individually or as a group.
3. The Secretary of Labor and Employment or his duly authorized

representatives shall have the power to cause the arrest and detention of
such non-licensee or non-holder of authority if after investigation it is
determined that his activities constitute a danger to national security and
public order or will lead to further exploitation of job-seekers. The
Secretary shall order the search of the office or premises and seizure of
documents, paraphernalia, properties and other implements used in
illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment of
workers for overseas employment, without having been licensed or
authorized to do so.
Art. 39. Penalties.

1. The penalty of life imprisonment and a fine of One Hundred Thousand
Pesos (P1000,000.00) shall be imposed if illegal recruitment constitutes
economic sabotage as defined herein;

First Exam
2. Any licensee or holder of authority found violating or causing another to

violate any provision of this Title or its implementing rules and
regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than two years nor more than five years or a fine
of not less than P10,000 nor more than P50,000, or both such
imprisonment and fine, at the discretion of the court;
3. Any person who is neither a licensee nor a holder of authority under this
Title found violating any provision thereof or its implementing rules and
regulations shall, upon conviction thereof, suffer the penalty of
imprisonment of not less than four years nor more than eight years or a
fine of not less than P20,000 nor more than P100,000 or both such
imprisonment and fine, at the discretion of the court;
4. If the offender is a corporation, partnership, association or entity, the

penalty shall be imposed upon the officer or officers of the corporation,
partnership, association or entity responsible for violation; and if such
officer is an alien, he shall, in addition to the penalties herein prescribed,
be deported without further proceedings;
5. In every case, conviction shall cause and carry the automatic revocation
of the license or authority and all the permits and privileges granted to
such person or entity under this Title, and the forfeiture of the cash and
surety bonds in favor of the Overseas Employment Development Board or
the National Seamen Board, as the case may be, both of which are
authorized to use the same exclusively to promote their objectives.
Q: What are the 3 forms of illegal recruitment? According to Sagmit? Not that it
matters when you take the bar, but according to me?
A:
1. Committed by a non-licensee but still recruits and places workers. 
2. Committed by a licensee, but committed any of the prohibited acts
mentioned in Art. 34 of the Labor Code and RA 8042/10022
3. Committed by a non-licensee AND committing any of the prohibited acts.
Q: Of course, we have the concept of economic sabotage. Why is it important to

label it as economic sabotage?

First Exam
A:
Q: If I were the lawyer for the private complainants, why would I want to charge a
recruitment agency for economic sabotage?
A: Economic sabotage imposes higher penalty which is life imprisonment.
C: Life imprisonment. That is why if I were the lawyer, if I want to pin down a
recruitment agency, I will try to gather…
2 forms of economic sabotage are:

1. Committed by a syndicate – committed by 3 or more persons conspiring or
confederating with one another.
2. Committed in large scale – committed against three (3) or more persons
individually or as a group
RA 10022
Section 5. Section 6 of Republic Act No. 8042, as amended, is hereby amended to
read as follows:
"SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or
procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, when undertaken
by non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of
the Philippines: Provided, That any such non-licensee or non-holder who, in any
manner, offers or promises for a fee employment abroad to two or more persons
shall be deemed so engaged. It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-holder, licensee or
holder of authority:
"(a) To charge or accept directly or indirectly any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay or acknowledge any
amount greater than that actually received by him as a loan or advance;
"(b) To furnish or publish any false notice or information or document in
relation to recruitment or employment;
"(c) To give any false notice, testimony, information or document or commit
any act of misrepresentation for the purpose of securing a license or
authority under the Labor Code, or for the purpose of documenting hired

First Exam
workers with the POEA, which include the act of reprocessing workers
through a job order that pertains to nonexistent work, work different from
the actual overseas work, or work with a different employer whether
registered or not with the POEA;
"(d) To include or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed
to liberate a worker from oppressive terms and conditions of employment;
"(e) To influence or attempt to influence any person or entity not to employ
any worker who has not applied for employment through his agency or
who has formed, joined or supported, or has contacted or is supported by
any union or workers' organization;
"(f) To engage in the recruitment or placement of workers in jobs harmful to
public health or morality or to the dignity of the Republic of the
Philippines;
"(h) To fail to submit reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation from jobs,
departures and such other matters or information as may be required by
the Secretary of Labor and Employment;
"(i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from
the time of actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of the
Department of Labor and Employment;
"(j) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency
or to be engaged directly or indirectly in the management of travel agency;
"(k) To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations, or for any other
reasons, other than those authorized under the Labor Code and its
implementing rules and regulations;
"(l) Failure to actually deploy a contracted worker without valid reason as
determined by the Department of Labor and Employment;
"(m) Failure to reimburse expenses incurred by the worker in connection with
his documentation and processing for purposes of deployment, in cases
where the deployment does not actually take place without the worker's
fault. Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage; and

First Exam
"(n) To allow a non-Filipino citizen to head or manage a licensed

recruitment/manning agency.
"Illegal recruitment is deemed committed by a syndicate if carried out by a group

of three (3) or more persons conspiring or confederating with one another. It is
deemed committed in large scale if committed against three (3) or more persons
individually or as a group.
"In addition to the acts enumerated above, it shall also be unlawful for any
person or entity to commit the following prohibited acts:
"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight
percent (8%) per annum, which will be used for payment of legal and
allowable placement fees and make the migrant worker issue, either
personally or through a guarantor or accommodation party, postdated
checks in relation to the said loan;
"(2) Impose a compulsory and exclusive arrangement whereby an overseas
Filipino worker is required to avail of a loan only from specifically
designated institutions, entities or persons;
"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino
worker after the latter's employment contract has been prematurely
terminated through no fault of his or her own;
Filipino worker is required to undergo health examinations only from
specifically designated medical clinics, institutions, entities or persons,
except in the case of a seafarer whose medical examination cost is
shouldered by the principal/shipowner;
Filipino worker is required to undergo training, seminar, instruction or
schooling of any kind only from specifically designated institutions,
entities or persons, except fpr recommendatory trainings mandated by
principals/shipowners where the latter shoulder the cost of such trainings;
"(6) For a suspended recruitment/manning agency to engage in any kind of
recruitment activity including the processing of pending workers'
applications; and
"(7) For a recruitment/manning agency or a foreign principal/employer to
pass on the overseas Filipino worker or deduct from his or her salary the
payment of the cost of insurance fees, premium or other insurance related
charges, as provided under the compulsory worker's insurance coverage.

First Exam
"The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having
ownership, control, management or direction of their business who are
responsible for the commission of the offense and the responsible
employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under
this section, the Secretary of Labor and Employment, the POEA Administrator
or their duly authorized representatives, or any aggrieved person may initiate
the corresponding criminal action with the appropriate office. For this purpose,
the affidavits and testimonies of operatives or personnel from the Department
of Labor and Employment, POEA and other law enforcement agencies who
witnessed the acts constituting the offense shall be sufficient to prosecute the
accused.
"In the prosecution of offenses punishable under this section, the public
prosecutors of the Department of Justice shall collaborate with the anti-illegal
recruitment branch of the POEA and, in certain cases, allow the POEA lawyers to
take the lead in the prosecution. The POEA lawyers who act as prosecutors in
such cases shall be entitled to receive additional allowances as may be
determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to
the filing of cases punishable under other existing laws, rules or regulations."
Q: What is conspiracy?
A: RPC Art. 8: A conspiracy exists when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it.
C: Pag sinabi mong may conspiracy, 3 or more persons doing the illegal
recruitment, that is economic sabotage.
[Note the difference in the number per RPC and per RA 10022]
Q: What is the other kind?

A: Committed in large scale.

First Exam
C: If you were a lawyer and you know that many people are victimized, wag naman
kayo mag ambulance chasing. Kung lapitan kayo, e ‘di i-group nyo na para at least
nakakatakot.
Q: In the case of Salazar v. Achacoso, what did administrator Achacoso do?

A: Issued an order for the search an arrest of Salazar.
Salazar v. Achacoso
March 14, 1990
FACTS:
Rosalie Tesoro of Pasay City in a sworn statement filed with the POEA, charged
petitioner with illegal recruitment. Public respondent Atty. Ferdinand Marquez
sent petitioner a telegram directing him to appear to the POEA regarding the
complaint against him.
On the same day, after knowing that petitioner had no license to operate a
recruitment agency, public respondent Administrator Tomas Achacoso issued a
Closure and Seizure Order No. 1205 to petitioner. It stated that there will a seizure
of the documents and paraphernalia being used or intended to be used as the
means of committing illegal recruitment, it having verified that petitioner has—
(1) No valid license or authority from the Department of Labor and Employment
to recruit and deploy workers for overseas employment; (2) Committed/are
committing acts prohibited under Article 34 of the New Labor Code in relation to
Article 38 of the same code. A team was then tasked to implement the said Order.
The group, accompanied by mediamen and Mandaluyong policemen, went to
petitioner’s residence. They served the order to a certain Mrs. For a Salazar, who let
them in. The team confiscated assorted costumes. Petitioner filed with POEA a
letter requesting for the return of the seized properties, because she was not given
prior notice and hearing. The said Order violated due process. She also alleged that
it violated sec 2 of the Bill of Rights, and the properties were confiscated against
her will and were done with unreasonable force and intimidation.
ISSUE: May the POEA or the Secretary of Labor validly issue warrants and search
seizure or arrest under Article 38 of the Labor Code? NO.
HELD:

First Exam
We reiterate that the Secretary of Labor, not being a judge, may no longer issue
search or arrest warrants. Hence, the authorities must go through the judicial
process. To that extent, we declare Article 38, paragraph (c), of the Labor Code,
unconstitutional and of no force and effect.
C: That was declared unconstitutional. Of course, it is still the regular courts that
can issue warrants of arrest.
10. Illegal Recruitment - overseas
a. Statement of Policies
Please be familiar with the statement of policies under RA 10022. I will charge you
with knowledge of that.
RA 8042 as amended by RA 10022

SEC. 2. DECLARATION OF POLICIES--
(a) In the pursuit of an independent foreign policy and while considering
national sovereignty, territorial integrity, national interest and the right to self-
determination paramount in its relations with other states, the State shall, at all
times, uphold the dignity of its citizens whether in country or overseas, in
general, and Filipino migrant workers, in particular, continuously monitor
international conventions, adopt/be signatory to and ratify those that
guarantee protection to our migrant workers, and endeavor to enter into
bilateral agreements with countries hosting overseas Filipino workers.
(Amended)
(b) 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. Towards this end, the State shall provide adequate and
timely social, economic and legal services to Filipino migrant workers.
(c) While recognizing the significant contribution of Filipino migrant workers to

the national economy through their foreign exchange remittances, the State
does not promote overseas employment as a means to sustain economic growth
and achieve national development. The existence of the overseas employment
program rests solely on the assurance that the dignity and fundamental human
rights and freedoms of the Filipino citizens shall not, at any time, be
First Exam
compromised or violated. The State, therefore, shall continuously create local

employment opportunities and promote the equitable distribution of wealth
and the benefits of development.
(d) The State affirms the fundamental equality before the law of women and
men and the significant role of women in nation-building. Recognizing the
contribution of overseas migrant women workers and their particular
vulnerabilities, the State shall apply gender sensitive criteria in the formulation
and implementation of policies and programs affecting migrant workers and
the composition of bodies tasked for the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any person by reason of poverty. In this regard,
it is imperative that an effective mechanism be instituted to ensure that the
rights and interest of distressed overseas Filipinos, in general, and Filipino
migrant workers, in particular, whether regular/documented or
irregular/undocumented, are adequately protected and safeguarded.
(Amended)
(f) The right of Filipino migrant workers and all overseas Filipinos to participate
in the democratic decision-making processes of the State and to be represented
in institutions relevant to overseas employment is recognized and guaranteed.
(g) The State recognizes that the most effective tool for empowerment is the
possession of skills by migrant workers. The government shall provide them free
and accessible skills development and enhancement programs. Pursuant to this
and as soon as practicable, the government shall deploy and/or allow the
deployment only of skilled Filipino workers. (amended)
(h) The State recognizes non-governmental organizations, trade unions,

workers associations, stakeholders and their similar entities duly recognized as
legitimate, are partners of the State in the protection of Filipino migrant workers
and in the promotion of their welfare. The State shall cooperate with them in a
spirit of trust and mutual respect. The significant contribution of recruitment
and manning agencies shall from part this partnership. (amended)

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(I) Government fees and other administrative costs of recruitment,

introduction, placement and assistance to migrant workers shall be rendered
free without prejudice to the provision of Section 36 hereof.
Nonetheless, the deployment of Filipino overseas workers, whether land-based

or sea-based by local service contractors and manning agencies employing them
shall be encouraged. Appropriate incentives may be extended to them.
b. Definition of Overseas Filipino Worker
Q: Define who is an Overseas Filipino Worker.
RA 10022
Section 2. Section 3, paragraph (a) of Republic Act No. 8042, as amended, is hereby
amended to read as follows:
"(a) "Overseas Filipino worker" refers to a person who is to be engaged, is engaged

or has been engaged in a remunerated activity in a state of which he or she is not a
citizen or on board a vessel navigating the foreign seas other than a government
ship used for military or non-commercial purposes or on an installation located
offshore or on the high seas; to be used interchangeably with migrant worker."
2016 Revised POEA Rules and Regulations on Landbased, Rule II

27. Overseas Filipino Worker or Migrant Worker — refers to a person who is to
be engaged, is engaged, or has been engaged in a remunerated activity in a
State or country of which the worker is not a citizen. A “person to be engaged
in a remunerated activity” refers to an applicant worker who has been
promised or assured employment overseas.  
Q: Other word for OFW?

A: Migrant Worker
We discussed a case where the employees were onboard a PH ship, but the
employer was saying that they are not OFWs.
Q: How did the SC dispose of that case? Diba there was an issue WON they were
OFWs considering the ship is of Filipino nationality.
A:

First Exam
C: In other words, this was the exact definition used. The ship was plying foreign
seas.
Example: MV Rodrigo, Philippine nationality. Ang issue dun e saan pumupunta

ang ship. The SC in that case ruled that the employees are OFWs because the ship
was plying foreign seas. Using this definition, this is a modified version of what
you already have in RA 8042 and in previous legislations.
c. Definition of Overseas Employment
2016 Revised POEA Rules and Regulations on Seafarers, Rule II

33. Overseas Employment — refers to the engagement of a Filipino seafarer on
board a ship navigating foreign waters other than a government ship used for
military or non- commercial purposes, or on an installation located offshore or
on the high seas under a government-approved standard employment contract.
d. Deployment of Migrant Workers
Q: What is the provision on termination or ban on deployment? What does Art.

10022 provide?
RA 10022
read as follows:
"SEC. 5. Termination or Ban on Deployment. - Notwithstanding the provisions of

Section 4 hereof, in pursuit of the national interest or when public welfare so
requires, the POEA Governing Board, after consultation with the Department of
Foreign Affairs, may, at any time, terminate or impose a ban on the deployment of
migrant workers."
C: That is why from time to time you have bans. Right now there is a ban kung saan
may giyera or may epidemic. The purpose for the banning is to protect the OFWs?
Q: What is recruitment and placement in RA 8042?

C: It is basically the same as that provided under the LC. But it is very specific, “for
a fee employment abroad to two or more persons”. [Refer to RA 10022, Sec. 5
above]
First Exam
Q: There is an enumeration of acts that will be considered as? How are they
labelled?
A: Prohibited Practices.
Q: Did you see the enumeration (in RA 10022, Sec. 5)? Is it something new? Have
you seen them before?
A: No. Appears in LC Art. 34.
Q: All of them?
A: No. [Unique or stated differently: LC: 7; RA 10022: c, e, f, l, m, n. Just double
check]
Q: Where else? Wala kayong nakitang hawig?
C: In the POEA rules on land-based and sea-based.
C: Pero ito, very specific, it pertains to illegal recruitment, but hindi sya
kaparehong-kapareho ng enumeration ng land-based and sea-based. For obvious
purposes (yung manning-manning, pinagmerge).
Art. 34 LC RA 10022
Art. 34. Prohibited practices. It shall Section 5. Section 6 of Republic Act No.
be unlawful for any individual, entity, 8042, as amended, is hereby amended
licensee, or holder of authority: to read as follows:
1. To charge or accept, directly or "SEC. 6. Definition. - For purposes of
indirectly, any amount greater this Act, illegal recruitment shall […]
than that specified in the likewise include the following acts,
schedule of allowable fees whether committed by any person,
prescribed by the Secretary of whether a non-licensee, non-holder,
Labor, or to make a worker pay licensee or holder of authority:
any amount greater than that
actually received by him as a "(a) To charge or accept directly or
loan or advance; indirectly any amount greater than
2. To furnish or publish any false that specified in the schedule of
notice or information or allowable fees prescribed by the
document in relation to Secretary of Labor and
recruitment or employment; Employment, or to make a worker
3. To give any false notice, pay or acknowledge any amount
testimony, information or greater than that actually received
document or commit any act of by him as a loan or advance;
misrepresentation for the "(b) To furnish or publish any false
notice or information or document

First Exam
purpose of securing a license or in relation to recruitment or

authority under this Code. employment;
4. To induce or attempt to induce a "(c) To give any false notice, testimony,
worker already employed to quit information or document or
his employment in order to offer commit any act of
him to another unless the misrepresentation for the purpose
transfer is designed to liberate of securing a license or authority
the worker from oppressive under the Labor Code, or for the
terms and conditions of purpose of documenting hired
employment; workers with the POEA, which
5. To influence or to attempt to include the act of reprocessing
influence any person or entity workers through a job order that
not to employ any worker who pertains to nonexistent work, work
has not applied for employment different from the actual overseas
through his agency; work, or work with a different
6. To engage in the recruitment or employer whether registered or not
placement of workers in jobs with the POEA;
harmful to public health or "(d) To include or attempt to induce a
morality or to the dignity of the worker already employed to quit his
Republic of the Philippines; employment in order to offer him
7. To obstruct or attempt to another unless the transfer is
obstruct inspection by the designed to liberate a worker from
Secretary of Labor or by his duly oppressive terms and conditions of
authorized representatives; employment;
8. To fail to file reports on the "(e) To influence or attempt to
status of employment, influence any person or entity not
placement vacancies, to employ any worker who has not
remittance of foreign exchange applied for employment through
earnings, separation from jobs, his agency or who has formed,
departures and such other joined or supported, or has
matters or information as may contacted or is supported by any
be required by the Secretary of union or workers' organization;
Labor. "(f) To engage in the recruitment or
9. To substitute or alter placement of workers in jobs
employment contracts approved harmful to public health or morality
and verified by the Department or to the dignity of the Republic of
of Labor from the time of actual the Philippines;
signing thereof by the parties up

First Exam
to and including the periods of "(h) To fail to submit reports on the

expiration of the same without status of employment, placement
the approval of the Secretary of vacancies, remittance of foreign
Labor; exchange earnings, separation from
10. To become an officer or jobs, departures and such other
member of the Board of any matters or information as may be
corporation engaged in travel required by the Secretary of Labor
agency or to be engaged directly and Employment;
or indirectly in the management "(i) To substitute or alter to the
of a travel agency; and prejudice of the worker,
11. To withhold or deny employment contracts approved
travel documents from and verified by the Department of
applicant workers before Labor and Employment from the
departure for monetary or time of actual signing thereof by the
financial considerations other parties up to and including the
than those authorized under this period of the expiration of the same
Code and its implementing rules without the approval of the
and regulations. Department of Labor and
Employment;
"(j) For an officer or agent of a
recruitment or placement agency to
become an officer or member of the
Board of any corporation engaged in
travel agency or to be engaged
directly or indirectly in the
management of travel agency;
"(k) To withhold or deny travel
documents from applicant workers
before departure for monetary or
financial considerations, or for any
other reasons, other than those
authorized under the Labor Code
and its implementing rules and
regulations;
"(l) Failure to actually deploy a
contracted worker without valid
reason as determined by the

First Exam
Department of Labor and

Employment;
"(m) Failure to reimburse expenses
incurred by the worker in
connection with his documentation
and processing for purposes of
deployment, in cases where the
deployment does not actually take
place without the worker's fault.
Illegal recruitment when
committed by a syndicate or in large
scale shall be considered an offense
involving economic sabotage; and
"(n) To allow a non-Filipino citizen to
head or manage a licensed
recruitment/manning agency.
xxx
Q: What is the rule if the one committing illegal recruitment is a juridical person?
A:
RA 10022, Sec. 5
xxx
In case of juridical persons, the officers having ownership, control, management
or direction of their business who are responsible for the commission of the
offense and the responsible employees/agents thereof shall be liable.
xxx
Q: Who are officers?

A:
C: [Refer to provision above] Control, supervision, ownership, management. It’s
not enough that a person is an officer. There must be showing that he knew of the
illegal recruitment activites, he had control and supervision, management, and
owner.
E pano kung nominal director lang yan, di nag-aattend ng meeting. Yung
ginagawang illegal recruitment hindi nya inallow.
You have to be very specific, hindi enough na officer ka.

First Exam
Q: What is the rule, where do you go if you want to file a case for illegal
recruitment?
A: RTC.
C: RTC because it is a criminal case.
RA 8042
SEC. 9. VENUE. - A criminal action arising from illegal recruitment as defined
herein shall be filed with the Regional Trial Court of the province or city
where the offense was committed or where the offended party actually resides
at the same time of the commission of the offense: Provided, That the court
where the criminal action is first filed shall acquire jurisdiction to the
exclusion of other courts. Provided, however, That the aforestated provisions
shall also apply to those criminal actions that have already been filed in court
at the time of the effectivity of this Act.
You don’t go to the POEA. Don’t give me POEA or LA in the exam. This is a criminal
offense, you go to the regular courts.
e. Definition of Illegal Recruitment in Overseas Employment
Q: What is the rule if the issue of illegal recruitment concerns the employment of
a minor?
RA 10022
read as follows:
"SEC. 7. Penalties. -
"(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than twelve (12) years and one (1) day but not
more than twenty (20) years and a fine of not less than One million pesos
(P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
"(b) The penalty of life imprisonment and a fine of not less than Two million
pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00)
shall be imposed if illegal recruitment constitutes economic sabotage as
defined therein.
"Provided, however, That 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.

First Exam
"(c) Any person found guilty of any of the prohibited acts shall suffer the
penalty of imprisonment of not less than six (6) years and one (1) day but
not more than twelve (12) years and a fine of not less than Five hundred
thousand pesos (P500,000.00) nor more than One million pesos
(P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein
prescribed, be deported without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the
license or registration of the recruitment/manning agency, lending institutions,
training school or medical clinic."
Q: What happens to the minor? [h. Mandatory Repatriation]

A: Mandatory repatriation [refer below]
RA 10022
Section 9. Section 16 of Republic Act No. 8042, as amended, is hereby amended
to read as follows:
"SEC. 16. Mandatory Repatriation of Underage Migrant Workers. - Upon discovery

or being informed of the presence of migrant workers whose ages fall below the
minimum age requirement for overseas deployment, the responsible officers in
the foreign service shall without delay repatriate said workers and advise the
Department of Foreign Affairs through the fastest means of communication
available of such discovery and other relevant information. The license of a
recruitment/manning agency which recruited or deployed an underage migrant
worker shall be automatically revoked and shall be imposed a fine of not less
than Five hundred thousand pesos (Php 500,000.00) but not more than One
million pesos (Php 1,000,000.00). All fees pertinent to the processing of papers
or documents in the recruitment or deployment shall be refunded in full by the
responsible recruitment/manning agency, without need of notice, to the
underage migrant worker or to his parents or guardian. The refund shall be
independent of and in addition to the indemnification for the damages
sustained by the underage migrant worker. The refund shall be paid within
thirty (30) days from the date of the mandatory repatriation as provided for in
this Act."

First Exam
Q: What is the minimum age for domestic helpers who are OFWs?
A: Based on the recent Dept. Order, 23 years old. [POEA Governing Board
Resolution No. 4, Series of 2011, par. 1]
C: 23 years old. But it is not so recent. Previously 25 years old.
Q: Why do you think there is a higher minimum age? Diba 18 yo naman ang age of
majority. Bakit pagdating sa DH, 23? Let’s speculate. What is the policy behind the
law?
A:
C: Do you recall the news where the DH was not fed. She died. Hong-Kong yata yun,
ginutom nila. The presumption is that when you are older, you are more
capaticated to defend yourself. Specially if you are working within the confines of
a family home.
I expect you to know what is illegal recruitment in local and overseas. I expect you
to know the enumeration.
2016 Revised POEA Rules on 2016 Revised POEA Rules on

Landbased OFWs Seafarers
RULE X Illegal Recruitment RULE X  Legal Assistance and
SECTION 76. Acts Constituting Illegal Enforcement Measures
Recruitment. — Illegal Recruitment SECTION 72. Acts Constituting Illegal
shall mean any act of canvassing, Recruitment. — Illegal Recruitment
enlisting, contracting, transporting, shall mean any act of canvassing,
utilizing, hiring or procuring workers enlisting, contracting, transporting,
and includes referrals, contract utilizing, hiring or procuring seafarers
services, promising or advertising for and includes referrals, contract
employment abroad, whether for services, promising or advertising for
profit or not, when undertaken by a employment abroad, whether for
non-licensee or non-holder of profit or not, when undertaken by a
authority contemplated under Article non-licensee or non-holder of
13(f) of Presidential Decree No. 442, as authority; provided, that any such
amended, otherwise known as the non-licensee or non-holder who, in any
Labor Code of the Philippines: manner, offer or promises for a fee
Provided, that any such non-licensee employment abroad to two or more
or non-holder who, in any manner, persons shall be deemed so engaged.
offers or promises for a fee

First Exam
employment abroad to two or more It shall likewise include the following

persons shall be deemed so engaged. prohibited acts committed by any
It shall likewise include the following person whether or not a holder of a
prohibited acts committed by any license or authority:
person whether or not a licensee or a a. To charge or accept directly or
holder of authority: indirectly any amount of money,
k. To charge or accept directly or goods or services, or any fee or
indirectly any amount greater than bond for any purpose from an
that specified in the schedule of applicant seafarer;
allowable fees prescribed by the b. To furnish or publish any false
Secretary or to make a worker pay notice or information or
the recruiter or its agents or document in relation to
acknowledge any amount greater recruitment or employment;  
than that actually loaned or c. To give any false notice,
advanced to him;   testimony, information or
l. To furnish or publish any false document or commit any act of
notice or information or document misrepresentation for the purpose
in relation to recruitment or of securing a license or authority
employment;   under the Labor Code;  
m. To give any false notice, d. To give any false notice,
testimony, information or testimony, information or
document or commit any act of document or commit any act of
misrepresentation for the purpose misrepresentation for the purpose
of securing a license or authority of documenting hired seafarers
under the Labor Code;   with the POEA, which include the
n. To give any false notice, act of reprocessing seafarers
testimony, information or through a crew request that
document or commit any act of pertains to non-existent work, or
misrepresentation for the purpose work with a different ship
of documenting hired workers with whether or not accredited with
the POEA, which include the act of the POEA;  
reprocessing workers through a job e. To induce or attempt to induce a
order that pertains to non-existent seafarer already employed to quit
work, work different from the his employment in order to offer
actual overseas work, or work with him another unless the transfer is
a different employer  whether designed to liberate a seafarer
registered or not with the POEA;   from oppressive terms and
conditions of employment;  

First Exam
o. To induce or attempt to induce a f. To influence or attempt to

worker already employed to quit influence any person or entity not
his/her employment in  order to to employ any seafarer who has
offer him another unless the not applied for employment
transfer is designed to liberate a through his agency or who has
worker from  oppressive terms and formed, joined or supported, or
conditions of employment;   has contacted or is supported by
p. To influence or attempt to any union or seafarers’
influence any person or entity not organization;  
to employ any worker who has  not g. To engage in the recruitment or
applied for employment through placement of seafarers in jobs
his/her agency or who has formed, harmful to public health or
joined or supported,  or has morality or to the dignity of the
contacted or is supported by any Republic of the Philippines as may
union or workers’ organization;   be prohibited by law or duly
q. To engage in the recruitment or constituted authority;  
placement of workers in jobs h. To obstruct or attempt to obstruct
harmful to public health or morality inspection by the Secretary or by
or to the dignity of the Republic of his/her duly authorized
the Philippines as may be prohibited representative;  
by law or  duly constituted i. To fail to submit reports on the
authority;   status of employment, remittance
r. To obstruct or attempt to obstruct of foreign exchange earnings,
inspection by the Secretary or by separation from jobs, departures
his/her duly and such other matters or
authorized  representative;   information as may be required
s.To fail to submit reports on the by the Secretary under penalty of
status of employment, placement law;  
vacancies, remittance of  foreign j. To substitute or alter to the
exchange earnings, separation from prejudice of the seafarer,
jobs, departures and such other employment contract approved
matters or information as may be and verified by the
required by the Secretary under Administration from the time of
penalty of law;   actual signing thereof by the
j. To substitute or alter to the parties up to and including the
prejudice of the worker, period of the expiration of the
employment contract approved and same without the approval of the
verified by the DOLE from the time Administration;  

First Exam
of actual signing thereof by the k. For an officer or agent of a

parties up to and including the recruitment or placement agency
period of the expiration of the same to become an officer or member of
without the approval of the DOLE;   the Board of any corporation
k. For an officer or agent of a engaged in travel agency or to be
recruitment or placement agency to engaged directly or indirectly in
become an officer or member of the the management of a travel
Board of any corporation engaged in agency;  
travel agency or insurance agency l. To withhold or deny travel
or to be engaged directly or documents from applicant
indirectly in the management of a seafarers before departure for
travel agency or insurance agency;   monetary or financial
l. To withhold or deny travel considerations, or for any other
documents from applicant workers reasons, other than those
before departure for monetary or authorized under existing laws;  
financial considerations, or for any m. To fail to actually deploy a
other reasons, other than those contracted seafarer without valid
authorized under the Labor Code reason as determined by the
and its implementing rules and Administration;  
regulations;   n. To fail to reimburse expenses
m. To fail to actually deploy a incurred by the seafarer in
contracted worker without valid connection with his/her
reason as determined by the DOLE;   processing for purposes of
n. To fail to reimburse expenses deployment, in cases where the
incurred by the worker in deployment does not actually take
connection with his/her place without the seafarer's fault;  
documentation and processing for o. To allow a non-Filipino citizen to
purposes of deployment, in cases head or manage a manning
where the deployment does not agency;  
actually take place without the p. To impose a compulsory and
worker's fault;   exclusive arrangement whereby a
o. To allow a non-Filipino citizen to seafarer is required to avail of a
head or manage a recruitment loan only from specifically
agency;   designated institutions, entities
p. To arrange, facilitate or grant a or persons;  
loan to an Overseas Filipino Worker q. To impose a compulsory and
with interest exceeding eight exclusive arrangement whereby
percent (8%) per annum, which will the Filipino seafarer is required to

First Exam
be used for payment of legal and undergo health examinations

allowable placement fees and make only from specifically designated
the migrant worker issue, either medical clinics, institutions,
personally or through a  guarantor entities or persons, except in the
or accommodation party, postdated case of a seafarer whose medical
checks in relation to the said loan;   examination cost is shouldered by
q. To impose a compulsory and the principal/employer;  
exclusive arrangement whereby an r. To impose compulsory and
Overseas Filipino Worker is exclusive arrangement whereby
required to avail of a loan only from the Filipino seafarer is required to
specifically designated institutions, undergo training, seminar,
entities or  persons;   instruction or schooling of any
r. To refuse to condone or renegotiate kind only from specifically
a loan incurred by an Overseas designated institutions, entities
Filipino Worker after  the latter’s or persons, except for
employment contract has been recommendatory trainings
prematurely terminated through mandated by principal/employer
no fault of  his/her own;   where the latter shoulder the cost
s.To impose a compulsory and of such trainings;  
exclusive arrangement whereby an s. For a suspended manning agency
Overseas Filipino Worker  is to engage in any kind of
required to undergo health recruitment activity including the
examinations only from specifically processing of pending seafarers’
designated medical clinics, applications;  
institutions, entities or persons, t. For a licensed manning agency or
except in the case of a worker whose a principal/employer to pass-on
medical examination cost is to the Filipino seafarer or deduct
shouldered by the principal;   from his/her salary the payment
t. To impose a compulsory and of the cost of insurance fees,
exclusive arrangement whereby an premium or other insurance
Overseas Filipino Worker is related charges, as provided under
required to undergo training, the compulsory seafarer’s
seminar, instruction or schooling of insurance coverage;  
any kind only from specifically
designated institutions, entities or
persons, except for
recommendatory trainings
mandated by principals where the

First Exam
latter shoulder the cost of such

trainings;  
u. For a suspended recruitment
agency to engage in any kind of
recruitment activity including the
processing of pending workers’
applications; and  
v. For a recruitment agency or a
foreign principal/employer to pass
on to the Overseas Filipino Worker
or deduct from his/her salary the
payment of the cost of insurance
fees, premium or other insurance
related charges, as provided under
the compulsory worker’s insurance
coverage.  
Q: What are the additional acts that are considered prohibited activities? Aside
from these activites, may additional. Ano yun? Which you do not see in your LC
provision?
A: Refer to Sec. 5, RA 10022 amending Sec. 6, RA 8042
C: If you take a look at the additional provision, it basically says, okay these are
things that the employer should pay for, why are you making the worker pay. It is
okay to say that you can have the seminar in this place but the employer should
pay. Bottomline, pera-pera. O kaya, magpapaloan ka more than 8%. More or less,
monetary yung additional. Premiums ng insurance, which is supposed to be
shouldered by the employer but if you charge, that is a prohibited activity that
may expose the entity to charges of illegal recruitment.
f. Penalties
Q: What are the penalties for illegal recruitment?

A: Refer to RA 8042 as amended by RA 10022 Sec. 6. Provision provided above.
Q: What is that penalty? 12y1d to 20y?

A:
Q: Until what age pwede makulong?

First Exam
A:
C: Review that.
Q: What are the other penalties aside from imprisonment?

A:
Q: What is economic sabotage? Review, 2 Forms.

A: Recruitment done by syndicate, or by large scale.
C: Yung isa yung nag co-commit (syndicate), yung isa yung nabiktima (large scale).
Q: Pag economic sabotage, what is the penalty?

A:
C: Mas matindi compared to the usual illegal recruitment.
Q: If there is a minor involved? What is the penalty?

A:
Q: if there is commission of prohibited acts?

A: RA 10022, Letter C.
Q: In the case of Pp. v. Tan Tiong Meng, what was the penalty imposed on Tan
Tiong Meng?
A: Life imprisonment, P200,000 penalty and deportation.
C: That’s the necessary consequence. Still a provision on penalties. If the accused
is convicted of illegal recruitment and he is an alien then the penalty carries with
it deportation. Si Dionisio (Pp v. Dionisio) di na deport kasi pilipino, pati si Ong (Pp
v. Ong) pilipino din kahit Ong ang apelyido. Si Sagaydo (Pp v. Sagaydo) wala, kasi
deportation is only applicable to aliens. Penalty yun, immediate deportation.

First Exam
People v. Tan Tiong Meng

April 10, 1997
FACTS:
Six(6) complainants went to Borja’s house to meet accused, Tan Tiong Meng,
Chinese, allegedly a job recruiter . Accused promised to complainants that they
could get jobs as factory worker in Taiwan with a monthly salary of P20K.
Accused required them to submit their passports, bio-data and their high school
diploma as well as to pay P15K each for placement and processing fees. Accused
kept on promising to complainants that they would be able to leave, but the
promises were never fulfilled. When complainants knew that accused was not a
licensed or authorized overseas recruiter, they filed for complaints for illegal
recruitment and estafa against accused.
Accused contend that he merely acted as a collector of money for the principal
recruiter Borja who made the representations that he(accused) could give the
applicants jobs in Taiwan.
ISSUE:
WON accused is guilty of the offense of illegal recruitment in large scale and 6
counts of estafa.
HELD:
YES.
Circumstances belie the version of accused: (1) Mascardo(one of the
complainants) testified that accused could no longer return the money because
he had already sent it to his brother-in-law in Taiwan; (2) all the receipts issued
to complainants were signed by accused; (3) Accused admitted that he and his
wife are respondents in about 70 cases of estafa and illegal recruitment; (4)
complainants pointed to Tan and not Borja as the one who had represented to
them that he could give them jobs in Taiwan.
The accused’ acts of accepting placement fees from job applicants and
representing to said applicants that he could get them jobs in Taiwan constitute
recruitment and placement under the Labor Code and is deemed illegal and
punishable under Art. 39 of the Labor Code.

First Exam
The offense committed against the 6 complainants is illegal recruitment in large

scale. Accused is also guilty of 6 separate crimes of estafa. A person convicted for
illegal recruitment under the Labor Code can be convicted for violation of the
RPC provisions on estafa provided the elements are present: (1) the accused
defrauded another by abuse of confidence or by means of deceit; and (2) damage
or prejudice capable of pecuniary estimation is caused to the offended party or
third person.
SC held him liable for damages and P100,000 fine. In addition to the foregoing
penalties, the accused being an alien, shall be deported without further
proceedings after service of sentence.
Q: What is the nationality of Meng?

A: Chinese
Q: Sinabi dito, whenerever there is a conviction for illegal recruitment, what is the
penalty that is always there? In all the cases that you have mentioned, ano yung
constant na penalty?
A: “In every case, conviction shall cause and carry the automatic revocation of the
license or registration of the recruitment/manning agency, lending institutions,
training school or medical clinic.” (RA 10022 Sec. 6)
C: Iba-iba yung penalties and yung length of imprisonment. In all these, when
there is a finding of illegal recruitment, last paragraph (Sec. 6). You don’t want the
agency to continue engaging in illegal recruitment.
g. Money Claims
Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended

to read as follows:
"SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and decide, within ninety
(90) calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damage. Consistent with this mandate, the NLRC

First Exam
shall endeavor to update and keep abreast with the developments in the global
services industry.
"The liability of the principal/employer and the recruitment/placement agency

for any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to de filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and
directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims and
damages.
"Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment
or modification made locally or in a foreign country of the said contract.
"Any compromise/amicable settlement or voluntary agreement on money

claims inclusive of damages under this section shall be paid within thirty (30)
days from approval of the settlement by the appropriate authority.
"In case of termination of overseas employment without just, valid or authorized

cause as defined by law or contract, or any unauthorized deductions from the
migrant worker's salary, the worker shall be entitled to the full reimbursement
if his placement fee and the deductions made with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his employment
contract or for three (3) months for every year of the unexpired term, whichever
is less.
"In case of a final and executory judgement against a foreign

employer/principal, it shall be automatically disqualified, without further
proceedings, from participating in the Philippine Overseas Employment
Program and from recruiting and hiring Filipino workers until and unless it fully
satisfies the judgement award.

First Exam
"Noncompliance with the mandatory periods for resolutions of case provided

under this section shall subject the responsible officials to any or all of the
following penalties:
"(a) The salary of any such official who fails to render his decision or resolution
within the prescribed period shall be, or caused to be, withheld until the
said official complies therewith;
"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold any appointive
public office for five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice
to any liability which any such official may have incurred under other existing
laws or rules and regulations as a consequence of violating the provisions of this
paragraph."
Q: What was the ruling in Serrano v. Gallant?
SERRANO v. GALLANT
March 24, 2009
Facts:
Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation
Co., Ltd. (respondents) under a POEA-approved Contract of Employment. On
March 19, 1998, the date of his departure, petitioner was constrained to accept a
downgraded employment contract for the position of Second Officer with a
monthly salary of US$1,000.00, upon the assurance and representation of
respondents that he would be made Chief Officer by the end of April. However,
respondents did not deliver on their promise to make petitioner Chief Officer.
Hence, petitioner refused to stay on as Second Officer and was repatriated to the
Philippines on May.
Petitioner's employment contract was for a period of 12 months or from March

19, 1998 up to March 19, 1999, but at the time of his repatriation on May 26,
1998, he had served only two (2) months and seven (7) days of his contract,
leaving an unexpired portion of nine (9) months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against respondents for
constructive dismissal and for payment of his money claims. LA rendered the
dismissal of petitioner illegal and awarding him monetary benefits.

First Exam
Respondents appealed to the NLRC to question the finding of the LA. Likewise,
petitioner also appealed to the NLRC on the sole issue that the LA erred in not
applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor
Relations Commission that in case of illegal dismissal, OFWs are entitled to their
salaries for the unexpired portion of their contracts.
Petitioner also appealed to the NLRC on the sole issue that the LA erred in not
applying the ruling of the Court in Triple Integrated Services, Inc. v. National Labor
Relations Commission that in case of illegal dismissal, OFWs are entitled to their
salaries for the unexpired portion of their contracts. Petitioner filed a Motion for
Partial Reconsideration; he questioned the constitutionality of the subject
clause. Petitioner filed a Petition for Certiorari with the CA, reiterating the
constitutional challenge against the subject clause. CA affirmed the NLRC ruling
on the reduction of the applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner.
The last clause in the 5th paragraph of Section 10, Republic Act (R.A.) No. 8042,
to wit:
Sec. 10. Money Claims. - x x x In case of termination of overseas
employment without just, valid or authorized cause as defined by law or
contract, the workers shall be entitled to the full reimbursement of his
placement fee with interest of twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three
(3) months for every year of the unexpired term, whichever is less.
Applying the subject clause, the NLRC and the CA computed the lump-sum
salary of petitioner at the monthly rate of US$1,400.00 covering the period of
three months out of the unexpired portion of nine months and 23 days of his
employment contract or a total of US$4,200.00.
Impugning the constitutionality of the subject clause, petitioner contends that,

in addition to the US$4,200.00 awarded by the NLRC and the CA, he is entitled
to US$21,182.23 more or a total of US$25,382.23, equivalent to his salaries for
the entire nine months and 23 days left of his employment contract, computed
at the monthly rate of US$2,590.00
Issue:

First Exam
1.) Is petitioner entitled to his monetary claim which is the lump-sum salary for
the entire unexpired portion of his 12-month employment contract, and not just
for a period of three months?  
2.) Should petitioner’s overtime and leave pay form part of the salary basis in
the computation of his monetary award, because these are fixed benefits that
have been stipulated into his contract?  
Held:
1.) Yes. Petitioner is awarded his salaries for the entire unexpired portion of his
employment contract consisting of nine months and 23 days computed at the
rate of US$1,400.00 per month. The subject clause “or for three months for every
year of the unexpired term, whichever is less” in the 5th paragraph of Section 10
of Republic Act No. 8042 is declared unconstitutional.
In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment
who were illegally discharged were treated alike in terms of the computation of their
money claims: they were uniformly entitled to their salaries for the entire unexpired
portions of their contracts. But with the enactment of R.A. No. 8042, specifically
the adoption of the subject clause, illegally dismissed OFWs with an unexpired
portion of one year or more in their employment contract have since been
differently treated in that their money claims are subject to a 3-month cap,
whereas no such limitation is imposed on local workers with fixed-term
employment.
The Court concludes that the subject clause contains a suspect classification in
that, in the computation of the monetary benefits of fixed-term employees who are
illegally discharged, it imposes a 3-month cap on the claim of OFWs with an
unexpired portion of one year or more in their contracts, but none on the claims of
other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar disadvantage.
The Court further holds that the subject clause violates petitioner's right to
substantive due process, for it deprives him of property, consisting of monetary
benefits, without any existing valid governmental purpose. The subject clause
being unconstitutional, petitioner is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his employment contract,
pursuant to law and jurisprudence prior to the enactment of R.A. No. 8042.

First Exam
2.) No. The word salaries in Section 10(5) does not include overtime and leave
pay. For seafarers like petitioner, DOLE Department Order No. 33, series 1996,
provides a Standard Employment Contract of Seafarers, in which salary is
understood as the basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work “performed” in
excess of the regular eight hours, and holiday pay is compensation for any work
“performed” on designated rest days and holidays.
By the foregoing definition alone, there is no basis for the automatic inclusion of
overtime and holiday pay in the computation of petitioner's monetary award;
unless there is evidence that he performed work during those periods.
Q: Which agency has jurisdiction of OFW money claims?

A:
Q: When money is involved, you always file the case with the labor arbiter’s office.
True or False?
A:
Q: Refund of placement fees, where do you go?

A:
C: POEA.
Q: What was the issue in the case of Serrano?

A: Refer to the case digest.
C: In violation of the equal protection clause.
Q: Is the ruling in Serrano consistent with RA 10022?

C: No.
Q: How can you explain. Bakit ganun, dito sabi 3 months lang, tapos biglang dito
unexpired? Bakit di consistent?
A:
Q: Kelan na enact yung RA 10022?
A: 8 July 2010
C: Anong sabi ni Justice Leonen? Kasi nung in-enact yung law, di pa naisip na may
violation of equal protection law pala. Here comes the case of Serrano telling us
that when there is a case for illegal dismissal [see part 2]

First Exam
__________________________
September 8, 2017 | Wildy Pahayahay
So we are now entering the indicators for employment but before that, we have
to discuss Human Resource Development.
Q: What is TESDA? What is the meaning of TESDA?
SECTION 5. Technical Education and Skills Development Authority; Creation. —

To implement the policy declared in this Act, there is hereby created a Technical
Education and Skills Development Authority (TESDA), hereinafter referred to
as the Authority, which shall replace and absorb the National Manpower and
Youth Council (NMYC), the Bureau of Technical and Vocational Education
(BTVE) and the personnel and functions pertaining to technical-vocational
education in the regional offices of the Department of Education, Culture and
Sports (DECS) and the apprenticeship program of the Bureau of Local
Employment of the Department of Labor and Employment.
Q: The composition of TESDA is?
SECTION 6. Composition of the Authority. — The Authority shall be composed

of the TESDA Board and TESDA Secretariat.
SECTION 7. Composition of the TESDA Board. — The TESDA Board shall be

composed of the following: The Secretary of Labor and Employment
Chairperson
Secretary of Education, Culture and Sports - Co-Chairperson

Secretary of Trade and Industry - Co-Chairperson
Secretary of Agriculture - Member
Secretary of Interior and Local Government - Member
Director-General of the TESDA Secretariat - Member
In addition, the President of the Philippines shall appoint the following

members from the private sector: two (2) representatives, from the
employer/industry organization, one of whom shall be a woman; three (3)

First Exam
representatives, from the labor sector, one of whom shall be a woman; and two
(2) representatives of the national associations of private technical-vocational
education and training institutions, one of whom shall be a woman. As soon as
all the members of the private sector are appointed, they shall so organize
themselves that the term of office of one-third (1/3) of their number shall
expire every year. The member from the private sector appointed thereafter to
fill vacancies caused by expiration of terms shall hold office for three (3) years.
The President of the Philippines may, however, revise the membership of the
TESDA Board, whenever the President deems it necessary for the effective
performance of the Board’s functions through an administrative order.
The TESDA Board shall meet at least twice a year, or as frequently as may be
deemed necessary by its Chairperson. In the absence of the Chairperson, a Co-
Chairperson shall preside. In case any member of the Board representing the
Government cannot attend the meeting, he or she shall be regularly
represented by an undersecretary or deputy-director general, as the case may
be, to be designated by such member for the purpose.
The benefits, privileges and emoluments of the Board shall be consistent with
existing laws and rules.
Q: Why do you think is the DEPED Secretary part of the composition of TESDA?
- Part of TESDA's function is to provide education or instruction to whoever is
interested, more on vocational. Now, with the happening of the K-12, the main
purpose of adding the two years is to make our students equipped or at par with
the students in other countries. So ang nangyari, tayo nalang ata ang hindi pa K-
12. So we are not able to compete. That is why DEPED is part of TESDA because
yung intruction and materials etc have to be reviewed and have to pass the
standards of teaching and instruction.
Q: Why is Department of Agriculture included?

Philippines is also an agricultural country. In fact if you listen to our elders, money
is in agriculture. But what happens is, the middlemen are the ones who get money
not the farmers.
Q: In addition to the members that you mentioned, who else may compose TESDA?

First Exam
In addition, the President of the Philippines shall appoint the following members from
the private sector: two (2) representatives, from the employer/industry organization,
one of whom shall be a woman; three (3) representatives, from the labor sector, one of
whom shall be a woman; and two (2) representatives of the national associations of
private technical-vocational education and training institutions, one of whom shall be
a woman. As soon as all the members of the private sector are appointed, they shall so
organize themselves that the term of office of one-third (1/3) of their number shall
expire every year. The member from the private sector appointed thereafter to fill
vacancies caused by expiration of terms shall hold office for three (3) years
Q: Bakit Tripartite?
The usual, when you say tripartite, meron kang labor, management, and
government. They come hand in hand.
Q: Of course, you should know the composition, but what is important is?
There is a representation of a woman, which is now problematic nowadays
because the LGBT will now say they are not represented. So it is a matter of
representation.
Q: Why is there a need for a labor representative? Bakit may management, may
association of vocational schools? Bakit ganon? Wala yan sa notes, gusto ko mag isip
ka.
The reason why we have DILG is because we need local government support in all
the programs. We need to encourage the establishment of vocational schools. We
want ordinances to be passed to encourage activities of TESDA. We need the DTI
because of course, when you have TESDA, the presumption is this is something
that can provide employment to other people. So kailangan involve and DTI.
This why TESDA is composed of these people. Each has a purpose. Not only for
purposes of allowances and honorarium.
Aside from these people, you have committees.
Q: Saan dapat nakikita ang mga committees na yan? What is the purpose?
SECTION 19. Technical Education and Skills Development Committees. — The

Authority shall establish Technical Education and Skills Development
Committees at the regional and local levels to coordinate and monitor the

First Exam
delivery of all skills development activities by the public and private sectors.
These committees shall likewise serve as the Technical Education and Skills
Development Committees of the Regional and local development councils. The
composition of the Technical Education and Skills Development Committees
shall be determined by the Director-General subject to the guidelines to be
promulgated by the Authority.
Q: What are Skills Development Centers? Saang level mo makikita yan? National,
Regional, or Local?
An example of which is Samson Polytechnic College of College, Joji Ilagan. Hindi
lang yan private but also public. Part of the Department of Labor and TESDA
partnership.
SECTION 20. Skills Development Centers. — The Authority shall strengthen the
network of national, regional and local skills training centers for the purpose of
promoting skills development.
This network shall include skills training centers in vocational and technical
schools, technical institutes, polytechnic colleges, and all other duly accredited
public and private dual system educational institutions. The technical
education and skills development centers
shall be administered and operated under such rules and regulations as may be
established by the Authority in accordance with the National Technical
Education and Skills Development Plan.
Q: What is the provision on incentive schemes?
SECTION 27. Incentives Schemes.— The Authority shall develop and administer
appropriate incentives schemes to encourage government and private
industries and institutions to provide high-quality technical education and
skills development opportunities.
ARTICLE 52. Incentive Scheme. – An additional deduction from taxable income

of one-half (1/2) of the value of labor training expenses incurred for
development programs shall be granted to the person or enterprise concerned
provided that such development programs, other than apprenticeship, are
approved by the Council and the deduction does not exceed ten percent (10%)
of the direct labor wage.

First Exam
There shall be a review of the said scheme two years after its implementation.
Q: What are the incentive schemes that you encounter? What is the formula and
under what circumstance?
Okay, actually the same as in the case of apprenticeship. And in the case of
apprenticeship, the condition is the salary would be minimum wage not the usual
minimum 75% allowable under the law.
Q: Who is an "apprentice"?
Definition of Terms:
“Apprentice” is a person undergoing training for an approved apprenticeable

occupation during an established period assured by an apprenticeship
agreement.
Q: Okay, I have a friend who is 14 years old, can he be an apprentice?

Actually, the person must be at least 15 years old as revised by RA 7658 and as
provided under the implementing rules. So 15, even under the TESDA Law, it is 15
subject to the conditions mentioned.
Q: What are the conditions for a person to be an apprentice?
ARTICLE 59. Qualifications of apprentice. – To qualify as an apprentice, a

person shall:
a. Be at least fourteen (14) years of age;
b. Possess vocational aptitude and capacity for appropriate tests; and
c. Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary of Labor

appropriate educational requirements for different occupations.
Q: What is an "apprenticeable occupation"?
“Apprenticeable Occupation” is an occupation officially endorsed by a

tripartite body and approved for apprenticeship by the Authority;

First Exam
Q: Can you mention at least 5 apprenticeable occupation?

Accounting technician, airplane inspector, barber, carpenter, and electrician.
Note: Please see the table of apprenticeable occuptation.
Q: What is the requirement before you can consider an occupation or trade as

apprenticeable? What kind of trade or business is given?
ARTICLE 60. Employment of apprentices. - Only employers in the highly

technical industries may employ apprentices and only in apprenticeable
occupations approved by the Secretary of Labor and Employment. (As
amended by Section 1, Executive Order No. 111, December 24, 1986).
It must be highly technical and some of the examples are?
Q: So gaano dapat katagal kapag apprenticeable?

Not more than 6 months.
Q: What about Learnership?

3 months.
So makikita niyo, highly technical for apprenticeable occupation. Ang learnership

is semi-skilled.
Apprenticeship Learnership
Training in highly-skilled job; job Training in semi-skilled job; industrial
found in highly-technical industry; occupa-tions that require training for
training period exceeds 3 months. less than 3 months
Minimum period is 6 months Job is non-apprenticeable because its
practical skills can be learned in 3 (not
6) months
No commitment to hire an apprentice Commitment to hire a learner after the
even after completion of period period
Prior DOLE approval required for No need for prior approval from DOLE
hiring apprentices in terms of hiring
Some of Learnable Traits are:

1. Executive Secretary

First Exam
2. Cloth Mender
3. Laundry / Washing Operator
4. Office Secretary
5. Paper-puncher Maker
6. Candle Maker
7. Bihon Maker
8. Telephone Switch Board Operator
9. Sponger
10. Stuff Toy Maker
11. Cashier
So be able to compare, kanina obviously highly technical, eto sa mga sinasabi natin
semi-skilled. And because of that, learnership will require a shorter period
compared to apprenticeable occupation. So be able to maker.
Q: Now, distinguish between a learner and an apprentice.

In terms of age, for apprentice - at least 15 years old. For learner ? Same
requirement?
Q: Can a learner be an apprentice? Can an apprentice be a learner?

Learner is not an apprentice, but an apprentice is considered a learner.
Q: What are the requirements for a learner?

Aralin niyo yan ha. Be familiar with that.
Q: What is an "Apprenticeship Agreement"? And what are the contents?

“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;
Apprenticeship Learnership
ARTICLE 61. Contents of ARTICLE 75. Learnership agreement. –
apprenticeship agreements. Any employer desiring to employ
Apprenticeship agreements, learners shall enter into a learnership
including the wage rates of agreement with them, which
apprentices, shall conform to the rules agreement shall include:
issued by the Secretary of Labor and a. The names and addresses of the

First Exam
Employment. learners;
·The period of apprenticeship shall b. The duration of the learnership
not exceed six months. period, which shall not exceed three (3)
· Apprenticeship agreements months;
providing for wage rates below the c. The wages or salary rates of the
legal minimum wage, which in no learners which shall begin at not less
case shall start below 75 percent of than seventy-five percent (75%) of the
the applicable minimum wage, applicable minimum wage; and
· may be entered into only in d. A commitment to employ the
accordance with apprenticeship learners if they so desire, as regular
programs duly approved by the employees upon completion of the
Secretary of Labor and Employment. learnership. All learners who have
been allowed or suffered to work
The Department shall develop during the first two (2) months shall
standard model programs of be deemed regular employees if
apprenticeship. (As amended by Sec. training is terminated by the
1, Exec. Order No. 111, Dec. 24, 1986). employer before the end of the
stipulated period through no fault of
the learners.
The learnership agreement shall be

subject to inspection by the Secretary
of Labor and Employment or his duly
authorized representative.
Q: What is the requirement before an employer or an entity can claim that a person
is an apprentice and not an employee?
It must be approved by the Authority or TESDA. Under the old law you have the
Ministry of Labor but we already know that the responsibility is passed to TESDA.
Nitto Enterprises v. NLRC and R. Capili

GR No. 114337 | September 29, 1995
Facts
Petitioner Nitto Enterprises, a company engaged in the sale of glass and
aluminum products, hired Roberto Capili sometime in May 1990 as an
apprentice machinist, molder and coremaker as evidenced by an
apprenticeship agreement 2for a period of six (6) months from May 28, 1990 to

First Exam
November 28, 1990 with a daily wage rate of P66.75 which was 75% of the
applicable minimum wage. On August 2, 1990, Roberto Capili who was
handling a piece of glass which he was working on, accidentally hit and injured
the leg of an office secretary who was treated at a nearby hospital. Further,
Capili entered a workshop within the office premises which was not his
work station. There, he operated one of the power press machines without
authority and in the process injured his left thumb. The following day he
was asked to resign. Three days after, , private respondent formally filed
before the NLRC Arbitration Branch, National Capital Region a complaint for
illegal dismissal and payment of other monetary benefits.
The Labor Arbiter rendered his decision finding the termination of

private respondent as valid and dismissing the money claim for lack
of merit. On appeal, NLRC issued an order reversing the decision of the
Labor Arbiter. The NLRC declared that Capili was a regular employee of Nitto
Enterprises and not an apprentice. Consequently, Labor Arbiter issued a Writ of
Execution ordering for the reinstatement of Capili and to collect
his back wages. Petitioner, Nitto Enterprises filed a case to the Supreme
Court.
Issue
WON Capili is a regulat employee or an apprentice.
Held
Regular employee. The apprenticeship agreement between petitioner
and private respondent was executed on May 28, 1990 allegedly
employing the latter as an apprentice in the trade of "care maker/molder.
However, the apprenticeship Agreement was filed only on June 7,
1990.Notwithstanding the absence of approval by the Department of Labor and
Employment, the apprenticeship agreement was enforced the day it was signed. The
act of filing the proposed apprenticeship program with the Department
of Labor and Employment is a preliminary step towards its final approval and
does not instantaneously give rise to an employer-apprentice relationship.
Nitto Enterprises did not comply with the requirements of the law.
It is mandated that apprenticeship agreements entered into by the employer
and apprentice shall be entered only in accordance with the apprenticeship
program duly approved by the Minister of Labor and Employment. Thus, the

First Exam
apprenticeship agreement has no force and effect; and Capili is considered to be

a regular employee of the company.
In the case of Century Canning Corporation v. CA. Take note ha fish cleaner, is
apprenticeable pala yun. So, century tapos fish cleaner, how connected can you be
diba. But then, there was an allegation that he was an apprentice? What was the
ruling of the Labor Arbiter? So there was a contract between the supposed
apprentice and century but it was not yet approved by TESDA. So in this case also,
the jurisdiction of approving the agreement is now with TESDA. By virtue of
TESDA Law it is no longer the DOLE.
Century Canning Corporation v. CA

G.R. No. 152894
Facts
On 15 July 1997, Century Canning Corporation (petitioner) hired Gloria C. Palad
(Palad) as fish cleaner at petitioners tuna and sardines factory. Palad signed on
17 July 1997 an apprenticeship agreement with petitioner. Palad received an
apprentice allowance of P138.75 daily. On 25 July 1997, petitioner submitted
its apprenticeship program for approval to the Technical Education and Skills
Development Authority (TESDA) of the Department of Labor and Employment
(DOLE). On 26 September 1997, the TESDA approved petitioners
apprenticeship program. According to petitioner, a performance evaluation
was conducted on 15 November 1997, where petitioner gave Palad a rating
ofN.I. or needs improvement since she scored only27.75% based on a 100%
performance indicator. Furthermore, according to the performance evaluation,
Palad incurred numerous tardiness and absences. As a consequence, petitioner
issued a termination notice dated 22 November 1997 to Palad, informing her of
her termination effective at the close of business hours of 28 November 1997.
Palad then filed a complaint for illegal dismissal, underpayment of wages, and
non-payment of pro-rated 13th month pay for the year 1997.
Issue
WON the apprenticeship agreement was valid and binding between the parties.
Held

First Exam
The Court held that the apprenticeship agreement which Palad signed was not
valid and binding because it was executed more than two months before the
TESDA approved petitioners apprenticeship program.
The Court cited Nitto Enterprises v. National Labor Relations Commission, where
it was held that an apprenticeship program should first be approved by the
DOLE before an apprentice may be hired, otherwise the person hired will be
considered a regular employee. It is mandated that apprenticeship agreements
entered into by the employer and apprentice shall be entered only in accordance
with the apprenticeship program duly approved by the Minister of Labor and
Employment. Prior approval by the Department of Labor and Employment of
the proposed apprenticeship program is, therefore, a condition sine qua non
before an apprenticeship agreement can be validly entered into. The Labor Code
defines an apprentice as a worker who is covered by a written apprenticeship
agreement with an employer.
Since Palad is not considered an apprentice because the apprenticeship

agreement was enforced before the TESDAs approval of petitioners
apprenticeship program, Palad is deemed a regular employee performing the
job of a fish cleaner. Clearly, the job of a fish cleaner is necessary in petitioners
business as a tuna and sardines factory. Under Article 280 of the Labor Code, an
employment is deemed regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual
business or trade of the employer.
Q: Where can apprenticeship programs be held or conducted?
ARTICLE 63. Venue of apprenticeship programs. – Any firm, employer, group or

association, industry organization or civic group wishing to organize an
apprenticeship program may choose from any of the following apprenticeship
schemes as the training venue for apprentice:
a. Apprenticeship conducted entirely by and within the sponsoring firm,
establishment or entity;
b. Apprenticeship entirely within a Department of Labor and Employment
training center or other public training institution; or
c. Initial training in trade fundamentals in a training center or other institution
with subsequent actual work participation within the sponsoring firm or entity
during the final stage of training.

First Exam
Q: What is the rule when there is a need to investigate situations involving TESDA
Programs or apprenticeship programs?
ARTICLE 65. Investigation of violation of apprenticeship agreement. – Upon

complaint of any interested person or upon its own initiative, the appropriate
agency of the Department of Labor and Employment or its authorized
representative shall investigate any violation of an apprenticeship agreement
pursuant to such rules and regulations as may be prescribed by the Secretary of
Labor and Employment.
Q: And if there is a need to appeal the investigation? Where do we go?
ARTICLE 66. Appeal to the Secretary of Labor and Employment. - The decision of
the authorized agency of the Department of Labor and Employment may be
appealed by any aggrieved person to the Secretary of Labor and Employment
within five (5) days from receipt of the decision. The decision of the Secretary
of Labor and Employment shall be final and executory.
We have to take note no, insofar as I know, this is still filed before the DOLE
because wala namang arm ang TESDA for investigating, but then of course, the
Secretary of Labor still has the appellate jurisdiction.
Q: What is the provision on incentive with respect to apprenticeship program?
ARTICLE 71. Deductibility of training costs. – An additional deduction from

taxable income of one-half (1/2) of the value of labor training expenses
incurred for developing the productivity and efficiency of apprentices shall be
granted to the person or enterprise organizing an apprenticeship program:
Provided, That such program is duly recognized by the Department of Labor
and Employment: Provided, further, That such deduction shall not exceed ten
(10%) percent of direct labor wage: and Provided, finally, That the person or
enterprise who wishes to avail himself or itself of this incentive should pay his
apprentices the minimum wage.
For example, the cost of all the expenses is 100,000. The 50,000 of 100,000 will
serve as the basis for deduction from the taxable income. For example the taxable
income is 500,000. So the company therefore is supposed to pay, has a taxable

First Exam
income of 500,000. Now, it has a labor-training cost of 100,000. So we subtract the

1/2 of 100,000 which is the 50,000. So 500,000 minus 50,000, that would now be
450,000. So nabawasan ka na ngayon.
But then what is the qualification? That such deduction shall not exceed 10% of
direct labor wage. So kung ang labor wage mo ay 40,000, hanggang 40,000 ka lang.
So incentive na yan for getting an apprentice. But the last condition is? That the
person or enterprise who wishes to avail himself or itself of this incentive should pay
his apprentices the minimum wage. So generally, when one gets an apprentice, what
is the most minimum wage that you can give? 75%. What is the minimum wage
of Davao? 340.00.
Now, to avoid the situation where companies will just say, "Ay, apprentice ko yan
kaya ganyan ang sweldo, meron ngayong rigorous procedure before there can be
an apprentice and apprenticeship agreement.
Q: How can we compare this from a learnership agreement? Who is a "learner"?
ARTICLE 73. Learners defined._ _– _Learners are persons hired as trainees in

semi-skilled and other industrial occupations which are non-apprenticeable
and which may be learned through practical training on the job in a relatively
short period of time which shall not exceed three (3) months.
TESDA Sec. 4 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.
Q: In what kinds of trades or occupations can we have learnership?

In semi-skilled and other industrial occupations which are non-appreciable.
Q: And any person who would like to get a learner must comply with what
requirements?
ARTICLE 74. When learners may be hired. – _Learners may be employed when
no experienced workers are available, the employment of learners is necessary
to prevent curtailment of employment opportunities, and the employment
does not create unfair competition in terms of labor costs or impair or lower
working standards.

First Exam
Q: If one is to compare between an apprentice and a learner with respect to the

prospect of being employed after, what is the provision of the law? Can an apprentice
become a regular employee? Can a learner become a regular employee?
ARTICLE 75. Learnership agreement. – Any employer desiring to employ

learners shall enter into a learnership agreement with them, which agreement
shall include:
a. The names and addresses of the learners;
b. The duration of the learnership period, which shall not exceed three (3)
months;
c. 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
d. 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.
The learnership agreement shall be subject to inspection by the Secretary of

Labor and Employment or his duly authorized representative.
Q: Is there a similar provision in apprenticeship agreement?

No. Employment in apprenticeship is legally allowed only in highly-technical
industries and only on apprenticeable occupation approved by the DOLE.
Q: So bakit walang commitment to hire?

Kasi nga highly technical. So kung dun sa 6 months nakita mo na di siya pwede
maging regular employee, bakit mo itatali ngayon ang company to engage him as
a regular employee as opposed to a learnership program where semi-skilled ang
kailangan, easier to do, easier to understand yung instructions, easier jobs.
Compare niyo naman si Forklift Operator kay Abaka Bag Maker? Diba? Why would
you put a commitment there for a forklift operating company to hire the
apprentice if he does not possess the technical skills for the job. Yung Abaka Bag
Maker, kasi sinasabi natin supposedly madali siya pero for some people mahirap
din yan.

First Exam
There is no counterpart provision making the company committed to hire because

we are talking about highly technical positions for apprenticeable occupations as
opposed to semi-skilled employees in the learnership program.
____________________________
September 22, 2017 | Barrios
So last time we already discussed TESDA, its composition. Of course we discussed

also the concept of apprenticeship, what is an apprentice in this apprenticeship
agreement, what are the requirement before an entity can engage an apprentice,
what are the qualifications of an apprentice [...] We were also able to compare an
apprentice with a learner, we also mentioned the different occupations that are
apprenticeable or subject of an apprentice agreement. By now you should be able
to distinguish between learnership and apprenticeship and all the details, yun ang
expectation ko.
Now we will start our discussion with RA 7277, Magna Carta for Disabled Persons,
pero dapat for differently-abled.
Q: What is the policy of the law with respect with the differently-abled persons,
because actually kung disabled persons mali na noh, so the correct term should be
differently-abled. So what is the policy of the State?
Section 2 of RA 7277 provides:
SECTION 2. Declaration of Polity The grant of the rights and privileges for
disabled persons shall be guided by the following principles:
(a). Disabled persons are part of the Philippine society, thus the Senate shall give
full support to the improvement of the total well-being of disabled persons and
their integration into the mainstream of society.
Toward this end, the State shall adopt policies ensuring the rehabilitation, self-
development and self-reliance of disabled persons.

First Exam
It shall develop their skills and potentials to enable them to compete favorably
for available opportunities.
(b). Disabled persons have the same rights as other people to take their proper
place in society. They should be able to live freely and as independently as
possible. This must be the concern of everyone the family, community and all
government and non-government organizations. Disabled person’s rights must
never be perceived as welfare services by the Government.
(c). The rehabilitation of the disabled persons shall be the concern of the
Government in order to foster their capability to attain a more meaningful,
productive and satisfying life. To reach out to a greater number of disabled
persons, the rehabilitation services and benefits
shall be expanded beyond the traditional urban-based centers to community

based programs, that will ensure full participation of different sectors as
supported by national and local government agencies.
(d). The State also recognizes the role of the private sector in promoting the
welfare of disabled persons and shall encourage partnership in programs that
address their needs and concerns.
(e). To facilitate integration of disabled persons into the mainstream of society,

the State shall advocate for and encourage respect for disabled persons. The State
shall exert all efforts to remove all social, cultural, economic, environmental and
attitudinal barriers that are prejudicial to disabled persons.
Q: Okay, and what is your definition of a disabled person?
Section 4 (a) of 7277 provides that "Disabled Persons are those suffering from
restriction of different abilities, as a 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"
Okay so mental, physical or sensory, may psychological ba?
Q: So what is an impairment?

First Exam
Section 4 (b) of 7277 provides: Impairment is any loss, diminution or

aberration of psychological, physiological, or anatomical structure of function;
What i wanted you to define was disability, so which is first? Disability or

impairment?
Section 4 (c) of RA 7277 provides that "Disability shall mean (1) a physical or
mental impairment that substantially limits one or more psychological,
physiological or anatomical function of an individual or activities of such
individual; (2) a record of such an impairment; or (3) being regarded as having
such an impairment"
A person can be impaired but not disabled. Meron siyang impairment but he is still
functioning. Disability on the other hand renders him limited with respect [or due
to his] to his incompetence. Be aware of the difference.
We introduce another complication, the definition of handicap, what is a

handicap?
Section 4 (d) of RA 7277 provides that "Handicap refers to a disadvantage for a

given individual resulting from an impairment or a disability, that limits or
prevents the functions or activity, that is considered normal given the age and
sex of the individual"
A handicap may either be an impairment or a disability and the effect is that it

limits the person.
What is sheltered employment?
Section 4 (i) of RA 7277 provides that "Sheltered Employment refers to the

provision of productive work for disabled persons through workshop providing
special facilities, income producing projects or homework schemes with a view
to given them the opportunity to earn a living thus enabling them to acquire a
working capacity required in open industry."
Now what is the antonym of sheltered employment?

First Exam
Open employment. Pag sheltered, it is providing special facilities for the disabled
persons so that they would be productive. Pag Open employment that is the usual
workplace that we provide for our labor force.
Who is a Qualified Individual with a Disability?

Section 4 (l) of RA 7277 provides Qualified Individual with a Disability shall
mean an individual with a disability who, with or without reasonable
accommodations, can perform the essential functions of the employment
position that such individual holds or desires. However, consideration shall be
given to the employer’s judgment as to what functions of a job are essential, and
if an employer has prepared a written description before advertising or
interviewing applicants for the job, this description shall be considered evidence
of the essential functions of the job
Note: do not use "normal" when referring to the usual workplace, or to people
without disability because it is tantamount to saying that sheltered places or
differently-abled persons are not normal.
Okay, familiarize yourselves with the definitions.
What is the requirement of this law with respect to employment opportunity for
differently-abled persons?
SECTION 5 of RA 7277 provides for "Equal Opportunity for Employment -- that

No disabled persons shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject to the same terms
and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able-bodied person.
What is the requirement of the law with respect with the percentage of
employees? And where are they required to provide employment for the
the same provision provides that Five percent (5%) of all casual, emergency and
contractual positions in the Department of Social Welfare and Development;
Health; Education, Culture and Sports; and other government agencies, offices or
corporations engaged in social development shall be reserved for disabled persons.

First Exam
Okay, take a look at the heading of section 5 noh, it says "Equal Opportunity for
Employment" but the last part of the provision is not an equal opportunity
reserving only 5% and only to specific positions, for contractual and emergency
positions. Tama ba yun? Parang something is wrong.
Many years ago, Jollibee hired differently-abled persons. In rizal park, there is a
restaurant there that hires only differently-abled persons. [maam continues with
her househelper-is-deaf-except-to-her-husband-na-gwapo story, selective daw
ang pagka-bingi :D]
Anyway, we have the concept of sheltered employment under section 6, of course

it also introduces the concept of open employment.
So what is the rule with respect to differently-abled persons becoming

apprentices?
SECTION 7 of RA 7277 provides for "Apprenticeship -- Subject to the provision

of the Labor Code as amended, disabled persons shall be eligible as apprentices
or learners; Provided, That their handicap is not much as to effectively impede
the performance of job operations in the particular occupation for which they
are hired; Provided, further, That after the lapse of the period of apprenticeship
if found satisfactory in the job performance, they shall be eligible for
employment."
Is there any mention of differently-abled persons becoming a learner?
Under the same provision it provides that "disabled persons shall be eligible as
apprentices or learners"
Yes, but take a look at your heading. Diba, kaya ma-weirdohan ka. Okay, pwedeng
apprentice, highly-technical pero semi-skilled, hindi. But there is that placement
that even under learnership, a differently-abled person can qualify.
Now, what is the incentive, what is in it for the private entities if they hire
Section 8 (b) provides that Private entities that employ disabled persons who
meet the required skills or qualifications, either as regular employee, apprentice
First Exam
or learner, shall be entitled to an additional deduction, from their gross income,

equivalent to twenty-five percent (25%) of the total amount paid as salaries and
wages to disabled persons
How does that work?
The deduction shall be subtracted from the gross income. The gross income is the
entire earning of a certain entity without reduction or exemption. For example the
salary and all of these expenses, for example its value is 100,000, the 25% thereof
which is 25,000 will be subtracted from the 100,000. The remaining 75,000 will
now be the base for taxation purposes of the entity employing these differently-
abled persons instead of the 100,000. So save na nila from tax yung 25,000 pesos,
sa kanila na yun. kasi diba the higher the income, the higher the tax, so since they
were able to deduct the 25%, so it will result to a lesser payable tax.
What else?
Section 8 (c) provides that Private entities that improved or modify their
physical facilities in order to provide reasonable accommodation for disabled
persons shall also be entitled to an additional deduction from their net taxable
income, equivalent to fifty percent (50%) of the direct costs of the
improvements or modifications. This section, however, does not apply to
improvements or modifications of facilities required under Batas Pambansa
Bilang 344.
What is vocational rehabilitation?
Section 9 provides for vocational rehabilitation, it says there that "Consistent

with the principle of equal opportunity for disabled workers and workers in
general, the State shall take appropriate vocational rehabilitation measures that
shall serve to develop the skills and potential of disabled persons and enable
them to compete favorably for available productive and remunerative
employment opportunities in the labor market. The State shall also take
measures to ensure the provisions of vocational rehabilitation and livelihood
services for disabled persons in the rural areas. In addition, it shall promote
cooperation and coordination between the government and non-government
organization and other private entities engaged in vocational rehabilitation
activities."

First Exam
"The Department of Social Welfare and Development shall design and

implement training programs that will provide disabled persons with
vocational skills to enable them to engage in livelihood activities or obtain
gainful employment. The Department of Labor and Employment shall likewise
design and conduct training programs geared towards providing disabled
persons with skills for livelihood"
Can you give me an example of this vocational rehabilitation?

example given by student: Jollibee conducts training to hone the skills of
differently-abled persons so that they may compete with persons who are not
differently-abled, in vying for the same job.
Note: the provision provides that it is the State who shall take such measures. So
substitute Jollibee with an entity of the State.
It is just a matter of training them. For example, people who are blind may be
trained to become call center agents, because they can still speak and type, in spite
of their blindness. You have to remind yourselves that a person who might be
deficient in one sense may make-up for it in another sense.
What are the acts, which may be considered as discrimination?
SECTION 32 of RA 7277:
Discrimination on Employment -- No entity, whether public or private, shall

discriminate against a qualified disabled person by reason of disability in regard
to job application procedures, the hiring, promotion, or discharge of employees,
employee compensation, job training, and other terms, conditions, and
privileges of employment. The following constitute acts of discrimination:
(a). Limiting, segregating or classifying a disabled job applicant in such a manner

that adversely affects his work opportunities;
(b). Using qualification standards, employment tests or other selection criteria

that screen out or tend to screen out a disabled person unless such standards,

First Exam
tests or other selection criteria are shown to be job-related for the position on
question and are consistent with business necessity;
(c). Utilizing standards, criteria, or methods of administration that:
1). have the effect of discrimination on the basis of disability; or
2). perpetuate the discrimination of others who are subject to common

administrative control;
(d). Providing less compensation, such as salary, wage or other forms of

remuneration and fringe benefits, to a qualified disabled employee, by reason of
his disability, than the amount to which a non-disabled person performing the
same work is entitled;
(e). Favoring a non-disabled employee over a qualified disabled employee with

respect to promotion, training opportunities, study and scholarship grants,
solely on account of the latter’s disability;
(f). Re-assigning or transferring a disabled employee to a job or position he

cannot perform by reason of his disability;
(g). Dismissing or terminating the services of a disabled employee by reason of

his disability unless the employer can prove that he impairs the satisfactory
performance of the work involve to the prejudice of the business entities;
Provided, however, That the employer first sought provide reasonable
accommodations for disabled persons;
(h). Failing to select or administer in the effective manner employment tests

which accurately reflect the skills, aptitude or other factor of the disabled
applicant or employee that such test purports to measure, rather than the
impaired sensory, manual or speaking skills of such applicant or employee, if
any; and
(i) Excluding disabled persons from membership in labor unions or similar

organization.

First Exam
Having enumerated those discriminatory acts, are we saying that differently-

abled persons shall not undergo entrance examinations, because they might not
pass the exams?
SECTION 33. Employment Entrance Examination Upon an offer of

employment, a disabled applicant may be subjected to medical examination, on
the following occasions:
(a). all entering employees are subjected to such an examination regardless of

disability;
(b). information obtained during the medical condition or history of the

applicant is collected and maintained on separate forms and in separate medical
files and is treated as a confidential medical record, Provided, however, That:
1). supervisors and managers may be informed regarding necessary restrictions

on the work or duties of the employees and necessary accommodations;
2).first aid and safety personnel may be informed, when appropriate, if the
disability might require emergency treatment;
3) government officials investigating compliance with this Act shall be provided

relevant information on request; and
4) the results of such examination are used only accordance with this Act.
You must be familiar with this one ha.
Now in the case of Bernardo v NLRC, what was the work done by the differently-
abled persons?
Complainants in this case, numbering 43, are deaf-mutes who were hired on
various periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
"Employment Contract for Handicapped Workers"
What was the issue here?
WON the deaf-mutes are considered regular employees

First Exam
What was the contention of Far-East Bank?
Far East submits that the complainants were hired only as "special workers and
should not in any way be considered as part of the regular complement of the
Bank." Rather, they were "special" workers under Article 80 of the Labor Code.
Far East contends that it never solicited the services of petitioners, whose
employment was merely an "accommodation" in response to the requests of
government officials and civic-minded citizens. They were told from the start,
"with the assistance of government representatives," that they could not become
regular employees because there were no plantilla positions for "money sorters,"
whose task used to be performed by tellers.
Their contracts were renewed several times, not because of need "but merely for
humanitarian reasons." Respondent submits that "as of the present, the "special
position" that was created for the petitioners no longer exist[s] in private
respondent [bank], after the latter had decided not to renew anymore their special
employment contracts."
What was the ruling of the Supreme Court?
Respondent bank entered into the aforesaid contract with a total of 56

handicapped workers and renewed the contracts of 37 of them. In fact, two of
them worked from 1988 to 1993. Verily, the renewal of the contracts of the
handicapped workers and the hiring of others lead to the conclusion that their
tasks were beneficial and necessary to the bank. More important, these facts
show that they were qualified to perform the responsibilities of their positions. In
other words, their disability did not render them unqualified or unfit for the tasks
assigned to them.
In this light, the Magna Carta for Disabled Persons mandates that a
qualified disabled employee should be given the same terms and conditions of
employment as a qualified able-bodied person. Section 5 of the Magna Carta
provides:
Sec. 5. Equal Opportunity for Employment. — No disabled person shall be denied

access to opportunities for suitable employment. A qualified disabled employee
shall be subject to the same terms and conditions of employment and the same

First Exam
compensation, privileges, benefits, fringe benefits, incentives or allowances as a

qualified able bodied person.
The fact that the employees were qualified disabled persons necessarily removes
the employment contracts from the ambit of Article 80. Since the Magna Carta
accords them the rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code, which provides:
Art. 280. Regular and Casual Employment. — The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreement of the
parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee or where the
work or services to be performed is seasonal in nature and the employment is for
the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered as
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
The test of whether an employee is regular was laid down in De Leon v. NLRC, in
which this Court held:
The primary standard, therefore, of determining regular employment is the

reasonable connection between the particular activity performed by the employee
in relation to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade of the
employer. The connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or trade
in its entirety. Also if the employee has been performing the job for at least one
year, even if the performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient evidence of
the necessity if not indispensability of that activity to the business. Hence, the
employment is considered regular, but only with respect to such activity, and
while such activity exist.

First Exam
Without a doubt, the task of counting and sorting bills is necessary and desirable
to the business of respondent bank. With the exception of sixteen of them,
petitioners performed these tasks for more than six months. Thus, the twenty-
seven petitioners should be deemed regular employees
So there was a connection between the business of a banking institution and the
work done by the individuals as money sorter and counter. You see in the bank the
people who count the coins and bills. Of course, that is desirable and necessary.
There was a defense by the far east bank that there is a reliance on the case of Brent
v Zamora, and the bank stated that these people are fixed-term employees. And the
fixed term has already expired. What did the Supreme Court say about this?
Applicability of the Brent Ruling: it is not applicable
Respondent bank, citing Brent School v. Zamora in which the Court upheld the
validity of an employment contract with a fixed term, argues that the parties
entered into the contract on equal footing. It adds that the petitioners had in fact
an advantage, because they were backed by then DSWD Secretary Mita Pardo de
Tavera and Representative Arturo Borjal.
We are not persuaded. The term limit in the contract was premised on the fact
that the petitioners were disabled, and that the bank had to determine their
fitness for the position. Indeed, its validity is based on Article 80 of the Labor
Code. But as noted earlier, petitioners proved themselves to
be qualified disabled persons who, under the Magna Carta for Disabled Persons,
are entitled to terms and conditions of employment enjoyed by qualified able-
bodied individuals; hence, Article 80 does not apply because petitioners
are qualified for their positions. The validation of the limit imposed on their
contracts, imposed by reason of their disability, was a glaring instance of the very
mischief sought to be addressed by the new law.
Moreover, it must be emphasized that a contract of employment is impressed with

public interest. Provisions of applicable statutes are deemed written into the
contract, and the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by simply contracting
with each other." Clearly, the agreement of the parties regarding the period of
employment cannot prevail over the provisions of the Magna Carta for Disabled

First Exam
Persons, which mandate that petitioners must be treated as qualified able-bodied

employees.
Respondent's reason for terminating the employment of petitioners is instructive.

Because the Bangko Sentral ng Pilipinas (BSP) required that cash in the bank be
turned over to the BSP during business hours from 8:00 a.m. to 5:00 p.m.,
respondent resorted to nighttime sorting and counting of money. Thus, it reasons
that this task "could not be done by deaf mutes because of their physical
limitations as it is very risky for them to travel at night." We find no basis for this
argument. Travelling at night involves risks to handicapped and able-bodied
persons alike. This excuse cannot justify the termination of their employment.
Now we go to the case of YRASUEGUI v PAL
What was the work of Yrasuegui?

He was a flight attendant for PAL
What was his problem?

He was obese
Petitioner Armando G. Yrasuegui was a former international flight steward of

Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (5’8") with a
large body frame. The proper weight for a man of his height and body structure is
from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual of PAL.
The weight problem of petitioner dates back to 1984. PAL advised him to go on an
extended vacation leave from December 29, 1984 to March 4, 1985 to address his
weight concerns. He failed to meet the company’s weight standards, prompting
another leave without pay from March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to return to work. But
petitioner’s weight problem recurred. He again went on leave without pay from
October 17, 1988 to February 1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal
weight. In line with company policy, he was removed from flight duty effective
May 6, 1989 to July 3, 1989.

First Exam
On February 25, 1989, petitioner underwent weight check. It was discovered that
he gained, instead of losing, weight. He was overweight at 215 pounds, which is
49 pounds beyond the limit. Consequently, his off-duty status was retained.
On October 17, 1989. Petitioner weighed 217 pounds, gaining 2 pounds from his
previous weight. Petitioner made a commitment to reduce weight in a letter
addressed to Cabin Crew Group Manager Augusto Barrios.
Despite the lapse of a ninety-day period given him to reach his ideal weight,
petitioner remained overweight. On January 3, 1990, he was informed of the PAL
decision for him to remain grounded until such time that he satisfactorily
complies with the weight standards. Again, he was directed to report every two
weeks for weight checks.
Petitioner failed to report for weight checks. Despite that, he was given one more
month to comply with the weight requirement. As usual, he was asked to report
for weight check on different dates. He was reminded that his grounding would
continue pending satisfactory compliance with the weight standards.
Again, petitioner failed to report for weight checks, although he was seen
submitting his passport for processing at the PAL Staff Service Division.
On April 17, 1990, petitioner was formally warned that a repeated refusal to report
for weight check would be dealt with accordingly. He was given another set of
weight check dates Again, petitioner ignored the directive and did not report for
weight checks. On June 26, 1990, petitioner was required to explain his refusal to
undergo weight checks.
When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds.
Clearly, he was still way over his ideal weight of 166 pounds.
From then on, nothing was heard from petitioner until he followed up his case
requesting for leniency on the latter part of 1992. He weighed at 219 pounds on
August 20, 1992 and 205 pounds on November 5, 1992.
On November 13, 1992, PAL finally served petitioner a Notice of Administrative

Charge for violation of company standards on weight requirements. He was given
ten (10) days from receipt of the charge within which to file his answer and submit
controverting evidence.

First Exam
YRASUEGUI's claims:
In his answer, he did not deny being overweight. What he claimed, instead, is that
his violation, if any, had already been condoned by PAL since "no action has been
taken by the company" regarding his case "since 1988." He also claimed that PAL
discriminated against him because "the company has not been fair in treating the
cabin crew members who are similarly situated
On June 15, 1993, petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, "and considering the utmost leniency"
extended to him "which spanned a period covering a total of almost five (5) years,"
his services were considered terminated "effective immediately
Yrasuigui elevated the case until it reached the Supreme Court
@Labor Arbiter and @NLRC:

The dismissal was illegal.
But do we see anywhere the Labor Code where it states that failure to follow weight
requirements is a ground to terminate employment? What was the discussion of
the SC about this?
No. The SC said that the obesity of petitioner is a ground for dismissal under Article
282(e) of the Labor Code.
A reading of the weight standards of PAL would lead to no other conclusion than
that they constitute a continuing qualification of an employee in order to keep the
job. Tersely put, an employee may be dismissed the moment he is unable to comply
with his ideal weight as prescribed by the weight standards. The dismissal of the
employee would thus fall under Article 282(e) of the Labor Code. As explained by
the CA:
x x x [T]he standards violated in this case were not mere "orders" of the employer;
they were the "prescribed weights" that a cabin crew must maintain in order to
qualify for and keep his or her position in the company. In other words, they were
standards that establish continuing qualifications for an employee’s position. In
this sense, the failure to maintain these standards does not fall under Article
282(a) whose express terms require the element of willfulness in order to be a
First Exam
ground for dismissal. The failure to meet the employer’s qualifying standards is in
fact a ground that does not squarely fall under grounds (a) to (d) and is therefore
one that falls under Article 282(e) – the "other causes analogous to the foregoing."
By its nature, these "qualifying standards" are norms that apply prior to and
after an employee is hired. They apply prior to employment because these are the
standards a job applicant must initially meet in order to be hired. They apply after
hiring because an employee must continue to meet these standards while on the
job in order to keep his job. Under this perspective, a violation is not one of the
faults for which an employee can be dismissed pursuant to pars. (a) to (d) of Article
282; the employee can be dismissed simply because he no longer "qualifies" for his
job irrespective of whether or not the failure to qualify was willful or intentional.
xxx
Is it [obesity] a disability? There was a reliance upon the case of Nadura by Yrasuegi
Petitioner advances a very interesting argument. He claims that obesity is a

"physical abnormality and/or illness." Relying on Nadura v. Benguet Consolidated,
Inc., he says his dismissal is illegal:
Conscious of the fact that Nadura’s case cannot be made to fall squarely within the
specific causes enumerated in subparagraphs 1(a) to (e), Benguet invokes the
provisions of subparagraph 1(f) and says that Nadura’s illness – occasional attacks
of asthma – is a cause analogous to them.
Even a cursory reading of the legal provision under consideration is sufficient to

convince anyone that, as the trial court said, "illness cannot be included as an
analogous cause by any stretch of imagination."
It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the others
expressly enumerated in the law are due to the voluntary and/or willful act of the
employee. How Nadura’s illness could be considered as "analogous" to any of them
is beyond our understanding, there being no claim or pretense that the same was
contracted through his own voluntary act.
The reliance on Nadura is off-tangent. The factual milieu in Nadura is

substantially different from the case at bar. First, Nadura was not decided under
the Labor Code. The law applied in that case was Republic Act (RA) No.
1787. Second, the issue of flight safety is absent in Nadura, thus, the rationale

First Exam
there cannot apply here. Third, in Nadura, the employee who was a miner, was
laid off from work because of illness, i.e., asthma. Here, petitioner was dismissed
for his failure to meet the weight standards of PAL. He was not dismissed due to
illness. Fourth, the issue in Nadura is whether or not the dismissed employee is
entitled to separation pay and damages. Here, the issue centers on the propriety of
the dismissal of petitioner for his failure to meet the weight standards of
PAL. Fifth, in Nadura, the employee was not accorded due process. Here, petitioner
was accorded utmost leniency. He was given more than four (4) years to comply
with the weight standards of PAL.
In the case at bar, the evidence on record militates against petitioner’s claims that
obesity is a disease. That he was able to reduce his weight from 1984 to 1992
clearly shows that it is possible for him to lose weight given the proper attitude,
determination, and self-discipline. Indeed, during the clarificatory hearing on
December 8, 1992, petitioner himself claimed that "[t]he issue is could I bring my
weight down to ideal weight which is 172, then the answer is yes. I can do it now."
True, petitioner claims that reducing weight is costing him "a lot of
expenses."However, petitioner has only himself to blame. He could have easily
availed the assistance of the company physician, per the advice of PAL. He chose
to ignore the suggestion. In fact, he repeatedly failed to report when required to
undergo weight checks, without offering a valid explanation. Thus, his fluctuating
weight indicates absence of willpower rather than an illness.
There was a also a reference to the case of Cook, is it applicable here?
Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health,
Retardation and Hospitals, decided by the United States Court of Appeals (First
Circuit). In that case, Cook worked from 1978 to 1980 and from 1981 to 1986 as
an institutional attendant for the mentally retarded at the Ladd Center that was
being operated by respondent. She twice resigned voluntarily with an
unblemished record. Even respondent admitted that her performance met the
Center’s legitimate expectations. In 1988, Cook re-applied for a similar position. At
that time, "she stood 5’2" tall and weighed over 320 pounds." Respondent claimed
that the morbid obesity of plaintiff compromised her ability to evacuate patients
in case of emergency and it also put her at greater risk of serious diseases.
Cook contended that the action of respondent amounted to discrimination on the

basis of a handicap. This was in direct violation of Section 504(a) of the

First Exam
Rehabilitation Act of 1973, which incorporates the remedies contained in Title VI

of the Civil Rights Act of 1964. Respondent claimed, however, that morbid obesity
could never constitute a handicap within the purview of the Rehabilitation Act.
Among others, obesity is a mutable condition, thus plaintiff could simply lose
weight and rid herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a disability under
the Rehabilitation Act and that respondent discriminated against Cook based on
"perceived" disability. The evidence included expert testimony that morbid
obesity is a physiological disorder. It involves a dysfunction of both the metabolic
system and the neurological appetite – suppressing signal system, which is
capable of causing adverse effects within the musculoskeletal, respiratory, and
cardiovascular systems. Notably, the Court stated that "mutability is relevant only
in determining the substantiality of the limitation flowing from a given
impairment," thus "mutability only precludes those conditions that an individual
can easily and quickly reverse by behavioral alteration."
Unlike Cook, however, petitioner is not morbidly obese. In the words of the District
Court for the District of Rhode Island, Cook was sometime before 1978 "at least one
hundred pounds more than what is considered appropriate of her height."
According to the Circuit Judge, Cook weighed "over 320 pounds" in 1988. Clearly,
that is not the case here. At his heaviest, petitioner was only less than 50 pounds
over his ideal weight.
Thus:
In fine, We hold that the obesity of petitioner, when placed in the context of his
work as flight attendant, becomes an analogous cause under Article 282(e) of the
Labor Code that justifies his dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary. As the CA correctly puts it,
"[v]oluntariness basically means that the just cause is solely attributable to the
employee without any external force influencing or controlling his actions. This
element runs through all just causes under Article 282, whether they be in the
nature of a wrongful action or omission. Gross and habitual neglect, a recognized
just cause, is considered voluntary although it lacks the element of intent found in
Article 282(a), (c), and (d)."
In other words, the primary objective of PAL in the imposition of the weight
standards for cabin crew is flight safety. It cannot be gainsaid that cabin

First Exam
attendants must maintain agility at all times in order to inspire passenger

confidence on their ability to care for the passengers when something goes wrong.
It is not farfetched to say that airline companies, just like all common carriers,
thrive due to public confidence on their safety records. People, especially the
riding public, expect no less than that airline company’s transport their
passengers to their respective destinations safely and soundly. A lesser
performance is unacceptable.
Finally, is he entitled to Separation Pay?
YES. Petitioner is entitled to separation pay.
Normally, a legally dismissed employee is not entitled to separation pay. This may
be deduced from the language of Article 279 of the Labor Code that "[a]n employee
who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from
the time his compensation was withheld from him up to the time of his actual
reinstatement." Luckily for petitioner, this is not an ironclad rule.
Exceptionally, separation pay is granted to a legally dismissed employee as an act

"social justice," or based on "equity”. In both instances, it is required that the
dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral
character of the employee.
Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s pay
for every year of service. It should include regular allowances which he might have
been receiving. We are not blind to the fact that he was not dismissed for any
serious misconduct or to any act which would reflect on his moral character. We
also recognize that his employment with PAL lasted for more or less a decade.
Maam: i forgot to include RA 10917, for employment of students, which

effectively revises some portions of RA 9547
Who can hire students? Who may be hired?
Section 1 of RA 9547 as amended by RA 10917 provides that :

First Exam
Any provision of law to the contrary notwithstanding, any person or entity

employing at least ten (10) persons may employ poor but deserving students,
out-of-school youth (OSY) or, dependents of displaced or would-be displaced
workers due to business closures, or work stoppages, or natural calamities,
intending to enroll in any secondary, tertiary or technical-vocational
institutions, fifteen (15) years of age but not more than thirty (30) years old,
paying them a salary or wage not lower than the minimum wage for private
employers and the applicable hiring rate for the national and local government
agencies: ...
For secondary students, what is the maximum period?
... Provided, That students enrolled in the secondary level shall only be employed
during summer and/or Christmas vacations, while the OSY and those enrolled
in tertiary, vocational or technical education may be employed at any time of the
year: Provided, further, That their period of employment shall be from twenty
(20) to seventy-eight (78) working days only, except that during Christmas
vacation, employment shall be from ten (10) to fifteen (15) days which may be
counted as part of the students’ probationary period should they apply in the
same company or agency after graduation: Provided, finally, That students
employed in activities related to their course may earn equivalent academic and
practicum or on-the-job training credits as may be determined by the
appropriate government agencies. (ibid.)
“For purposes of this Act, poor but deserving students, OSY, and dependents of
displaced or would-be displaced workers due to business closures, or work
stoppages, or natural calamities refer to those whose parents’ combined income,
together with their own, if any, does not exceed the annual regional poverty
threshold level for a family of six (6) for the preceding year as may be determined
by the National Economic and Development Authority (NEDA). Employment
facilitation services for, applicants to the program shall be done by the Public
Employment Service Office (PESO). (ibid.)
Who pays for the salaries of these students? What is the mode of compensation?
Sec. 2 of RA 9547 as amended by RA 10917:
“Sec. 2. Sixty per centum (60%) of the said salary or wage shall be paid by the
employer in cash and forty per centum (40%) by the government also in the
form of cash directly to the student or through financial institutions or other

First Exam
payment facilities, subject to the existing rules on procurement which shall be

applicable in the payment for the student’s tuition fees, books, and other
education-related expenses, including their daily allowance for food and
transportation in going to school: Provided, That local government units (LGUs)
may assume responsibility for paying in full the salary or wages: Provided,
further, That for low income LGUs employing SPES beneficiaries, the national
government share may be increased up to seventy-five per centum (75%)
depending on the LGUs’ financial capacity to pay the SPES beneficiaries.
“The national government share shall be paid within thirty (30) working days
upon submission of the partner-employer or participating establishment of
their report on payment of salary or wages which shall be the basis of the portion
of the salary or wages to be paid by the national government through the
Department of Labor and Employment.
“In case of sickness, absence, or death of the SPES beneficiary, the immediate
heirs may claim the salary: Provided, That proof to this effect has been clearly
established.
“Likewise, the SPES beneficiary shall be entitled to social protection by virtue of
an insurance coverage with the Government Service Insurance System (GSIS) for
a period of one (1) year.”
What does Article 82 of the Labor Code provide?
Article 82. Coverage. The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who are paid by results
as determined by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty

consists of the management of the establishment in which they are employed or
of a department or subdivision thereof, and to other officers or members of the
managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly

perform their duties away from the principal place of business or branch office
of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.
First Exam
Is a supervisor a manager or employee?
It is important to know those definitions under the first part of article 82 because
they are the employees who are not covered under this Title.
So whatever benefits are discussed under this Title, unless there is a more specific
provision on exclusion, punta tayo dyan later, pagdating sa holiday may ibang set
of employees na hindi included. Yan ang gagamitin nyo, but as to the other
benefits under this Title, ito yung coverage, inclusion/exclusion. Example ha,
nandito tayo ngayon tapos pag-usapan natin bigla "wage", meron na namang
another enumeration, yun a gagamitin nyo, not this one. Are you getting me? So
wag kayong lumapit sakin "maam ang manager ba entitled sa holiday pay?" so
anong nakalagay? "maam ang field personnel ba hindi entitled sa overtime?"
anong nakalagay? noh, if there is a more specific inclusion/exclusion provision,
then you apply that, otherwise we apply article 82.
Sge, in the case of BROTHERHOOD v ZAMORA
What is Brotherhood?
Brotherhood is a labor unity movement. Complainants are members of the said
movement and are workers who have been employed at the San Miguel Parola
Glass Factory. They worked as "cargadores" or "pahinante" at the SMC Plant
loading, unloading, piling or palleting empty bottles and woosen shells to and
from company trucks and warehouses. At times, they accompanied the company
trucks on their delivery routes.
They complained that they were neither paid overtime nor compensation for work
on Sundays and holidays.
What was the allegation of San Miguel?
San Miguel refused to bargain with the petitioner union alleging that the workers
are not their employees.
ISSUE: WON an employer-employee relationship exists

First Exam
What was used by the Court in determining the existence of employer-employee

relationship?
In determining the existence of an employer-employee relationship, the elements

that are generally considered are the following:
(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 employee with respect to the means and
methods by which the work is to be accomplished. It is the called "control test" that
is the most important element
Applying the above criteria, the evidence strongly indicates the existence of an
employer-employee relationship between petitioner workers and respondent San
Miguel Corporation.
The respondent asserts that the petitioners are employees of the Guaranteed Labor
Contractor, an independent labor contracting firm.
The facts and evidence on record negate respondent SMC's claim.
How was control established?
Most importantly, "control" was established because they were issued work/gate
passes, they reported to the superintendent of san miguel and the one who doing
the schedule. These are all indicators of control, not only as to the end result, but
also as to the means by which the result is arrived at or achieved. How do we arrive
at the desired result? Work schedule, diba? Tapos reporting to someone who was
supposed to do the monitoring. Kung lahat yan, mag pipinpoint sa San Miguel, SC
said that of course San Miguel is their employer.
"Who exercises control" is the most vital indicator, according to the SC.
Now in the case of SEVILLA v CA, what are the three types of relationship?
1. Joint business venture/ joint venture / joint management or Partnership - there
is a pooling of resources, money or labor.
2. Employment relationship - employer-employee relationship

First Exam
3. Agency - Principal-agent relationship

[with a grain of salt, wla gi-enumerate ni maam, just based on the discussions
below]
What was the allegation of Sevilla, what was she?
Sevilla claims that a joint business venture was entered into by and between her
and appellee TWS with offices at the Ermita branch office and that she was not an
employee of the TWS to the end that her relationship with TWS was one of a joint
business venture
Teka, why is it not an agency? why is not a partnership? why is it not an

employment relationship? what are the pros and cons, what was the conclusion of
the SC?
NOT A JOINT VENTURE OR A PARTNERSHIP BECAUSE:
In rejecting Tourist World Service, Inc.'s arguments however, we are not, as a

consequence, accepting Lina Sevilla's own argument, that is, that the parties had
embarked on a joint venture or otherwise, a partnership.
Sevilla herself did not recognize the existence of such a relation. In her letter of
November 28, 1961, she expressly 'concedes your [Tourist World Service, Inc.'s]
right to stop the operation of your branch office in effect, accepting Tourist World
Service, Inc.'s control over the manner in which the business was run.
A joint venture, including a partnership, presupposes generally a of standing

between the joint co-venturers or partners, in which each party has an equal
proprietary interest in the capital or property contributed and where each party
exercises equal rights in the conduct of the business.
Furthermore, the parties did not hold themselves out as partners, and the building
itself was embellished with the electric sign "Tourist World Service, Inc. in lieu of
a distinct partnership name.
NOT EMPLOYMENT RELATIONSHIP
The fact that Sevilla had been designated 'branch manager" does not make her,
ergo, Tourist World's employee. As we said, employment is determined by the
First Exam
right-of-control test and certain economic parameters. But titles are weak
indicators.
In addition to the standard of right-of control, the existing economic conditions

prevailing between the parties, like the inclusion of the employee in the payrolls,
in determining the existence of an employer-employee relationship.
The records will show that the petitioner, Lina Sevilla, was not subject to control
by the private respondent Tourist World Service, Inc., either as to the result of the
enterprise or as to the means used in connection therewith. In the first place,
under the contract of lease covering the Tourist Worlds Ermita office, she had
bound herself in solidum as and for rental payments, an arrangement that would
be like claims of a master-servant relationship. True the respondent Court would
later minimize her participation in the lease as one of mere guaranty, that does not
make her an employee of Tourist World, since in any case, a true employee cannot
be made to part with his own money in pursuance of his employer's business, or
otherwise, assume any liability thereof. In that event, the parties must be bound
by some other relation, but certainly not employment.
IT WAS A CONTRACT OF AGENCY
It is the Court's considered opinion, that when the petitioner, Lina Sevilla, agreed
to (wo)man the private respondent, Tourist World Service, Inc.'s Ermita office, she
must have done so pursuant to a contract of agency. It is the essence of this
contract that the agent renders services "in representation or on behalf of another.
In the case at bar, Sevilla solicited airline fares, but she did so for and on behalf of
her principal, Tourist World Service, Inc. As compensation, she received 4% of the
proceeds in the concept of commissions. And as we said, Sevilla herself based on
her letter of November 28, 1961, pre-assumed her principal's authority as owner
of the business undertaking. We are convinced, considering the circumstances
and from the respondent Court's recital of facts, that the ties had contemplated a
principal agent relationship, rather than a joint managament or a partnership..
So klaro no, the control test was used, and there was no control. Thus there is no
employment relationship.
What was the work of the employees in the case of DOMASIG v NLRC?

First Exam
Eddie Domasig worked as Salesman for Carta Garments Corporation. he was

dismissed when respondent learned that he was being pirated by a rival
corporation which offer he refused. Prior to his dismissal, complainant alleged
that he was receiving a salary of P1,500.00 a month plus commission. On
September 3, 1992 he filed the instant complaint.
The issue here was WON there was an employer-employee relationship

What were the evidences presented that made the SC rule that there exists such
relationship?
The existence of an employer-employee relationship between private respondents

and petitioner, is supported by substantial evidence on record.
In a business establishment, an identification card is usually provided not only as

a security measure but mainly to identify the holder thereof as a bona
fide employee of the firm that issues it. Together with the cash vouchers covering
petitioner's salaries for the months stated therein, we agree with the labor arbiter
that these matters constitute substantial evidence adequate to support a
conclusion that petitioner was indeed an employee of private respondent.
What about the contention that he was an agent?

With regards the nature of petitioner's employment as a commission agent:
The list of sales collection including computation of commissions due, expenses

incurred and cash advances received cannot overcome the evidence of the ID card
and salary vouchers presented petitioner which private respondents have not
denied. The list presented by private respondents would even support petitioner's
allegations that, aside from a monthly salary of P1,500.00, he also received
commissions for his work as a salesman of private respondents.
Okay, yung list of sales collection vs the ID and the vouchers, syempre ano ang mas
matimbang. The SC also talekd about substantial evidence.
It has long been established that in administrative and quasi-judicial proceedings,

substantial evidence is sufficient as a basis for judgment on the existence of
employer-employee relationship. No particular form of evidence is required is
required to prove the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted.

First Exam
Substantial evidence has been defined to be such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion, and its absence is not
shown by stressing that there is contrary evidence on record, direct or
circumstantial, for the appellate court cannot substitute its own judgment or
criterion for that of the trial court in determining wherein lies the weight of
evidence or what evidence is entitled to belief.
Okay, wala masyadong evidence na mag pepertain to an agency. Rather, the

evidences points to an employment relationship. The fact the he received
commissions does not matter, diba may empleyado naman na nakakareceive ng
commission.
How is this different from the GREAT PACIFIC LIFE v JUDICO case?
What was the relationship between GrePaLife and the individual in this case?
Regular employee sila pareho. Of course mas pabor sa GrePaLife na agent lang si
Judico.
So, he was a regular employee. So let us compare, may commission aspect thin in
this case, but what made the SC rule that in GrePaLife that there was an
employment relationship?
An insurance company may have two classes of agents who sell its insurance
policies:
(1) salaried employees who keep definite hours and work under the control and
supervision of the company; and
(2) registered representatives who work on commission basis
What made the persons here an employee and not a salary agent and not a
commission agent?
The SC ruled that there is control. Judico received a definite minimum amount per
week as his wage known as "sales reserve" wherein the failure to maintain the
same would bring him back to a beginner's employment with a fixed weekly wage
of P 200.00 for thirteen weeks regardless of production. He was assigned a definite
place in the office to work on when he is not in the field; and in addition to his
canvassing work he was burdened with the job of collection.
In both cases he was required to make regular report to the company regarding
these duties, and for which an anemic performance would mean a dismissal.
Conversely faithful and productive service earned him a promotion to Zone
Supervisor with additional supervisor's allowance, a definite amount of P110.00
First Exam
aside from the regular P 200.00 weekly "allowance". Furthermore, his contract of
services with petitioner is not for a piece of work nor for a definite period.
Okay, an ordinary commission agent who can sell whenever he wants, who does
not need to reach a quota, who is not supposed to work on a particular location, so
lahat ng indicator of control here is wala sa commission agent. A salary agent, on
the other hand, has to report everyday, has to reach a quota, has to work in a
particular location.
So in this case makikita nyo ano yung control na sinasabi ng SC. In another case,
agent din, but then ang control lang e kung san sya magbebenta. The SC said na
that is not control, because an insurance agent, may jurisdiction yan. That is a
weak indicator, hindi lang kung san ka mag wo-work. Other indicators, does he
work regularly, does he need to meet a quota, is he disciplined when the quota is
not met. These are control indicators.
In the case of FLORES v NUESTRO, what is the nature of the business?

Flores had worked for respondent Fortunato Nuestro in his funeral parlor known
as Funeraria Nuestro. Herminio Flores and respondent Fortunato Nuestro had an
altercation
Petitioners filed a complaint against respondent for illegal dismissal,

underpayment of living allowances, non-payment of five (5) days incentive leave
and non-payment of overtime compensation
What was the allegation of the Funeral home?
The respondent denied the existence of employer-employee relation with the

petitioners and further alleged that in any event the petitioners had abandoned
their work on October 30, 1982.
The Labor arbiter held that Flores was merely a contractual worker paid on a piece-
work basis, while Herminia Flores was a domestic helper; and that on October 30,
1982, they abandoned their work
What did the SC say?
Upheld the NLRC's decision. "while holding that an employer-employee

relationship existed between the parties, found that the petitioners had
abandoned their work, thus precluding them from seeking reinstatement with
backwages. However, the Commission ordered respondent to pay the petitioners

First Exam
their living allowances from October 1980 until October 1982 when the
employment relations were severed."
In finding the distance of an employer-employee relationship between respondent

and petitioners, the NLRC committed no grave abuse of discretion. That the
respondent had registered the petitioners with the Social Security System is proof
that they were indeed his employees. The coverage of Social Security Law is
predicated on the existence of an employer-employee relationship.
So that is the indicator in this case, SSS. Bakit mo i-memeber sa SSS yan kung di mo
employee? diba.
In the case of EQUITABLE v NLRC, what was the work done by the person? by the
complainant.
Sadac was the Vice-President for the Legal Department and General Counsel of
petitioner Equitable Banking Corporation
What was the allegation of equitable here, what was the relationship?
Equitable stressed that private respondent's services were not terminated by the
Board which, instead, was merely exercising its managerial prerogative "to
control, conduct (its) business in the manner (it) deems fit and to regulate the
same.
So again, the SC used the four-fold test:
In determining the existence of an employer-employee relationship, the following

elements are considered:
(1) the selection and engagement of the employee; -- he was not engaged as a
retained lawyer but as an employee, as vice-president of the legal department.
(2) the payment of wages; -- he had a salary of P8,000.00, plus an allowance of
P4,500.00 and a Christmas bonus equivalent to a two-month salary; a usual
retained lawyer does not get that amount and that allowance.
(3) the power of dismissal, and -- they waited, out of compassion, for his
resignation from the employ of the bank
(4) the power to control the employee's conduct, with the control test generally
assuming primacy in the overall consideration. --

First Exam
Respondent bank since 1982 continuously reported and included the complainant
as one of its senior officers in its statements of financial condition holding the
position of Vice President.
Complainant, like other bank officers, prepared his biographical data for
submission to the Central Bank after his assumption of duties in 1981. Thereafter,
and pursuant to the regulations of the Central Bank, he has been required to update
annually his biographical data.
The power of control refers to the existence of the power and not necessarily to the
actual exercise thereof. It is not essential, in other words, for the employer to
actually supervise the performance of duties of the employee; it is enough that the
former has the right to wield the power
So, the case of Fuji, machine operator, et cetera. Great pacific, we have already
discussed it. By the way, in the case of saga[?], you know how this lawyer invoked
[...], he filed a case for adjustment of his separation pay taking into consideration
wage adjustments. So the SC said uy siniswerte ka, you were already terminated
but you are still asking for differentials? Sobra ka na. So that is Sadac v NLRC.
Okay time na, coverage until nightshift differential tayo for next meeting. Tapos
hangang Meralco tayo and then lets take the first exam.
______________________
October 6, 2017 (Part 1) - Peroy
Employer-Employee Relationship. Why did we discuss it in the first place? Before

we can apply the provisions of the labor code, before any person can claim any
benefit under the Labor Code, he must be able to establish that there is employer-
employee relationship. Otherwise, if he is not an employee as in the case of Sevilla,
she has no right claiming the benefits under the Labor Code.
If a person is a corporate officer in the first place and is not an employee, he will
not be entitled to any benefits under the Labor Standards. Empleyado k aba? Bakit
ka nagkiclaim ng overtime? Bakit ka nagkiclaim ng minimum wage? Bakit ka
nagkiclaim ng night shift differential?

First Exam
Despite the presence of employment relationship, there are a set of employees who
are also not entitled to some of the benefits and you must be familiar with this
listing. That’s why we are … Articles 82 to 83 because those provisions will tell us,
sino baa ng covered sino ang hindi?
The cases that we discussed already tackled different situations, a mere agent
whether salaried or commissioned, to be able to distinguish who is an employee or
not, Comparison of a possible relationship of a person with a supposed employer.
PHILIPPINE FUJI vs NLRC
Of course in the case of Philippine Fuji, what is the work performed by the one
alleging employment relationship? What is the main business of Fuji according to
the Supreme Court? How did the Supreme Court analyze the facts that led into the
conclusion that there is employment relationship?
PHILIPPINE FUJI vs NLRC
Petitioner Fuji Xerox entered into an agreement under which Skillpower, Inc.
supplied workers to operate copier machines of Fuji Xerox as part of their "Xerox
Copier Project". Respondent Garado was assigned as key operator at Fuji Xerox
Buendia Branch.
In 1983, Garado went on leave and was replaced by a substitute. However, upon
his return he found out that there was a spoilage of over 600 copies. He tried to
talk to the service technician to stop the meter of the machine since he was afraid
that he would be blamed for the spoilage. The technician refused and later on Fuji
Xerox learned about the incident. Fuji Xerox reported this to Skillpower, Inc.
Skillpower, Inc. asked Garado to explain the incident and was put on suspension.
Garado filed a complaint for illegal dismissal.
The Labor Arbiter ruled that Garado was an employee of Skillpower, Inc. this
dismissing the complaint for illegal dismissal against Fuji Xerox. LA said that
Skillpower exercised control and supervision of Garado's work although the later
receives his salary from Fuji Xerox.
On appeal, the NLRC found that Garado was an employee of Fuji Xerox and was
illegally dismissed by the latter. NLRC said that although Garado's request was

First Exam
wrongful it was not the appropriate penalty. NLRC also said that although Garado
was suspended by Skillpower, Inc. the company acted at the behest of Fuji Xerox.
The power of control and supervision was with Fuji Xerox and also the payment
of respondent's salary. Skillpower, Inc. merely acted as a paymaster-agent of Fuji
Xerox and that Skillpower, Inc is a labor-only contractor. Thus, Garado is
employed by Fuji Xerox.
Fuji Xerox contends that Skillpower, Inc. is an independent contractor. Thus, this
appeal to the SC.
ISSUE
1. Whether or not Garado is an employee of Fuji Xerox or of Skillpower, Inc.
RULING
ISSUE#1 Garado is an employee of Fuji Xerox
The Agreement between petitioner Fuji Xerox and Skillpower, Inc. provides that
Skillpower, Inc. is an independent contractor and that the workers hired by it
“shall not, in any manner and under any circumstances, be considered employees
of [the] Company, and that the Company has no control or supervision
whatsoever over the conduct of the Contractor or any of its workers in respect to
how they accomplish their work or perform the Contractor’s obligations under
this AGREEMENT.”
In Tabas v. California Manufacturing Company, Inc.,[9] this Court held on facts

similar to those in the case at bar:
There is no doubt that in the case at bar, Livi performs “manpower

services,” meaning to say, it contracts out labor in favor of clients.
We hold that it is one notwithstanding its vehement claims to the
contrary, and notwithstanding the provision of the contract that it
is “an independent contractor.” The nature of one’s business is not
determined by self-serving appellations one attaches thereto but by
the tests provided by statute and prevailing case law. The bare fact
that Livi maintains a separate line of business does not extinguish

First Exam
the equal fact that it has provided California with workers to pursue
the latter’s own business. In this connection, we do not agree that the
petitioners had been made to perform activities “which are not
directly related to the general business of
manufacturing,” California’s purported “principal operation
activity.” The petitioners had been charged with “merchandising
[sic] promotion or sale of the products of [California] in the different
sales outlets in Metro Manila including task and occasional [sic] price
tagging,” an activity that is doubtless, an integral part of the
manufacturing business. It is not, then, as if Livi had served as its
(California’s) promotions or sales arm or agents, or otherwise,
rendered a piece of work it (California) could not have itself done;
Livi as a placement agency, had simply supplied it with the
manpower necessary to carry out its (California’s) merchandising
activities, using its (California’s) premises and equipment.
xxx xxx xxx

The fact that the petitioners have allegedly admitted being Livi’s
“direct employees” in their complaints is nothing conclusive. For one
thing, the fact that the petitioners were (are), will not
absolve California since liability has been imposed by legal
operation. For another, and as we indicated, the relations of parties
must be judged from case to case and the decree of law, and not by
declaration of parties.
Skillpower, Inc. is, therefore, a “labor-only” contractor and Garado is not its
employee. No grave abuse of discretion can thus be imputed to the NLRC for
declaring petitioner Fuji Xerox guilty of illegal dismissal of private respondent.
Will the Supreme Court rule the same way if there was no issue as to employment
relationship between the contractor and the individual?
I think what matters here was there was presence of labor-only contractor which
complicated matters and that was for the … offense on the part of Philippine Fuji.
Hindi man tayo focused on that but more on the absence of link between the work
done of the machine operator and the main business of the corporation.

First Exam
GREAT PACIFIC vs JUDICO
In the case of Great Pacific, we touched on this a little earlier during our last
meeting
What’s the job of Judico? Who is Judico according to Great Pacific? What was the
allegation of Great Pacific in this case? Who is Judico in the scheme of things?
According to Judico, who is he? There was a signing that he was receiving a
commission. How did the Supreme Court deal with that argument?
What are the two classes of agents of an insurance company?
1. Salaried employees who keep definite hours and work under the control and
supervision of the company
2. Registered representatives who work on commission basis
Both may be called agents but what … that the agent is not an employee?
According to the Supreme Court, Judico is which one? He seems to be an agent here
but what did the Supreme Court say here? What are the earmarks of control in the
Great Pacific case?
GREAT PACIFIC vs JUDICO
Facts:
1. On June 09, 1976, Great Pacific Life Assurance Corporation (Grepalife, for
brevity) entered into an agreement of agency with Honorato Judico to become
a debit agent to the industrial life agency.
Debit agent-an insurance agent selling/servicing industrial life plans and

policy holders.
Industrial life plans-are those whose premiums are payable either daily, weekly
or monthly and which are collectible b the debit agents at the home or any place
designated by the policy holder.

First Exam
2. As a debit agent, Judico had definite work assignments including but not
limited to collections of premiums from policy holders and selling insurance to
prospective clients.
3. Judico was initially paid P200.00 as allowance for thirteen (13) weeks
regardless of production and later a certain percentage denominated as “sales
reserve” of his total collections but not lesser than P200.00.
3. In September 1981, he was promoted to the position of Zone Supervisor and

paid additional (supervisor’s) allowance fixed at P110,00 per week. However,
two months thereafter, he was reverted to his former position as debit agent,
but, for unknown reasons, not paid so-called weekly sales reserve of at least
P200.00. Finally, on June 28, 1982, he was dismissed by way of termination of
his agency contract.
4. Contentions of the petitioner.
a. Judico’s compensation was not based on any fixed number of hours but was
based on actual production.
b. Judico’s compensation, in the form of commissions and bonuses, cannot be

construed as salary, but as a subsidy or way of assistance for transportation
and meal expenses of a new debit agent during the initial period of his
training which was fixed for thirteen (13) weeks.
4. Contentions of the respondent.
a. adopted by SC in its ruling.
6. Ruling of the Labor Arbiter (LA) – In favor of Grepalife
a. The LA dismissed the complaint on the ground that no employer-employee

relationship exist.
7. Ruling of the NLRC - In favor of Honorato Judico
a. It ruled that Judico is a regular employee as defined under Article 281 of the
Labor Code.

First Exam
Art. 281. Probationary employment. Probationary employment shall not

exceed six (6) months from the date the employee started working, unless it is
covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be
terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work
after a probationary period shall be considered a regular employee.
9. Not convinced, the matter was elevated to the Supreme Court.
Issue: Whether or not: (1) the debit agent is considered as regular employee;
and (2) the dismissal was valid.
Ruling of the Supreme Court:
Salaried employees vs. Registered representatives
1. In Investment Planning Corp. vs. SSS, 21 SCRA 294, an insurance agent may have
two classes of agents who sell its insurance policies.
a. Salaried employees – who keep definite hours and work under the control and
supervision of the company.
b. Registered representatives – who works on a commission basis.
• These agents are not required to report for work anytime;

• They do not have to devote their time exclusively to or work exclusively
for the company since the time and effort they spend in their work
depend entirely upon their own will and initiative;
• They are not required to account for their time nor submit a report of
their activities;
• They shoulder their own selling and transportation expenses; and
• They are paid their commission based on a certain percentage of their
sales.
Element of control

First Exam
2. The test is whether the “employer” controls or has reserved the right to control
the “employee” not only as to the result of the work to be done but also as to the
means and methods by which the same is to be accomplished.
3. In this case, the element of control is evident.
• The element of control by the petitioner on Judico was very much

present.
• The record shows that petitioner Judico received a definite minimum
amount per week as his wage known as "sales reserve" wherein the
failure to maintain the same would bring him back to a beginner's
employment with a fixed weekly wage of P 200.00 for thirteen weeks
regardless of production.
• He was assigned a definite place in the office to work on when he is not
in the field; and in addition to his canvassing work he was burdened with
the job of collection.
• In both cases he was required to make regular report to the company
regarding these duties, and for which an anemic performance would
mean a dismissal.
• Conversely faithful and productive service earned him a promotion to
Zone Supervisor with additional supervisor's allowance, a definite
amount of P110.00 aside from the regular P 200.00 weekly "allowance".
• Furthermore, his contract of services with petitioner is not for a piece of
work nor for a definite period.
Ordinary commission insurance agent in brief.
4. An ordinary commission agent works at his own volition or at his own leisure
without fear of dismissal from the company and short of committing acts
detrimental to the business interest of the company or against the latter,
whether he produces or not is of no moment as his salary is based on his
production, his anemic performance or even dead result does not become a
ground for dismissal.
DISPOSITIVE PORTION
1. The appealed decision of AFFIRMED in toto

First Exam
If you compare this with a commission agent, what is the comparison? The
Supreme Court made that comparison. What are the earmarks of lack of control?
1. No reporting in the office

2. No. of hours of work …
3. No specific assignment
4. He works on his own volition except if it will ruin the reputation of the
insurance company
5. Is not afraid of dismissal
In this case, Judico, there was threat of disciplinary action if he does not perform
and there is a reward of being promoted as supervisor when he have good
performance. There was a specific area where he was supposed to work. In other
words, lahat ng control. When you talk about control, the means and manner by
which the work is performed is dictated by the entity who is claimed to be the
employer.
If insurance agent ka and you are on commission, you can actually go part time.
Your working in a company and at the same time you are selling as an agent left
and right.
FEATI vs BAUTISTA
What was the issue in the case of Feati? What was the work done here? What was
the allegation of Feati? What was the relationship? What is the contention of Feati?
That they are independent contractors.
What was the ruling of the Supreme Court? Why are they independent contractor?
Why is there an employment relationship? If considered employees even if they
are only part time employees, the school still maintains controls over the teachers
or professors. There’s an element of control. That does not make them
independent contractors.
FEATI vs BAUTISTA
Facts:

First Exam
Certain cases arose in the Court of Industrial Relations between FEATI and the
Faculty club. FEATI contended that the CIR has no jurisdiction over the cases
because it is an educational institution and it is not considered an employer
under the industrial peace act.
Issues:
1. Whether or not CIR has jurisdiction over cases involving unfair labor
practices of educational institutions?
2. Whether or not FEATI may be considered an employer under the
industrial peace act?
Held:
1. In this case, YES. The cases cited by FEATI bolstering its claim that CIR
has no jurisdiction over educational institutions only apply to non-
profit educational institutions. Therefore, having admitted that FEATI
is an educational institution organized for profit, CIR has jurisdiction
over the case.
2. YES. It will be noted that in defining the term "employer" the Act uses
the word "includes", which it also used in defining, "employee" (Sec.
2[d], and "representative" (Sec. 2[h]); and not the word "means" which
the Act uses in defining the terms "court" (Sec 2[a]), "labor organization"
(Sec. 2[e]), "legitimate labor organization" (Sec. 2[f]), "company union"
(Sec. 2[g]), "unfair labor practice" (Sec. 2[i]), "supervisor" (Sec. 2[k]),
"strike" (Sec. 2[I]) and "lockout" (Sec. 2[m]). A methodical variation in
terminology is manifest. This variation and distinction in terminology
and phraseology cannot be presumed to have been the inconsequential
product of an oversight; rather, it must have been the result of a
deliberate and purposeful act, more so when we consider that as
legislative records show, Republic Act No. 875 had been meticulously
and painstakingly drafted and deliberated upon. In using the word
"includes" and not "means", Congress did not intend to give a complete
definition of "employer", but rather that such definition should be
complementary to what is commonly understood as employer.
Congress intended the term to be understood in a broad meaning
because, firstly, the statutory definition includes not only "a principal
employer but also a person acting in the interest of the employer"; and

First Exam
secondly, the Act itself specifically enumerates those who are not
included in the term "employer", namely: (1) a labor organization
(otherwise than when acting as an employer), (2) anyone acting in the
capacity of officer or agent of such labor organization (Sec. 2[c]), and (3)
the Government and any political subdivision or instrumentality
thereof insofar as the right to strike for the purpose of securing changes
or modifications in the terms and conditions of employment is
concerned (Section 11). Among these statutory exemptions,
educational institutions are not included; hence, they can be included
in the term "employer". This Court, however, has ruled that those
educational institutions that are not operated for profit are not within
the purview of Republic Act No. 875.5
"An employer is one who employs the services of others; one for whom
employees work and who pays their wages or salaries (Black Law Dictionary, 4th
ed., p. 618).
"An employer includes any person acting in the interest of an employer, directly
or indirectly (Sec. 2-c, Rep. Act 875)."
Under none of the above definitions may the University be excluded, especially
so if it is considered that every professor, instructor or teacher in the teaching
staff of the University, as per allegation of the University itself, has a contract
with the latter for teaching services, albeit for one semester only. The University
engaged the services of the professors, provided them work, and paid them
compensation or salary for their services. Even if the University may be
considered as a lessee of services under a contract between it and the members
of its Faculty, still it is included in the term "employer". "Running through the
word "employ" is the thought that there has been an agreement on the part of one
person to perform a certain service in return for compensation to be paid by an
employer. When you ask how a man is employed, or what is his employment, the
thought that he is under agreement to perform some service or services for
another is predominant and paramount.
CITIZENS vs ABBAS

First Exam
In the case of Citizen’s League, what was the job? What kind of drivers? What was
the issue here? What was the arrangement in regard to the auto-calesa driver with
the operators? Boundary system.
Who gives the money to whom? Despite the fact that it is the driver who gives the
money to the operator owner, the Supreme Court said in relation to employment
relationship that?
What was the ruling of the Supreme Court? There was an employment
relationship. Even if you take out jeepney boundary system, di mo pwede sabihing
walang control. Di mo pwedeng sabihin na ibabalik mo yung jeepney next week.
Ibabalik mo yan end of day. May control. Ang control din at end of day, you are
supposed to be givin a certain amount, regular amount to the owner or operator.
When they are late, they are also given a penalty.
CITIZENS vs ABBAS
Facts:
On March 11, 1963 the respondents filed a complaint to restrain the Citizens'
League of Freeworkers, a legitimate labor organization (referred to as union)
from interfering in with the respondents’ auto-calesas business in Davao and to
recover damages from committing certain acts complained of in connection
therewith. The union members who were drivers of the said business, alleges
that the defendants named therein used to lease the auto-calesas of the spouses
on a daily rental basis and that the same does not recognize the union as their
employees rather the petitioners were treated as lessees and refuses to bargain
with them. The union declared a strike on February 20, 1963, to which paralyzed
plaintiffs' business operations through threats, intimidation and violence. The
writ was granted.
On March 18, 1963, petitioners filed a motion to declare the writ of preliminary
injunction void on the ground that the same had expired by virtue of Section 9
(d) of Republic Act 875. In his order of March 21, 1963, however, the respondent
judge denied said motion on the ground that there was no employer-employee
relationship between respondents-spouses and the individual petitioners herein
and that, consequently, the Rules of Court and not Republic Act No. 875 applied
to the matter of injunction. Thereupon the petition under consideration was

First Exam
filed.
Issue:
Whether or not there is an employer-employee relationship existing from a daily

rental basis company?
Held:
In the case of Isabelo Doce vs. Workmen's Compensation Commission, et al. (G.R.
No. L-9417, December 22, 1958), upon a similar if not an altogether identical set
of facts, We held:
"The only features that would make the relationship of lessor and lessee between
the respondent, owner of the jeeps, and the drivers, members of the petitioner
union, are the fact that he does not pay them any fixed wage but their
compensation is the excess of the total amount of fares earned or collected by
them over and above the amount of P7.50 which they agreed to pay to the
respondent, and the fact that the gasoline burned by the jeeps is for the account
of the drivers. These two features are not, however, sufficient to withdraw the
relationship, between them from that of employer-employee, because the
estimated earnings for fares must be over and above the amount they agreed to
pay to the respondent for a ten-hour shift or ten-hour a day operation of the
jeeps. Not having any interest in the business because they did not invest
anything in the acquisition of the jeeps and did not participate in the
management thereof, their service as drivers of the jeeps being their only
contribution to the business, the relationship of lessor and lessee cannot be
sustained."
Wherefore, judgment is hereby rendered setting aside the writ of preliminary

injunction issued by the respondent judge in Civil Case No. 3966 of the Court of
First Instance of Davao, with costs.
MAKATI HABERDASHERY vs NLRC
What was the job performed by the ones claiming to be employees? What is the
allegation of Makati Haberdashery? How did the Supreme Court arrive at the
decision?

First Exam
There was control. Even the design was dictated. There was a pattern to be
followed. It’s not something that they did out of their own talent. Sabi ng Supreme
Court, there was obviously control. So, they are not independent contractors but
employees.
MAKATI HABERDASHERY vs NLRC
Individual complainants are working for Makati Haberdashery Inc as tailors,

seamstress, sewers, basters, and “plantsadoras” and are paid on a piece-rate basis
(except two petitioners who are paid on a monthly basis). In addition, they are
given a daily allowance of P 3.00 provided they report before 9:30 a.m. everyday.
Work schedule: 9:30-6 or 7 p.m., Mondays to Saturdays and even on Sundays and
holidays during peak periods.
The Sandigan ng Manggagawang Pilipino filed a complaint for underpayment of

the basic wages, underpayment of living allowance, nonpayment of overtime
work, nonpayment of holiday pay, and other money claims. The Labor Arbiter
rendered judgment in favor of complainants which the NLRC affirmed but
limited back wages to one year.
Petitioner urged that the NLRC erred in concluding that an employer-employee

relationship existed between the petitioner and the workers.
Issue:
1. WON employees paid on piece-rate basis are entitled to service incentive pay?
2. WON there is an Employer-Employee Relationship?
Held:
1. NO, fall under exceptions set forth in the implementing rules (this will be
reexamined under Article 101).
2. Yes, evident in a Memorandum issued by the Assistant Manager.
Ratio:

First Exam
1. As to the service incentive leave pay: as piece-rate workers being paid at a fixed
amount for performing work irrespective of time consumed in the performance
thereof, they fall under the exceptions stated in Sec1(d), Rule V, IRR, Book III,
Labor Code.
Service Incentive Leave
SECTION 1. Coverage. — This rule shall apply to all employees except:

(d) Field personnel and other employees whose performance is unsupervised by
the employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
2. Employer-Employee Relationship
There is such relationship because in the application of the four-fold test, it was
found that petitioners had control over the respondents not only as to the result
but also as to the means and method by which the same is to be accomplished.
Such control is proven by a memorandum which enumerates procedures and
instructions regarding job orders, alterations, and their behavior inside the shop
issued by the Assistant Manager which reads in part:
"Effective immediately, new procedures shall be followed:
a. To follow instruction and orders from the undersigned…

b. Before accepting the job orders, tailors must check the materials, job
orders, due dates, and other things to maximize efficiency…
c. Effective immediately all job orders, must be finished one day before
the due date. This can be done by proper scheduling of job order and if
you will cooperate with your supervisors. xxxx
d. If there is any problem regarding supervisors or co-tailor inside our
shop, consult with me at once to settle the problem. Fighting inside the
shop is strictly prohibited. Any tailor violating this memorandum will
be subject to disciplinary action.”
WHEREFORE, the decision of the National Labor Relations Commission dated

March 30, 1988 and that of the Labor Arbiter dated June 10, 1986 are hereby

First Exam
modified. The complaint filed by Pelobello and Zapata for illegal dismissal
docketed as NLRC NCR Case No. 2-428-85 is dismissed for lack of factual and
legal bases. Award of service incentive leave pay to private respondents is
deleted. SO ORDERED.
RUGA vs NLRC
What was the work done? Fishermen. How were they performing their work?
What is the allegation of National Labor? What about the mode of compensation?
Kasi joint venture so let’s explore that argument. What was the mode of
compensation here? What did the Supreme Court say? Even if there was no act of
selling the fish and there was no dismissal after, will the Supreme Court rule the
same? You think if there’s no radio, will the Court rule the same way?
What is the four-fold test? Be careful, they are rights. As long as a person possesses
that right, he’s not even required to exercise that right, there is now employment
relationship.
1. Right to selection of employees

2. Right to pay their wages and salaries
3. Right to dismissal
4. Right of control
Let’s look at the facts, inalis ko yung radio, inalis ko yung dismissal, you think the
SC would have ruled the same way?
When analyzing the facts of the case, you have to enumerate on your mind, what
is the four-fold test? Are there indicators?
RUGA vs NLRC
FACTS:
Petitioners were the fishermen-crew members of 7/B Sandyman II, one of several
fishing vessels owned and operated by private respondent De Guzman Fishing
Enterprises which is primarily engaged in the fishing business with port and
office at Camaligan, Camarines Sur. Petitioners rendered service aboard said

First Exam
fishing vessel in various capacities, as follows: Alipio Ruga and Jose Parma
patron/pilot; Eladio Calderon, chief engineer; Laurente Bautu, second engineer;
Jaime Barbin, master fisherman; Nicanor Francisco, second fisherman; Philip
Cervantes and Eleuterio Barbin, fishermen.
For services rendered in the conduct of private respondent's regular business of

"trawl" fishing, petitioners were paid on percentage commission basis in cash by
one Mrs. Pilar de Guzman, cashier of private respondent. As agreed upon, they
received thirteen percent (13%) of the proceeds of the sale of the fish-catch if the
total proceeds exceeded the cost of crude oil consumed during the fishing trip,
otherwise, they received ten percent (10%) of the total proceeds of the sale. The
patron/pilot, chief engineer and master fisherman received a minimum income
of P350.00 per week while the assistant engineer, second fisherman, and
fisherman-winchman received a minimum income of P260.00 per week.
On September 11, 1983 upon arrival at the fishing port, petitioners were told by
Jorge de Guzman, president of private respondent, to proceed to the police station
at Camaligan, Camarines Sur, for investigation on the report that they sold some
of their fish-catch at midsea to the prejudice of private respondent. Petitioners
denied the charge claiming that the same was a countermove to their having
formed a labor union and becoming members of Defender of Industrial
Agricultural Labor Organizations and General Workers Union (DIALOGWU) on
September 3, 1983.
During the investigation, no witnesses were presented to prove the charge

against petitioners, and no criminal charges were formally filed against them.
Notwithstanding, private respondent refused to allow petitioners to return to
the fishing vessel to resume their work on the same day, September 11, 1983.
On September 22, 1983, petitioners individually filed their complaints for illegal
dismissal and non-payment of 13th month pay, emergency cost of living
allowance and service incentive pay, with the then Ministry (now Department)
of Labor and Employment, Regional Arbitration Branch No. V, Legaspi City,
Albay. They uniformly contended that they were arbitrarily dismissed without
being given ample time to look for a new job.
ISSUE/S:

First Exam
Whether or not the fishermen-crew members of the trawl fishing vessel 7/B
Sandyman II are employees of its owner-operator, De Guzman Fishing
Enterprises, and if so, whether or not they were illegally dismissed from their
employment.
HELD:
YES
We have consistently ruled that in determining the existence of an employer-

employee relationship, the elements that are generally considered are the
following (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
employee with respect to the means and methods by which the work is to be
accomplished. The employment relation arises from contract of hire, express or
implied. In the absence of hiring, no actual employer-employee relation could
exist.
From the four (4) elements mentioned, We have generally relied on the so-called
right-of-control test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the means to
be used in reaching such end. The test calls merely for the existence of the right
to control the manner of doing the work, not the actual exercise of the right.
The case of Pajarillo vs. SSS, supra, invoked by the public respondent as authority
for the ruling that a “joint fishing venture” existed between private respondent
and petitioners is not applicable in the instant case. There is neither right of
control nor actual exercise of such right on the part of the boat-owners in the
Pajarillo case, where the Court found that the pilots therein are not under the
orders of the boat-owners as regards their employment; that they go out to sea
not upon directions of the boat-owners, but upon their own volition as to when,
how long and where to go fishing; that the boat-owners do not in any way control
the crew-members with whom the former have no relationship whatsoever; that
they simply join every trip for which the pilots allow them, without any
reference to the owners of the vessel; and that they only share in their own catch
produced by their own efforts.

First Exam
WHEREFORE, in view of the foregoing, the petition is GRANTED. The questioned

resolution of the National Labor Relations Commission dated May 30, 1985 is
hereby REVERSED and SET ASIDE. Private respondent is ordered to reinstate
petitioners to their former positions or any equivalent positions with 3-year
backwages and other monetary benefits under the law. No pronouncement as to
costs.
AGRO vs NLRC
What is the work here? Security guard. What was the allegation of both parties?
What are the indicators of employment relationship? What was the ruling of the
Supreme Court in this case? There was an employer-employee relationship.
What was the basis of that ruling? Disciplinary, promotion, salary and the right of
control in the sense that work assignment were determined by the Company.
I-enumerate niyo lagi yan. Who hired them? Who’s paying their wages? You might
get confused. It might be commission as an agent. It might be an allowance or an
honorarium. The third is the right to discipline. Is it really a disciplinary action or
is it a termination of a civil agreement? The most important thing is the right to
control. So if the work assignment is determined by certainty, that is an indicator
of control. Ofcourse, the additional fact is the payment of SSS, PhilHealth, Pagibig.
Those are indicators of employment relationship.
I think I did not assign Sonza, … and Nazareno. READ IT FOR COMPARISON.
AGRO vs NLRC
Private respondents, numbering forty-six (46) in all, worked as security guards

and/or janitors under individual contracts with petitioner. They were assigned
to firms and offices where petitioner had contracts providing security and
janitorial services. Their individual contracts of employment provide, among
others, as follows: 3.d. That the security guard, agrees to temporary suspension
of his employment completely to include such changes in his employment
status with the Agency, in case of termination of contract between the Agency
and its Client, or reduction Agro's service contracts with various corporations
and government agencies to which private respondents were previously
assigned had been terminated generally due to the sequestration of the said

First Exam
offices by the Presidential Commission on Good Government, Accordingly,

many of the private respondents were placed on "floating status4iirSeptember
16, 1986. A number of them had been put on that status even earlier. "Hosting-
status" means an indefinite period of time when private respondents do not
receive any s8lary or financial benefit provided by law. A. number of them later
obtained employment in other security agencies.
On account of the uncertainty of their employment with the potitionf.J, on July

25 1986. itprivate respondents filed a complaint for illegal dismissal. They
sought the payment or their respective separation pay, 13th month pay for 1986
and service incentive leave pay.
Issue: WON there is EE-EM relationship
Held:
Yes. Their individual length of service ranges from four (4) to more than ten (10)
11years. It was petitioner who determined how much private respondents
received as their monthly salary, overtime/night differential pay, mid-year and
Christmas bonus and 13th month pay, uniforms and meal allowances and other
benefits mandated by law.
Private respondents were reported by the petitioner as its employees for

purposes of social security coverage. Petitioner remitted their withholding taxes
to the Bureau of Internal Revenue and made monthly contributions to the Pag-
ibig fund for their benefit. It was petitioner who determined and decided on the
assignments, promotions and salary increases of private respondents, their
working hours, the firearms to be issued to them and janitorial devices and tools
to be used. Likewise, it was petitioner who
imposed the appropriate disciplinary measures on private respondents by way
of reprimand, suspension and dismissal.
It is clear, therefore, that private respondents are petitioner's regular employees

who enjoy security of tenure and who cannot be dismissed except for cause. In
this case, it appears that twenty-seven (27) of the private respondents accepted
employment in other security agencies without previously resigning from
employment with petitioner.

First Exam
No doubt, this is a just cause for termination of their services and as such they
are not entitled to any separation pay. As regards the other seventeen (17)
private respondents, they admittedly remained in "floating status" for more
than six (6) months. Such a 'floating status" is not unusual for security guards
employed in security agencies as their assignments primarily depend on the
contracts entered into by the agency with third parties, Such a stipulated status
is, therefore, lawful. The "floating status" of such an employee should last only
for a reasonable time. in this case, respondent labor arbiter correctly held that
when the "floating status" of said employees lasts for more than six months. they
may be considered to have been illegally dismissed from the service.
MARAGUINOT vs VIVA FILMS, INC.
What are the positions? It was very specific: cameraman, lights man, etc. What
was the allegation of Viva Films? What was the ruling of the Supreme Court? They
are employees of the Viva Films. Why? Do you agree with their allegation that they
are independent contractors? Yun yung allegation ng Viva. They were hired by the
producers so sila ang bahala.
The ruling of the Supreme Court was? Viva’s requirements, standards, which
movies, saan sila mag wowork, assignments, there is control as to the totality of
the movie. Example, star cinema..
Continuation … Part II c/o Wildy
October 6, 2017 (Part II) | Pahayahay
In other words, Star Cinema, meron akong camera man, meron akong lightsmen,
meron akong associate producer. Hindi ka na kailangan jan, ililipat na kita sa next
project. Pagkatapos sa next project, hindi na kailangan, ililipat ka na naman sa
third project. My point is, the work assignment is controlled, there is continuity of
service. Obviously, the four-fold test is satisfied not by the associate producers but
by Viva or Star Cinema for that matter. So, it won't matter that these are
independent contractors. It won't matter that the associate producers are the
employers. That is the case of Maraguinot.

First Exam
In the case of Bautista vs. Inciong, March 16, 1988, who was the employer here?
The Labor Union. According to the Labor Union, it cannot be considered as the
employer but the SC said? Anong pangalan ng Union dito? Associated Labor Union.
Is there employment relationship? What was the person doing here? Organize
unions.
Q: What is "management prerogative"?

This is something that as a future practitioner, you will use over and over to justify
the corrupt practices of your client. But what is the concept? What is your
definition?
Management prerogative entails that, except as limited by special laws, an

employer is free to regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments, working methods,
time, place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall of work.
(San Miguel v. Ople, 170 S 25)
Nota Bene: You are supposed to memorize that. You are supposed to be familiar
with these aspects not only for purposes of labor standards or the bar, but for
practice. Important to. Panangga to kapag sinabi ng employee mong, hindi mo to
pwedeng gawin sa akin.
Q: What is the only indication in the exercise of management prerogative?
So long as a company's prerogatives are exercised in good faith for the

advancement of the employer's interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements, the Supreme Court will uphold them. (San Miguel v. Ople, 170 S 25)
Okay, you have to strike a balance. It will serve the interests of the employer but it
should not defeat the rights of employees under Labor laws, special laws, or other
legislations. Good faith. Yan no. Tandaan niyo yan. Management prerogative, yes,
management has the prerogative to exercise all these things but subject to that
limitations - good faith, employer's interest without prejudicing the rights of the
workers under special laws. Ulit ulit yan. A landmark case.

First Exam
EXCLUDED EMPLOYEES
We have been discussing who are supposed to be covered but there are excluded
employees. Uulitin ko to ha. We are going to discuss benefits under this Section,
under this Title. We know who are not supposed to enjoy but when we discuss a
particular benefit, and before that provision, meron kang exclusion, yun ang
gagamitin mo. Hindi etong enumeration under this Section.
In the case of National Sugar Refineries Corp., v. NLRC, March 24, 1993.
Q: What was the issue here?

WON supervisory employees are to be considered as officers or members of the
managerial staff who are exempt from the coverage of Article 82.
Q: What is the opposite of managerial?

Rank and file.
Q: Why is it important to distinguish between the two sets in the case of National
Sugar Refineries?
Q: What are the benefits?

Over time, rest day, and holiday pay. These are benefits not given to managerial
staff.
Q: The SC said, in determining whether an employee is a managerial staff or not, what

were the standards of...? What are the duties or the nature of the work done by the
managerial employee according to the Supreme Court?
'Managerial employee' is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharged, assign or discipline employees. 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. All employees not falling
within any of those above definitions are considered rank-and-file employees of
this Book."
Q: In this case, what were the findings of the SC that made it conclude that? What are
the five facts which the SC considered before it concluded that employees here are
managerial employees?
Okay. So 5 indicators. All present.

First Exam
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;
3. (i) Regularly and directly assist a proprietor or a managerial employee whose

primary duty consists of the management of a department of the establishment in
which he is employed or subdivision thereof;
4. They execute under general supervision work along specialized or technical

lines requiring special training, experience, or knowledge; or they execute under
general supervision special assignments and tasks; and
5. Who do not devote more 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 above."
Q: So the conclusion is?

Since they are part of managerial staff, they are outside the ambit of Article 82 so
they are not entitled to the benefits - to overtime, rest day and holiday pay.
So, yung managerial, hindi naman lagi na siya yung nag foformulate ng policies
although that is your definition under Article 220 and of course, Article 82. So it is
there. But a person can be considered as a managerial staff or personnel if he is also
a supervisor. Yung supervisor does not formulate policies but effectively
recommends management decisions such as dismissal, promotion, and demotion.
'Effective Recommendation' means when you recommend something, this will

more or less be adopted by the company. Effective recommendation, i aadopt yung
suggestion mo. So are you a maneger? No you are a supervisor. But are you part of
manegerial personnel? Yes you are in which case you will not be entitled to some
of the benefits under this Title. Si maneger talaga, siya talaga mag foformulate ng
policies. Siya rin nag i-implement.
And of course very important here, it is not the title, it is not the nomenclature that
matter but the duties and the responsibilities.

First Exam
In the case of Union of Filipro Employees v. Benigno Vivar, January 20, 1992.
Q: What was the issue here?

The issue is WON the field personnel are entitled to holiday pay.
Q: Why are they NOT entitled?

The law requires that the actual hours of work in the field be reasonably
ascertained. The company has no way of determining whether or not these sales
personnel, even if they report to the office before 8:00 a.m. prior to field work and
come back at 4:30 p.m., really spend the hours in between in actual field work.
"The requirement for the salesmen and other similarly situated employees to
report for work at the office at 8:00 a.m. and return at 4:00 or 4:30 p.m. is not
within the realm of work in the field as defined in the Code but an exercise of
purely management prerogative of providing administrative control over such
personnel. This does not in any manner provide a reasonable level of
determination on the actual field work of the employees which can be
reasonably ascertained. The theoretical analysis that salesmen and other
similarly situated workers regularly report for work at 8:00 a.m. and return to
their home station at 4:00 or 4:30p.m., creating the assumption that their field
work is supervised, is surface projection. Actual field work begins after 8:00 a.m.
when the sales personnel follow their field itinerary, and ends immediately
before 4:00 or 4:30 p.m. when they report back to their office. The period
between 8:00 a.m. and 4:00 or 4:30 p.m. comprises their hours of work in the
field, the extent or scope and result of which are subject to their individual
capacity and industry and which ‘cannot be determined with reasonable
certainty.’ This is the reason why effective supervision over field work of
salesmen and medical representatives, truck drivers and merchandisers is
practically a physical impossibility."
Q: What is a 'field personnel'?

Under Article 82, field personnel are not entitled to holiday pay. Article 82 defines
field personnel as "non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be determined with reasonable
certainty."
Q: In the case of Union of Filipro, what was the set-up with the salesmen?

First Exam
"The reasons for excluding an outside salesman are fairly apparent. Such a
salesman, to a greater extent, works individually. There are no restrictions
respecting the time he shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of overtime he ordinarily
receives commissions as extra compensation. He works away from his
employer’s place of business, is not subject to the personal supervision of his
employer, and his employer has no way of knowing the number of hours he
works per day."
Q: So monitored ang time? And because of the lack of reasonable certainty as to the
actual time at work, what is the ruling of the SC?
No. The fact that they bundied in and bundied out does not mean that they are
monitored. Yun lang umpisa and end. In-between, natutulog yang mga yan. It
does not matter. As long as output oriented lang.
In the case of Cadiz v. Phil Sinter, July 3, 1979, ano ang sabi ni Azucena? Basahin
niyo nalang.
In the case of Dela Cruz v. NLRC, November 20, 1998.
Q: What was the work being done by the employee here? And what is the ruling of the
SC here?
Dela Cruz started working with respondent Emmanuel Lo in June 1988 as
ordinary crew and received wages in cash from the share of the catch of the
fishing boat of said respondent; that on January 1989, the complainant was
promoted to light boat operator and the wages was [sic] increased from one (1)
share as a crew [member] to five (5) shares; that in March 1989 the complainant
was again promoted to secondo patron with fixed salary of P200.00 in addition
to five (5) shares of the catch and P1.00/fish box commission; that in November
1989, complainant became a full-pledged patron (Captain of respondents
fishing boat known as M/DCA Sheenly Joy 1); that as captain, the complainant
received a monthly salary of P450.00 and ten (10) shares of the fish catch plus
P2.00/fish box commission; that on December 2, 1990, the undersigned
complainant was dismissed by the respondent Emmanuel Lo illegally and
unlawfully without notice and separation pay.
Q: What is the issue in this case?

First Exam
WON Dela Cruz is a manegerial employee.
Q: What is the ruling?

Yes. A managerial employee is therefore excluded from the coverage of the law as
regards conditions of employment which include hours of work, weekly rest
periods, holidays, service inventive leaves and service charges.
Q: Still in the case of Dela Cruz, eh unlicensed naman siya eh, so bakit siya kinonsider
as managerial?
The labor arbiter classified petitioner as a managerial employee. We have not been
provided with any compelling reason to overturn this factual finding. As chief
patron of the M/DCA Sheenly Joy 1, albeit an unlicensed one, petitioner was tasked
to take complete charge and command of the vessel and perform the
responsibilities and duties of a ship captain. Petitioner, an employee who falls
squarely within the category of officers or members of a managerial staff, is thus
exempted from payment of overtime pay, premium pay for holidays and rest days
and service incentive leave pay. Therefore, the labor arbiter was correct in holding
that petitioner was not entitled to overtime pay, legal holiday pay, premium pay
for holidays and rest days.
Okay, again, for definition of managerial employee, formulates and implements

policies. And he falls under that definition. Since he is a managerial employee, he
will not be entitled to any of the benefits under this Title.
HOURS OF WORK
Article 82. Coverage. The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of
the family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are paid
by results as determined by the Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty

consists of the management of the establishment in which they are employed
or of a department or subdivision thereof, and to other officers or members of
the managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly

perform their duties away from the principal place of business or branch office
First Exam
of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.
Q: What is the usual hours of work in a day?

Article 83. Normal hours of work. The normal hours of work of any employee
shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one

million (1,000,000) or in hospitals and clinics with a bed capacity of at least one
hundred (100) shall hold regular office hours for eight (8) hours a day, for five
(5) days a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight (48)
hours, in which case, they shall be entitled to an additional compensation of at
least thirty percent (30%) of their regular wage for work on the sixth day. For
purposes of this Article, "health personnel" shall include resident physicians,
nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists, midwives, attendants and
all other hospital or clinic personnel.
Art. 84. Hours worked. Hours worked shall include (a) all time during which
an employee is required to be on duty or to be at a prescribed workplace; and (b)
all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours
worked.
Q: How about for health personnel?

Refer to second paragraph of Article 83.
Q: How do we know if the hours are considered compensable or not? What are the
principles according to the implementing rules?
OMNIBUS RULES TO IMPLEMENT THE LABOR CODE OF THE PHILIPPINES
SECTION 3. Hours worked. — The following shall be considered as

compensable hours worked:

First Exam
(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 4. Principles in determining hours worked. — The following general

principles shall govern in determining whether the time spent by an employee
is considered hours worked for purposes of this Rule:
(a) All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in productive labor
or involve physical or mental exertion.
(b) An employee need not leave the premises of the work place in order that his
rest period shall not be counted, it being enough that he stops working, may rest
completely and may leave his work place, to go elsewhere, whether within or
outside the premises of his work place.
(c) If the work performed was necessary, or it benefited the employer, or the
employee could not abandon his work at the end of his normal working hours
because he had no replacement, all time spent for such work shall be considered
as hours worked, if the work was with the knowledge of his employer or
immediate supervisor.
(d) The time during which an employee is inactive by reason of interruptions in

his work beyond his control shall be considered working time either if the
imminence of the resumption of work requires the employee's presence at the
place of work or if the interval is too brief to be utilized effectively and gainfully
in the employee's own interest.
Q: Let us say si A ay isang driver, ihahatid niya si Mrs. B sa trabaho at 9am. Lalabas
si Mrs. B ng 3pm. From 9-3 nag to "tong its"siya sa kanto. Compensable or not?
It is compensable. Because part and parcel of being a driver is to wait in time. That
is integral. The fact that he is using it to play tong its does not mean he is not
available. He is there. It is a principle, whether you are doing something productive,
whether you are exerting mental or physical energy, pwede kang considered na
compensable.
Waiting time spend by an employee shall be considered as working time if

First Exam
waiting is considered an integral part of his work or if the employee is required

or engaged by an employer to wait. (Azucena, pp. 192)
Q: Let us say, nag brownout. The workers are working at the factory, operating
machines. They were advised to go home and just asked to standby for further
announcements. Are they supposed to pay for the day?
No. In relation to the fourth principle, there should be imminence of return of the
power and they should be there making themselves available to work again. In this
case, pinauwi sila eh. Lugi naman si company. Now, if they were told na 'jan ka lang,
one-hour lang to!' Ayun. They should be paid the working hours.
As to meeting time, very important yan ha. Alam niyo dapat kung kelan
compensable or not.
Q: With respect to lectures, let us say, A is a lawyer, working for a corporation. He

informs his employer that he is supposed to attend the MCLE for lawyers so that he
can continue to become a lawyer, practicing. Is he supposed to get paid during the 1-
week that he is in Boracay? What are the conditions?
Yes. Attendance at lectures, meetings, training programs, and similar activities
need not be counted as working time if the following three criteria are met:
OMNIBUS RULES TO IMPLEMENT THE LABOR CODE OF THE PHILIPPINES
SECTION 6. Lectures, meetings, training programs. — Attendance at lectures,

meetings, training programs, and other similar activities shall not be counted
as working time if all of the following conditions are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such
attendance.cralaw
Note: Section 6 provides for all the conditions that should be present for non-payment.
These conditions are cumulative. The moment one of these conditions is absent, it shall
be compensable and therefore, payment shall be made. Pag nanjan yung tatlo, may
payment.

First Exam
Whing brings us to the case of National Development Company v. Court of

Industrial Relations, November 30, 1962.

WON the mealtime breaks should be considered working time.
Q: What is the ruling of the SC?

Because it was established that there was a continuous work and that there was no
chance for them to enjoy their real break. So dapat productive hours yan, therefore,
it is compensable. SC said:
It will be noted that, under the law, the idle time that an employee may spend
for resting and during which he may leave the spot or place of work though not
the premises2 of his employer, is not counted as working time only where the
work is broken or is not continuous. The determination as to whether work is
continuous or not is mainly one of fact which We shall not review as long as the
same is supported by evidence.
In the case of Pan American v. Pan American, February 23, 1961.

WON meal period is included in the 8-hour shift.
Q: What was the ruling of the SC?

Yes. The Industrial Court's order for permanent adoption of a straight 8-hour shift
including the meal period was but a consequence of its finding that the meal hour
was not one of complete rest, but was actually a work hour, since for its duration,
the laborers had to be on ready call. Of course, if the Company practices in this
regard should be modified to afford the mechanics a real rest during that hour (f.
ex., by installing an entirely different emergency crew, or any similar
arrangement), then the modification of this part of the decision may be sought
from the Court below. As things now stand, we see no warrant for altering the
decision.
Finally, the case of PRISCO v. CIR, May 23, 1960.
Q: What is being contested here?

Respondent PRISCO Worker's Union, a labor organization duly registered with the

First Exam
Department of Labor, filed with respondent court, a petition praying that herein
petitioner-employer PRISCO be ordered to pay its present employees,
claimantsmembers of the said Union, their basic pay and at least 25 per cent
additional compensation for one hour overtime work they had previously
rendered as security guards of petitioner, from April 17, 1953 to January 13, 1954,
and the additional compensation of at least 25 per cent for the work they have
been rendering on Sundays and legal holidays, from March 7, 1954 and on.
Q: Sino yang mga yan? Ano ang mga ginagawa nila?

Security guards. They do the briefing.
Q: So that was the issue, compensable or not? What is the ruling of the SC?
So applying the three requirements for non-payment, it is compensable. First
requirement is present. Second is not because it was not voluntary. Third is not
present because the work is producting. So, dahil wala ang dalawa dun, isa nga
lang ang wala paid na diba, so compensable siya.
_____________________
October 20, 2017 (Part I) | Alcomendras
Distinguish between a mere talent and employee of a broadcasting station. In the

case of Sonza, the court said that the four indicators are not present. May
tinataggap na pera si Sonza but it was too large to be a salary. It was not hiring but
entering into a civil contract. There was no right to dismiss. And right of control
was absent in Sonza but present in Nazareno. In Murillo, she was a newscaster and
would deliver the news that was given to her. Pero si Sonza siya ang nagiisip ng
topic. Anong concept or discussion na ipepresent nila sa Mel and Jay. So meron pa
siyang sariling production company. Parang Willie Revillame vs Karen Davila. Si
Karen binabasa niya lang ang gusto ng ABS CBN. Si Willie, siya nagdi-dictate kung
anong gusto niya. Hindi siya talent ng GMA.
In Nazareno, it involved people who are production crew of ABS. ABS without any
creativity cited the case of Sonza. OF course the right to contral was present in the
case of Nazareno. They are regular employees. Their salary was too small to be a
talent. They were also engaged as employees. So Nazareno is akin to the
Maraguinot case.

First Exam
After that we started discussing the rules, exemptions, hours of worked,

exceptions sa hospitals. And then we started discussing what travels are
considered as compensable and what are the rules on compensability. We
discussed the PRISCO Case where the two hours of work before they render service
as guards is compensable. They were exercising or praying for the benefit of the
employer.
DELIA R. SIBAL VS NOTRE DAME OF GREATER MANILA
Delia R. Sibal was employed as school nurse by private respondent Notre Dame of
Greater Manila starting January 1973. Prior to school year 1976-1977, she was
compensated on a 12-month basis, although she worked only during the ten
month period of classes. She was not required to report for work for the entire
Christmas and summer vacations. However, on March 10, 1976, respondent's
director, Fr. Enrique Gonzales, requested her to shorten her summer vacation,
from two weeks after the last day of classes to two weeks before the first day of
classes of the next school year.
Fr. Gonzales was replaced by Fr. Pablo Garcia, an American, as new director. Fr.
Garcia required petitioner to report for work during the summer before the
beginning of school year 1981-1982. Petitioner informed him that her contract
does not require her to report for work during the summer vacation. hus, in order
that her failure to report for work may not be misinterpreted, petitioner filed
leaves of absence extending from April 1, 1981 to June 14, 1981. SHE failed to
receive her vacation pay.
She was also assigned to teach health subjects because two teachers left the school.
She was not given compensation for teaching even if other teachers were
compensated for addition work done. She received her 13th month pay which was
computed on the basis of a 10-month period only.
Failing to receive the compensation demanded, she filed a complaint for non
payment of 1) vacation pay for four (4) summer months; (2) compensation for
teaching health subjects; and (3) deficiency in the 13th month pay for 1981. After
which she was terminated by the school. Thus she included in her complaint for
illegal dismissal.
Issue: WON entitled
Held: She was illegally terminated. The petitioner and the director was strictly
First Exam
official in nature, the cause of which was the violation of the terms of employment
by the latter. Petitioner's assertion of her right to unpaid salaries and bonus
differential was not motivated by any personal consideration. Rather, she simply
claimed benefits which, under the law, she was entitled to and legally due her.
NLRC erred in ruling that petitioner is not entitled to compensation for teaching
health subjects allegedly because petitioner taught during her regular working
hours; the subject Health is allied to her profession as nurse; and she and
respondent school had no clear understanding regarding extra compensation.
Although the subject taught is Health and allied to her profession, and is taught
during regular working hours, petitioner's teaching the subject in the classroom
and her administering to the health needs of students in the clinic involve two
different and distinct jobs. They cannot be equated with each other for they refer
to different functions. teaching health subjects is extra work for petitioner, and
therefore necessitates extra compensation.
It was established that in several precedents, non-teaching personnel of

respondent school who were made to handle teaching jobs were actually paid
actual compensation. Besides, justice and equity demand that since the principle
of equal work has long been observed in this jurisdiction, then it should follow that
an extra pay for extra work should also be applied.
Sembreak should be compensated. Always remember that. Sibal is still the rule to
be followed. Whenever productive work is rendered, even non productive, if it is
working time then it is compensable. More so in Sibal because actual work was
rendered. She was even giving teaching load and was made to work during the
summer.
STOLT-NIELSEN MARINE SERVICES vs NLRC
Meynardo J. Hernandez was hired by petitioner Stolt-Nielsen Marine Services as

radio officer on board M/T Stolt Condor for a period of ten months. THe ship
captain ordered private respondent to carry the baggage of crew member Lito
Loveria who was being repatriated. He refused to obey the order out of fear in view
of the utterance of said crew member "makakasaksak ako" and also because he did
not perceive such task as one of his duties as radio officer. As a result of such
refusal, private respondent was ordered to disembark on April 30, 1990 and was

First Exam
himself repatriated on May 15, 1990. He was paid his salaries and wages only up
to May 16, 1990.
Thus he filed a complaint before POEA for illegal dismissal and breach of contract
praying for, among other things, payment of salaries, wages, overtime and other
benefits due him for the unexpired portion of the contract which was six (6)
months and three (3) days.
POEA held that he was illegaly dismissed and was entitled to his salaries for
the unexpired portion of his contract computed as follows:
1. Remaining portion of his contract - 6 months & 3 days
2. Basic salary - US$1,024.00
3. Fixed Overtime - 420.00
Total US$1,434.00
4. Salary/day = ($1,434/30 days) = US$47.8/day
5. Salary for 3 days - ($47.8 x 3) = US$143.4
6. Salary for 6 months - ($1,434 x 6) = US$8,604.00
7. Salary for the unexpired portion of his contract (basic salary + fixed O.T.)
for 6 months and 3 days (US$8,604 + 143.4) = US$8,747.40
Issue: WON entitled to overtime pay
Held: No. A close scrutiny of the computation of the monetary award[8]shows that
the award for overtime was for the remaining six (6) months and three (3) days of
private respondent's contract at which time he was no longer rendering services
as he had already been repatriated.
NLRC erred in adopting the view that the guaranteed or fixed overtime pay of 30%
of the basic salary per month" embodied in their employment contract should be
awarded to them as part of a "package benefit”. Their theory is erroneous for being
illogical and unrealistic. Their thinking even runs counter to the intention behind
the provision. The contract provision means that the fixed overtime pay of 30%
would be the basis for computing the overtime pay if and when overtime work
would be rendered. Simply stated, the rendition of overtime work and the
submission of sufficient proof that said work was actually performed are
First Exam
conditions to be satisfied before a seaman could be entitled to overtime pay which

should be computed on the basis of 30% of the basic monthly salary. In short, the
contract provision guarantees the right to overtime pay but the entitlement to
such benefit must first be established. Realistically speaking, a seaman, by the very
nature of his job, stays on board a ship or vessel beyond the regular eight-hour
work schedule. For the employer to give him overtime pay for the extra hours
when he might be sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.
Just because he is in the premises does not mean that he is doing productive work
for the benefit of the employer.
What’s the ruling in Soriano? Basically the same in Luzon. Working hours of
seamen is about the nature. The work premises is on board the ship. An exception
is if you are able to prove that you rendered over time work or productive work
while you’re on board, you get overtime pay.
So meal periods. What’s the provision of law?
Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less
than sixty (60) minutes time-off for their regular meals.
Generally it is 60 minutes. It can be shorter than that but not shorter than 20
minutes. There are coffee breaks, AM and PM, for 15 minutes each. Compensable.
Ang condition is if shorter than 60 minutes nagiging compensable. Okay so meal
period na. NDC? What’s the issue here?
NATIONAL DEVELOPMENT COMPANY VS CIR
At the National Development Co., a government-owned and controlled

corporation, there were four shifts of work. One shift was from 8 a.m. to 4 p.m.,
while the three other shifts were from 6 a.m. to 2 p.m; then from 2 p.m. to 10 p.m.
and, finally, from 10 p.m. to 6 a.m. In each shift, there was a one- hour mealtime
period, to wit: From (1) 11 a.m. to 12 noon for those working between 6 a.m. and 2
p.m. and from (2) 7 p.m. to 8 p.m. for those working between 2 p.m. and 10 p.m.
Although there was a one-hour mealtime, petitioner nevertheless credited the

workers with eight hours of work for each shift and paid them for the same
First Exam
number of hours. However, since 1953, whenever workers in one shift were
required to continue working until the next shift, petitioner instead of crediting
them with eight hours of overtime work, has been paying them for six hours only,
petitioner that the two hours corresponding to the mealtime periods should not be
included in computing compensation. On the other hand, respondent National
Textile Workers Union whose members are employed at the NDC, maintained the
opposite view and asked the Court of Industrial Relations to order the payment of
additional overtime pay corresponding to the mealtime periods.
NDC contends that CIR has no jurisdiction over claims for overtime compensation
and, secondary that the CIR did not make "a correct appraisal of the facts, in the
light of the evidence" in holding that mealtime periods should be included in
overtime work because workers could not leave their places of work and rest
completely during those hours.
Issue: WON CIR has jurisdiction and WON mealtime breaks is considered as
working time
Held: Yes. For such jurisdiction to come into play, the following requisites must be
complied with: (a) there must exist between the parties an employer-employee
relationship or the claimant must seek his reinstatement; and (b) the controversy
must relate to a case certified by the President to the CIR as one involving national
interest, or must arise either under the Eight-Hour Labor Law, or under the
Minimum Wage Law. In default of any of these circumstances, the claim becomes
a mere money claim that comes under the jurisdiction of the regular courts. Here,
petitioner does not deny the existence of an employer- employee relationship
between it and the members of the union. Neither is there any question that the
claim is based on the Eight-Hour Labor Law. Thus CIR jas jurisdiction.
Under the law, the idle time that an employee may spend for resting and during
2
which he may leave the spot or place of work though not the premises of his
employer, is not counted as working time only where the work is broken or is not
continuous.
Indeed, it has been said that no general rule can be laid down is to what constitutes
compensable work, rather the question is one of fact depending upon particular
circumstances, to be determined by the controverted in cases.
While it may be correct to say that it is well-high impossible for an employee to

work while he is eating, yet under Section 1 of Com. Act No. 444 such a time for
First Exam
eating can be segregated or deducted from his work, if the same is continuous and
the employee can leave his working place rest completely. The time cards show
that the work was continuous and without interruption. There is also the evidence
adduced by the petitioner that the pertinent employees can freely leave their
working place nor rest completely. There is furthermore the aspect that during the
period covered the computation the work was on a 24 hours basis and divided into
shifts. The work in the company therefore was continuous and mealtime breaks
should be counted as working time for purposes of overtime compensation.
On call sila, they cannot fully concentrate on themselves or enjoy their breaks.
Then that is fully compensable.
SIME DARBY PILIPINAS vs NLRC
Sime Darby Pilipinas, Inc., petitioner, is engaged in the manufacture of automotive

tires, tubes and other rubber products. Sime Darby Salaried Employees Association
(ALU-TUCP), private respondent, is an association of monthly salaried employees
of petitioner at its Marikina factory. Prior to the present controversy, all company
factory workers in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid on call lunch break.
petitioner issued a memorandum to all factory-based employees advising all its

monthly salaried employees in its Marikina Tire Plant, except those in the
Warehouse and Quality Assurance Department working on shifts, a change in
work schedule which increased the lunch break to 1 hour. Excluded from the
schedule are the Warehouse and QA employees who are on shifting.
Since private respondent felt dversely by the change in the work schedule and
discontinuance of the 30-minute paid on call lunch break, it filed a complaint for
unfair labor practice, discrimination and evasion of liability.
However, the Labor Arbiter dismissed the complaint on the ground that the
change in the work schedule and the elimination of the 30-minute paid lunch
break of the factory workers constituted a valid exercise of management
prerogative and that the new work schedule, break time and one-hour lunch break
did not have the effect of diminishing the benefits granted to factory workers as
the working time did not exceed eight (8) hours.
SIME DARBY argues that the new work schedule was not discriminatory of the
union members nor did it constitute unfair labor practice on the part of petitioner.
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Issue: WON work schedule is discriminatory
Held: No. The right to fix the work schedules of the employees rests principally on
their employer. In the instant case petitioner, as the employer, cites as reason for
the adjustment the efficient conduct of its business operations and its improved
production
It rationalizes that while the old work schedule included a 30-minute paid lunch
break, the employees could be called upon to do jobs during that period as they
were on call. Even if denominated as lunch break, this period could very well be
considered as working time because the factory employees were required to work
if necessary and were paid accordingly for working. With the new work schedule,
the employees are now given a one-hour lunch break without any interruption
from their employer. For a full one-hour undisturbed lunch break, the employees
can freely and effectively use this hour not only for eating but also for their rest
and comfort which are conducive to more efficiency and better performance in
their work. Since the employees are no longer required to work during this one-
hour lunch break, there is no more need for them to be compensated for this
period. We agree with the Labor Arbiter that the new work schedule fully complies
with the daily work period of eight (8) hours without violating the Labor Code.
So nakita niyo ang shift from 30 minutes compensable. Naging one hour not
compensable. So sabi nila mababwasan ang 30 minutes na pera namin. But that’s
the purpose of a meal period. It gives you the time to eat and to replenish your
energy. Yun ang pinaka-purpose. Not for you to have extra money. Kaya may break
kasi tao ka at hindi machine. That’s why there’s no violation of diminution of
benefits.
Next. Night shift deferential. How much?
Art. 86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour of
work performed between ten o’clock in the evening and six o’clock in the
morning.
We call this shift graveyard. Bakit graveyard? Kasi mamatay ka eh. It’s against the
body clock. That’s why you’re paid extra 10%. If you work beyond 10AM, you pay
night shift.
In the case of SHELL VS NLU, what’s the issue?

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SHELL VS NLU
National Labor Union instituted this action to ask for 50% additional
compensation for the employees of Shell Company who work at night to attend to
the foreign planes landing and taking off (at night) to supply petrol and lubricants,
and perform other duties. Court of Industrial Relations held that the Shell
Company pay its workers working at night an additional compensation of 50%
over their regular salaries by working during daytime.
Shell argues that there is no legal provision empowering CIR to order payment of
additional compensation to workers who work at night, and that Act No. 444
relieved the employer of such obligation as it is provided in the Act where it made
compulsory the "overtime" (additional compensation) pay for work rendered
beyond 8 hours, and such cases do not include the work at night.
NLU argues decision of the CIR is part of its broad and effective powers as granted
by Commonwealth Act No. 103 - the charter of the Industrial Relations Court, and
that Act No. 444 has no Application to this case because it is referring only to
particular and the maximum working day permitted in industrial establishments
- the 8-hour day.
ISSUES: WON CIR has the authority to order payment of additional compensation
to workers who work at night?
WON those who work at night are entitled to 50% additional compensation?
Held: Yes.
Articles 1, 4 and 13 of Commonwealth Act No. 103:

It is evident from the Com Act. No. 103 :
SECTION 1. (a) that when a dispute arises between the principal and the employee
or worker on the question of wages, CIR has jurisdiction throughout the
Philippines to consider, investigate and resolve the dispute, setting the wages they
deem fair and reasonable,
SEC. 4. (b) that for the purposes of prevention, arbitration, decision and
arrangement, CIR also has jurisdiction over any dispute - industry and agriculture
- resulting from any differences in wages, compensation or participation, working
hours, conditions of employment or tenancy between the employers and
employees or between workers and owners and the landowners or farm workers

First Exam
subject to the fulfillment of certain requirements and conditions when it sees that
the dispute could cause results or a strike,
SEC. 13. (c) that in exercising its powers specified above, the Court Industrial
Relations is not limited, to decide the dispute, to grant the remedy or remedies
requested by the parties to the dispute, but may include in any order or decision or
determination relating to the purpose of settling the dispute or to prevent further
agricultural or industrial disputes.
Shell’s Arguments:
The power of CIR to fix wages is subject to restrictions of law. Com. Act No. 444
expressly specified those items where payment of extra compensation is
authorized:
(a) for "overtime" or work in excess of regular hours for emergency imposed
during any disaster or accident, or to avoid loss or repair,
(b) for work on Sundays and holidays,
(c) in case of emergency,
There is nothing that relates to the work done at night, then the order in question
is illegal because not authorized by law.
The argument of Shell is mistaken. Law No. 444 does not apply to this case, it is
evident that it has a specific objective, namely: (a) set at 8 hours the maximum
working day, (b) at some exceptional cases employees could be allowed Work off
the day, (c) provide increment, which must be not less than 25% of regular salary
for the "overtime" or work in excess of 8 hours.
The work required by Shell is not covered by the overtime of Com Act. 444 since
the work which is the subject of controversy in this case is not overtime but a full
day of work for 8 hours, done at night or in night shift.
Hence, if CIR has the authority to fix wages for the work done during the day, it
also has the authority to fix wages done at night.
(Work Day- 24-hr period commencing from the time an employee regularly starts
to work regardless of whether the work is broken or continuous. It may not
coincide with a calendar day.

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The case against nightwork, then, may be said to rest upon several grounds. In the
first place, there are the remotely injurious effects of permanent nightwork
manifested in the later years of the worker's life. Of more immediate importance
to the average worker is the disarrangement of his social life, including the
recreational activities of his leisure hours and the ordinary associations of normal
family relations. From an economic point of view, nightwork is to be discouraged
because of its adverse effect upon efficiency and output. A moral argument against
nightwork in the case of women is that the night shift forces the workers to go to
and from the factory in darkness. Recent experiences of industrial nations have
added much to the evidence against the continuation of nightwork, except in
extraordinary circumstances and unavoidable emergencies. The immediate
prohibition of nightwork for all laborers is hardly practicable; its discontinuance
in the case of women employees is unquestionably desirable. The night was made
for rest and sleep and not for work' is a common saying among wage-earning
people, and many of them dream of an industrial order in which there will be no
night shift
In the case of NARIC VS NARIC, what is the issue here?
NATIONAL RICE AND CORN CORPORATION VS NARIC WORKERS UNION
On May 21, 1956, upon motion of the union, the industrial court issued an order
directing its chief examiner, or any of his assistants, to compute the additional
compensation for night work.
The report shows that there are 163 workers and employees of the corporation
who have rendered night work from October 3, 1952, to February 16, 1953 and the
25 per cent additional compensation of said workers and employees computed on
the basis of their respective monthly salaries amounted to P5,221.84.
In making his report he considered any all work performed between 6:00 o'clock
in the afternoon and 6:00 o'clock in the morning as "night work" and accordingly
has awarded each employee or worker an additional compensation of 25 per cent
for "night work". He further stated that if a particular employee worked from 8:00
o'clock in the morning to 5:00 o'clock in the afternoon and then rendered overtime
service from 5:00 o'clock in the afternoon of the same day to 7:00 o'clock in the
evening of the same day, he considered the work from 5:00 to 6:00 p.m. as
overtime work and entitled to 25 per cent additional compensation as overtime

First Exam
work, and the same work from 6:00 to 7:00 p.m. as both overtime work and night
work and therefore entitled to 25 per cent additional compensation as overtime
work and another 25 per cent additional compensation as night work.
The main issue raised by the corporation is: "Should the employee performing his
regular eight hours work during the daytime from 8:00 o'clock in the morning to
12:00 o'clock at noon and from 1:00 o'clock to 5:00 o'clock in the afternoon . . . be
paid for his services from 5:00 o'clock to 9:00 in the afternoon as "overtime work"
and at the same time be paid from 6:00 o'clock to 9:00 o'clock in the evening as
night work?"
Held: Yes. Respondent court upheld the manner of computation made by its chief
examiner in implementing its decision rendered on February 15, 1956. This
interpretation of the term "night work" is, according to the corporation, erroneous
for it runs counter to the definition given to said term by the Supreme Court in
SHELL VS NLU. Thus, in said case, the following comment was made: "The night
work which the Shell Company demands of its laborers is not merely an overtime
work in the sense in which this word is issued in Act No. 444, but it is in reality a
complete working day also of eight hours, only that, instead of its being done at
daytime, it is performed at night. In other words, the night work referred to here
is not an excess, extension or overtime of the regular work during the day time,
but it is rather another kind of work absolutely independent of the work being
done during the day. For this reason, there are two shifts: the shift of laborers who
work during the day and the shift of those who work at night."
While it is true that this Court made the above comment in the aforementioned
case, it does not intend to convey the idea that work done at night cannot also be
an overtime work. The comment only served to emphasize that the demand which
the Shell company made upon its laborers is not merely an overtime work but
night work and so there was need to differentiate night work from daytime work.
In fact, the company contended that there was no law that required the payment
of additional compensation for night work unlike an overtime work which is
covered by Commonwealth Act No. 444 (Eight Hour Labor Law). And this Court in
that case said that while there was no law actually requiring payment of additional
compensation for night work, the industrial court has the power to determine the
wages that night workers should receive under Commonwealth Act No. 103, and
so it justified the additional compensation given to night workers by the industrial
court in the Shell case for "hygienic, medical, moral, cultural and sociological
reasons." That case therefore cannot be invoked as an authority for concluding

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that one who does night work cannot be paid additional compensation for the
same work as overtime. One is paid for his work done during the night and the
other is paid because it is excess of the regular eight-hour work may be legally
required to do. One is done for reasons of health and the other because of an
express mandate of the law (Commonwealth Act No. 444). We find therefore
correct the computation made by the chief examiner as affirmed by the industrial
court.
Work done at night should be paid more than work done by the chief examiner.
Respondent court is there- workers regular hour of duty, he should also be paid
additional compensation for overtime work. This is what was done by the chief
examiner.
Do not confuse this. Ang tanong talaga is did you work in excess of eight hours or
is that your usual 8 hour shift. If your 8 hour shift is 10PM to 6AM, you are only
entitled to night shift. Let’s say ang end ng duty mo 9PM. Start ka 1PM. If inextend
ka up to 12 midnight. Pagdating mo nang 10 o’clock to 12, meron ka nang OT na
25% plus 10%.
How do you compute? Ano ang una? 25% ang una. Do you get the 10% from the
basic or from the additional 25%?
Example: 800 pesos a day ang sweldo. Divided by 8, 100 pesos per hour. Ang work
from 1-9, no problem. From 10 to 12 you add 25%. So the 100 becomes 125 x 2 kasi
10-12 eh. Two hours. Night shift pa siya. So you get the 10% of 125 which is 12.50.
So 125 + 12.50 is 137.50. Ang 10-12 mo is 137.50 per hour. So times 2 hours. May
800 ka may 137.50 ka times 2, yan ang sweldo mo sa araw na iyan. Are you getting
me? Ang basis for 10% is already 125 because that’s overtime.
Case of NARIC, can you have overtime plus night shift? Yes. They address two
different purposes. One is for working in excess of 8 hours one is for rendering
work during graveyard shift.
MERCURY DRUG CO., INC. vs NARDO DAYAO
This is a verified petition dated March 17, 1964 which was subsequently amended
on July 31, 1964 filed by Nardo Dayao and 70 others against Mercury Drug Co., Inc.,
and/or Mariano Que, President & General Manager, and Mercury Drug Co., Inc.,
Employees Association praying, with respect to respondent corporation and its
president and general manager: payment of extra compensation on work done at
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night.
The other issue raised in the second assignment of error is premised on the
petitioner-company's contention that the respondent court's ruling on the
additional compensation for nighttime work is not supported by substantial
evidence
Issue: WON nightshift benefits may be waived
Held: No.. Witnesses for petitioners declared they worked on regular days and on
every other Sunday and also during all holidays; that for services rendered on
Sundays and holidays they were not paid for the first four (4) hours and what they
only received was the overtime compensation corresponding to the number of
hours after or in excess of the first four hours; and that such payment is being
indicated in the overtime pay for work done in excess of eight hours on regular
working days. It is also claimed that their nighttime services could well be seen on
their respective daily time records.
The respondent court's ruling on additional compensation for work done at night
is, therefore, not without evidence. Moreover, the petitioner-company did not
deny that the private respondents rendered nighttime work. In fact, no additional
evidence was necessary to prove that the private respondents were entitled to
additional compensation for whether or not they were entitled to the same is a
question of law which the respondent court answered correctly. The "waiver rule"
is not applicable in the case at bar. Additional compensation for nighttime work is
founded on public policy, hence the same cannot be waived.
The petitioner's contention that its employees fully understood what they signed
when they entered into the contracts of employment and that they should be
bound by their voluntary commitments is anachronistic in this time and age.
The Mercury Drug Co., Inc., maintains a chain of drugstores that are open every
day of the week and, for some stores, up to very late at night because of the nature
of the pharmaceutical retail business. The respondents knew that they had to
work Sundays and holidays and at night, not as exceptions to the rule but as part
of the regular course of employment. Presented with contracts setting their
compensation on an annual basis with an express waiver of extra compensation
for work on Sundays and holidays, the workers did not have much choice. The

First Exam
private respondents were at a disadvantage insofar as the contractual relationship

was concerned
Okay, founded on public policy. Even if you make your employee sign a waiver.
You cannot waive something founded on public policy or on social benefits.
SEABORNE CARRIERS CORPORATION and JERRY RONALDO GATAN vs NLRC

AND ARMANDO A. TERNIDA
The private respondent began working for Seaborne Carriers Corporation

(Seaborne) on April 8, 1983 as Tug Master with a monthly salary of P2,475.00. On
September 15, 1987, the tugboat he was manning met an accident. Half of the cost
of repairs totalling P5,000.00 was shouldered by Seaborne. Private respondent was
required to pay for the other half, and an initial salary deduction of P250.00 was
actually made by Seaborne. On September 24, 1987, he sought permission to go on
leave of absence to ask from the Department of Labor and Employment if such
deduction was legal, but this request was not granted. Instead, he was asked by
petitioner Gatan, Seaborne's president and manager, to tender his resignation.
When he refused to resign, as he had not yet received any separation pay, he was
dismissed.
A complaint was then filed by the private respondent against Seaborne for illegal
dismissal, illegal deduction, and unpaid wages, which was later amended to
include petitioner Gatan as party respondent and to embrace claims for overtime
pay, holiday pay, 13th month pay, sick leave pay. The petitioners aver that the
award to private respondent should not have included service incentive pay
because it was never sought in the complaint and the private respondent is already
enjoying vacation leave benefits, which bars the employee from entitlement to the
yearly service incentive leave benefit mandated by Article 95.
Issue: Who between employer or employee has burden of proof that payment was
made
Held: Employer. The private respondent's allegation of non-payment of these

benefits, to which he is by law entitled, is a negative allegation which need not be
supported by evidence unless it is an essential part of the cause of action.1 It must
be noted that the main cause of action of the private respondent is his illegal

First Exam
dismissal, and the claim for the monetary benefits is but an incident of the protest
against such dismissal. Thus, the burden of proving that payment of said benefits
has been made rests upon the party who will suffer if no evidence at all is
presented by either party, that is, the petitioners as private respondent's employer.
This brings us to the second issue raised by the petitioners: Should Jerry Ronaldo
Gatan, as president and general manager of Seaborne be held responsible to the
private respondent for the payment of backwages and other monetary benefits
awarded by the NLRC? No.
All that the evidence shows is that petitioner Gatan ordered the private respondent
to resign and dismissed him when he failed to do so without considering the
reason for such refusal, which is the non-payment of his separation pay. There is
nothing on record which would prove the insinuation that Jerry Gatan sanctioned
the deduction of P250.00 from private respondent's salary, as well as the denial of
the latter's request for leave of absence.
These factors are simply not sufficient to convince this Court that petitioner Gatan
acted with malice and in bad faith in the termination of private respondent's
employment.
The employer always has the burden of proving payment, that there was valid
dismissal because the presumption of the law is being the employer you have the
payroll slips with you. So the burden is with the employer. But you will see later
that the rule is different in cases of benefits which are not usually given like
overtime pay or night shift differential. Employee has to establish the work was
really rendered in excess of eight hours or that it was done at night. Pero pag
payment of minimum wage, the burden of proof of payment is of course with the
employer. If you were not given service incentive leave, the burden is with the
employer. But if extraordinary like night shift or overtime, patunayan mo na you
worked. The burden is shifted to the one alleging the extraordinary work.
NATIONAL SEMICONDUCTOR (HK) DISTRIBUTION vs NLRC AND EDGAR

SANTOS
Edgar Philip C. Santos was employed by NSC as a technician in its Special Products
Group with a monthly salary of P5,501.00 assigned to the graveyard shift starting
at ten o clock in the evening until six o clock in the morning.
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On 8 January 1993 Santos did not report for work on his shift. He resumed his
duties as night shift Technician Support only on 9 January 1993. However, at the
end of his shift the following morning, he made two (2) entries in his daily time
record (DTR) to make it appear that he worked on both the 8th and 9th of January
1993.
His immediate supervisor, Mr. Joel Limsiaco, unknown to private respondent

Santos, received the report that there was no technician in the graveyard shift of 8
January 1993. Thus, Limsiaco checked the DTRs and found out that Santos indeed
did not report for work on 8 January. But when he checked Santos DTR again in the
morning of 9 January 1993 he found the entry made by Santos for the day before.
On 11 January 1993 Santos submitted his written explanation alleging that he was
ill on the day he was absent.As regards the entry on 8 January, he alleged that it
was merely due to oversight or carelessness on his part. He was dismissed on the
ground of falsification of DTR.
Santos filed a complaint for illegal dismissal and non- payment of back wages,
premium pay for holidays and rest days, night shift differential pay, allowances,
separation pay, moral damages and attorneys fees.
Issue: Who has the burden of proving payment of nightshift differential
Held: The fact that Santos neglected to substantiate his claim for night shift
differentials is not prejudicial to his cause. After all, the burden of proving
payment rests on petitioner NSC. Santos allegation of non-payment of this benefit,
to which he is by law entitled, is a negative allegation which need not be supported
by evidence unless it is an essential part of his cause of action. It must be noted
that his main cause of action is his illegal dismissal, and the claim for night shift
differential is but an incident of the protest against such dismissal. Thus, the
burden of proving that payment of such benefit has been made rests upon the
party who will suffer if no evidence at all is presented by either party.
As a general rule, one who pleads payment has the burden of proving it. Even
where the plaintiff must allege non-payment, the general rule is that the burden
rests on the defendant to prove payment, rather than on the plaintiff to prove non-
payment. The debtor has the burden of showing with legal certainty that the
obligation has been discharged by payment.
Santos cannot adequately prove the fact of non-payment of night shift

First Exam
differentials since the pertinent employee files are not in his possession but in the
custody and absolute control of petitioner.
It is not disputed that complainant was regularly assigned to a night shift (10:00
P.M. to 7:00 A.M.).Under Section 2, Rule II, Book Three of the Implementing Rules
of the Labor Code, complainant is entitled to an additional benefit of not less than
ten percent (10%) of his regular wage for each hour of work performed. The record
is bereft of evidence that respondent has paid complainant this benefit. The best
evidence for respondent corporation would have been the payrolls, vouchers, daily
time records and the like which the company is obliged to keep.
Its failure gives rise to the presumption that either it does not have them or if it
does, their presentation is prejudicial to its cause.
We rule therefore that complainant should be awarded a night shift differential

but limited to three (3) years considering the prescriptive period of money claims
Ito kasi wala nang issue if nag-work siya sa night shift kaya ang burden is still with
the employer. Pero kung ang issue ay if in the first place nagtrabaho ka during
night shift, the burden shifts to the employee. Example security guards,
magtatanong ka pa ba kung may night shift ka? If by industry practice, may night
shift talaga the burden is wth employer. Pero kunwari ang normal operations ay
eight hours lang, the burden shifts to the employee na nag-work siya between
10PM to 6AM. Kung 7/11 yan, please pwede ba wag na tayo mag usap? Gets?
October 20, 2017 (Part 2) | Manligoy
Ito kasi, wala ng issue kung nag wowork ba talaga siya ng night shift. So, the
burden was still with the employer. Pero kung may issue in the first place,
nagtrabaho ka ng nightshift, the burden is shifted to the employee. Ano’ng usual
example? Security guards na alam na natin na by industry practice na talagan nag
nanight shift. The burden is still on the employer. Pero halimbawa, store siya na 8
hours lang ang normal operating hours, bigla kang nagsasabi na nagnanight shift
ka, the burden is with the employee who in the first place na nagwork siya between
two pm to 6 am. Are you getting me? Kelan si employer, kelan si employee?
Overtime work.

First Exam
How much? Plus 25% plus 25% of the base rate. In the case of National vs CIR,
nadiscuss na ba natin to?
NATIONAL vs CIR
(to follow nalang..nahihirapan akong makita yung case L)
Please distinguish this with the previous case where the seamen or the … not
rendering productive work. Pareho lang ang nature eh. Pero dito, naprove talaga
na he rendered extra work.
PNB vs CIR
ISSUE: What is the basis for the computation of the overtime pay; WON
longevity pay is included in the computation of overtime pay
28 Jan ’65: President of PH issued a certification of an industrial dispute between

the PNB Employees Assoc. and the PNB. It was alleged that PNB failed to comply
with its commitment of organizing a Committee on Personnel Affairs to take
charge of screening & deliberating on the promotion of employees covered by
the collective bargaining agreement.
Said date, CIR issued an order aimed at settling the dispute temporarily. It
ordered to settle the strike & for employees to return to work immediately
starting 29 Jan. it also created the Committee on Personnel Affarirs to start
functioning on 1 Feb.
PNB filed another pleading for the following cause of action:
t. PNB’s BOD approved a revision of the computation of overtime pay retroactive

as of 1 Jul ’54 & authorized a recomputation of the regular 1-hr and extra
overtime already rendered by all officers & employees of PNB. However,
in 1963, PNB withdrew said benefits without just cause & still refused to
reinstate in spite of repeated  demands.  
u. PEMA has repeatedly requested PNB that the cost of living  allowance &
longevity pay be taken into account in the computation of overtime pay.
Until now, PNB has not taken any concrete steps toward the payment of
the differential overtime & nighttime pays arising from CLA & longevity
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pay.  
PNB’s Answer: alleged causes of action were not disputes existing between the
parties; they are mere money claims hence, CIR has no jurisdiction; parties have
not stipulated under the CBA between them; premature as the pertinent CBA has
not yet expired.
As to jurisdiction of CIR: it speaks of the existence of a labor dispute between

the parties and of a strike declared by PEMA. There is E-E relationship. What
confers jurisdiction on the Industrial Court is not the form or manner of
certification by the President, but the referral to said court of the industrial
dispute between the employer and the employees.
NAWASA Ruling: For purposes of computing overtime compensation a regular

wage includes all payments which the parties have agreed shall be received
during the work week, including piece-work wages, differential payments for
working at undesirable times, such as at night or on Sundays and holidays, and
the cost of board and lodging customarily furnished the employee. The 'Regular
rate of pay also ordinarily includes incentive bonus or profit- sharing payments
made in addition to the normal basic pay and it was also held that the higher rate
for night, Sunday and holiday work is just as much as regular rate as the lower
rate for daytime work. The higher rate is merely an inducement to accept
employment at times which are not at desirable form a workman's standpoint.
However, the NAWASA case is not applicable here. To apply the NAWASA
computation would require a different formula for each and every employee,
would require reference to and continued use of individual earnings in the past,
thus multiplying the administrative difficulties of the Company.
“Regular wage or salary”. Why is a laborer or employee who works beyond the
regular hours of work entitled to extra compensation called in this enlightened
time, overtime pay? It is for the reason that he is made to work longer than what
is commensurate with his agreed compensation for the statutorily fixed or
voluntarily agreed hours of labor he is supposed to do. When he thus spends
additional time to his work, the effect upon him is multi-faceted: he puts in more
effort, physical and/or mental; he is delayed in going home to his family to enjoy
the comforts thereof; he might have no time for relaxation, amusement or
sports; he might miss important pre-arranged engagements; etc., etc.
Overtime work is actually the lengthening of hours developed to the interests of

First Exam
the employer and the requirements of his enterprise. It follows that the wage or
salary to be received must likewise be increased, and more than that, a special
additional amount must be added to serve either as encouragement or
inducement or to make up fop the things he loses which We have already
referred to. And on this score, it must always be borne in mind that wage is
indisputably intended as payment for work done or services rendered.
Thus, in order to meet the effects of uncertain economic conditions affecting

adversely the living conditions of wage earners, employers, whenever the
financial conditions of the enterprise permit, grant them what has been called
as cost-of-living allowance. In other words, instead of leaving the workers to
assume the risks of or drift by themselves amidst the cross -currents of country-
wide economic dislocation, employers try their best to help them tide over the
hardships and difficulties of the situation. Sometimes, such allowances are
voluntarily agreed upon in collective bargaining agreements. At other times, it
is imposed by the government.
Two distinctive features: First, it is evidently gratifying that the government,

in keeping with the humanitarian trend of the times, always makes every effort
to keep wages abreast with increased cost of living conditions, doing it as soon
as the necessity for it arises. However, obviously, in order not to overdo things,
except when otherwise provided, it spares from such obligation employers who
by mutual agreement with their workers are already paying what the
corresponding law provides.
In the case at bar, the cost-of-living allowance began to be granted in 1958 and
the longevity pay in 1981. In other words, they were granted by PNB upon
realizing the difficult plight of its labor force in the face of the unusual
inflationary situation in the economy of the country, which, however acute, was
nevertheless expected to improve. There was thus evident an inherently
contingent character in said allowances. They were not intended to be regular,
much less permanent additional part of the compensation of the employees and
workers. Much less were they dependent on extra or special work done or service
rendered by the corresponding recipient. Rather, they were based on the needs
of their families as the conditions of the economy warranted.
Negative. Anent longevity pay, this was not based on the daily or monthly
amount of work done or service rendered it was more of a gratuity for their
loyalty, or their having been in the bank's employment for consideration periods

First Exam
of time. It is beyond question that longevity pay cannot be included in the

computation of overtime pay for the reason that the contrary is expressly
stipulated in the collective bargaining agreement and, as should be the case, it is
settled that the terms and conditions of a collective bargaining agreement
constitute the law between the parties.
CIR could not impose upon the parties in an E-E conflict, terms & conditions
which are inconsistent with the existing law and jurisprudence.
Anent cost-of-living allowance, the same has to be examined in another

perspective. While PEMA had been always demanding for its integration into the
basic pay, it never succeeded in getting the conformity of PNB thereto, and so, all
collective bargaining agreements entered into periodically by the said parties
did not provide therefor. However, there is nothing in CA 444 that could justify
its posture that cost-of-living allowance should be added to the regular wage in
computing overtime pay. Nowhere did NAWASA refer to extra, temporary and
contingent compensation unrelated to work done or service rendered, which as
explained earlier is the very nature of cost-of- living allowance.
The basis of computation of overtime pay beyond that required by CA 444 must
be the collective bargaining agreement. It is not for the court to impose upon
the parties anything beyond what they have agreed upon which is not tainted
with illegality. On the other hand, where the parties fail to come to an
agreement, on a matter not legally required, the court abuses its discretion when
it obliges any of them to do more than what is legally obliged. In the absence of
any specific provision on the matter in a collective bargaining agreement, what
are decisive in determining the basis for the computation of overtime pay are
two very germane considerations, namely, (1) whether or not the additional pay
is for extra work done or service rendered and (2) whether or not the same is
intended to be permanent and regular, not contingent nor temporary and given
only to remedy a situation which can change any time.
Again, overtime pay is for extra effort beyond that contemplated in the
employment contract, hence when additional pay is given for any other purpose,
it is illogical to include the same in the basis for the computation of overtime
pay.

First Exam
If you take note of the nature of the … and meal allowance, it is not part of the basic
pay. 25% or 30% in holidays of the basic wage. COLA, during 1987, was not
integrated. Hindi siya pinasok as basic. Nakaseparate siya. For example, sa Davao,
dati 314 ang minimum wage tapos may COLA na 5 php. Kapag nagcompute ka ng
overtime, it’s only based on 314. Hindi siya basic wage. However, there was a wage
order which eventually said COLA should be integrated after 6 months, yung 5
pesos maiintegrate na siya sa basic. So yung basic, magiging 319 na unless there is
that condition na maiintegrate, you just stick to the basic wage. You do not include
the COLA na 25%. Pero ngayon yung ating bagong minimum wage, integrated na
yung COLA.
Caltex? What’s the issue in Caltez. Familiarize yourself with the ruling. How about
Bisig?
BISIG vs PRC
September 30, 1981
ISSUE: WON Christmas bonus & other fringe benefits are excluded in the
computation of overtime pay under the CBA between the parties
15 Apr ’66: Bisig ng Manggagawa ng Philippine Refining Co. Inc. filed with the
CFI a petition for declaratoty relief. It contended that PRC was under obligation
to include the employees’ Christmas bonus & other fringe benefits in the
computation of their overtime pay.
PRC’s Answer: the parties never intend, in their 1965 CBA, to include Christmas
bonus & other fringe benefits in the computation of the overtime pay. In fact,
the company agreed to a rate of 50%, which is much higher than the 25%
required by the 8-Hour Labor Law on the condition that in computing the
overtime pay, only the “regular base pay” would be considered.
During trial, it was established that the CBA contained a provision that the
overtime compensation of the employees was computed on the basis solely of
their basic monthly pay, i.e., excluding the employees' Christmas bonus and
other fringe benefits, and that in the negotiations which led to the execution of
the 1965 collective bargaining agreement, the matter of the proper
interpretation of the phrase "regular base pay" was discussed.
Negative. The phrase "regular base pay" is clear, unequivocal and requires no

First Exam
interpretation. It means regular basic pay and necessarily excludes money

received in different concepts such as Christmas bonus and other fringe
benefits. In the CBA, the overtime compensation was invariably based only on
the regular basic pay, exclusive of Christmas bonus and other fringe benefits.
Employers covered by CA 444 are under legal compulsion to grant their

employees overtime compensation in amounts not less than their basic pay and
the fringe benefits regularly and continuously received by them plus 25%
thereof. This does not however mean that agreements concerning overtime
compensation should always provide for a computation based on the employee's
"regular wage or salary” i.e. regular base pay plus fringe benefits regularly and
continuously received. For it is axiomatic that in multiplication, the product is
directly related to the multiplicand the multiplier, and that the multiplicand Is
inversely related to the multiplier conveniently, the same product may be
obtained despite reduction of the multiplicand provided that the multiplier is
correspondingly increased.
Conformably, there is still compliance with the above-stated ruling despite the
fact that the overtime compensation is based only on the employee's "regular
base pay" (the multiplicand) as long as the rate of 25% (the multiplier) is
increased by such amount as to produce a result (the product) which is not less
than the result to be obtained in computing 25% of the employee's "regular wage
or salary" ("regular base pay" plus fringe benefits regularly and continuously
received). In fine, the parties may agree for the payment of overtime
compensation in an amount to be determined by applying a formula other than
the statutory formula of "regular wage or qqqs plus at least twenty-five per
centum additional" provided that the result in applying the contractual formula
is not less than the result in applying said statutory formula.
In the case at bar, it is admitted that the contractual formula of “regular base pay
plus 50% thereof” yields an overtime compensation which is higher than the
result in applying the statutory formula in Nawasa case. Hence, it is valid.
Basic, regular.. that’s very easy. Let’s go to PNB vs PEMA.
PNB vs PEMA
115 SCRA 507

First Exam
REFER TO THE CASE OF PNB vs CIR
Ano’ng gusto nilang isama? So again, what’s your base? If you include
transportation allowance, is that supposed to be added as basic? Pursuant to PNB
cases, there has to be some regularity in the grant is imposed. Longevity is not
included, definitely. COLA as I told you is already included.
What’s the issue in PALEA vs PAL?
PALEA vs PAL
70 SCRA 244
ISSUE:
14 Feb ’63: PH Air Lines Employees Assoc. & PH Air Lines Supervisors Assoc.
commenced an action against PAL, praying that it be ordered to revise its
method of computing the basic daily & hourly rate of its monthly salaried
employees & to pay them their accrued sala differentials. What is sought to be
revised is PAL’s formula in computing wages:
CIR issued an order denying the union’s prayer for a modified wage formula. It
ruled, “it appears that for may years since 1952, and even previously, PAL has been
consistently and regularly determining the basic and hourly rates of monthly
salaried employees by multiplying the monthly salary by 12 months and dividing
the product by 365 days to arrive at the basic daily rate, and dividing the quotient
by 8 to compute the basic hourly rate. There has been no attempt to revise this
formula notwithstanding the various negotiations. Hence, PALSA & PALEA are

First Exam
now estopped.”
Union’s contentions: there is error to PAL’s wage formula, particularly the use
of 365 days as divisor. The use of such would necessarily include off-days
which, under the terms of CBA, were not paid days. This is so since for work
down on an off-day, an employee was paid 100% plus 25% or 100% plus 37-
1⁄2% of his regular working hour rate.
CIR ordered the reversal of its decision.
Off-days are not paid days, Precisely, off-days are rest days for the worker. He is
not required to work on such days. Note that the basis of remuneration or
compensation is actual service rendered & in the ever pervading labor spirit
aimed at humanizing the conditions of the working man. Since during his off-
days an employee is not compelled to work, he cannot, conversely, demand for
his corresponding pay. If, however, a worker works on his off-day, the laws
reward him with a premium higher than what he would receive when he
works on his regular working day.
Such being the case, the divisor in computing an employee's basic daily rate
should be the actual working days in a year. The number of off-days are not to
be counted precisely because on such off-days, an employee is not required to
work. Simple common sense dictates that should an employee opt not to work
— which he can legally do — on an off-day, and for such he gets no pay, he
would be unduly robbed of a portion of his legitimate pay if and when in
computing his basic daily and hourly rate, such off-day is deemed subsumed by
the divisor.
As to contention that NAWASA doctrine should not apply because it is a

public utility: NAWASA is also a public utility which likewise requires its
workers to work the whole year round. Moreover, the NAWASA is a
government-owned corporation & PAL is akin to it, being a government-
controlled corporation.
As to contention that union is estopped: mere innocent silence will not work
estoppel. There must also be some element of turpitude or negligence
connected with the silence by which another is misled to his injury. It is not
denied that PAL's formula of determining daily and hourly rate of pay has been
decided and adopted by it unilaterally without the knowledge and express
consent of the employees. It was only later on that the employees came to know
First Exam
of the formula's irregularity and its being violative of the CBA. PALSA
immediately proposed that PAL use the correct method of computation, which
proposal PAL chose to ignore. Clearly, the alleged long-standing silence by the
PAL employees is in truth and in fact innocent silence, which cannot place a
party in estoppel.
Further, in the interest of public policy, estoppel & laches cannot arrest the
recovery of overtime compensation. It would be contrary to the spirit of the 8-
Hour Labor Law if the workers can waive their right to extra compensation.
The present case calls for the application of the Civil Code provisions on the
prescriptive period in the filing of actions based on written contracts, not the 3-
yr prescriptive period provided in the CA 444. Union’s claim fundamentally
involves the strict compliance by PAL of the provisions on wage computation
embodied in the CBA. The 3-yr period fixed in CA 444 will apply, if the claim for
differentials for overtime work is solely based on said law & not on a CBA or
any other contract. In this case, the claim is a demandable right of the
employees by reason of their CBA. Therefore, it is anchored on a written
contract, to which the 10-yr prescriptive period of CC shall govern.
Ano baa ng tama? PALEA or PAL? Ang weird kasi pag nilakihan moa ng
denominator mo, liliit yung lalabas. Why would PAL want that? Let’s be more
accurate. Hindi mo lalakihan yung … precisely because? What’s the reason? Bakit
hindi lalakihan yung 365? What’s the more accurate one? Only the actual working
days. Kapag actual working days, Malaki ang denominator mo, lesser yung
overtime.
Yung iba kasi ng iba, nililiitan nila para compliant but it has to be accurate. Hindi
maliit or Malaki, but the actual working days in a calendar year. So, bakit ko na siya
inassign sa section niya to? Sa topic natin? Kung lalakihan ko ang denominator,
ang daily rate mo liliit. 25% of that is maliit. Pero kung liliitan moa ng
denominator, it will result to a larger daily rate in which 25% of that is Malaki din.
For purposes of sabihing compliant sila with the minimum wage law, PAL would
want to have the accurate computation. Kung ang issue dito eh differential, PAL
will use the actual working hours. Pero since the issue is overtime, gusto nila mas
maliit yung basic rate. Got me?

First Exam
What happened to Manila Railroad?
MANILA RAILROAD vs CIR

July 31, 1952
If the work performed was necessary, or that it benefited the company or that
the employee could not abandon his work at the end of his eight hour work
because there was no substitute ready to take his place and he performed
overtime services upon the order of his immediate superior, notwithstanding
the fact that there was a standing circular to the effect that before overtime work
may be performed with pay, the approval of the corresponding department head
should be secured, such overtime services are compensable inspite of the fact
that said overtime services were rendered without the prior approval of the
Department Head.
Whatever work is rendered in excess of 8 hours should be paid. After the

regulation, dapat may permission of the supervisor or manager.
Next case, Reatan vs National Rice.
REATAN vs NATIONAL RICE

4 SCRA 418
ISSUE: WON NARIC should give overtime pay to Reotan notwithstanding its
nature as a GOCC subject to the CS Law Fermin Reotan, Silvestre Reotan &
Praxedes Balane were guards-watchment in the agencies of NARIC in Naga,
Labay & Daet. Inasmuch as these agencies had each only 2 guards-watchmen,
the guards had been required by their immediate supervisors to work in 2 shifts
of 12 hours daily each, except when they were on vacation or sick leave of
absence.
The guards-watchmen made demands of payment of the corresponding

overtime compensation but were not heeded by NARIC. They filed with claims
& it was decided in their favor. Notwithstanding, NARIC persisted in its refusal
to pay said compensation. Hence, another action was filed.
NARIC’s contentions: its Pres-Manager had ordered that “except in special cases
of overtime work specifically approved by the management to be with pay, no

First Exam
payment of overtime work will be approved", for pursuant to Resolution No. 479
of its BOD, "no overtime nor meal allowance shall be allowed unless previously
approved by the General Manager and only in cases of absolute necessity.” Also, that
the period during which said plaintiffs were on leave of absence should not have
been included in the computation of the amounts due them by way of overtime
according to the decision appealed from.
Sec. 6 of CA 444 specifically provides that 'any agreement or contract between

the employer and the laborer or employee contrary to the provision of this Act
shall be null and void ab initio.’ Sec. 3 further provides that 'in all such cases the
laborers and employees shall be entitled to receive compensation for the
overtime work performed at the same rate as the regular wages or salary, plus at
least 25% additional'. Sec. 4 provides that 'no person, firm, or corporation ... shall
compel an employee or laborer to work during Sundays and legal holidays,
unless he is paid an additional sum of at least 25% of his regular remuneration."
Affirmative. Sec. 10, EO 350, Series of 1951 provides that officers and
employees of the [PRISCO] are subject to the CS Law ... refer to the fixed tenure of
office of its officers and employees who may be removed only for cause as
provided by law.” CS Law has been made applicable to NARIC by EO 399, s. 1951.
A government-owned corporation run and operated like any ordinary

corporation which may realize profits and incur losses and the jurisdiction of the
CIR in labor disputes involving government-owned corporations is recognized.
Moreover, it is a well-established doctrine that when the Government engages in
business, it abdicates part of its sovereign prerogatives and descends to the level
of a citizen, and thereby subjects itself to the laws and regulations governing the
relation of labor and management. Additional compensation for overtime,
Sundays and legal holidays' work, and for night time work, have been granted to
labor.
However, it appears that Fermin Reotan had been on LOA for 36 days & Silvestre
Reotan and Praxedes Balane had been absent for 1 day & 4 days respectively,
these absences should not be considered in computing the overtime
compensation due to them.

First Exam
We have three conditions when overtime is generally has to be approved by the

employer. If it was shown that there was no permission… upon the behest of the
manager, dapat meron pa rin.
Next case, Global vs Atienza.
GLOBAL vs ATIENZA
143 SCRA 69
ISSUE: WON Clarita Rosal is entitled to overtime pay
Feb ’70: Clarita Rosal was employed by Global Inc. as a sales clerk with a salary of
P450/mo.
11 Nov ’76: Global filed with DOLE an application for clearance to terminate the
services of Rosal for having violated company rules & regulations by incurring
repeated absences & tardiness. She was placed under preventive suspension on
16 Nov pending resolution of the application for clearance.
3 Dec: Rosal filed her opposition to the clearance application. She complained of
illegal dismissal, overtime pay & premium pay.
OIC Leogardo of DOLE lifted the preventive suspension of Rosal, finding her
suspension not warranted & reinstated her to her former position without loss
of rights & with full backwages from the time of preventive suspension up to the
date of her actual reinstatement.
28 Jun ’79: After hearings, LA granted the clearance for Rosal’s termination.
Global was ordered to pay Rosal overtime pay at the rate of 1 hr everyday starting
1 Nov ’74 to 16 Nov ’76 when she was suspended. She was also to be paid
backwages from 2 Dec ’76 to 31 May ’78.
Global’s contention: it was found that the grounds of absenteeism & tardiness
were valid causes to terminate the employment. Therefore, the preventive
suspension is likewise valid & just. Therefore, she is not entitled to backwages.
Anent overtime pay, the grant of overtime pay in favor of Rosal at the rate of 1
hour everyday starting 1 Nov ‘74 to 16 Nov ‘76 is not justified as there is nothing
in the record except her bare allegations which would show that she truly and
actually rendered said overtime work.

First Exam
Negative. It should be denied for want of sufficient factual & legal basis. The
evidence on record shows that the office hours of Rosal are from 8am-5pm, with
noon break from 12nn-1pm from Monday thru Saturday. No employee is
authorized to work after office hours, during Sundays and Holidays unless
required by a written memorandum from the General Manager. During the
period from 1 Nov ‘74 to 16 Nov ‘76, no employee of the company was ever
required to work after 5pm. Neither did the company require any employee to
work during Sundays or Holidays except on 1 Nov ‘76, on which date Rosal was
requested to work through a written memorandum signed by the General
Manager. Rosal admitted this, and that she was properly compensated for her
work on said date.
The claim of Rosal that she rendered overtime work from 1 Nov ‘74 to 16 Nov ‘76
has not been substantiated by adequate evidence. Her time records for said
period show that she had no time-in and time-out during Sundays and Holidays,
except for some time records where there were no time-outs in the afternoon,
Rosal's time records show that she regularly left the office at or a few minutes
after 5pm. The records where there were no time-outs in the afternoon were
sufficiently explained by Global's witness as due to a mechanical defect in the
office bundy clock. The same omission of time-outs was found in the records of
the other employees, but only Rosal complained.
As to issue of backwages: She is entitled Leogardo rendered his decision lifting

the preventive suspension of Rosal & ordered Global to reinstate her. However,
reinstatement had not been complied with. Neither was it appealed by Global,
therefore, the decision had become final and executory. To exempt Global from
the payment of backwages would be to give premium to the blant disregard of
orders of the Ministry of Labor. Moreover, it would be in consonance with
compassionate justice that Rosal be paid backwages during period that she was
supposed to be reinstated.
So, ito yung sinasabi kong case sa inyo kanina. Kapag ang pinaguusapan eh
minimum wage, the burden of proving is on the employer. If ang pinagusapan
natin is service incentive leave mandated by law upon the service of at least one
year, the burden of proof is on the employer. But when the issue is did you render
overtime work? The burden is now shifted to the employee. Pag walang nakitang

First Exam
evidence sa overtime, the burden is on the employee. Kasi nga hindi siya regular.
Hindi siya mandated by law.
Next case, Durabuilt.
DURABUILT vs NLRC
August 22, 1989
ISSUE: WON Bodegas is entitled to compensation during the days when
there were brownouts & machine trouble
11 Jul ’83: Reynaldo Bodegas filed an illegal dismissal complaint against

Durabuilt, a tire recapping plant.
13 Feb ’84: LA ordered reinstatement of Bodegas with full backwages from the
time he was terminated up to the time he is actually reinstated, without loss of
seniority rights and benefits accruing to him. Since Durabuilt failed to file an
appeal, decision became final. Pursuant to the judgment, a computation of
backwages, ECOLA, 13th month pay, sick & vacation leave benefits was
submitted. Amounted to P24,316.38
Durabuilt’s opposition, contentions: the computation contemplated a straight

computation of 26 working days in one month when the period covered by the
computation was intermittently interrupted due to frequent brownouts and
machine trouble and that Bodegas had only a total of 250.75 days of attendance
in 1982 due to absences.
However, LA denied the opposition. NLRC affirmed LA.
Negative. Backwages, in general, are granted on grounds of equity for earnings

which a worker or employee has lost due to his dismissal from work. The general
principle is that an employee is entitled to receive as backwages all the amounts
he may have lost starting from the date of his dismissal up to the time of his
reinstatement. Court has established a policy, fixing the amount of backwages
to a just and reasonable level without qualification or deduction. To fix the
amount of backwages without qualification/deduction simply means that the
workers are to be paid their backwages fixed as of the time of their dismissal or
strike without deduction for their earnings elsewhere during their law-off and
without qualification of their backwages as thus fixed; i.e. unqualified by any
First Exam
wage increases or other benefits that may have been received by their co-
workers who were not dismissed or did not go on strike.
The age-old rule governing the relation between labor and capital, or
management and employee of a "fair day's wage for a fair day's labor" remains as
the basic factor in determining employees' wages, and for that matter
backwages. If there is no work performed by the employee there can be no wage
or pay unless, of course, the laborer was able, willing and ready to work but was
illegally locked out, or suspended.
In the case at bar, Durabuilt conceded to the illegal dismissal of Bodegas. It is

willing to pay backwages. However, it argued that for days where no work was
required and could be done by its employees, no wages could have been earned
and, thereafter, lost by said employees to justify an award of backwages. It
claimed that on certain days, their business was not in actual operation due to
brownouts or power interruption. Hence, Bodegas should not be entitled to
backwages during these days.
Policy Instruction No. 36 provides, “Brownouts running for more than twenty
minutes may not be treated as hours worked provided that any of the following
conditions are present; a) The employees can leave their work place or go
elsewhere whether within or without the work premises; or b) The employees
can use the time effectively for their own interest.”
Where the failure of workers to work was not due to the employer's fault, the
burden of economic loss suffered by the employees should not be shifted to the
employer. Each party must bear his own loss.
Indeed, it would neither be fair nor just to allow Bodegas to recover something
he has not earned and could not have earned and to further penalize Durabuilt
over and above the losses it had suffered due to lack of raw materials and the
energy-saving programs of the government. Bodegas cannot be allowed to
enrich himself at the expense of Durabuilt. The computation of backwages
should be based on daily rather than on monthly pay schedules where, as in the
case at bar, such basis is more realistic and accurate.
Wherefore, Durabuilt is ordered to pay Bodegas his backwages from the time he
was terminated up to the time he was actually reinstated computed on the basis
of the number of days when Durabuilt's business was in actual operation. The
number of days where no work was required and could be done by Durabuilt's
First Exam
employees on account of shutdowns due to electrical power interruptions,

machine repair, and lack of raw materials are not considered hours worked for
purposes of computing the Durabuilt's obligation to Bodegas.
You must be able to distinguish this with the earlier discussion on work
interruption. If you remember we discussed the rules on compensability, may
mention dun na work interruptions can be considered compensable if the
employee was made to wait, was not able to do something productive or do
something for his personal needs. Halimbawa do you think the SC would rule the
same way fi the worker was made to wait in the premises. Yung waiting time nay
un which is not the fault of the employee must be paid.
What is important is that during the time where there was work interruptions,
pinauwi siya. So he was free to sleep. He was free to do anything that he wanted
but still he did not render any productive work. Earlier on sinabi natin, work
interruptions without the fault of the employee is compensable, if he was made to
wait. He cannot do anything personal. Are you getting my point?
_______________________
October 27 (Part I - First 36min)
So where did we end last time? So Durabuilt.
So who is assigned for the first case? What is the issue in the case of William v.
Lopez, 96 S 69? Yung ganun kasing klase, by the nature of his position, parang it is
just like a security guard, meron bang nagduduty na security guard na 8 hours?
Usually 12 hours yan sila. So pag merong recognition in practice, we take notice of
the fact that general practice is really 12 hours.
So in this case, hindi kayo makaka hard-and-fast rule when it comes to overtime.
It will depend on the evidence and in this case, inapply na naman natin yung rules
of construction when there is doubt then your interpretation will be in favor of
labor. Pero kung wala talaga tayong eividence of overtime because it is an
extraordinary benefit, when there is no permission on the part of management
First Exam
and there is that policy that before you render, you have to sign an overtime slip
and it has to be approved by your supervisor, then we do not ... kasi malay ko ba,
ako I have been working for 15 hours, but what is the basis? Next case...
William v. Lopez
96 S 69
Facts
5 May ’47: William Lines Inc., which is engaged in shipping business in the PH,
employed Eugenio Lopez as storekeeper of M/V Luzon, with monthly salary of
P122. Later, he was transferred to M/V Edward, then to M/V Victoriano, and
finally to M/V Davao.
13 Oct ’62: Lopez’s services were terminated when M/V Davao drydocked in
Cebu. He received separation pay of P1,586.
17 Mar ’64: Lopez, who was refused readmission to work by William Lines, filed
a petition, claiming salary differentials in the amount of P2,816, premium pay
for servces rendered on Sundays & holidays, plus daily overtime compensation,
with request for reinstatement.
William Lines’ contention: no cause of action, CIR had no jurisdiction. Dismissal

of Lopes was lawful because he had been paid his separation pay; that he was
not entitled to premium pay because William Lines is a public utility
corporation; that his various claims had prescribed; that Lopez never renderd
overtime service because the nature of his work was without fixed time & did
not require him to work more than 8 hrs/day.
Lopez’s contention: his main duties were to clean the storeroom & to serve food
to the passengers. Although there was no exact number of hours for either of
these duties, he estimated that 2 hours, more or less, were spent each time in
cleaning the storeroom, morning & afternoon, while 2 hours, more or less, were
also needed to serve food, which he did 3x a day. This clearly averaged 10 hours
a day.
Issue
WON Lopez is entitled to overtime pay
Held

First Exam
Affirmative. TC found that he had been working no less than 10 hours daily.
Doubts should be resolved in his favor to pursue the ends of the 8-Hour Labor
Law. But, since Sec. 7-A of the 8-Hour Labor Law allows the enforcement of an
action "within three years after the cause of action accrued, otherwise, such
action shall be forever barred", Lopez can collect only the overtime
compensation for the 2 hrs in excess of the regular 8 hrs a day which accrued
within 3 yrs immediately before the filing of the petition on 17 Mar ‘64. Similar
claims which accrued prior to the 3-yr period or before 17 Mar ‘61 have already
prescribed, and can no longer
be enforced in this action.
However, since Lopez’s services were terminated on 13 Oct ‘62, the

computation of the 2-hr daily overtime will cover the period from 17 Mar ‘61 to
13 Oct ‘62, or a period of 1 year, 6 months and 26 days, from which shall be
excluded Sundays and legal holidays based on the principle that being on board
the vessel on these days were "part and parcel of" and
"inherent" in his work.
As to illegal dismissal: negative. The dismissal was not wrongful. It is not

controverted that his employment with William Lines was without definite
period. Under RA 1052, “an employee may be dismissed by the employer
without just cause by serving at least one month advance notice to the
employee, or by giving the said employee one-half month for every year of
service of the employee, whichever is longer, a fraction of at least six months
being considered as one whole year."
The question of actual notice becomes immaterial in view of William’s

compliance with the alternative requirement – that Lopez accepted separation
pay. Since the burden of proof of illegal dismissal devolved upon Lopez himself,
his failure to discharge this burden defeats his allegation that he was illegally
dismissed.
In cases of employment, without a definite period, in a commercial. Industrial.

or agricultural establishment or enterprise, the employer or the employee may
eliminate at any time the employment with just cause; or without just cause in
the case of an employee by serving notice on the employer at least one month
in advance, or in the case of an employer, by serving such notice to the
employee at least one month in advance or onehalf month for every year of

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service of the employee, whichever is longer, a fraction of at least six months

being considered as one whole year.
As to issue on jurisdiction: disputes that arise while the employeremployee

relationship between the parties exists, or the employee seeks reinstatement
comes within the jurisdiction of CIR. When such relationship is over and the
employee does not seek reinstatement, all claims become
money claims that fall under the jurisdiction of the regular courts.
The case of PESALA v. NLRC, August 22, 1989. My favorite case. Sino ang
complainant dito? PAL ang pinakamaraming labor case. What is the issue here?
Okay, the main allegation is, it is already integrated in your monthly salary. Why
am I going to pay extra? But, what was the finding of the SC? There was a difference
of 300. Diba, kasi nag emergency COLA. Of course, very important. But then, the
allegation is, kasama na dun eh bat pa ako magbabayad? Ano ang sabi ng SC?
You take a look at the facts, yes, it might appear like a big salary, that it already
integrates the overtime, but if you make the mathematical computation, it
actually does not.
PESALA v. NLRC
August 22, 1989
Facts
1 Mar ’86: Angel Esquejo started working as a company guard & was receiving
a monthly basic salary of P1,990 plus an emergency allowance of P510. He was
required to work 12 hrs/day.
10 Dec: PAL Employees Savings & Loan Assoc. BOD approved a salary
adjustment for the complainant, increasing his monthly basic salary to P2,310
& emergency allowance of P510.
Because of his impressive performance on his assigned job, another adjustment
was approved, increasing his monthly basic salary to P2,880.
Later, several salary adjustments were made. His latest salary prior to the filing
of complaint was P3,720. During his entire period of employment, he was
required to perform overtime work without any additional compensation.
PESALA, then, refused to give P25 increase on the minimum wage rates
provided by law.

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10 Oct ’90: Esquejo filed a complaint for non-payment of overtime pay & non-
payment of the P25 statutory minimum wage increase.
12 Oct: Esquejo was suspended for 37 days for an offense he allegedly

committed sometime last Aug ’89.
Statement of facts by PESALA: manager of PESALA, Sulpicio Jomales, wrote to

Esquejo informing him that the position of a guard will be abolished & that he
will be reassigned to the position of a ledger custodian. He will now be working
8 hrs/day.
29 Aug: Esquejo was administratively charged with serious misconduct or

disobedience of the lawful orders of PESALA & gross & habitual neglect of his
duties. It was alleged that he forwarded the checks of Mr. Jimenez & Mr. dela
Banda without the signature of the Treasurer & President of
PESALA, which resulted in a delay to the embarrassment of PESALA. Also, that
before he went on his vacation, he failed to leave or surrender the keys of the
office (main and back doors), which resulted to damage, injury &
embarrassment of PESALA.
PESALA faults Esquejo when it said that there was no meeting of minds
between the parties, since the employment contract explicitly states without
any equivocation that the overtime pay for work rendered for 4 hours in excess
of the 8 hour regular working period is already included in the P1,990 basic
salary. This is very clear from the fact that the appointment states 12 hours a
day work.
Issue
WON an employee is entitled to overtime pay for work rendered in excess of 8
hrs/day, given the fact that his employment contract specifies a 12-hr workday
at a fixed monthly salary rate that is above the legal minimum wage.
Held
Affirmative. It appears that the basic salary plus emergency allowance given to
Esquejo did not actually include the overtime pay claimed by PESALA.
Following the computation, it would appear that by adding the legal minimum
monthly salary which at the time was P1,413 and the legal overtime pay

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P877.50, the total amount due the private respondent as basic salary should
have been P2,290.50. By adding the emergency cost of living allowance
(ECOLA) of P510 as provided by the employment contract, the total basic salary
plus emergency allowance should have amounted to P2,800.50. However,
PESALA admitted that it actually paid Esquejo P1,990 as basic salary plus
P510.00 emergency allowance or a total of only P2,500. Undoubtedly, Esquejo
was shortchanged in the amount of P300.50. PESALA’s own computations thus
clearly establish
that Esquejo’s claim for overtime pay is valid.
Hence, there is a difference of P209.50. As to issue on meeting of the minds: it

was alleged by PESALA that Esquejo cannot be allowed to question the said
salary arrangements for the extra 4 hrs overtime pay after the lapse of 4 yrs and
claim only now that the same is not included in the terms of the employment
contract.
There is no such agreement as to overtime pay. In fact, the contract was definite
only as to the number of hours of work to be rendered but vague as to what is
covered by the salary stipulated. Said contract appears to be in the nature of a
document identifiable as an appointment memorandum.
It cannot be said that there was a meeting of the minds between the parties, it
appearing that Esquejo considered the 4 hrs work in excess of the 8 hours as
overtime work and compensated by way of Esquejo’s monthly salary while on
the latters part, said work rendered is likewise claimed as overtime work but
yet unpaid in view of Esquejo’s being given only his basic salary.
While it is true that Esquejo received a salary rate which is higher than that the
minimum provided by law, it does not however follow that any additional
compensation due him can be offset by his salary in excess of the minimum,
especially in the absence of an express agreement to that effect. To consider
otherwise would be in disregard of the rule of nondiminution of benefits which
are above the minimum being extended to the employees. Furthermore, such
arrangement is likewise in disregard of the manner required by the law on how
overtime compensation must be determined.
PESALA contends that the agreed salary rate in the employment contract
should be deemed to cover overtime pay, otherwise serious distortions in wages
would result since a mere company guard will be receiving a salary much more

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that the salaries of other employees who are much higher in rank and position
than him in the company. This argument flimsy and undeserving of
consideration. How can paying an employee the overtime pay due him cause
serious distortions in salary rates or scales? And how can other employees be
aggrieved when they did not render any overtime service? As to issue on unjust
enrichment: since the stipulated pay did not include overtime pay, there can be
no undue enrichment in claiming what legally belongs to Esquejo.
However, records show that Esquejo absented himself from work for one day in
Aug 1989. For this unworked day, no overtime pay must be due. As to the rest
of his period of employment subject to the three year limitation rule which
dates from October 10, 1987 up to his appointment as Ledger Custodian on
December 1, 1989 after which is regular work period was already reduced to
eight hours, there being no showing that the Esquejo absented himself from
work, and he being then required to work for a period of twelve hours daily, We
therefore rule on Esquejo’s entitlement to overtime compensation for the
duration of the aforesaid period in excess of one working day.
The case of MERALCO v. MERALCO (1959), ayan, ang makabagbag damdamin na

1959 case. Hindi yung 1963 ha. What is the issue in this case? WON they are
entitled to overtime pay. Parang obiter nga lang eh. The funny thing is, obiter lang
dito yung guidelines for Compressed Work Week, but it now became the basis for
applications, future executive issuances. And this case tells us, anong ruling
muna? So parang may swapping but you have to bear in mind that this is a very
old case. After this case, are you also handling the Compressed Work Week ng
MERALCO, or another person? Okay discuss muna natin.
So as regards the issue on compressed work week, this decision tells us what are
the requirements before a compressed work week, and later on a flexible work
schedule can be considered as valid. What are these conditions?
Concept of temporary probation has been interpreted to mean 6 months. So not

longer than 6 months. Pag longer than than 6 months, aba pwede ka na ma ano for
constructive retrenchment. Sino nag lalabor relations dito? Meron na? When you
talk about retrenchment, the employer is given the right to terminate people based
on economic losses, severe financial bleeding. When you say severe financial
bleeding, you conduct a study of the financial sitution from at least 3 years. Hindi
pwedeng nalugi ka lang this year, magreretrench ka na.

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So who can be retrenched? It will be according to several criteria, but the criteria
will primarily be:
1) Performance of violation;
2) Who possesses the more preferred status; meaning, bago ka mag tanggal ng
regular, contractual muna. Bago ka mag tanggal ng regular, probationary
muna. So siya yung pinaka hari. Bago mo siya itotouch, yun munang mga
alipin ang itotouch mo.
3) Seniority; this is actually a poor criteria because sometimes you want to get
rid of the more senior ones because they are not functioning.
4) Retrenchment means there is a severe financial losses.
When you have a compressed work week for more than 6 months, example, dati 6
days a week siya, ngayon 3 days a week nalang, pwede ba yan? Yes, under the
conditions we enumerated but not more than 6 months. Kung yung tao, sanay sa
6 days a week, ginawa mong 3 days a week, tapos nilampas mo sa 6 months na
ganun, ginugutom mo na siya, that is what we call constructive retrenchment. It is
as if you are terminating him. So if it is the duration of the compressed work week,
is more than 6 months, then the company is obligated to give separation fee on the
ground of constructive retrenchment.
MERALCO v. MERALCO
May 29, 1959
Facts
Meralco Workers Union, composed of laborers & employees of Manila Electric
Company, charged said company with unfair labor practice, alleging (1) that it
discriminatorily discharged Conrado Trinidad by reason of his union activities,
and (2) that union members were refused overtime compensation enjoyed by
non-members.
LC found that Trinidad’s discharge was caused by his repeated absences

without previous permission and that the members who were denied overtime
compensation had signed a waiver in consideration of certain valuable
privileges, it dismissed the charges.
Union’s contentions: Trinidad was absent only twice. Also, since the court had
found that some workers worked overtime, it should have directed Meralco to

First Exam
make payment.
Issue
WON the laborers & employees are entitled to overtime pay
Held
Negative. Since the only issue in this case was that of unfair labor practice based
on alleged discrimination in the payment of overtime compensation, & the
court found that there had been no such discrimination, it had no alternative
but to dismiss the charge as without foundation.
If the Union believes & can prove that there has been a violation of the 8-Hour
Labor Law, what it should do is to file a charge on that specific point so that
adequate proof could be adduced for or against it. The Union cannot just
assume that the waiver of overtime compensation by drivers who preferred to
work in the motor pool was against the law, it appearing that such waiver was
to be in consideration for certain certain valuable privileges they were to enjoy,
& there is no proof that the value of those privileges did not adequately
compensate for such work.
As to Trinidad’s dismissal: it was found that previous to the two absences

without permission, Trinidad had already been absent 5 times and was warned
that should he again absent himself from work without permission, he would
be dismissed from the service. Repeated absences without permission are
something that should not be taken lightly in an enterprise, which, like Meralco,
is under obligation to furnish electric light & power 24 hrs a day to the
inhabitants of a metropolitan and industrial city like Manila, and that disregard
of warning against repetition of a series of absences amounts to gross
indiscipline which no enterprise should be compelled to tolerate.
Now, there are different Department Order through the years. Meron kang 02, 09,
meron din I think 2010. So for your information, these are some of the schemes,
compressed work week. If ... is 6 days, it can be shorter than that. Why would you
want a compressed work week? Maybe because your raw materials are not there.
Maybe because economic losses. Maybe because there is always a power
interruption. Or maybe decreased production, decreased demands for the goods.
Kung walang mag oorder ng goods mo, bakit 6 days a week ka mag ooperate. It can
be shorter than that.

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Ayun reduction of work days. So kung dati, isa lang ang day off niya, ngayon
pwede mong gawin dalawang day off. Bakit? Mahina ang negosyo.
Rotation of workers. Eto ang pinakamalupet. Kung dati 6 days a week ka, ngayon
M W F ka lang papasok. Tapos may another batch na T TH S. Rotation. Medyo
masakit yun.
Forced Leave. This is another scheme under DOLE Advisory Order NO. 02 series of
2009. Forced Leave. Yung mga meron pang leave, they can already avail of it now.
So example, si Pedro, meron pang 10 leaves tapos wala namang ginagawa because
of the reduced demand for the goods. Pwede mong sabihin sa kanya, you are
obligated to go on leave now. Ubusin mo yung leaves mo. Forced leave.
Broken-time schedule. Eto because of the power outage, pwede mong sabihin, you
reported to work from 9-12 but because of the power interruption, please come
back at 3pm. So 9-12, 3 hours. So kulang ka pa ng 5 hours, mag uumpisa siya from
3 hanggang 8 ng gabi. So that is broken. Sasabihin mo, diba attorney dapat bayaran
ako the entire time? No because you are not productive. In fact in one of your cases,
sinabi jan kapag may power outage, you are not supposed to be paid. Each party
shall bear his own loss, citing SSS case, which case is that? Ah Durabuilt.
Flexi holidays. So the employee will agree to work during Christmas, but on
December 26, magbabalik na siya. So instead of enjoying the holiday, mag sswitch
switch. Ang problema jan, you will to comply with the requirements of MERALCO
which means there is no diminution of the benefits granted to him. So if 26 siya
hindi papasok, you are still obligated to give him holiday pay for 25.
For some employers, they get away with not paying the extra. Hindi nagrereklamo
si worker. Sabihin niya okay lang sa akin mag work sa pasko basta 28 ha, kasi may
lakad ako. So switching nalang.
Familiarize yourselves with the conditions because important yun. So okay, next.
Sino na ang next?
The case of Engineering v. MOLE, Sept. 23, 1985. You have to consider the fact that
this is an old case. It seems that the DOLE paved with the non-waiver principle but
it might be abnormal conditions. So does it justify the waiver? This is an exception

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to the rule. Even if the DOLE approves, we have the well-entrenched principles in
jurisprudence that there can be no waiver of the right to overtime pay. So ang
conditions lang, inapprove ng DOLE, tapos in good faith. This is an abnormal
exception to the rule. Kaya ko siya inassign. Can you use it? I don't think so unless
you justify na the same circumstances are present.
Engineering v. MOLE
Sept. 23, 1985
Facts
Miguel Aspera, a mechanical engineer, worked for Engineering Equipment Inc.
in Saudi Arabia for nearly a year from 26 Apr ’77 to 16 Apr ’78 with a monthly
salary of P750 (P860) with a six-day work week consisting of 10 working hours.
Aspera worked 10 hrs for 335 working days. He claimed that his monthly salary
should correspond to 8 hrs of daily work & that for the additional 2 hrs daily, he
was entitled to overtime pay at $1.2162/hr or to $814.85 for 670 hrs during
335 working days.
NLRC awarded him such amount as overtime pay. Also declared void the
stipulation for a 10-hr working day, being contrary to Sec. 82 of LC.
Engineering’s contentions: Aspera was a managerial employee exercising
supervision & control over its rank-and-file employees with power to
recommend disciplinary action or their dismissal. Hence, he is not entitled to
overtime pay. Also asserted that Aspera was one of several employees who
signed written contracts with a "built-in" overtime pay in the 10-hr working
day and that their basic monthly pay was adjusted to
reflect the higher amount covering the guaranteed 2-hr extra time whether
worked or unworked. Further, the contracts were submitted to Director
Jonathan Dela Cruz & approved the same; that without such approval,
Engineering would not have stipulated the 10-hr work schedule.
Issue
WON Miguel Aspera is entitled to overtime pay
Held
Negative. Aspera had not denied that he was a managerial employee within the
meaning of Sec. 82. As such, he was not entitled to overtime pay. It appeared

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that the Acting Minister of Labor & Director Dela Cruz awarded overtime pay &
disregarded a contract that he himself had previously sealed with his
imprimatur. Because of that approval, Engineering acted in good faith in
enforcing the contract. Hence, Dela Cruz committed grave abuse of discretion.
Next case. The case of Mercury Drug v. Dayao, September 30, 1982. Pag Sundays
and even holidays, magkano dapat? Sunday, presumably it is a restday, hindi
porket Sunday may extra na. So if it is the rest day, how much? What will be the
extra cost? 30%. So if it is a special holiday, it is also 30%. What is the reason why
you are charged extra 30%?
Again, the Mercury Drug test is a reiteration of the rule that there can be no waiver
of overtime pay or even night shift differential because of the rationale for this
benefits is founded on public policy. There can be no valid waiver, Engineering
case, it is an exception under extraordinary circumstances.
Mercury Drug v. Dayao

September 30, 1982
Facts
17 Mar ’64: Nardo Dayao & 70 others filed a complaint against Mercury Drug Co.
for payment of their unpaid back wages for work done on Sundays & legal
holidays plus 25% additional compensation from date of employment up to 30
Jun ‘62; 2) payment of extra compensation on work done at night; 3)
reinstatement of Januario Referente & Oscar Echalar.
Mercury’s contentions: they have no cause of action against Mariano Que

because their employer Mercury Drug Co. is separate and distinct from its
incorporators stockholders. Also that no court has the power to set wages, rates
of pay, hours of employment, or other conditions of employment to the extent
of disregarding an agreement thereon between the Mercury & Nardo, and of
fixing night differential wages. Also that they were fully paid for services
rendered under their contracts.
Issue
WON Nardo et. al. are entitled to additional compensation
Held

First Exam
Affirmative. Witnesses for Nardo et.al. declared they worked on regular days
and on every other Sunday and also during all holidays; that for services
rendered on Sundays and holidays they were not paid for the first 4 hours and
what they only received was the overtime compensation corresponding to the
number of hours after or in excess of the first four hours; and that such
payment is being indicated in the overtime pay for work done in excess of eight
hours on regular working days. It is also claimed that their nighttime services
could well be seen on their respective daily time records.
Moreover, Mercury did not deny that Nardo et.al. rendered nighttime work. In
fact, no additional evidence was necessary to prove that they were entitled to
additional compensation for whether or not they were entitled to the same is a
question of law which the respondent court answered correctly. The "waiver
rule" is not applicable in the case at bar. Additional compensation for nighttime
work is founded on public policy, hence the same cannot be waived.
Mercury’s contention that its employees fully understood what they signed
when they entered into the contracts of employment and that they should be
bound by their voluntary commitments is obsolete in this time and age.
Mercury Drug Co., Inc., maintains a chain of drugstores that are open every day
of the week and, for some stores, up to very late at night because of the nature
of the pharmaceutical retail business. The respondents knew that they had to
work Sundays and holidays and at night, not as exceptions to the rule but as
part of the regular course of employment. Presented with contracts setting
their compensation on an annual basis with an express waiver of extra
compensation for work on Sundays and holidays, the workers did not have
much choice. The private respondents were at a disadvantage insofar as the
contractual relationship was concerned.
As to the contracts: the contracts signed by Nardo et.al. are on standard form.
These contracts were not declared by the respondent court null and void in
their entirety. It merely ruled that any agreement in a contract of employment
which would exclude the 25% additional compensation for work done during
Sundays and holidays is null and void as mandated by law.
As to contention that the 25% additional compensation had already been

included in their monthly salaries: merely based on the testimony of its lone
witness, Jacinto Concepcion. On the other hand, Nardo et. al. presented

First Exam
evidence through the testimonies of Nardo Dayao, Ernesto Talampas, and

Josias Federico who are themselves among the employees who filed the case for
unfair labor practice.
September 27, 2017 (Part II) – Peroy
f.1. Undertime v. Overtime
Art. 88. Undertime not offset by overtime. Undertime work on any particular
day shall not be offset by overtime work on any other day. Permission given to
the employee to go on leave on some other day of the week shall not exempt the
employer from paying the additional compensation required in this Chapter.
Example:
4 hours ka lang yesterday, short ka. Bawal yung today 12 hours ka (8 today +
yung kulang mo na 4 hours yesterday). That is not allowed.
Why do you think it is not allowed?

Main reason for having OT pay is because an employee is only supposed to be
productive for only 8 hours. When you make him work more than that, you’re
supposed to give him extra. How much? 25%.
Rate: 25%
What will you do now with the half day [4 hours yesterday based on the
example]?
Deducted from the leave.
What if he does not have a leave anymore?

Salary deduction.
Example 2:
Half day ka ngayon, kung may leave credits ka, kukunin natin. Buo yung sweldo
mo because we deducted your half-day absence to your leave. Kung ang leave
balance mo 5 days, magiging 4 ½ days nalang.
Example 3:

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Kung walang leave, 4 hours lang yung sweldo mo today. [It is deducted from your
salary for the day]
Example 4:
“E ma’am mag o-OT ako the next day, so offset nalang.”
Hindi, you get the 8-hour pay + 25% for the next 4 hours of OT.
Cannot be offset because lugi ka [employer], nawala yung plus 25% mo. “E ma’am
binawasan sya”, oo may plus 25% ka naman dito.
NWSA vs. NWSA (1964)
ISSUE: (1) WON the undertime of an employee should be set off with his
overtime, (2) WON the employees are “managerial employees” & therefore, not
entitled to the benefits of CA 444
National Waterworks & Sewerage Authority is a GOCC created under RA 1383
while NWSA Consolidated Unions are various labor organizations composed of
laborers & employees of NAWASA.
5 Dec ’57: CIR conducted a hearing on the controversy then existing between
NAWASA & Unions as to the implementation of the 40-Hour Week Law,
alleged violations of CBA concerning “distress pay”, minimum wage of P5.25,
additional compensation for night work, wage increase. They also included a
new demand for overtime pay in favor of Jesus Centeno, Cesar Cabrera,
Feliciano Duiguan, Cecilio Remotigue & others receiving P4,200/annum or
more.
(1) A worker is entitled to overtime pay only for work in actual service beyond
8 hrs. If a worker should incur in undertime during his regular daily work, should
said undertime be deducted in computing his overtime work?
Negative. The method used by NAWASA in offsetting the overtime with the
undertime and at the same time charging said undertime to the accrued leave
of the employee is unfair because then, the employee is made to pay twice for
his undertime because his leave is reduced to that extent while he was made to
pay for it with work beyond the regular working hours. The proper method
should be to deduct the undertime from the accrued leave but pay the
employee the overtime to which he is entitled. This method also removes the
irregular schedule that would result if the overtime should be set off against

First Exam
the undertime for that would place the schedule for working hours dependent
on the employee.
(2) One of the distinguishing characteristics of a managerial employee is that

he is not subject to the rigid observance of regular office hours. The true worth
of his service does not depend so much on the time he spends in office but more
on the results he accomplishes. In fact, he is free to go out of office anytime.
Negative. The respondents here are holding a position of responsibility. One of

them is the Secretary of the Board of Directors. Another is the private secretary
of the general manager. Another is a public relations officer, and many other
chiefs of divisions or sections and others are supervisors and overseers.
However, their primary duties do not bear any direct relation with the
management of the NAWASA, nor do they participate in the formulation of its
policies nor in the hiring and firing of its employees. The chiefs of divisions and
sections are given ready policies to execute and standard practices to observe
for their execution. Hence, it concludes, they have little freedom of action, as
their main function is merely to carry out the company's orders, plans and
policies.
As a matter of fact, they are required to observe working hours and record their
time work and are not free to come and go to their offices, nor move about at
their own discretion. They do not, therefore, come within the category of
"managerial employees" within the meaning of the law.
As to contention that daiy wage should be computed exclusively on the

basic wage without including the automatic increase of 25% corresponding
to Sunday differential: RA 1880 does not intend to raise the wages of the
employees over what they are actually receiving. Rather, its purpose is to limit
the working days in a week to five days, or to 40 hours without however
permitting any reduction in the weekly or daily wage of the compensation
which was previously received.
For purposes of computing overtime compensation, a regular wage includes all

payments which the parties have agreed shall be received during the work
week, including piece work wages, differential payments for working at
undesirable times, such as at night or on Sundays and holidays, and the cost of
board and lodging customarily furnished the employee. The higher rate for

First Exam
night, Sunday and holiday work is just as much a regular rate as the lower rate
for daytime work. The higher rate is merely an inducement to accept
employment at times which are not as desirable from a workman's standpoint.
Comments:
Double whammy diba, binawas mo na nga sa leave nya,di mo pa binigyan ng OT
pay.
Of course, citing the principle that UT cannot be offset with OT. This case also
tells us na ibawas mo nalang sa leave.
Sto. Domingo v. Phil Rock

NLRC Case, June 30, 1980
The proper method should be to deduct the undertime hours from the accrued
leave but to pay the employee the overtime compensation to which he is
entitled. Where the employee has exhausted his leave credits, his undertime
hours may simply be deducted from his day’s wage,, but he should still be paid
his overtime compensation for work in excess of 8 hours a day.
f.2. Emergency Overtime Work
Art. 89. Emergency overtime work. Any employee may be required by the
employer to perform overtime work in any of the following cases:
1. When the country is at war or when any other national or local emergency
has been declared by the National Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or property or in case of imminent

danger to public safety due to an actual or impending emergency in the
locality caused by serious accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
3. When there is urgent work to be performed on machines, installations, or

equipment, in order to avoid serious loss or damage to the employer or some
other cause of similar nature;

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4. When the work is necessary to prevent loss or damage to perishable goods;

and
5. Where the completion or continuation of the work started before the eighth
hour is necessary to prevent serious obstruction or prejudice to the business
or operations of the employer.
Any employee required to render overtime work under this Article shall be paid
the additional compensation required in this Chapter.
Something you have to bear in mind:

General Rule:
• An employee cannot be compelled to render overtime
• You cannot compel an employee to work during his rest day, because after
6 days of work, he is entitled to 24 consecutive hours of rest.
Exception (when there can be emergency OT)

1. When the country is at war or when any other national or local emergency
has been declared by the National Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or property or in case of imminent
danger to public safety due to an actual or impending emergency in the
locality caused by serious accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
3. When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to the employer or some
other cause of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
and
5. Where the completion or continuation of the work started before the eighth
hour is necessary to prevent serious obstruction or prejudice to the business
or operations of the employer.
6. When overtime work is necessary to avail of favorable weather or
environmental conditions, where performance or quality of work is
dependent thereon. [from the IRR]
Remember these exceptions.

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Take note that we go by the principle that the spring cannot rise above its source
[referring to exception number 6]. But here you have a IRR provision which adds
to the enumeration.
f.3 Computation
Art. 90. Computation of additional compensation. For purposes of computing

overtime and other additional remuneration as required by this Chapter, the
"regular wage" of an employee shall include the cash wage only, without
deduction on account of facilities provided by the employer.
Caltex v. CIR
Issue:
What is the base in computing for OT pay.
Held:
Based on regular pay. Excluding additional or extra pay such as those rendered
in rest days and night differentials, cost of living allowance, and payments for
sick leaves.
In the computation of OT pay, the premium pay for work done on Sundays,
holidays, night, and other fringe benefits which are occasionally and not
regularly received by all employees should not be added to the basic pay.
[I can’t find this case online]
The question here is what is your base.
Note: Formula
Percentage = Base * %
Example:
Assuming the salary is P1,600 a day.
Assuming he worked for 2 hours OT.
Daily Rate 1,600

Divide: work hours per day 8
Rate per hour [Base] 200

First Exam
Computation of Overtime Rate:

Rate per hour 200
Multiply: OT rate 25%
Additional salary per hour of OT 50
Multiply: Number of OT hours 2
Total Additional for OT 100
In the case of Caltex v. CIR, the issue is what is the base. In our example, 1,600/8
hours = 200 pesos. 200 is your base for the 25%. In the case of Caltex, what was
the allegation? What did the SC say? Do we add the fringe benefits, etc. in
computing? No.
Concept of “basic”. But then last time, if there is OT work, and on top of that there
is night shift, then the new base would be the OT na. Dun ka na mag 10%, di yung
ordinary rate of P200 because double na. Pinag-OT mo na ako, pinag-night shift
mo pa ako. So the new basic now is P200 + P50.
First, you get the first 8 hours. Then, you compute the excess.
g. Validity of the compressed work week
[already discussed previously]
4. Weekly Rest Periods
[2nd exam coverage]
________________
"Reason is the natural order of truth;

but imagination is the organ of meaning."
- C. S. Lewis


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First Exam

AMPP LABOR STANDARDS Based on the Lectures of

July 14, 2017 | Peroy

PART ONE: INTRODUCTION

PART TWO: GENERAL PROVISIONS – 3, 4, 6

Art. III Social Justice and Human Rights

It shall guarantee the rights of all workers to self-organization, collective

Alcomendras | Manligoy | Pahayahay | Peroy 1

Q: So, you’re basically saying that the LC is a reiteration of the constitution?

Q: Is the LC provision the same as the Constitutional provision?

Q: Which is the more extensive discussion of the rights of the employees?

Q: Does the LC mention the right to collective bargaining (CB), self-organization,

Alcomendras | Manligoy | Pahayahay | Peroy 2

B. Construction in favor of labor – 4

Q: What is the rule with respect to construction?

Arco Metal v. Samahan

Respondent protested the prorated scheme, claiming that on several occasions

Alcomendras | Manligoy | Pahayahay | Peroy 3

Q: What provision of the LC was being interpreted in this case?

Q: What were the subject matters of the complaint?

Alcomendras | Manligoy | Pahayahay | Peroy 4

Q: Ang sinabi nya, basta may vagueness as to what benefits?

Q: Bakit may vagueness?

Alcomendras | Manligoy | Pahayahay | Peroy 5

Which brings me to my point earlier, we do not limit ourselves to applying Art. 4

Duty Free v. Tria

Consequently, the Discipline Committee requested respondent to submit a written

Alcomendras | Manligoy | Pahayahay | Peroy 6

issued a Joint Resolution holding respondent GUILTY OF DISHONESTY for (his)

On September 18, 1998, Petitioner sent respondent a memorandum terminating

Aggrieved, respondent filed a Complaint against Petitioner for Illegal Dismissal

Alcomendras | Manligoy | Pahayahay | Peroy 7

Q: What was the ground for the dismissal?

Q: What was the defense of the worker?

Q: How did the SC apply Art. 4 in this case?

Q: What was the ruling of the SC that there was no employer-employee

Alcomendras | Manligoy | Pahayahay | Peroy 8

A: Principle of Estoppel was applied here.

PART THREE: PRE-EMPLOYMENT

A. Recruitment and placement of workers

Q: What is the state policy on the recruitment and placement provide?

Art. 12. Statement of objectives. It is the policy of the State:

3. To facilitate a free choice of available employment by persons seeking work in

4. To facilitate and regulate the movement of workers in conformity with the

5. To regulate the employment of aliens, including the establishment of a

6. To strengthen the network of public employment offices and rationalize the

7. To insure careful selection of Filipino workers for overseas employment in order

Alcomendras | Manligoy | Pahayahay | Peroy 9

Q: What is full employment? What do you mean by that?

Q: Security of tenure, which means?

Another aspect of course if underemployment. A person may be employed but,

A: There is an apparent mismatch there when we talk about underemployment,

In other words, full employment is not the same as security of tenure.

Alcomendras | Manligoy | Pahayahay | Peroy 10

Q: What is recruitment and placement?

Art. 13. Definitions.

Alcomendras | Manligoy | Pahayahay | Peroy 11

1. "Worker" means any member of the labor force, whether employed or

2. "Recruitment and placement" refers to any act of canvassing, enlisting,

3. "Private fee-charging employment agency" means any person or entity

4. "License" means a document issued by the Department of Labor

5. "Private recruitment entity" means any person or association engaged in

6. "Authority" means a document issued by the Department of Labor