Labor Law Review Midterm PDF

Labor Law Review
Atty. Ronic Treptor

GENERAL PRINCIPLES AND
CONCEPTS
General Principles and Concepts
• General Concepts
• Constitutional Provisions
• Civil Code Provisions on Labor
• Social Justice
• Construction in Favor of Labor
• Labor Code Preliminaries
• Why does the State regulate labor?
• Because an absolute free market capitalism will lead to exploitation of the
work force. Thus as a policy of the State, it uses its police power to regulate
the use of labor by capital.
General Concepts
• Definition of Labor
• Exertion by human beings of physical or mental efforts, or both, towards the
production of goods and services. (as an act)
• That sector or group in a society, which derives its livelihood chiefly from
rendition of work or services in exchange for compensation under managerial
direction (Mendoza, 2001). (as a sector of society)
• Labor law
• The law governing the rights and duties of the employer and employees with
respect to:
• The terms and conditions of employment and
• Labor disputes arising from collective bargaining (CB) respecting such terms and
conditions.
• Labor Standards Law
• Labor standards refers to the minimum requirements prescribed by existing
laws, rules and regulations relating to wages, hours of work, cost of living
allowance and other monetary and welfare benefits, including occupational,
safety and health standards (BatongBuhay Gold Mines, Inc., vs. Dela Serna, et.
al., G.R. No. 86963, August 6, 1999)They are covered by Books I to IV of the
Labor Code.
• BOOK I – Pre-Employment
• BOOK II – Human Resources Development Program
• BOOK III – Conditions of Employment
• BOOK IV – Health, Safety and Social Welfare
• Labor Relations Law
• Labor relations laws are the laws, rules and regulations which govern the
relationship between employees and their employers, promote the right of
the employees to self-organization and collective bargaining, penalize unfair
labor practice, and provide modes for the settlement of labor disputes such
as conciliation, mediation, grievance machinery, voluntary arbitration and
compulsory arbitration. They are covered by Books V – VII of the Labor Code.
• BOOK V – Labor Relations
• BOOK VI – Post Employment
• BOOK VII – Transitory Final Provisions
• Social Legislations
• Social legislations are laws, rules, and regulations that promote welfare of all
sectors of society. Social Legislation includes laws that provide particular kinds
of protection or benefits to the society, in furtherance of social justice. Not all
social legislations are labor laws. Labor laws directly affect employment they
directly govern effects of employment. All labor laws are social legislations.
But not all social legislations are labor laws.
• NOTE: all labor laws are social legislations, but not all social legislations are considered
labor legislations. Social legislation is broader in scope and will include social security
laws and agrarian reform laws.
Constitutional Provisions
Sec. 3, Art. XIII – The State shall afford full protection to labor, local and overseas, organized
and unorganized, and promote full employment and equality of employment opportunities
for all.
It shall guarantee the rights of all workers to self‐organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions of work, and a
living wage. They shall also participate in policy and decision‐making processes affecting
their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and growth.
• Other constitutional provisions
• Sec. 9, Art. II
• Sec. 10, Art. II
• Sec. 1, Art. III
• Sec. 1, Art. XIII
• Sec. 9, Art. II
• State shall promote full employment, a rising standard of living,…

• Promote social justice in all phases of national development
• NOTE: Definition of Social Justice (Social justice is “neither communism,
nor despotism, nor atomism, nor anarchy,” but the humanization of laws
and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments
on the time-honored principles of salus populi est suprema lex.”
• State values dignity of every human person and guarantees full respect for
human rights
• NOTE Universal Declaration on Human Rights
• Article 23.
(1) Everyone has the right to work, to free choice of employment, to just and favourable
conditions of work and to protection against unemployment.
(2) Everyone, without any discrimination, has the right to equal pay for equal work.
(3) Everyone who works has the right to just and favourable remuneration ensuring for
himself and his family an existence worthy of human dignity, and supplemented, if necessary,
by other means of social protection.
(4) Everyone has the right to form and to join trade unions for the protection of his interests.
• State values dignity of every human person and guarantees full respect for
human rights
• NOTE Universal Declaration on Human Rights
• Article 24. Everyone has the right to rest and leisure, including reasonable limitation of
working hours and periodic holidays with pay.
• Article 4. No one shall be held in slavery or servitude; slavery and the slave trade shall be
prohibited in all their forms.
• Article 20.
(1) Everyone has the right to freedom of peaceful assembly and association.
(2) No one may be compelled to belong to an association
• Vital role of youth in nation building

• Role of women in nation-building… ensure fundamental equality before the
law

• State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare
• Recognize role of private sector… encourage private enterprise

• No person shall be deprived of property without due process of law… equal
protection clause
• NOTE: employment, profession, trade or calling is a property right
• Ones employment, profession, trade or calling is a property right, and the
wrongful interference therewith is an actionable wrong. The right is
considered to be property within the protection of a constitutional guaranty
of due process of law. Clearly then, when one is arbitrarily and unjustly
deprived of his job or means of livelihood, the action instituted to contest the
legality of ones dismissal from employment constitutes, in essence, an action
predicated upon an injury to the rights of the plaintiff, as contemplated under
Art. 1146 of the New Civil Code, which must be brought within four years.
(Callanta v. Carnation Philippines, 1986; reiterated in recent decisions)
• NOTE: money claims involving Eer-Eee relations must be brought within three years from
accrual of cause of action.
• No law shall be passed abridging… the right of the people to peaceably
assemble and petition the government for redress of grievances.

• The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to
law shall not be abridged.
• NOTE: persons employed in the public sector are allowed to join labor organizations or
workers associations. (but no right to strike)
The Court can concede hypothetically that the protest rally and gathering in
question did not involve some specific material demand. But then the
absence of such economic-related demand, even if true, did not, under the
premises, make such mass action less of a prohibited concerted activity. For,
as articulated earlier, any collective activity undertaken by government
employees with the intent of effecting work stoppage or service disruption
in order to realize their demands or force concessions, economic or
otherwise, is a prohibited concerted mass action and doubtless actionable
administratively. xxx“[i]n the absence of statute, public employees do not
have the right to engage in concerted work stoppages for any purpose
(Government Service Insurance System vs. Kapisanan ng mgaManggagawasa
GSIS, G.R. No. 170132, December 6, 2006)
The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
• The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self‐reliance.

• The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such
facilities and opportunities that will enhance their welfare and enable them
to realize their full potential in the service of the nation.
• Protection to labor clause: Sec. 3, Art. XIII of 1987 Consti
• Afford full protection to labor
• Promote full employment
• Ensure equal employment opportunities for all
• Assure the rights of workers to
• Self-organization
• Security of tenure
• Just and humane conditions of work
• Participate in policy and decision making process affecting their right and benefits
• Regulate the relations between workers and employers
• Rights under Sec. 3, Art. XIII
• Under Labor Standards
• Security of tenure
• Living wage
• Share in the fruits of production
• Humane conditions of work
• Under Labor Relations
• Self-organization
• Collective bargaining and negotiations
• Peaceful concerted activities, including the right to strike
• Participation in policy and decision-making processes affecting their rights and
benefits
Civil Code provision on labor
• Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the common good. Therefore, such contracts
are subject to the special laws on labor unions, collective bargaining,
strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
• Art. 1701. Neither capital nor labor shall act oppressively against the
other, or impair the interest or convenience of the public.
• NOTE: known as the “principle of non-oppression”
• The protection to labor clause in the Constitution is not designed to oppress or destroy
capital.
• Art. 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the
laborer.
• Art. 1703. No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid.
Social Justice
• NOTE: Definition of Social Justice (Social justice is “neither communism,
nor despotism, nor atomism, nor anarchy,” but the humanization of laws
and the equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure
economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally, through
the adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all governments
on the time-honored principles of salus populi est suprema lex.”
Social Justice
• Note that the promotion of social justice does not imply oppression
of capital.
• Limitation to invoking the principle:
1. Social justice does not champion division of property or equality of economic status
(Guido v. Rural Progress Adm, L-2089, October 31, 1949). It should not tolerate
usurpation of property, public or private.
2. May only protect the laborers who come to court with clean hands (Phil. Long
Distance Telephone Co. v. NLRC, G.R. No. 80609, August 23, 1988) and their motives
blameless (Gustilo v. Wyeth Phils., G.R. No. 149629, October 4, 2004).
3. Never result in an injustice or oppression of the employer (Phil. Geothermal Inc. v.
NLRC, G.R. No. 106370, September 8, 1994).
4. If it is used to shield wrongdoings, it cannot be permitted to be the refuge of
scoundrels (PNCC v. NLRC, G.R. No. 83320, Feb. 9, 1989).
Social Justice
• Note: Political Law; Principle of Balancing of Interest (equal protection
clause; constitutional rights colliding)
• Rule in favor of labor. The State is bound under the Constitution to afford full
protection to Labor and when conflicting interests collide and they are to be
weighed on the scales of social justice, the law should accord more sympathy
and compassion to the less privileged workingman (Fuentes v. NLRC, G.R. No.
110017, January 2, 1997).
• BUT STILL, it cannot be used to shield wrongdoing.

Construction in Favor of Labor
• Art. 4. (LC) 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.
• NOTE also Art. 1702 of the Civil Code.
• The construction in favor of labor is not limited to the interpretation

of labor laws and its implementing rules. It extends to doubts arising
from evidence and interpretations of agreements i.e. employment
contracts or company policies.
Construction in Favor of Labor
• Note that the principle of interpretation in favor of labor is only
applicable if there is doubt.
• If the provision is clear, it must be applied according to its express

terms. (Meralco v. NLRC, GR No. 78763, July 12, 1989).
Labor Code Preliminaries
• Declaration of basic policy (Art. 3.)
• The State shall:
1. Afford full protection to labor;
2. Promote full employment;
3. Ensure equal work opportunities regardless of sex, race, or
creed;
4. Regulate the relations between workers and Er; and
5. Assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work
• BUT NOTE: Protection to labor should not equate to oppression of
capital
• The law recognizes management rights. The Eer has the right to:
• Conduct business
• Prescribe rules
• Select and hire Eees
• Transfer or discharge Eees
• Discipline of Eees
• Return of investment and expansion of business
• Concept of Management Prerogatives
• Under the doctrine of management prerogative, every employer has the
inherent right to regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments, working
methods, the time, place and manner of work, work supervision, transfer of
employees, lay-off of workers, and discipline, dismissal, and recall of
employees (Rural Bank of Cantilan. v. Julve, GR No. 169750, February 27,
2007).
• Management prerogatives are subject to limitations provided by:
• Law
• Contract or CBA
• General principles of fair play and justice
(Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7, 2004).

• Applicability of the Labor Code – the Labor Code applies to all workers whether
agricultural or non-agricultural
• XPN:
1. Government employees
2. Employees of government owned and controlled corporations created by special
or original charter
3. Foreign governments
4. International agencies
• NOTE: International organizations and intergovernmental bodies are not covered by the Philippines Labor Laws.
The remedy of the aggrieved employee is to file a complaint before the Department of Foreign Affairs.
5. Corporate officers/ intra-corporate disputes which fall under P.D. 902-A and now
fall under the jurisdiction of the regular courts pursuant to the Securities Regulation Code.
6. Local water district except where NLRC’s jurisdiction is invoked.
7. As may otherwise be provided by the LC.
• Rule on GOCCs
• If created by special or original charter – Labor Code does not apply to its
employees (Civil Service Law will govern)
• If created under the Corporation Code – Labor Code applies.

• Rule on Corporate officers
Section 25 of the Corporation Code plainly states that the corporate officers are
the President, Secretary, Treasurer and such other officers as may be provided
for in the By-Laws. Whoever are the corporate officers enumerated in the by-
laws are the exclusive Officers of the corporation and the Board has no power
to create other Offices without amending first the corporate By-laws.(Matling
Industrial Corporation vs. Coros, October 13, 2010)
• Corporate officers: those enumerated in the Corporation Code or provided in

the by-laws.
• Note: Prudential Bank and Trust Company v. Reyes, 2001
• Corporate officer who started as a rank and file employee was terminated. She
filed an action for illegal dismissal before the labor arbiter. The Bank questioned
the jurisdiction of the labor arbiter, considering that the party concerned is a
corporate officer. The Bank argues that it is the SEC (now RTC) and not the NLRC
who has jurisdiction.
• Held: Labor Arbiter has jurisdiction. It has been stated that the primary standard
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. Additionally, an employee is regular because of the
nature of work and the length of service, not because of the mode or even the
reason for hiring them.
RECRUITMENT AND
PLACEMENT
Recruitment and Placement
• General Concepts
• Regulation of Recruitment and Placement Activities
• Illegal Recruitment
General Concepts
RECRUITMENT AND PLACEMENT
General Concepts
• Recruitment and Placement (Art. 13[b])
• 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.
• NOTE: “Provided, That any person…” creates a presumption under the law
and does not provide for an element of recruitment and placement.
General Concepts
• Private fee-charging employment agency (Art. 13 [c])
• 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.
• Private recruitment entity (Art. 13 [e])

• 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.
General Concepts
• License (Art. 13 [d])
• means a document issued by the Department of Labor authorizing a person
or entity to operate a private employment agency.
• Authority (Art. 13 [f])

• 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.
General Concepts
• A license is given to a Private fee-charging employment agency.
• An authority is given to a Private recruitment agency.

Regulation of Recruitment and
Placement Activities
Regulation of Recruitment and Placement
Activities
• Entities authorized to engage in recruitment:
1. Public employment offices
2. Private employment agencies (fee-charging) [issued a license]
3. Private recruitment entities [issued an authority]
4. Shipping or manning agents or representatives
5. The POEA
6. Construction contractors if authorized by the DOLE and Construction
Industry Authority
7. Members of the diplomatic corps (but hiring must be processed through
POEA)
8. Other persons or entities as may be authorized by the SOLE
9. Name hires
Activities
• Name hires
• Individual workers who are able to secure contracts for overseas employment
opportunities with employers without the assistance or participation of any
agency.
• NOTE: Name hires shall pass through the POEA for processing purposes and
should be registered under POEA for protection. (after they have acquired
employment)
Activities
• Overseas Employment (Art. 13[h])
• means employment of a worker outside the Philippines.
• Seaman (Art. 13[g])

• means any person employed in a vessel engaged in maritime navigation.
• Emigrant (Art. 13[i])

• 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.
Activities
• Philippine Overseas and Employment Administration (POEA)
• Principal functions:
1. Protection of the right of Filipino workers to fair and equitable employment practices.
2. Regulation of private sector participation in the recruitment and overseas placement
of workers by setting up a licensing and registration system.
3. Deployment of Filipino workers through Government to Government hiring.
4. Formulation, implementation, and monitoring of overseas employment of Filipino
workers taking into consideration their welfare and domestic manpower requirements.
5. Shall inform migrant workers not only of their rights as workers but also of their rights as
human beings, instruct and guide the workers how to assert their rights and provide the
available mechanism to redress violation of their rights.
6. Implementation, in partnership with other law-enforcement agencies, of an intensified
program against illegal recruitment activities (Sec. 14, R.A. 10022).
Activities
• The POEA may at any time terminate or impose a ban on employment
of migrant workers, to do so, in consultation with the DFA based on
the following grounds:
1. In pursuit of the national interest; or
2. When public welfare so requires (Sec. 4, R.A. 10022)
• EX: Somalia, Afghanistan, Sudan…

Activities
• Deployment of workers shall be allowed by the POEA only:
• Where the Philippines has concluded bilateral labor agreements or
arrangements;
• When an accommodating state observes and/or complies with the
international laws and standards for migrant workers;
• Where there is a guarantee from the accommodating state to protect the
rights of Filipino migrant workers.
Activities
• The following are recognized as guarantee on the part of the receiving
country for the protection of the rights of overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of workers,
including migrant workers;
(b) It is a signatory to and/or a ratifier of multilateral conventions,
declarations or resolutions relating to the protection of workers, including
migrant workers; and
(c) It has concluded a bilateral agreement or arrangement with the
government on the protection of the rights of overseas Filipino Workers.
• NOTE: In the absence of a clear showing that any of the guarantees exists in
the country of destination of the migrant workers, no permit for deployment
shall be issued by the POEA.
Activities
• Adjudicatory functions of POEA:
a. Administrative cases involving violations of licensing rules and regulations
and registration of recruitment and employment agencies or entities.
b. Disciplinary action cases and other special cases which are administrative in
character involving employers, principals, contracting partners and Filipino
migrants (RA 8042, IRR, Rule X, Sec. 6).
• POEA has the power to:

• Suspend or cancel licenses
• Order the refund or reimbursement of illegally collected fees
Activities
• Art. 22. Mandatory remittance of foreign exchange earnings. It shall
be mandatory for all Filipino workers abroad to remit a portion of
their foreign exchange earnings to their families, dependents, and/or
beneficiaries in the country in accordance with rules and regulations
prescribed by the Secretary of Labor.
Activities
• SECTION 2 (Rule XIII, Book I, IRR of LC). Obligation to remit. — It shall
be mandatory for a worker or seaman to remit regularly a portion of
his foreign exchange earnings abroad to his beneficiary, through the
Philippine banking system. This obligation shall be stipulated in the
following documents:
a) Contract of employment and/or service between foreign
based employer and a worker;
b) Affidavit of undertaking whereby a worker obligates himself to
remit a portion of his earnings to his beneficiaries; and
c) Application for a license or authority to recruit workers.
Activities
• Amount to be remitted: (E.O. 857, as amended)
1. Seamen and mariners – 80% of the basic salary
2. Construction companies and their workers – 70%
3. Professional workers (doctors, nurses, teachers) whose employment
contract provide for free board and lodging – 70%
4. Professionals without free board and lodging – 50%
5. Domestic and other service workers – 50%
6. All other workers – 50%
Activities
• Failure to remit:
• Worker shall be suspended or excluded from the list of eligible workers for
overseas employment. Subsequent violations shall warrant his repatriation.
• Employers who fail to comply shall be excluded from the overseas
employment program.
• Private employment agencies or entities shall face cancellation or revocation
of their licenses or authority to recruit, without prejudice to other liabilities
under existing laws and regulations.
Activities
• Exception to mandatory remittance:
1. The worker’s immediate family members, beneficiaries and dependents are
residing with him abroad
2. Immigrants and Filipino professionals and employees working with the UN
agencies or specialized bodies
3. Filipino servicemen working in U.S. military installations (Resolution No. 1-
83, Inter-Agency Committee for Implementation of E.O. 857).
Activities
• Qualifications of private entities for participation in recruitment and
placement activities:
1. Citizenship requirement
a) Individuals – Filipino citizens only
b) Corporations or partnerships – at least 75% of the authorized and voting capital stock of
which is owned and controlled by Filipino citizens
2. Capitalization requirement
a) Local employment – a minimum net worth or paid-up capital of 1,000,000 (all kinds)
b) Overseas employment – 5,000,000
3. Should not be otherwise disqualified by law or other government regulations to
engage in the recruitment and placement of workers for overseas employment (ex.
Prohibition against travel agencies)
4. Payment of registration fees
5. Posting of surety or cash bonds
Activities
• Limitations on License or Authority (Art. 29)
• Can only be used by the person or entity in whose favor it was issued
• Can only be used in the place stated in the license
• It cannot be transferred, conveyed, or assigned
• Provincial recruitment and/or job fairs may be allowed only when authorized by
POEA in writing.
• Note: 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
• Note: When one is given a license, one is also authorized to collect fees. Unlike a
license, an authority does not entitle a private recruitment entity to collect fees
Activities
• Persons and Entities Disqualified to Engage in the Business of
Recruitment and Placement of Workers:
1. Travel agencies and sales agencies of airline companies(LC, Art. 26)
2. Officers or members of the board of any corporation or members in a
partnership engaged in the business of a travel agency
3. 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
Activities
4. Persons, partnerships or corporations which have derogatory records, such
as but not limited to those:
a) Certified to have derogatory record or information by the NBI or by the Anti-Illegal
Recruitment Branch of the POEA;
b) Against whom probable cause or prima facie finding of guilt for illegal recruitment or
other related cases exists;
c) Convicted for illegal recruitment or other related cases and/or crimes involving moral
turpitude; and
d) Agencies whose licenses have been previously revoked or cancelled by the POEA for
violation of R.A. 8042, P.D. 442 as amended and their IRRs.
Activities
5. Any official or employee of the DOLE, POEA, OWWA, DFA and other
government agencies directly involved in the implementation of R.A. 8042
and/or any of his/her relatives within the 4th civil degree of consanguinity
or affinity
6. Persons or partners, officers and directors of corporations whose licenses
have been previously cancelled or revoked for violation of recruitment
laws (Sec. 2, Rule I, 2002 Rules and Regulations on the Recruitment and
Employment of Land-Based Workers).
Activities
• Bond requirement (Art. 31)
• All applicants for license or authority shall post such cash and surety bonds as
determined by the Secretary of Labor, including escrow deposits.
• NOTE: the purpose of the bond is to guarantee compliance with the

prescribed recruitment procedures, rules and regulations, and terms and
conditions of employment.
Activities
• The surety bond required of recruitment agencies is intended for the
protection of our citizens who are engaged for overseas employment
by foreign companies. The purpose is to insure that if the rights of
these overseas workers are violated by their employers, recourse
would still be available to them against the local companies that
recruited them for the foreign principal. The foreign principal is
outside the jurisdiction of our courts and would probably have no
properties in this country against which an adverse judgment can be
enforced. This difficulty is corrected by the bond, which can be
proceeded against to satisfy that judgment. (STRONGHOLD
INSURANCE COMPANY, INC. vs. CA and ADRIANO URTESUELA, G.R.
No. 88050, January 30, 1992)
Activities
• Note that the recruitment agency is solidarily liable with the foreign
principal for unpaid salaries of a worker it recruited.
• Before recruiting, the agency is required to submit a document

containing its power to sue and be sued jointly and solidarily with the
principal or foreign-based employer for any of the violations of the
recruitment agreement, and the contracts of employment.
Activities
• The recruitment agency may still be sued even if agency agreement
between recruitment agency and principal is already severed if no
notice of the termination was given to the employee based on Art.
1921 of the New Civil Code (Catan v. NLRC, GR No. 77297, April 15,
1988).
Activities
• Exemption from solidary liability:
• Where the workers themselves insisted for the recruitment agency to send
them back to their foreign employer despite their knowledge of its inability
to pay their wages, the Court absolved the agency from liability (Feagle
Construction Corp. v. Gayda, GR No. 82310, June 18, 1990).
Activities
• Note: The bond is exempted from garnishment
• Cash bond filed by applicants for license or authority is not subject to
garnishment by a judgment creditor of the agency.
• Should the bond/deposit in escrow or any part thereof be garnished, the

same should be replenished by the agency within 15 days from notice from
the POEA. Failure to replenish the same within the said period shall cause the
suspension of the license. [in case it was validly executed against; ex. An
employee was successful in a case against a foreign principal, and the bond
answered for the amount]
Activities
• Prohibition on Travel Agencies
• This is so, for travel agencies are under the supervisory powers of the
Department of Tourism, not the Department of Labor and Employment.
Otherwise, confusion may arise to the detriment and disadvantage of an
overseas applicant-worker or may lead to exploitation of the applicant-worker
who will be at the economic mercy of the travel agency or sales agencies of
airline company from the time his papers are processed to the time he
departs.
Activities
• Prohibition on Travel Agencies
• It cannot be discounted, however, that travel agencies can facilitate with the
airlines for the issuance of the worker's plane ticket. Moreover, illegal
recruitment activities can be traced to travel agencies that facilitate papers of
job-seekers for overseas. They do dirty job of legalizing the travel on tourist-
visas and with the assurance that the same could be converted into work-
visas in the country of employment.
Activities
• To clarify: the following are prohibited from engaging in recruitment
and placement:
1. Travel agencies and sales agencies of airline companies(LC, Art. 26)
2. Officers or members of the board of any corporation or members in a
partnership engaged in the business of a travel agency
3. 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
Suspension or Cancellation of
License or Authority
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES
Suspension or Cancellation of License or
Authority
• Grounds for cancellation:
1. Incurring an accumulated 3 counts of suspension by an agency based on final
and executory orders within the period of validity of its license;
2. Violations of the conditions of license;
3. Engaging in acts of misrepresentation for the purpose of securing a license or
renewal; and
4. Engaging in the recruitment or placement of workers to jobs harmful to the
public health or morality or to the dignity of the country (Sec. 3, Rule I, Book VI,
Rules and Regulations Governing Overseas Employment).
Authority
• Grounds for suspension or cancellation:
1. Commission of prohibited acts under Art. 34 of LC
2. Publishing job announcements w/o POEA’s approval
3. Charging a fee which may be in excess of the authorized amount before a
worker is employed
4. Deploying workers w/o processing through POEA
5. Recruitment in places outside its authorized area (Sec. 4, Rule II, Book IV,
POEA Rules).
Authority
• Who suspends or cancels the license or authority?
• The Secretary of Labor and Employment is empowered to suspend or cancel a
license or authority.
• Overseas employment: SOLE and POEA can suspend or cancel.
• NOTE: there must be a hearing before the cancellation or suspension

of the license or authority to observe due process.
Prohibited Acts
Prohibited Acts
• Art. 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 (Overcharging);
b) To furnish or publish any false notice or information or document in relation to recruitment or
employment (False Notice);
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
(Misrepresentation to Secure License);
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 (Inducing Worker to Quit);
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 (Inducement not to Employ);
Prohibited Acts
• Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:
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 (Recruitment for Harmful Jobs);
g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives (Obstructing Inspection);
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 (Non-submission of Reports);
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 (Contract Substitution);
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 (Involvement in 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
(Withholding of Travel Documents).
Prohibited Acts
• Under RA 10022:
l) Failure to actually deploy a contracted worker without valid reason as

determined by the Department of Labor and Employment (Failure to Deploy);
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 (Failure to Reimburse); and
n) Allowing a non-Filipino citizen to head or manage a licensed
recruitment/manning agency (Non-Filipino Manager) (as amended by RA
10022).
Prohibited Acts
• In addition (RA 10022):
1. Granting a loan to an OFW which will be used for payment of legal and allowable
placement fees ;
2. Refusing to condone or renegotiate a loan incurred by an OFW after his employment
contract has been prematurely terminated through no fault of his or her own (Non-
Renegotiation of Loan);
3. For a suspended recruitment/manning agency to engage in any kind of recruitment
activity including the processing of pending workers' applications (Violation of
Suspension);
4. For a recruitment/manning agency or a foreign principal/ Er to pass on the OFW 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 (Collection of Insurance Premium); and
Prohibited Acts
• In addition (RA 10022)
5. Imposing a compulsory and exclusive arrangement whereby an OFW is

required to:
a) Avail a loan only from specifically designated institutions, entities or persons
(Specifying a Loan Entity).
b) To undergo health examinations only from specifically designated medical, entities
or persons, except seafarers whose medical examination cost is shouldered by the
shipowner (Specifying a Medical Entity).
c) To undergo training of any kind only from designated institutions, entities or
persons, except for recommendatory trainings mandated by principals or
shipowners (Specifying a Training Entity) (Sec. 6, R.A. 8042, Migrant Workers and
Overseas Filipino Act, as amended by R.A. 10022).
Regulatory and Visitorial Powers
of the Secretary of Labor and
Employment
Regulatory and Visitorial Powers of the
Secretary of Labor and Employment
• Regulatory powers: (Art. 36)
• The Secretary of Labor shall have the power to:

1. Restrict and regulate the recruitment and placement activities of all
agencies; and,
2. Issue orders and promulgate rules and regulations.
• Visitorial powers: (Art. 37)
• The Secretary of Labor or his duly authorized representatives may, at

any time:
1. Inspect the premises, books of accounts and records of any person or entity
covered by this Title;
2. Require it to submit reports regularly on a prescribed forms; and
3. Act on violations of any provisions of this Title.
• NOTE: The proceeding before the SOLE or his agents exercising
visitorial powers is summary in nature (Servando’s Inc. vs. Secretary
of Labor and Employment, GR 85840, June 5, 1991).
• When Visitorial Power of the SOLE may be Exercised Under the Labor
Code:
1. Inspect books of accounts and records of any person or entity engaged in
recruitment and placement; require it to submit reports regularly on
prescribed forms and act in violations of any provisions of the LC on
recruitment and placement (Art. 37).
2. Have access to Employer’s records and premises to determine violations of
any provisions of the LC on recruitment and placement (Art. 128).
3. Conduct industrial safety inspections of establishments (Art. 171)
• Note: the SOLE cannot issue search warrants. The labor authorities
must go through the judicial process. (Salazar v. Achacoso, G.R. No.
81510, March 14, 1990 )
Illegal Recruitment
Illegal Recruitment
• Definition:
• 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: 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
(RA 10022, Sec. 5).
• It shall likewise include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority: (see
prohibited activities)
• Elements: (1st)
• The offender is not a holder of a license of authority
• He performs any of the act of recruitment and placement
• Element: (2nd)
• The offender performs any of the prohibited activities. (being a holder of a
license or authority in this case is immaterial)
• Types of illegal recruitment:
• SIMPLE – no qualifying circumstance
• Prescriptive of the offense – 5 years
• Illegal recruitment as ECONOMIC SABOTAGE –

• Syndicated – carried out by a group of 3 or more persons in conspiracy or confederation
with another.
• Large scale or qualified – committed against 3 or more persons individually or as a group.
• Prescription of the offense – 20 years

• Persons criminally liable:
• 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 (Sec. 6, R.A.
8042).
• Penalties
• Simple illegal recruitment – 12y1d to 20y and a fine of 1M to 2M
• Illegal recruitment deemed as economic sabotage – life Imprisonment and a

fine of 2M to 5M
• The maximum penalty shall be imposed if the person illegally recruited is less
than 18 years of age OR if committed by a non-licensee or non-holder of
authority.
• Consequence of Conviction
1. Automatic revocation of the license or authority
2. Forfeiture of the cash and surety bonds
3. Conviction for the crime of estafa, if found guilty therefor.
• Note:
• There is illegal recruitment when one gives the impression of having
the ability to send a worker abroad. It is undisputed that appellant
gave complainants the distinct impression that she had the power or
ability to send people abroad for work such that the latter were
convinced to give her the money she demanded in order to be so
employed (People v. Goce, G.R. No. 113161, August 29, 1995).
• Note:
• It is important that there must at least be a promise or offer of an
employment from the person posing as a recruiter, whether locally or
abroad (People v. Laogo, G.R. no. 176264, January 10, 2011).
• Illegal recruitment vs. Estafa
ILLEGAL RECRUITMENT ESTAFA
Malum prohibitum Malum in se
It is not required that it be shown that the recruiter Accused defrauded another by abuse of confidence or
wrongfully represented himself as a licensed recruiter. by means of deceit.
Ex: accused represents that he is a license holder to

deceive his victims to part with their money to
process their employment abroad.
It must be shown that the reason why the victims

parted with their money is because of the
misrepresentations of the accused.
• Note: Illegal recruitment and estafa cases may be filed simultaneously
or separately. The filing of charges for illegal recruitment does not bar
the filing of estafa, and vice versa.
Liabilities
• Liabilities of local employment agency and foreign employer
• Local employment agencies are solidarily liable with their foreign principal for
any violation of the recruitment agreement and violation of contracts of
employment.
• XPN: Where the workers themselves insisted for the recruitment agency to
send them back to their foreign employer despite their knowledge of its
inability to pay their wages, the agency is absolved from liability (Feagle
Construction Corp. vs. Gayda, GR 82310, June 18, 1990).
• Note:
• If the recruitment/placement agency is a juridical being, the
corporate officers, directors or partners as the case may be, shall
themselves be jointly and solidarily liable with the corporation or
partnership for the claims and damages (Becmen Service Exporter
and Promotion v. Cuaresma, G.R. Nos. 182978-79, April 7, 2009).
• Foreign employer
• A foreign corporation which trough unlicensed agents recruits workers in the
country may be sued in and found liable by Philippine courts.
• Theory of Imputed Knowledge
• The theory of imputed knowledge ascribes the knowledge of the agent, to the
principal employer not the other way around. The knowledge of the principal-
foreign employer cannot, therefore, be imputed to its agent. (Sunace
International Management Inc. vs. NLRC, G.R. No. 161757, January 25, 2006)
• Employment contract lapsed, and the foreign employer and the employee
agreed to an extension without the approval of Sunace (employment agency).
When the employee returned to the Philippines, she filed a case against
Sunace, its owner, and the foreign principal alleging that she was imprisoned
for 3 months and that she was under paid.
• Sunace cannot be held liable for the violations during the extension.
Sunace was not aware of the extension, thus it cannot be considered
a party thereto.
• The theory of imputed knowledge cannot make Sunace liable, because it does
not apply the other way around. Knowledge of the principal IS NOT
considered knowledge of the agent.
• Pretermination of contract of migrant workers without just or valid
cause; relief:
• Full reimbursement of his placement fee with 12% interest per annum.
• Plus salaries for the unexpired portion of his employment contract.
• BUT: 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.
• RA 8042 (Migrant Workers Act)
• But note: The three-month option is declared unconstitutional for
violating the equal protection clause and the substantive due process
rule in the Constitution (Serrano vs. Gallant Maritime Services Inc.
and Marlow Navigation Company, Inc., GR 167614, March 24, 2009).
• However: 2010, RA 10022 was passed, amending RA 8042. RA 10022

reiterated the provision concerned.
• So, what now? If asked, consider the provision unconstitutional. The

same provision was not even changed.
Ban on Direct Hiring
GR: An employer may only hire Filipino worker for overseas
employment through POEA or entities authorized by DOLE (LC, Art. 18).
XPNs: Direct hiring by:
1. International organizations
2. Name hires
3. Members of the diplomatic organizations
4. Other Employers as may be allowed by DOLE
• Purposes of the Prohibition on Direct Hiring:
1. To ensure the best possible terms and conditions of employment for
the worker.
2. To assure the foreign employer that he hires only qualified Filipino
workers.
3. To ensure full regulation of employment in order to avoid
exploitation.
Jurisdiction (Migrant Workers Act)
• Criminal actions – RTC (see penalty)
• Money claims – NLRC
• Administrative – POEA (regarding license or authority, etc.)

• Jurisdiction of Labor Arbiters. Notwithstanding any provision of law to
the contrary, the Labor Arbiters of the NLRC shall have the original
and exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after the filing of the compliant, 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
damages.
Employment Permit of Non-
Resident Aliens
• An Alien Employment Permit is a document issued by the Department
of Laborand Employment which authorizes a foreign national to work
in the Philippines.
• Art. 40. Employment permit of non-resident aliens. Any alien seeking admission
to the Philippines for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in the Philippines shall
obtain an employment permit from the Department of Labor.
• The employment permit may be issued to a non-resident alien or to the applicant

employer after a determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to
perform the services for which the alien is desired.
• For an enterprise registered in preferred areas of investments, said employment

permit may be issued upon recommendation of the government agency charged
with the supervision of said registered enterprise.
• Persons not required to acquire an Alien Employment Permit:
1. Members of the diplomatic services and foreign government officials
accredited by the Philippine government;
2. Officers and staff of international organizations of which the Philippine
government is a cooperating member, and their legitimate spouses
desiring to work in the Philippines;
3. Foreign nationals elected as members of the Governing Board who do
not occupy any other position, but have only voting rights in the
corporation;
4. All foreign nationals granted exemption by special laws and all other laws
that may be promulgated by the Congress;
• Persons not required to acquire an Alien Employment Permit:
5. Owners and representatives of foreign principals, whose companies are
accredited by the Philippine Overseas Employment Administration
(POEA), who come to the Philippines for a limited period solely for the
purpose of interviewing Filipino applicants for employment abroad;
6. Foreign nationals who come to the Philippines to teach, present and/or
conduct research studies in universities and colleges provided that the
exemption is on a reciprocal basis; and
7. Resident foreign nationals and temporary or probationary resident visa
holders employed or seeking employment in the Philippines (DO 97-09,
Series of 2009).
• NOTE: Art. 41. Prohibition against transfer of employment.
a) After the issuance of an employment permit, the alien shall not transfer
to another job or change his employer without prior approval of the
Secretary of Labor.
b) Any non-resident alien who shall take up employment in violation of the
provision of this Title and its implementing rules and regulations shall be
punished in accordance with the provisions of Articles 289 and 290 of
the Labor Code.
In addition, the alien worker shall be subject to deportation after service of
his sentence.
• Duration of Permit:
• 1 year
• Unless if the employment contract provides otherwise, but it cannot exceed 5

years.
LABOR STANDARDS
Labor Standards
• Conditions of employment
• Wages
• Leaves
• Special group of employees
Conditions of employment
• Scope
• Hours of work
• Holiday pay, 13th month pay
• Service charge
SCOPE
Scope
• Coverage of provisions on conditions of employment:
• Art. 82. Coverage. The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not.
• XPNS:
• government employees
• managerial employees (including officers and members of the managerial staff and
supervisors, under implementing rules)
• 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.
• Government Employees:
• The terms and conditions of their employment are governed by the
Civil Service Law.
• In case of government-owned or controlled corporations with original
charters, terms and conditions of employment may be governed by
such legislated charters.
• Government-owned or controlled corporations without original
charters and created under the Corporation Code are governed by the
Labor Code
• Managerial Employees: as defined in the implementing rules
• 1. Their primary duty consists of the management of the
establishment in which they are employed or of a department or sub-
division thereof.
• 2. They customarily and regularly direct the work of two or more
employees therein.
• 3. They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendations as to hiring and firing and as
to the promotion or any other change of status of other employees,
are given particular weight (Sec. 2[b], Rule I, Book III, Rules
Implementing the Labor Code).
• Officers or Members of Managerial Staff:
• 1. Their primary duty consists of the performance of work directly related to
management policies of their employer;
• 2. They customarily and regularly exercise discretion and independent judgment; and
• 3. They regularly and directly assist a proprietor or -- a managerial employee whose
primary duty consists of the management of the establishment in which he is employed
or subdivision thereof; or execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge; or execute, under
general supervision, special assignments and tasks; and
• 4. They do not devote more than 20 percent of their hours worked in a work week to
activities which are not directly and closely related to the performance of the work
described above (Sec. 2[c], Rule I, Book III, Rules Implementing the Labor Code).
• Officers or Members of Managerial Staff:
• Will include supervisors.
• Meaning supervisors are not covered by the provisions on conditions of employment.
• BUT under labor relations, supervisors are different from managers. Supervisors are not
considered part of the management and they are allowed to form unions, BUT they
cannot join rank-and-file unions.
• Field Personnel
• Field personnel refers to non-agricultural employees who:
• 1. Regularly perform their duties away from the principal place of
business or branch office of the employer; and
• 2. Whose actual hours of work in the field cannot be determined
with reasonable certainty (Sec. 27, Rule II, Book III, Rules
• e.g. outside sales personnel, agents on commission basis, or
insurance field agents (San Miguel Brewery vs Democratic Labor
Union, G.R. No. L-18353, 31 July 1963); meter readers, medical
representatives(Duka, Labor Laws and Social Legislation, A Barrister’s
Companion, 2016, p. 118).
• Bus drivers and conductors not considered field personnel. (Autobus
Transport System, Inc. V. Bautista, G.R No. 156367, 16 May 2005).
• Time of departure and arrival is known. (also during stop-overs)
• In every depot, there is always the dispatcher whose function is precisely to
see to it that the bus and its crew leave the premises at specific times and
arrive at the estimated proper time.
• Members of the Family
• They are exempted from the coverage, for the support given by the
employer may exceed the benefit for which an employee is entitled
under appropriate labor provisions. To cover them under Art.82, may
create labor problems that would eventually break-up the family,
which is the evil sought to be prevented.
• Note that the employee must be a member of the family of the

employer and he must be dependent on the employer for support.
• Domestic Servants/Persons In The Personal Service Of Another
• These are those who:
• 1. Perform such services in the employer's home which are usually
necessary or desirable for the maintenance and enjoyment thereof; or
• 2. Minister to the personal comfort, convenience, or safety of the
employer as well as the members of his employer's household (Sec. 2[d],
Rule I, Book III, Rules Implementing the Labor Code).
• Note: They are not covered by this Title because terms and conditions of
employment are governed by the provisions of R.A. 10361 (Kasambahay
Law).
• Note under Kasambahay Law:
• Domestic worker or "Kasambahay" refers to any person engaged in
domestic work within an employment relationship such as, but not
limited to, the following: general househelp, nursemaid or "yaya",
cook, gardener, or laundry person, but shall exclude any person who
performs domestic work only occasionally or sporadically and not on
an occupational basis.
• Domestic work refers to work performed in or for a household or
households.
• Note that even if the NATURE of the work is “domestic” if it is not
performed in or for a household or not in the service of the family of
the employer, the worker may be considered as covered by the
provisions on conditions of employment. (and not under the
exclusion)
• A laundrywoman in staff houses of a company or within the premises

of the business of the employer, not actually serving the family of the
employer, is a regular employee. She is not included in the definition
of domestic servants. (Apex Mining Co. Inc. v NLRC, G.R. No. 94951,
22, April 1991).
• Workers Paid By Results
• Workers who are paid by results include those who are paid on piece-
work, "takay," "pakiao," or task basis.
• Payment of this type of worker is determined by the results of the
work performed or the number of units produced, not the number of
hours used in the completion of the job or the time spent in
production (Poquiz, 2012, p. 175).
• Tailors and similar workers hired in the tailoring establishment,
although paid weekly wages on piece-work basis, are employees and
not independent contractors, and accordingly, as regular employees
paid on piece-rate basis, they are not entitled to overtime pay,
holiday pay, premium pay for holiday/rest day and service incentive
leave pay (Villaga v. NLRC, G.R. No. 75038, August 23, 1993).
HOURS OF WORK
Hours of Work
• Normal hours of work = shall not exceed 8 hours a day. (day =
workday)
• Xpn:
• Compressed workweek
• The eight-hour work requirement does not, however, preclude the
employer in the exercise of its management prerogatives to reduce
the number of working hours, provided that there is no diminution of
existing benefits. The law imposes a maximum number of hours and
not a minimum.
• Work day is the 24-hour period which commences from the time the
employee regularly starts to work.
• Important IRT holiday pay, special non-working days, etc.
• Part-time work
• The employer can prescribe normal working hours lesser than 8 hours.
• NOTE: Under Art. 124, as amended by R.A. 6727, wage proportionate to part-
time work is recognized. The wage and benefits of a part-time worker are in
proportion to the number of hours worked.
• Broken hours
• Minimum normal 8 working hours fixed by law need not be
continuous to constitute the legal working day. It may mean broken
hours of say, 4 hours in the morning and 4 hours in the evening or
variation thereof provided the total of 8 hours is accomplished within
the work day
Compressed workweek
• Considered as an exception to the normal working hours of not
exceeding 8 hours because under this scheme, an employee may be
required to work for more than 8 hours in a workday but not to
exceed 12 hours.
• Requisites:
1. The scheme is expressly and voluntarily supported by majority of the
Employees
2. In firms using substances, or operating in conditions that are
hazardous to health, a certification is needed from an accredited safety
organization or the firm’s safety committee that work beyond 8 hours is
within the limit or levels of exposure set by DOLE’s occupational safety
and health standards.
3. The DOLE Regional Office is duly notified (Department Advisory
Order No. 2, Series of 2004).
Hours worked
• Working time is one during which an employee is actually working or
when an employee is not actually working but he is required to be
present in the employer's premises. Thus, the fact that he is required
to be present although not actually doing any work, is still deemed
working time.
• The following shall be considered as compensable hours worked:
(a) All time during which an employee is required to be on duty or to be
at the employer's premises or to be at a prescribed work place; and
(b) All time during which an employee is suffered or permitted to
work. (Section 3, Rule I, Labor Code Implementing Rules and
Regulation, Book III)
Principles in determining hours worked
1. All hours which the employee is required to give to his employer
regardless of whether or not such hours are spent in productive labor
or involve physical or mental exertion.
2. Rest period is excluded from hours worked, even if employee does

not leave his workplace, it being enough that:
a. He stops working
b. May rest completely
c. May leave his workplace, to go elsewhere, whether within or
outside the premises of the workplace
• But note: Rest periods or coffee breaks running from five (5) to
twenty (20) minutes shall be considered as compensable working
time. (IRR, Book III, Rule I, Sec. 7)
3. 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.
4. The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered
working time:
a. If the imminence of the resumption of the work requires the
employees’ presence at the place of work; or
b. If the interval is too brief to be utilized effectively and gainfully
in the employees own interest.
Some rules on hours worked
• Waiting time
• It shall be considered as working time if:
1. Waiting is an integral part of this work;
2. The employee is required or engaged by the employer to wait; or
3. When employee is required to remain on call in the employer’s
premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose (IRR, Book III, Rule I, Sec. 5).
• NOTE: An employee who is not required to leave word at his home or
with company officials where he may be reached is not working while
on call (IRR, Book III, Rule I, Sec. 5(b)).
• The controlling factor is whether waiting time spent in idleness is so

spent predominantly for the employer’s benefit or for the
employee’s.
• Engaged to Wait v. Waiting to be Engaged
• In engaged to wait, waiting is an integral part of the job; the time
spent waiting is compensable, while in waiting to be engaged, idle
time is not working time; it is not compensable.
• Ex: Company driver who waits while his boss attends meetings.
• Preliminary and postliminary activities
• Preliminary (before work) and postliminary (after actual work)
activities deemed performed during working hours and compensable:
1. Where such activities are controlled by the employer or required by
the employer; and
2. Pursued necessarily and primarily for the employer's benefit (31 Am.
Jur. 882-883).
• Travel time
• Normal travel from HOME to WORK = not working time.
• XPN:
• Emergency call outside the employee’s regular working hours where he is required to
travel to his regular place of business of some other work site.
• Done through conveyance provided by the employer. (Ex: Company Bus)
• Done under the supervision and control of the employer (Ex: designated route)
• Done under vexing and dangerous circumstances.
• Travel time
• Travel that is all in a day’s work = time spend in travel as part of the
employee’s principal activity. = working hours.
• Travel away from home

• Travel that requires an overnight stay on the part of the employee when it cuts across
the employee’s workday is clearly working time.
• b. The time is not only hours worked on regular workdays but also during corresponding
working hours on non-working days. Outside of these regular working hours, travel away
from home is not considered working time.
• XPN: during meal periods or when employee is permitted to sleep in adequate facilities
furnished by the employer.
• Sleeping time
• Sleeping while on duty is compensable if the nature of the
employee’s work allows sleeping without interrupting or prejudicing
work OR when there is an agreement between the employee and his
employer to that effect.
• For example, a truck helper may sleep after performing his task and
while his truck is traveling on its way to its assignment. But of course,
the same may not be done by the driver.
• Power Interruptions
• Brownouts of short duration but not exceeding 20 minutes shall be
treated as worked or compensable hours whether used productively
by the employees or not; (DOLE Policy Instruction No. 36, May 1978).
• Brownouts running for more than 20 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
(Durabuilt Recapping Plant v. NLRC, G.R. No. 76746, 27 July 1987).
• NOTE: In each case, the employer may extend the working hours of
his employees outside the regular schedules to compensate for the
loss of productive (Chan 2017)
• The days when work was not required and no work could be done
because of shutdown due to electrical power interruptions, lack of
raw materials and repair of machines, are not deemed hours worked
(Durabit Recapping Plant Company v. NLRC, G.R. No. L-76746, July 27,
1987).
• When a CBA contains a reporting time-off provision wherein
employees who have reported for work but unable to continue
because of emergencies such as typhoons, flood, earthquake and
transportation strike shall also mean to include brownout or power
outage because the key element of the provision is that employees
who have reported for work are unable to continue working because
of the incident. Hence employees who were prevented to continue
their work due to brownout should also be remunerated (Supreme
Steel Corporation v. Nagkakaisang Manggagawa ng Supreme
Independent Union, G.R. 185556, March 28, 2011).
• Lectures, meetings, training programs
• Attendance at lectures, meetings, trainings programs and similar
activities need not be counted as working time if the following criteria
are met:
1. Attendance is outside of the employee's regular working hours;
2. Attendance is in fact voluntary;
3. The employee does not perform any productive work during such
attendance (Sec. 6, Rule I, Book III, Rules Implementing the Labor
Code).
• Attendance in labor relations activities
• CBA Negotiations - compensable if:
• a. There is an agreement for the compensability in the parties’
Ground Rules.
• b. There is an established policy allowing compensability.
• c. When it is done during regular work hours with the agreement of
the employer.
• Grievance Meeting
• GR: Time spent in adjusting grievance between employer and
employees during the time employees are required by the employer
to be on the premises is compensable.
• XPN: When a bona fide union is involved and there is a CBA, policy,
practice to contrary
• Strikes
• GR: Not compensable
• XPN: if there is an agreement to allow “strike duration pay” provided
under the company policy, practice or CBA.
• Hearing, Arbitration, Conciliation

• Not compensable for it is hardly fair for an employee or laborer to
fight or litigate against his employer and eventually consider it as
hours worked.
• Semestral break of teachers
• Semestral break of teachers is considered as compensable hours
worked for it is a form of an interruption beyond their control
(University of Pangasinan Faculty Union v. University of Pangasinan,
G.R. Nos. 64821-23, 29 January 1993).
• NOTE: Payment compensation is given only to regular full-time
teachers (Duka, Labor Laws and Social Legislation, A Barrister’s
Companion, 2016, p. 131).
Meal Breaks
• 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.
• SECTION 7. Meal and Rest Periods. — Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals, except in
the following cases when a meal period of not less than twenty (20) minutes may
be given by the employer provided that such shorter meal period is credited as
compensable hours worked of the employee:
• (a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion;
• (b) Where the establishment regularly operates not less than sixteen (16) hours a day;
• (c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and
• (d) Where the work is necessary to prevent serious loss of perishable goods.
• Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall
be considered as compensable working time.
• As a general rule, employees are entitled to at least one hour time-off
for regular meals which can be taken inside or outside company
premises. 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 (Sime Darby
Pilipinas, Inc. v. NLRC, G.R. No. 119205).
• NOTE: Where during a meal period, the laborers are required to stand
by for emergency work, or where the meal hour is not one of
complete rest, such is considered overtime [working hours] (Pan Am
v. Pan Am Employees’ Association, G.R. No. L-16275, 1961)
• If employees are required to work while eating, then the meal break
is considered working hours and is thus compensable. Even if the
employer pays for the meal.
• Note: Shorter meal time is not compensable if it was the employer who requested for
the shorter meal time so that he can leave work earlier than the previously established
schedule. Provided:
a. Employees voluntarily agree in writing and are willing to waive OT pay for the shortened
meal period;
b. No diminution in the salary and other fringe benefits of the employees which are
existing before the effectivity of the shortened meal period;
c. Work of the employees does not involve strenuous physical exertion and they are
provided with adequate coffee breaks in the morning and afternoon;
d. Value of the benefits derived by the employees from the proposed work arrangements is
equal to or commensurate with the compensation due them for the shortened meal
period as well as the OT pay for 30 min. as determined by the employees concerned;
e. OT pay will become due and demandable after the new time schedule
f. Arrangement is of temporary duration.
• Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time.Thus, the
eight-hour work period does not include the meal break. Nowhere in
the law may it be inferred that employees must take their meals
within the company premises. Employees are not prohibited from
going out of the premises as long as they return to their posts on
time. Private respondent's act, therefore, of going home to take his
dinner does not constitute abandonment. (Philippine Air Lines, Inc.
vs. National Labor Relations Commission, G.R. No. 132805, February
2, 1999)
Waiting time
• Waiting time
• It shall be considered as working time if:
1. Waiting is an integral part of this work;
2. The employee is required or engaged by the employer to wait; or
3. When employee is required to remain on call in the employer’s
premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose (IRR, Book III, Rule I, Sec. 5).
Night shift differential
• Night shift differential
• An employee shall be paid night shift differential of no less than ten
percent (10%) of his regular wage for each hour of work performed
between 10:00 PM and 6:00 AM (Sec. 2, Rule II, Book III, Rules
• GR; all employees are entitled to NSD.
• Xpns:
• Retail and service establishments regularly employing not more than 5
workers.
• Those not covered under Book 3.
• Note: NSD and overtime pay are distinct with each other. If the
employer is rendering overtime pay during the hours of 10PM to
6AM, then he is entitled to both NSD and OT pay.
• The philosophy behind the provision is to give premium to night work
when an employee is supposed to be sleeping. Working at night is
violative of the law of nature for it is the period for rest and sleep. An
employee who works at night has less stamina and vigor; thus, he can
easily contract a disease.
• Work done at night places has a greater burden on the worker. It is
more strenuous and onerous than work done during the day;
therefore it deserves greater or extra compensation (Shell Co. vs.
NLU, 81 Phil. 315).
• NSD cannot be waived (reason: contrary to public policy)
• Xpn: if the waiver will result to higher or better benefits fo

employees.
• NSD:
• Time = 10PM to 6AM
• Rate = no less than 10% of the regular wage per hour.
Overtime Work
• Work may be performed beyond eight (8) hours a day (workday)
provided that the employee is paid for the overtime work, an
additional compensation equivalent to his regular wage plus at least
twenty-five percent (25%) thereof. Work performed beyond eight
hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a
holiday or rest day plus at least thirty percent (30%) thereof.
• Overtime work is the service rendered in excess of and in addition to
eight hours on ordinary working days, which are the prescribed daily
work period, is overtime work (Caltex Regular Employees at Mla.
Office v Caltex Phils., Inc., 247 SCRA 398).
• Overtime pay is the additional compensation of at least 25% on the

regular wage for the service or work rendered or performed in excess
of 8 hours a day by employees or laborers in employment covered by
the Eight-hour Labor Law
• Note: overtime pay is only given for overtime work. OT pay is given if
the employee renders work in excess of 8 hours in a workday.
• Note: exception = allowed compressed workweek schedules. Work rendered
beyond the 8-hour period in a workday is not entitled to OT pay.
• NOTE: employees working under a compressed workweek schedule are only entitled to
OT pay if they render work beyond 12 hours per workday or beyond 48 hours per week.
• Q: an employee has a regular shift of 5 hours per workday. One day

the employer required him to work for 7 hours in a workday. Is he
entitled to OT pay for the two hours? No. not beyond the 8-hour
period.
• Employment contracts may indicated that the OT pay is integrated in
the basic salary. This is not illegal. However, it must have a
designation as to the regular and overtime compensation so it can be
determined if it complies with the minimum requirements of the law.
(as to the rates)
• Requisites for a Valid Built in Overtime Pay (Base Pay with Integrated
Overtime Pay)
• 1. A clear written agreement knowingly and freely entered into by the
employee;
• 2. The mathematical result shows that the agreed legal wage rate and the
overtime pay, computed separately are equal or higher than the separate
amounts legally due
• Entitlement to overtime pay must first be supported by sufficient
proof that said overtime work was actually performed, before an
employee may avail of said benefit (Cagampan v NLRC, 195 SCRA
633).
• OT pay:
• For = work rendered beyond the 8 hour period per workday.
• Rate = at least 25% of regular pay. Holidays or rest days, the rate is at least
30% of the rate that day. (premium rates)
Undertime not offset by 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.
• It has been held the proper remedy should be to deduct undertime or
absences against the employee's accrued leave but pay him the
overtime to which he is rightfully entitled. Lastly, the rule will prevent
the anomalous situation whereby an employee could schedule his
working hours at will thereby destroying the regular working
schedules (Detective and Protective Bureau, Inc. v. United Employees
Welfare Association, G.R. No. L-4337, 29 December 1951).
Emergency overtime work
• As a general rule, an employee cannot be compelled to render
overtime work.
• Xpns:
• When the country is at war or when any other national or local emergency
has been declared by Congress or the Chief Executive;
• When overtime work is necessary to prevent loss of life or property, or in
case of imminent danger to public safety due to actual or impending
emergency in the locality caused by serious accident, fire, floods, typhoons,
earthquake, epidemic or other disaster or calamities;
• Xpns:
• 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 causes of similar nature;
• When the work is necessary to prevent loss or damage to perishable goods;
• When the completion or continuation of work started before the 8th hour is
necessary to prevent serious obstruction or prejudice to the business or
operations of the employer; or
• When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is dependent
thereon (LC, IRR, Sec. 10; Art. 89).
• Compelled OT = payment of OT pay.
• Note: the employee has no right to render overtime work. There is no

law granting an employee the right to render overtime work. If the
employer will not allow an employee to render work beyond 8 hours,
the employee cannot compel the employer to allow him to work.
• the Supreme Court held that the basis of overtime claim is an
employee’s having been “permitted to work”.
Rest Periods
• Art. 91. Right to weekly rest day.
• It shall be the duty of every employer, whether operating for profit or
not, to provide each of his employees a rest period of not less than
twenty-four (24) consecutive hours after every six (6) consecutive
normal work days.
• The employer shall determine and schedule the weekly rest day of
his employees subject to collective bargaining agreement and to such
rules and regulations as the Secretary of Labor and Employment may
provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is
based on religious grounds.
• SECTION 4. Preference of employee. — The preference of the
employee as to his weekly day of rest shall be respected by the
employer if the same is based on religious grounds. The employee
shall make known his preference to the employer in writing at least
seven (7) days before the desired effectivity of the initial rest day so
preferred.
• Where, however, the choice of the employee as to his rest day based
on religious grounds will inevitably result in serious prejudice or
obstruction to the operations of the undertaking and the employer
cannot normally be expected to resort to other remedial measures,
the employer may so schedule the weekly rest day of his choice for
at least two (2) days in a month.
• Who determines the schedule of the rest day? Employer.
• GR: Employer shall determine and schedule the rest day of his employee.
• XPNS:
• CBA
• Rules and regulations as the Sec. of Labor provides
• Employer must respect the preference of his employee if it is based on religious grounds.
• Note: employer must notify the employees of their scheduled rest day.
• By written notice
• Posting
• Or personal notification
Emergency rest day work
• As a general rule the employer cannot be compelled to work on his
rest day.
• Xpns:
• In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent
loss of life and property, or imminent danger to public safety;
• In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
• Xpns:
• In the event of abnormal pressure of work due to special circumstances,
where the employer cannot ordinarily be expected to resort to other
measures;
• To prevent loss or damage to perishable goods;
• Where the nature of the work requires continuous operations and the
stoppage of work may result in irreparable injury or loss to the employer; and
• Under other circumstances analogous or similar to the foregoing as
determined by the Secretary of Labor.
• Employees may voluntarily work on his rest day.
• He may be allowed by the employer, provided he shall express it in writing
subject to additional compensation.
Premium pay
• It is the additional compensation for work rendered by the Ee on days
when normally he should not be working such as special holidays and
rest days.
• Refers to the additional compensation required by law to be paid for

work performed within the regular eight (8) hours on non-working
days such as rest days and special holidays. (premium OT pay)
• Note: the employer and the employee can agree on higher rates.
Holiday pay
• Holiday Pay is a one-day pay given by law to an employee even if he
does not work on a regular holiday.
• It is a premium given to employees pursuant to the law even if he has

not been suffered to work on a regular holiday. It is limited to the 12
regular holidays, also called legal holidays listed by law. The employee
should not have been absent without pay on the working day
proceeding the regular holiday.
• Exempted from paying holiday pay:
• Retail and service establishments regularly employing less than 10 workers.
• They are engaged in the sale of goods to end users for personal or household use.
• They are engaged in the sale of services to individuals for their own or household use.
• Regular holidays: (12)
• New Year’s day – January 1
• Araw ng Kagitingan – Monday nearest April 9
• Maunday Thursday – movable date
• Good Friday – movable date
• Labor Day – May 1
• Independence Day – June 12
• National Heroes Day – Last Monday of August
• Eidl Fitr – movable date
• Eidl Adha – movable date
• Bonifacio Day – November 30
• Christmas Day – December 25
• Rizal Day – December 30
• Special non-working days:
• Ninoy Aquino Day – August 21
• All Saints Day – November 1
• Last day of the year – December 31
• Other days declared by law or ordinance
• Important Condition That Should Be Met In Order To Avail/Receive
The Single Holiday Pay
• The employee should not have been absent without pay on the working day
immediately preceding the regular holiday.
• To be entitled to two (2) days successive holidays:

• 1. One must be present on the day immediately preceding the first holiday; or
• 2. One is on leave with pay
• Note: An employee is entitled to premium pay (holidays) if the work
has started or ended on a regular holiday.
• Effects of Business Closure On Holiday Pay
• 1. In case of temporary or periodic shutdown and temporary
cessation of work of an establishment, as when a yearly inventory or
when the repair or cleaning of machineries and equipment is
undertaken, the regular holidays falling within the period shall be
compensated.
• 2. The regular holiday during the cessation of operation of an
enterprise due to business reverses as authorized by the Secretary of
Labor may not be paid by the employer (Sec. 7, Rule IV, Book III, Rules
• Formula
13th Month pay
• It is a form of monetary benefit equivalent to the monthly basic
compensation received by an employee, computed pro-rata according
to the number of months within a year that the employee has
rendered service to the employer
13th Month pay
• PD 851, Thirteenth Month Pay Law, as amended by Memorandum
Order No. 28, requires all employers to pay their employees a 13th
month pay not later than December 24 of every year.
• Originally, PD 851required payment of 13th month pay to employees
receiving not more than P1,000 a month. MO 28 (1987), removed the
salary ceiling, and all rank and file employees became entitled to a
13th month pay regardless of the amount of their monthly basic
salary.
• Such is in the nature of additional income granted to employees who
are not receiving the same (Agabon v. NLRC, G.R. No. 158693,
November 17, 2004).
• It is based on wage but not part of wage (Central Azucarera de Tarlac

v. Central Azucarera de Tarlac Labor Union-NLU, G.R. No. 188949, July
26, 2010).
• It is imposed as a ‘minimum service requirement’ that the employee
should have worked for at least one (1) month during a calendar year
Coverage of 13 th month pay (IRR)
• Employees
• GR: All rank-and-file employees are covered by P.D. 851 regardless of
the amount of basic salary that they receive in a month, if their
employers are not otherwise exempted from paying the 13th month
pay. Such employees are entitled to the 13th month pay regardless of
said designation of employment status, and irrespective of the
method by which their wages are paid.
• Provided, that they have worked for at least 1 month, during a
calendar year (Revised Guidelines on the Implementation of the 13th
Month Pay Law).
• XPN:
• a. Government Ees;
• b. Ees paid purely on commission basis;
• c. Ees already receiving 13th month pay;
• d. Managers; and
• e. Seafarers
• NOTE: Managerial employees may receive 13th month pay, if such
payment has been a company practice.
• Employers: GR = all employers.
• XPNS:
• a. The Government and any of its political subdivisions, including GOCCs;
• XPN to XPN: Corporations operating essentially as private subsidiaries of the Government.
(subsidiary corporation of a GOCC)
• b. Employers already paying their employees 13th month pay or more in a calendar
year in its equivalent at the time of the issuance of the Revised Guidelines;
• c. Employers of those who are paid on purely basis of:
• Commission
• Boundary
• Task
• Fixed amount for performing a specific work (except employees paid on a piece-rate basis)
• NOTE: Bus drivers and conductors who are paid a fixed or guaranteed
minimum wage in case their commission be less than the statutory
minimum are entitled to a 13th-month pay equivalent to one-twelfth
of their total earnings during the calendar year (Philippine
Agricultural Commercial and Industrial Workers Union v. NLRC, GR No.
107994, 14 August 1995).
• Employers: GR = all employers.
• XPNS:
• d. Distressed employers:
• Currently incurring substantial losses; or
• In the case of non-profit institutions and organizations, where their income, whether
from donations, contributions, grants and other earnings from any source, has
consistently declined by more than 40% of their normal income for the last 2 years,
subject to the provision of Sec. 7 of P.D. 851
• Options of covered employers:
• 1. Pay 1/2 of the 13th month pay required before the opening of the
regular school year and the other half on or before the 24th day of
December of every year.
• 2. In any establishment where a union has been recognized or
certified as the CB agent of the Ee, the periodicity or frequency of
payment of the 13th month pay may be the subject of agreement.
• NOTE: 13th month pay must always be in the form of a legal tender.
• Adjudicated Claims
• Non-payment of the 13th month pay provided by P.D. 851 and the
rules of NLRC shall be treated as money claims cases.
• Computation:
• Not less than 1/12 of the total basic salary earned by the employee
within the calendar year.
• Note: Only basic salary is included in the computation of 13th month

pay. However, salary-related benefits should be included as part of
the basic salary in the computation of the 13th month pay if by
individual or collective agreement, company practice or policy, the
same are treated as part of the basic salary of the employees.
• Issue on commissions (as part of basic salary)
• Commission as an incentives or encouragement to ensure productivity, i.e.,
productivity bonus–does not form part of basic salary, not to be included in
computation
• Commission as a direct remuneration for service rendered – forms part of

basic salary.
• Some rules:
• Employees paid by results = entitled
• NOTE: Ees paid a fixed or guaranteed wage plus commission are also entitled to the
mandated 13th month pay, based on their total earnings during the calendar year, i.e. on
both their fixed or guaranteed wage and commission.
• Employees with multiple employers = entitled to all 13th month pays.
• Private School Teachers, including faculty members of universities and
colleges = Entitled regardless of the number of months they teach or are paid
within a year, if they have rendered service for at least 1 month within a year.
• Resigned or Separated employees = If resigned or separated from work before
the time of payment of 13th month pay, entitled to monetary benefits in
proportion to the length of time he started working during the calendar year
up to the time of resignation or termination of service
Service charges
• These are charges collected by hotels, restaurants and similar
establishments at the rate of 85% for covered employees equally
distributed among them, and 15% for the management to answer for
losses and breakages.
• If the establishments like hotel, motels, restaurants and the likes
collect service charges and/or the customers give tips for their
services the following rules must be observed:
• The service charges must be pooled
• The amount collected is divided between the company (15%) and employees
(85%)
• It shall be given twice a month with intervals of not more than 15 days
• If discontinued, removed, or stopped, the average, share of the employees of
their service charge or tips shall be integrated with their basic wage.
• GR: All employees are covered, regardless of their position,
designation, and employment status, irrespective of the method by
which their wages are paid.
• NOTE: Applies only to hotels, restaurants, lodging houses, night clubs,

cocktail lounge, massage clinics, bars, casinos and gambling houses,
and similar establishment collecting service charges.
• XPN: Managerial employees(IRR, Book III, Rule VI, Sec. 2)

• Relation to agreements. — Nothing in this Rule shall prevent the
employer and his employees from entering into any agreement with
terms more favorable to the employees than those provided herein,
or be used to diminish any benefit granted to the employees under
existing laws, agreement and voluntary employer practice.
Wages
Wages
• Compensation paid to the employee for work or services rendered.
Wages (attributes)
• It is the remuneration or earnings, however designated, capable of being
expressed in terms of money,
• whether fixed or ascertained on a time, task, piece, or commission basis, or
other method of calculating the same,
• payable by an employer to an employee under a written or unwritten
contract of employment
• for work done or to be done, or for services rendered or to be rendered
and,
• Includes fair and reasonable value of board, lodging, or other facilities
customarily furnished by the employer to the employee as determined by
SLE.
• “No Work, No Pay” Principle (Fair Day’s Wage for a Fair Day’s Labor)
• GR: If there is no work performed by the employee, without the fault
of the employer, there can be no wage or pay. Burden of economic
loss suffered by employee shall not be shifted to the employer.
• XPNs: The laborer was able, willing and ready to work but was:
• 1. Prevented by management;
• 2. Illegally locked out;
• 3. Illegally suspended;
• 4. Illegally dismissed;
• 5. Illegally prevented from working (Aklan Electric Coop. v. NLRC, G.R. No.
129246, January 10, 2000)
• “Equal Pay For Equal Work” Principle
• Persons who work with substantially equal qualifications, skill, effort
and responsibility, under similar conditions, should be paid similar
salaries.
• Employees holding the same position and rank are presumed to be
performing equal work. The rule equal pay for equal work applies
whether the employee is hired locally or abroad (International School
Alliance of Educators v. Quisumbing, G.R. No. 128845, 1 June 2000).
Wage vs. Salary
• The distinction between salary and wage was only for the purpose of
Art. 1708 of the Civil Code which mandates that laborer's wages shall
not be subject to execution or attachment except for debts incurred
for food, shelter, clothing and medical attendance (Gaa v. Court of
Appeals, GR No. L-44169, December 3, 1985).
• In labor law, the distinction is only a matter of semantics. It is settled
that wage and salary are synonymous. Likewise, the term "pay" is also
synonymous with wage and salary (Equitable PCI v Sadac, G.R. No.
164772, June 8, 2006).
Payment of wages (form)
• Art. 102. Forms of payment. No employer shall pay the wages of an
employee by means of promissory notes, vouchers, coupons, tokens,
tickets, chits, or any object other than legal tender, even when
expressly requested by the employee.
• Payment of wages by check or money order shall be allowed when

such manner of payment is customary on the date of effectivity of
this Code, or is necessary because of special circumstances as
specified in appropriate regulations to be issued by the Secretary of
Labor and Employment or as stipulated in a collective bargaining
agreement.
• IRR: SECTION 2. Payment by check. — Payment of wages by bank
checks, postal checks or money orders is allowed where such manner
of wage payment is customary on the date of the effectivity of the
Code, where it is so stipulated in a collective agreement, or where all
of the following conditions are met:
• (a) There is a bank or other facility for encashment within a radius of
one (1) kilometer from the workplace;
• (b) The employer or any of his agents or representatives does not
receive any pecuniary benefit directly or indirectly from the
arrangement;
• IRR: SECTION 2. Payment by check. — Payment of wages by bank
checks, postal checks or money orders is allowed where such manner
of wage payment is customary on the date of the effectivity of the
Code, where it is so stipulated in a collective agreement, or where all
of the following conditions are met:
• (c) The employees are given reasonable time during banking hours to
withdraw their wages from the bank which time shall be considered
as compensable hours worked if done during working hours; and
• (d) The payment by check is with the written consent of the
employees concerned if there is no collective agreement authorizing
the payment of wages by bank checks.
• Requisites of Payment Through Automated Teller Machine (ATM)
• 1. The ATM system of payment is with the written consent of the
employees concerned;
• 2. The employees are given reasonable time to withdraw their wages from
the bank facility which time, if done during working hours, shall be
considered compensable hours worked;
• 3. The system shall allow workers to receive their wages within the period
or frequency and in the amount prescribed under the Labor Code, as
amended; (IRT when wages are paid)
• 4. There is a bank or ATM facility within a radius of one (1) kilometer to the
place of work;
• Requisites of Payment Through Automated Teller Machine (ATM)
• 5. Upon request of the concerned employees, the employer shall
issue a record of payment of wages, benefits and deductions for a
particular period;
• 6. There shall be no additional expenses and no diminution of
benefits and privileges as a result of the ATM system of payment;
and
• 7. The employer shall assume responsibility in case the wage
protection provisions of law and regulations are not complied with
under the arrangement(DOLE Labor Advisory, Series of 1996).
Payment of wages (time)
• Art. 103. Time of payment. Wages shall be paid at least once every
two (2) weeks or twice a month at intervals not exceeding sixteen
(16) days.
• If on account of force majeure or circumstances beyond the
employer’s control, payment of wages on or within the time herein
provided cannot be made, the employer shall pay the wages
immediately after such force majeure or circumstances have ceased.
No employer shall make payment with less frequency than once a
month.
• The payment of wages of employees engaged to perform a task which
cannot be completed in two (2) weeks shall be subject to the
following conditions, in the absence of a collective bargaining
agreement or arbitration award:
• That payments are made at intervals not exceeding sixteen (16) days,
in proportion to the amount of work completed;
• Note: Final settlement is made upon completion of the work.

Payment of wages (place)
• Art. 104. Place of payment. Payment of wages shall be made at or
near the place of undertaking, except as otherwise provided by such
regulations as the Secretary of Labor and Employment may prescribe
under conditions to ensure greater protection of wages.
• SECTION 4. Place of payment. — As a general rule, the place of payment
shall be at or near the place of undertaking. Payment in a place other than
the work place shall be permissible only under the following
circumstances:
• (a) When payment cannot be effected at or near the place of work by
reason of the deterioration of peace and order conditions, or by reason of
actual or impending emergencies caused by fire, flood, epidemic or other
calamity rendering payment thereat impossible;
• (b) When the employer provides free transportation to the employees back
and forth; and
• (c) Under any other analogous circumstances; Provided, That the time
spent by the employees in collecting their wages shall be considered as
compensable hours worked;
• Note: (d) No employer shall pay his employees in any bar, night or
day club, drinking establishment, massage clinic, dance hall, or
other similar places or in places where games are played with stakes
of money or things representing money except in the case of persons
employed in said places.
Payment of wages (to whom)
• Art. 105. Direct payment of wages. Wages shall be paid directly to
the workers to whom they are due, except:
• A. In cases of force majeure rendering such payment impossible or
under other special circumstances to be determined by the Secretary
of Labor and Employment in appropriate regulations, in which case,
the worker may be paid through another person under written
authority given by the worker for the purpose; or
Payment of wages (to whom)
• Art. 105. Direct payment of wages. Wages shall be paid directly to the
workers to whom they are due, except:
• B. Where the worker has died, in which case, the employer may pay the
wages of the deceased worker to the heirs of the latter without the
necessity of intestate proceedings. The claimants, if they are all of age,
shall execute an affidavit attesting to their relationship to the deceased and
the fact that they are his heirs, to the exclusion of all other persons. If any
of the heirs is a minor, the affidavit shall be executed on his behalf by his
natural guardian or next-of-kin. The affidavit shall be presented to the
employer who shall make payment through the Secretary of Labor and
Employment or his representative. The representative of the Secretary of
Labor and Employment shall act as referee in dividing the amount paid
among the heirs. The payment of wages under this Article shall absolve the
employer of any further liability with respect to the amount paid.
• SECTION 5. Direct payment of wages. — Payment of wages shall be made
direct to the employee entitled thereto except in the following cases:
• (a) Where the employer is authorized in writing by the employee to pay
his wages to a member of his family;
• (b) Where payment to another person of any part of the employee's wages
is authorized by existing law, including payments for the insurance
premiums of the employee and union dues where the right to check-off
has been recognized by the employer in accordance with a collective
agreement or authorized in writing by the individual employees concerned;
or
• (c) In case of death of the employee as provided in the succeeding Section.
• SECTION 6. Wages of deceased employee. — The payment of the wages of
a deceased employee shall be made to his heirs without the necessity of
intestate proceedings.
• When the heirs are of age:
• they shall execute an affidavit attesting to their relationship to the deceased and the
fact that they are his heirs to the exclusion of all other persons.
• In case any of the heirs is a minor,
• such affidavit shall be executed in his behalf by his natural guardian or next of kin.
• Upon presentation of the affidavit to the employer, he shall make payment
to the heirs as representative of the Secretary of Labor and Employment.
Facilities vs. Supplements
• Facilities include those articles or services of benefit to the employee
and his family such as rice ration, housing, recreational facilities,
medical treatment to dependents, school facilities, cost of light,
water, fuel, meals or snacks (Atok Big Wedge Mutual Benefit Assn. v
Atok Big Wedge Mining Co., 97 Phil. 294; Mayon Hotel v. Adana, G.R.
No. 157634, 16 May 2005).
• These are included as part of the wages.

• Supplements are extra remunerations or benefits given to or
received by laborers over and above their ordinary earnings or
wages. E.g. vacation leave pay, overtime pay in excess of the legal
rate, profit-sharing benefits, sick pension, retirement and death
benefits, family allowances, Christmas bonus, war-risk or cost-of-
living bonuses or other bonuses other than those paid as reward for
extra output or time spent on the jobs (Atok Big Wedge Mining Co. v.
Atok Big Wedge Mutual Benefit Assoc., G.R. No. L-7349, July 19,
1955).
• Since they are not considered as part of wages, their value cannot be
deducted from the cash wage of an employee.
• Requirements For Deducting Values For Facilities
• 1. Proof must be shown that such facilities are customarily furnished
by the trade;
• 2. The provision of deductible facilities must be voluntarily accepted
in writing; and,
• 3. The facilities must be charged at fair and reasonable value
(Mabeza v. NLRC, G.R. No. 118506, 18 April 1997)
• Voluntary Acceptance Of Facilities
• Acceptance of facilities is voluntary, for to compel the employee to
accept such facilities against his will would be violative of the
fundamental right of employee to the free disposal of his wage
guaranteed under Art. 112 (Mabeza v NLRC, G.R. No. 118506, 18 April
1997)
• Customarily Furnished Facilities
• It is important to determine when facilities are customarily furnished
or not, for the fair and reasonable value of facilities not customarily
furnished cannot be charged against the cash wage.
• For example, a messenger who slept in the office cannot be charged
by the employer for housing allowance because the office is not a
regular sleeping quarter. On the other hand, housing quarters are
common in a mining industry; hence, the latter can charge its
employees for housing quarter (Mabeza v NLRC, G.R. No. 118506, 18
April 1997).
• Criterion In Determining Whether An Item Is A Supplement Or
Facility
• The criterion is not so much with the kind of the benefit or item
(food, lodging, bonus or sick leave) given, but its purpose [who will
benefit] (State Marine v. Cebu Seamen’s Ass’n., G.R. No. L-12444,
February 28, 1963).
FACILITIES SUPPLEMENT
Forms part of the wage Independent of wage
Deductible from wage Not wage deductible
For the benefit of the employee For the benefit of employer

• Facilities are items of expense necessary for the laborer's and his
family's existence and subsistence so that by express provision of law
they form part of the wage and when furnished by the employer are
deductible therefrom, since if they are not so furnished, the laborer
would spend and pay for them just the same.
• They shall include all articles or services for the benefit of the
employee or his family but shall not include tools of the trade or
articles or services, primarily for the benefit of the employer or
necessary to the conduct of the employer’s business. They form part
of the wage and deductible from the wage.(Mabeza vs. National
Labor Relations Commission, G.R. No. 118506, April 18, 1997 (271
SCRA 670)
• Supplements constitute extra remuneration or special privileges or
benefits given to or received by the laborers over and above their
ordinary earnings or wages. They are independent of the wage and
not wage deductible.
• A benefit or privilege granted to an employee for the convenience of
the employer is not a facility. (Mabeza vs. National Labor Relations
Commission, G.R. No. 118506, April 18, 1997)
Non-diminution of benefits
• Art. 100. Prohibition against elimination or diminution of
benefits. Nothing in this Book shall be construed to eliminate or in
any way diminish supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.
• A company practice favorable to the employees had indeed been
established and the payments made pursuant thereto, ripened into
benefits enjoyed by them. And any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished,
discontinued or eliminated by the employer, by virtue of Sec. 10 of
the Rules and Regulations Implementing P.D. No. 851, and Art. 100 of
the Labor Code of the Philippines which prohibit the diminution or
elimination by the employer of the employees’ existing benefits.
(Sevilla Trading Co. vs. Semana, G.R. No. 152456, April 28, 2004)
• Benefits being given to employees cannot be taken back or reduced unilaterally
by the employer because the benefit has become part of the employment
contract, whether written or unwritten.
• XPN:
• 1. Correction of error
• 2. Contingent benefit or conditional bonus
• 3. Wage order compliance
• 4. Benefits on reimbursement basis
• 5. Reclassification of position
• 6. Negotiated benefits
• 7. Productivity incentives
• NOTE: If the error is not corrected in a reasonable time, it ripens into
a company policy and employees can demand it as a matter of right.
• However, if there is an impelling reasonable justification of the

diminution or reduction because of an emergency or exigency, or
business losses, such diminution or reduction would be valid,
provided it is duly approved by the Secretary of Labor and
Employment or his duly authorized representative pursuant to Art.
233 (Poquiz, p. 229).
• Instances of Violation of the Rule On Non-Diminution of Benefits
• Withdrawal of the following would amount to diminution of
employee’s existing benefits:
• 1. Enjoyment of the privilege of commutation of sick leave benefits into cash
equivalent as a company practice (Davao Integrated Port Stevedoring Services
v Abarquez, 220 SCRA 197);
• 2. Grant of resignation benefits to a Branch Manager on the basis of
company practice of applying expired CBA concluded by the supervisory
union (Republic Planters Bank, v, NLRC, 166 SCRA 197;)and
• 3. Giving of special bonus as the company's long and regular practice
(Meralco v. Quisimbing, 302 SCRA 173).
Prohibitions regarding wages
• Art. 112. Non-interference in disposal of wages. No employer shall
limit or otherwise interfere with the freedom of any employee to
dispose of his wages. He shall not in any manner force, compel, or
oblige his employees to purchase merchandise, commodities or other
property from any other person, or otherwise make use of any store
or services of such employer or any other person.
Civil Code provisions
• Art. 1705. The laborer's wages shall be paid in legal currency.
• Art. 1706. Withholding of the wages, except for a debt due, shall not
be made by the employer.
• Art. 1707. The laborer's wages shall be a lien on the goods
manufactured or the work done.
• Art. 1708. The laborer's wages shall not be subject to execution or
attachment, except for debts incurred for food, shelter, clothing and
medical attendance.
• Art. 1709. The employer shall neither seize nor retain any tool or
other articles belonging to the laborer.
• Art. 113. Wage deduction. No employer, in his own behalf or in behalf of
any person, shall make any deduction from the wages of his employees,
except:
• A. In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid by
him as premium on the insurance;
• B. For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by
the individual worker concerned; and
• C. In cases where the employer is authorized by law or regulations issued

by the Secretary of Labor and Employment.
• SECTION 13. Wages deduction. — Deductions from the wages of the
employees may be made by the employer in any of the following cases:
• (a) When the deductions are authorized by law, including deductions for
the insurance premiums advanced by the employer in behalf of the
employee as well as union dues where the right to check-off has been
recognized by the employer or authorized in writing by the individual
employee himself. (same in the LC)
• (b) When the deductions are with the written authorization of the
employees for payment to the third person and the employer agrees to do
so; Provided, That the latter (employer) does not receive any pecuniary
benefit, directly or indirectly, from the transaction.
• cases where the employer is authorized by law or regulations issued by the
SLE:
• a. Deductions for value of meals and facilities freely agreed upon (1
Azucena, 2016, p. 411);
• b. In case where the employee is indebted to the employer where such
indebtedness has become due and demandable (NCC, Art. 1706);
• c. In court awards, wages may be subject of execution or attachment, but
only for debts incurred for food, shelter, clothing, and medical attendance
(NCC, Art. 1703);
• d. Taxes withheld pursuant to the Tax Code;
• cases where the employer is authorized by law or regulations issued by the
SLE:
• e. Salary deduction of a member of a legally established cooperative (R.A.
6938; LC, Art. 59);
• f. Deductions for SSS, PhilHealth and Pag-ibig premiums;
• g. Deductions for loss or damage (LC, Art. 114);
• h. Deductions made with the written authorization of the employee for
payment to a third person (IRR, Book III, Rule VIII, Sec 13);
• i. Deductions as disciplinary measures for habitual tardiness (Opinion dated
March 10, 1975 of the Labor Secretary);
• j. Agency fees (LC, Art. 248[e])
• In situations where the employer has to reduce the number of regular
working days to prevent serious losses, such as when there is a
substantial slump in the demand for his goods or services or when
there is lack of raw materials, the employer may deduct the wages
corresponding to the days taken off from the workweek, consistent
with the principle of “no work, no pay.” This is without prejudice to an
agreement or company policy which provides otherwise (Handbook
on Workers’ Statutory Monetary Benefits ,DOLE 2016 ed. page 9).
• Art. 114. Deposits for loss or damage. No employer shall require his
worker to make deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer, except when the employer is engaged in
such trades, occupations or business where the practice of making
deductions or requiring deposits is a recognized one, or is necessary
or desirable as determined by the Secretary of Labor and
Employment in appropriate rules and regulations.
• SECTION 14. Deduction for loss or damage. — Where the employer is engaged in a trade,
occupation or business where the practice of making deductions or requiring deposits is
recognized to answer for the reimbursement of loss or damage to tools, materials, or
equipment supplied by the employer to the employee, the employer may make wage
deductions or require the employees to make deposits from which deductions shall be
made, subject to the following conditions:
• (a) That the employee concerned is clearly shown to be responsible for the loss or
damage; (IRT Art. 114 of LC)
• (b) That the employee is given reasonable opportunity to show cause why deduction
should not be made; (IRT Art. 114 of LC)
• (c) That the amount of such deduction is fair and reasonable and shall not exceed the
actual loss or damage; and
• (d) That the deduction from the wages of the employee does not exceed 20 percent of
the employee's wages in a week.
• Art. 116. Withholding of wages and kickbacks prohibited. It shall be
unlawful for any person, directly or indirectly, to withhold any amount
from the wages of a worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or by any other means
whatsoever without the worker’s consent.
• Art. 117. Deduction to ensure employment. It shall be unlawful to
make any deduction from the wages of any employee for the benefit
of the employer or his representative or intermediary as
consideration of a promise of employment or retention in
employment.
• Art. 118. Retaliatory measures. It shall be unlawful for an employer

to refuse to pay or reduce the wages and benefits, discharge or in any
manner discriminate against any employee who has filed any
complaint or instituted any proceeding under this Title or has testified
or is about to testify in such proceedings.

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Atty. Ronic Treptor

• Sec. 10, Art. II

• Sec. 14, Art. II

• Sec. 18, Art. II

• Sec. 1, Art. III

• Sec. 8, Art. III

• Sec. 14, Art. XIII

• BUT STILL, it cannot be used to shield wrongdoing.

• NOTE also Art. 1702 of the Civil Code.

• The construction in favor of labor is not limited to the interpretation

• If the provision is clear, it must be applied according to its express

(Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7, 2004).

• If created under the Corporation Code – Labor Code applies.

• Corporate officers: those enumerated in the Corporation Code or provided in

• Private recruitment entity (Art. 13 [e])

• Authority (Art. 13 [f])

• An authority is given to a Private recruitment agency.

• Seaman (Art. 13[g])

• Emigrant (Art. 13[i])

• EX: Somalia, Afghanistan, Sudan…

• POEA has the power to:

• Note: Any transfer of business address, appointment or designation of any agent or

• NOTE: the purpose of the bond is to guarantee compliance with the

• Before recruiting, the agency is required to submit a document

• Should the bond/deposit in escrow or any part thereof be garnished, the

• Overseas employment: SOLE and POEA can suspend or cancel.

• NOTE: there must be a hearing before the cancellation or suspension

l) Failure to actually deploy a contracted worker without valid reason as

5. Imposing a compulsory and exclusive arrangement whereby an OFW is

• The Secretary of Labor shall have the power to:

• The Secretary of Labor or his duly authorized representatives may, at

• Illegal recruitment as ECONOMIC SABOTAGE –

• Prescription of the offense – 20 years

• Illegal recruitment deemed as economic sabotage – life Imprisonment and a

Ex: accused represents that he is a license holder to

It must be shown that the reason why the victims

• However: 2010, RA 10022 was passed, amending RA 8042. RA 10022

• So, what now? If asked, consider the provision unconstitutional. The

• Money claims – NLRC

• Administrative – POEA (regarding license or authority, etc.)

• The employment permit may be issued to a non-resident alien or to the applicant

• For an enterprise registered in preferred areas of investments, said employment

• Unless if the employment contract provides otherwise, but it cannot exceed 5

• Note that the employee must be a member of the family of the

• A laundrywoman in staff houses of a company or within the premises

2. Rest period is excluded from hours worked, even if employee does

3. If the work performed was necessary, or it benefited the employer,

• The controlling factor is whether waiting time spent in idleness is so

• Travel away from home

• Hearing, Arbitration, Conciliation

• Xpn: if the waiver will result to higher or better benefits fo

• Overtime pay is the additional compensation of at least 25% on the

• Q: an employee has a regular shift of 5 hours per workday. One day

• Note: the employee has no right to render overtime work. There is no

• Refers to the additional compensation required by law to be paid for

• It is a premium given to employees pursuant to the law even if he has

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

• It is based on wage but not part of wage (Central Azucarera de Tarlac

• Note: Only basic salary is included in the computation of 13th month

• Commission as a direct remuneration for service rendered – forms part of

• NOTE: Applies only to hotels, restaurants, lodging houses, night clubs,

• XPN: Managerial employees(IRR, Book III, Rule VI, Sec. 2)