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BAR REVIEWER

ON
LABOR LAW

Annotation
Based on the Topics in the Latest Supreme-
Court-Prescribed Syllabus for Labor Law

By

JOSELITO GUIANAN CHAN


Legal Practitioner, Professor of Law
and Bar Reviewer

Managing Partner
Chan Robles Law Firm
www.chanrobles.com
ChanRobles Internet Bar Review
www.chanroblesbar.com

3rd Revised Edition


2017
i CHAPTER I
ii BAR REVIEWER ON lABOR lAW ~- FUNDAMENTAL PRINCIPLES AND CONCEPTS iii

Bar Reviewer on Labor Law


FOREWORD
Third Revised Edition, 2017 ,,.. To the 3rd Revised Edition
2017
© Philippine Copyright i
2012, 2014 & 2017 The issuance of this latest edition of this book becomes imperative
in the light of recent laws, labor issuances and rulings of the Supreme
by Court affecting some of the topics prescribed in the Syllabus for labor law
which, earlier this year, was revised by the Supreme Court Bar
PROF. JOSELITO GUIANAN CHAN Examination Committee for the forthcoming 2017 bar examinations.

All Rights Reserved The author is grateful for the favorable feedbacks he received from
bar reviewees who have used this book in preparing for the bar
ISBN 978-621-8079-00-7 examination in labor law and from undergraduate law students who used
this book as supplement to their curriculum-prescribed labor law
..... subjects.

The commentaries in this book. though expansive and broad,


remain focused on the topics and sub-topics prescribed in the labor law
syllabus. This, the author believes, is what makes this book unique and
helpful to bar. reviewees and law students who are constantly faced with
,.,..~
stressful deadlines and short timelines in their preparation for the
examination in the bar and in the classroom.
/
This book, together with the updated 3-Volum.e series by the
author on the Labor Code, would greatly enhance the chances of its
Authorized Signature readers in hurdling the labor law examinations.
Serial No. _ __
JOSELITO GUIANAN CHAN
Published & Distributed by: Managing Partner
Chan Robles Law Firm
ChanRobles Publishing Company 22/F, Philippine Stock Exchange Centre
22nd Floor, Philippine Stock Exchange Centre, Tektite East Tower Tektite East Tower, Exchat).ge Road, Ortigas Center
Exchange Road, Ortigas Center, Pasig City Pasig City, Metro Manila, Philippines
Metro Manila, Philippines
Tel. Nos.: (632) 634-!Yl-41/42/43/44/45 I Fax No.: (632) 634-07-36
Website: www.chanrobles.com I E-mail: aalaw@chanrobles.com July 15, 2017

~
Printed by:

A Division ofChanRobles Publishing Company


-~

.J....
iv BAR REVIEWER ON LABOR LAW

FOREWORD
t
I
CHAPTER I
FUNDAMENTAL PRINCIPLES AND CONCEPTS

few decisions of the Supreme Court have cited the new renumbering
scheme prescribed by this law. Labor tribunals have likewise continued
·v

To the 2nd Revised Edition LI to cite the old numbering - as if the mandate of R.A. No. 10151 does not
201'4 exist in our statute books.

This latest revision of this book was occasioned by the chief This led the author to write to the Office of the Secretary of Labor
changes introduced in the 2013 syllabus for Labor Law which were and Employment in 2013 to suggest that it come out with a definitive
replicated in toto in the 2014 syllabus and presumably in the next issuance on this matter in order to provide for a uniform re-numbering of
syllabus for subsequent bar examination in this subject. the affected provisions of the Labor Code. A DOLE Undersecretary
promptly replied that the DOLE will look into this matter. However,
Structurally, the eight (8) major topical classifications in the 2011 almost a year had passed from that letter, and almost three (3) years
and 2012 syllabi remain unperturbed. However, some topics and sub- from the enactment of R.A. No. 10151, but no such issuance has been
topics were either expanded or pruned down or merely re-arranged or made by the DOLE - the government agency primordially tasked to
relocated. implement and enforce the Labor Code. Hopefully, an Explanatory
Bulletin, Circular or similar issuance will be released by the DOLE as
For better and more effective presentation, the author took the J,.... soon as possible to dispel the mix-up.
liberty of re-organizing some topics which, in his view, is extremely
necessary. Appropriate notes pointing out the changes are indicated in For purposes of guiding the readers of this book on the
the comments of the author. renumbering of the Labor Code, the author is reproducing in full his
paper submitted to the Office of the DOLE Secretary, entitled
Additionally and most significantly, the passage of new "CLARIFYING THE NEW RENUMBERING OF THE LABOR CODE." A
amendatory laws and promulgation of new doctrinal pronouncements by copy of this material is presented after this Foreword.
the Supreme Court in this subject have made this latest revision very . r·~

compelling. The author has thus expanded in no small measure his However, to avoid confusion, the new renumbering of the Labor
commentaries on each and every topic in the syllabus, in the hope that Code will not be used in this edition. One reason for this hesitancy is that
law students and reviewees preparing for the bar examinations of 2014 even the 2014 syllabus for Labor Law does not use or make reference
and beyond will have a comprehensive reference material in Labor Law thereto.
that is focused on the syllabus-prescribed topics. JOSEUTO GUIANAN CHAN
Managing Partner
Notably, this book appears to be thus far the first and only attempt Chan Robles Law Firm
at annotating and commenting on the Supreme Court-prescribed 22/F, Philippine Stock Exchange Centre
syllabus for a bar subject. Examinees for the 2012 and 2013 bar exams Tektite East Tower, Exchange Road, Ortiga5 Center
who had used this book had given it their stamp of approval as a worthy Pasig City, Metro Manila, Philippines
reference material for Labor Law. To this, the author expresses his
utmost thanks and sincere appreciation. June15,2014

Before ending, it bears stressing that unknown to so many


practitioners and students, the Labor Code has been ordered renumbered
in 2011 by Republic Act No. 10151,1 However, until this writing, only very ~

1 EntiUed 'An Act Allowing the Employment of N~ht Wori<ers, Thereby Repealing Articles 130 and 131 of
Presidential Decree Number Four Hundred Forty-Two, As Amended, Otherwise Known as the Labor Code of
the Philippines.' This was approved on June 21, 2011. li.o•
vi BAR REVIEWER ON lABOR lAW L CHAPTER I
FUNDAMENTAL PRINClrLES AND CONCErTS vii

FOREWORD
To the 1st Edition
,,..
I

The dramatic and substantial revision of the format of the 2011 bar !

examinations by the Supreme Court triggered the publication of this


book. From the previous open-ended format, the Supreme Court has laid
down a syllabus for every bar subject in the 2011 bar examinations and in Citing the Renumbered Provisions
the forthcoming examinations this 2012. With the syllabus prescribing of the Labor Code
specific major topics and sub-topics for every point of law, preparation
for the bar exams becomes systematic, precise, clear-cut and well-
defined. In the light of the renumbering of certain
This book seeks to discuss in a simple and concise manner, each provisions of the Labor Code, as mandated under
topic and sub-topic mentioned in the syllabus for labor law. Pertinent ~A. No. 101511 and DOLE Department
provisions of law, rules and regulations and other issuances, as well as Advisory No. 01, Series of 2015/ both the
the applicable jurisprudential precepts, are cited in the discussion of each renumbered and old provisions of the affected
and every major topic and sub-topic. This manner of presenting the Labor Code provisions are cited in this book
'.J\'JA;
discussions would, in the humble view of the author, assure the bar
alongside each other. ·
reviewee of a broader and more methodical understanding and
comprehension of the important aspects of the topic under
consideration. Example:
The contents of this book are based on the more-than-a-decade of
pre-bar and pre-week review lectures of the author on the subject. Some .-.,.,.~
Article 130 [132] 3
I
relevant commentaries of the author in his two (2) volumes on the Labor ~-

Code of the Philippines are likewise cited in this book. For a more where "130" is the new renumbering while
extended and authoritative discussion on the topics prescribed in the "[132]" is its counterpart old number.
syllabus, his commentaries in these 2 volumes would certainly prove
helpful. By so presenting together both the new and the old
In the light of the introduction of multiple choice questions numbers, the reader would be well guided on the proper
(MCQs) in the 2011 bar examinations and in subsequent ones, sample provision to cite.
MCQs for each topic are presented at the end of this book. These MCQs
could well be used by the bar reviewees in honing their skill at answering
this type of questions.
It is hoped that this book would serve as a useful tool of bar
reviewees in hurdling the bar examination in labor law in the
forthcoming bar examinations in 2012 and beyond.
JOSELITO GUIANAN CHAN
Managing Partner
Chan Robles Law Firm ,~ ..
22/F, Philippine Stock Exchange Centre
Tektite East Tower, Exchange Road, Ortigas Center t This liM was enaded on June 21, 2011. tt is entilled 'AN ACT ALLOWING THE EMPLOYMENT OF NIGIIT WORKERS,
Pasig City, Metro Manila, Philippines THEREBY REPEALING ARTICLES 130 AND 131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-
lWO,AS AMENDED, OTHERVv'ISE KNOWN AS THE LABOR CODE OF THE PHIUPPINES.'
March 19, 2012 Entlled'Renumbering ollhe LaborCodeollhe Philippines, as Amended' issuedbylhe DOLE SecrelalyonJu~21, 2015.
.,., 2
3 This arlk:le is enlilled 'Faclilies !or Women.' This is lhe fusl arti:le affected bylhe renumbering underRA. No.10151.
viii BAR REVIEWER ON' lABOR lAW
..I CHAPTER!
fUNDAMENTAl PRINCIPlES AND CONCEPTS ix

TABLE OF CONTENTS b. THEORY OF IMPUTED KNOWLEDGE ..................................................... 65


6. TERMINATION OF CONTRACT OF MIGRANT WORKER
Topics are based on the ' '""' WITHOUT JUST OR VALID CAUSE ............................................................ 67
Supreme Court-prescribed 6-1. AWARD OF MONETARY CLAIMS
SYLLABUS FOR LABOR LAW AND DAMAGES TO OFWs ..................................................................75
7. DIRECT-HIRING ......................................................................................83
CHAPTER ONE B. REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES ................... 85
FUNDAMENTAL PRINCIPLES AND CONCEPTS ..................................................1 C. EMPLOYMENT OF NON-RESIDENT ALIENS ................................................. 89
A. LEGAL BASIS D. TRAINING AND EMPLOYMENT OF SPECIAL WORKERS ............................... 95
1. APPRENTICES AND LEARNERS .............................................................. 95
1. 1987 CONSTITUTION............... .....................................................................1 2. DISABLED WORKERS (PERSONS WITH DISABILITY) .................................. 98
(State Policies, Bill of Rights &Socia/ Justice) a. EQUAL OPPORTUNITY ...................................................................... 100
I. STATE POL/C/ES ..................................................................................1 b. DISCRIMINATION ON EMPLOYMENT ................................................... 101
(Artie/ell of the Constitution)
II. BILL OF RIGHTS........................................................................ :.......... 5 :>!'.:._. CHAPTER THREE
(Article Ill of the Constitution) LABOR STANDARDS ................................ . 103
Ill. SOCIAL JUSTICE... .............................................................................16
A. CONDITIONS OF EMPLOYMENT ...............................................................104
(Article XIII of the Constitution)
IV. EXAMPLE OF ALAW WHICH VIOLATES
1. SCOPE ................................................................................................ 104
2. HOURS OF WORK ................................................................................ 105
SEVERAL CONSTITUTIONAL PRINCIPLES ..............................................21
V. CONSTITUTIONAL PROVISIONS NOT APPLICABLE ;._-.,...,
a. PRINCIPLES IN DETERMINING HOURS WORKED ................................. 105
b. NORMAL HOURS OF WORK ............................................................... 106
· TO COMPANY-LEVEL ADMINISTRATIVE CASES...................................... 24
i. COMPRESSED WORK WEEK .......................................................... 108
2. ARTICLES 1700 AND 1702, CIVIL CODE..................................................... 31 ii. POWER INTERRUPTIONS/BROWNOUTS .......................................... 112
B. CONSTRUCTION IN FAVOR OF LABOR ......................................................34 c. MEAL BREAK ....................................................................................112
d. WAITING TIME .................................................................................. 115
C. SOCIAL JUSTICE ......................................................................................39
e. OVERTIME ..-; ....................................................................................118
f. NIGHT SHIFT DIFFERENTIAL .............................................................. 122
CHAPTER TWO
g. REST PERIODS ......................................................................, ......... 123
RECRUITMENT AND PLACEMENT ..................................................................40 1. WEEKLY REST DAY ....................................................................... 123
A. ILLEGAL RECRUITMENT ............................................................................40 2. EMERGENCY REST DAY WORK ...................................................... 124
h. HOLIDAY PAY, 13TH MONTH PAY ....................................................... 125
1.1LLEGAL RECRUITMENT/N LOCAL EMPLOYMENT .................................... 43 1. HOLIDAY PAY ................................................................................125
2.1LLEGAL RECRUITMENT IN OVERSEAS EMPLOYMENT ..............................45 1-A. HOLIDAY PAY/PREMIUM PAY OF TEACHERS,
3. TYPES OF ILLEGAL RECRUITMENT AND THEIR ELEMENT .......................... 49 PIECE WORKERS, TAKAY, SEASONAL WORKERS,
3-A.SIMPLE ILLEGAL RECRUITMENT ..............................................................49 SEAFARERS ......... ...................................................................131
3-8. ILLEGAL RECRUITMENT INVOLVING ECONOMIC SABOTAGE ...............53 ...... 2. 13TH MONTH PAY .......................................................................... 135
3-C. SOME PRINCIPLES ON ILLEGAL RECRUITMENT ................................. 57 i. SERVICE CHARGE .............................................................................138
4.1LLEGAL RECRUITMENT VERSUS ESTAFA ................................................60 B. WAGES ........................................................:.........................................139
5. LIABILITY OF LOCAL RECRUITMENT AGENCY
1. WAGE VERSUS SALARY .......................................................................139
AND FOREIGN EMPLOYER ......................................................................63
2. PAYMENT OF WAGES ...........................................................................140
a. SOLIDARY LIABILITY ............................................................................ 63 Ill-•

J.
BAR REVIEWER ON' LABOR LAW
l CHAPTER I
FUNDAMENTAL PRINCIPLES AND CONCEPTS xi
X
OR SUBCONTRACTING ARRANGEMENTS ........................................... 248
3. FACILITIES VERSUS SUPPLEMENTS ...................................................... 143
4. NON-DIMINUTION OF BENEFITS ............................................................ 145
,_ 4. LABOR-ONLY CONTRACTING ............................................................251
5. OTHER ILLICIT FORMS OF EMPLOYMENT ........................................... 253
5. PROHIBITIONS REGARDING WAGES ...................................................... 155 6. EFFECTS OF LABOR-ONLY CONTRACTING
6. WAGE ORDER, WAGE DISTORTION ....................................................... 163 AND ENGAGING IN OTHER ILLICIT FORMS
6.1. WAGE ORDER ...............................................................................163 OF EMPLOYMENT ............................................................................. 255
6.2. WAGE DISTORTION ........................................................................ 167 7. SUBCONTRACTING VS. LABOR-ONLY CONTRACTING .......................... 255
C. LEAVES .................................................................................................173 8. SOLIDARY LIABILITY .........................................................................256
1. SERVICE INCENTIVE LEAVE ..................................................................173 B. TERMINATION OF EMPLOYMENT............................................................. 261
2. MATERNITY LEAVE ..............................................................................174 1. TERMINATION BY EMPLOYEE ...............................................................261
3. PATERNITY LEAVE .............................................................................. 177 I. RESIGNATION, IN GENERAL .............................................................261
4. PARENTAL LEAVE FOR SOLO PARENTS ................................................ 178 II. VOLUNTARY RESIGNATION
5. SPECIAL LEAVES FOR WOMEN WORKERS (TERMINATION BY EMPLOYEE WITHOUT JUST CAUSE) ....................... 263
(MAGNA CARTA FOR WOMEN) .............................................................. 181 Ill. INVOLUNTARY/FORCED RESIGNATION
D. SPECIAL GROUPS OF EMPLOYEES ........................................................182 OR CONSTRUCTIVE DISMISSAL
1. WOMEN ..............................................................................................182 ..... (TERMINATION BY EMPLOYEE WITH JUST CAUSE) ............................. 272
a. DISCRIMINATION ............................................................................ 182 2. TERMINATION BY EMPLOYER ............................................................... 288
b. ST/PULA T/ON AGAINST MARRIAGE ................................................... 184 I. TWO-FOLD DUE PROCESS REQUIREMENT ......................................... 288
c. PROHIBITED ACTS ........................................................................... 185 a. JUST CAUSES ..............................................................................289
d. SEXUAL HARASSMENT ..................................................................... 188 I. SERiOUS MISCONDUCT ............................................................ 292
2. MINORS ..............................................................................................192 il. INSUBORDINATiON
3. KASAMBAHAY ......................................................................................195 (-o
OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS ...................... 296
4. HOMEWORKER$ .................................................................................213 Ill. GROSS AND HABITUAL NEGLECT OF DUTIES .............................. 298
5. NIGHT WORKERS ................................................................................215 IV. ABANDONMENT OF WORK ........................................................300
V. FRAUD ....................................................................................302
VI. WILLFUL BREACH OF TRUST AND CONFIDENCE ......................... 303
CHAPTER FOUR VII. COMMISSION OF CRIME OR OFFENSE ....................................... 311
POST EMPLOYMENT ...................................................................................220 VIII. OTHER ANALOGOUS CAUSES .................................................. 312
A. EMPLOYER·EMPLOYEE RELATIONSHIP ................................................... 220 IX. OTHER JUST CAUSES RECOGNIZED
1. TESTS TO DETERMINE UNDER OTHER PROVISIONS OF THE LABOR CODE ...... .............. 313
EMPLOYER-EMPLOYEE RELATIONSHIP ................................................. 220 b. AUTHORIZED CAUSES .................................................................. 314
2. KINDS OF EMPLOYMENT ......................................................................224 I. INSTALLATION OF LABOR-SAVING DEVICE .................................316
a. PROBATIONARY EMPLOYMENT .........................................................225 II. REDUNDANCY ..........................................................................317
b. REGULAR EMPLOYMENT ..................................................................229 Ill. RETRENCHMENT ......................................................................319
c. PROJECT EMPLOYMENT ...................................................................231 111-A. REDUNDANCY VS. RETRENCHMENT ......... .......................... 324
d. SEASONAL EMPLOYMENT .................................................................238 IV. CLOSURE OR CESSATION OF BUSINESS OPERATIONS ............... 326
e. CASUAL EMPLOYMENT .....................................................................239 IV-A. RETRENCHMENT VS. CLOSURE OF BUSINESS ..................... 328
f. FIXED-TERM EMPLOYMENT ...............................................................239 V. DISEASE ...................................................................................329
3. SUBCONTRACTING VERSUS c. DUE PROCESS ................................ :..-.......................... :................ 336
LABOR-ONLY CONTRACTING ................................................................241 1. TWIN-NOTICE REQUIREMENT ..................................................... 336
1. CONTRACTING VS. SUBCONTRACTING .............................................. 243 2. HEARING; AMPLE OPPORTUNITY TO BE HEARD ........................... 336
2. TRILATERAL RELATIONSHIP ..............................................................244 d. RELIEFS FOR ILLEGAL_DISMISSAL ................................................ 347
3. PERMISSIBLE CONTRACTING
CHAPTER l

"""' FUNDAMENTAl PRINCIPlES AND CONCEPTS xiii


BAR REVIEWER ON lABOR lAW
xii

1. REINSTATEMENT ..................................................................... 348 CHAPTER SEVEN


2. SEPARATION PAY IN LIEU OF REINSTATEMENT .......................... 349 ,._ LABOR RELATIONS.....................................................................................476
3. BACKWAGES ........................................................................... 355 A. RIGHT TO SELF-ORGANIZATION .............................................................. .477
e. PREVENTIVE SUSPENSION ......................................................... .363 1. WHO MAY EXERCISE THE RIGHT... ........................................................ 478
C. RETIREMENT .......................................................................................... 365 2. WHO CANNOT FORM, JOIN OR ASSIST
1. AMOUNT OF RETIREMENT PAY .............................................................375 · LABOR ORGANIZATIONS.......................................................................482
2. RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS ...................... 379 3. DOCTRINE OF NECESSARY IMPLICATION .............................................. .483
3. RETIREMENT BENEFITS OF PART-TIME WORKERS ................................. 380 4. COMMINGLING/MIXTURE OF MEMBERSHIP............................................ .487
5. RIGHTS AND CONDITIONS OF MEMBERSHIP ......................................... .489
A. NATURE OF RELATIONSHIP ..............................................................489
CHAPTER FIVE i. MEMBER-LABOR UNION ................................................................489
MANAGEMENT PREROGATIVES ...................................................................381
ii. LABOR UNION-FEDERATION ..........................................................493
A DISCIPLINE .........................................................................................382 1. AFFILIATION ..............................................................................493
B. TRANSFER OF EMPLOYEES .................................................................385 2. DISAFFILIATION .........................................................................495
C. PRODUCTIVITY STANDARD ................................................................390
D. BONUS ...............................................................................................394
E. CHANGE OF WORKING HOURS ............................................................396
- 3 SUBSTITUTIONARY DOCTRINE .................................................. .497
B. BARGAINING UNIT...................................................................................501
C. BARGAINING REPRESENTATIVE ..............................................................505
F. MARRIAGE BETWEEN EMPLOYEES
OF COMPETITOR-EMPLOYERS ............................................................. 397 1. DETERMINATION OF REPRESENTATION STATUS ................................... 505
G. POST-EMPLOYMENT BAN .................................................................... 399 a. REQUEST FOR SEBA CERTIFICATION .
I. NON-COMPETE CLAUSE ................................................................... 399 (WHICH REPEALED AND REPLACED
II. OTHER POST-EMPLOYMENT PROHIBITIONS ...................................... .404 ,-.. "VOLUNTARY RECOGNITION") ...........................................................508
b. CERTIFICATION ELECTION ................................................................513
b-1. CERTIFICATION ELECTION
CHAPTER SIX. IN ORGANIZED &UNORGANIZED ESTABLISHMENTS ..................... 515
SOCIAL WELFARE LEGISLATION ..................................................................406
b-1-A. CERTIFICATION ELECTION
A. SSS LAW ................................................................................................406 IN ORGANIZED ESTABLISHMENTS ...................................... 516
1. COVERAGE .........................................................................................406 b-1-B. CERTIFICATION ELECTION
2. EXCLUSIONS FROM COVERAGE ...........................................................409 IN UNORGANIZED ESTABLISHMENTS .................................. 518
3. DEPENDENTS, BENEFICIARIES .............................................................410 b-2. SOME PRINCIPLES ON CERTIFICATION ELECTION ....................... 518
4. BENEFITS ...........................................................................................411 b-3. BAR RULES ...............................................................................522
4.1. SOCIAL SECURITY BENEFITS .........................................................411 I. CONTRACT BAR RULE ........................................................... 523
4.2. EMPLOYEES' COMPENSATION BENEFITS ........................................426 II. STATUTORY BAR RULE ..........................................................526
B. GSIS LAW ...............................................................................................426 Ill. CERTIFICATION YEAR BAR RULE .................... ,.......................528
1. COVERAGE .........................................................................................426 IV. NEGOTIATIONS BAR RULE ..................................................... 530
2. EXCLUSIONS FROM COVERAGE ...............................,.......................... .428 V. BARGAINING DEADLOCK BAR RULE ....................................... 531 .
3. DEPENDENTS, BENEFICIARIES .............................................................428 c. CONSENT ELECTION ........................................................................ 534
4. BENEFITS ...........................................................................................429 d. RUN-OFF ELECTION ......................................................................... 536
C. LIMITED PORTABILITY LAW .....................................................................444 e. RE-RUN ELECTION ........................................................................... 537
D. RIGHTS OF LABOR ORGANIZATIONS........................................................540
D. EMPLOYEE'S COMPENSATION
·COVERAGE AND WHEN COMPENSABLE.................................................449 1. CHECK-OFF, ASSESSMENT, AGENCY FEES ........................................... 540
xiv BAR REviEWER ON lABOR lAW
.... CHAPTER I.
FUNDAMENTAL PRINCIPLES AND CONCEPTS ·
XV
i. CHECK-OFF .................................................................................... 540
ii. DUES AND ASSESSMENTS ............................................................... 542 IN ULP CASES UNDER ARTICLE 260 [249] ...... .................................... 601
iii. AGENCY FEES .................................................................................545 VIII. CRIMINAL AND CIVIL LIABILITY
2. COLLECTIVE BARGAINING .................................................................... 548 FOR ULPs OF LABOR ORGANIZATION ............................................. 602
a. DUTY TO BARGAIN COLLECT/VEL Y.................................................... 548
F. PEACEFUL CONCERTED ACTIVITIES .........................................................602
i. DUTY TO BARGAIN COLLECT/VEL Y
WHEN THERE IS NO CBA YET ......................................................... 549 1. BY LABOR ORGANIZATION ...................................................................602
ii. DUTY TO BARGAIN COLLECT/VEL Y a. STRIKE ............................................................................................602
WHEN THERE IS ACBA ..................................................................550 i. VALID VERSUS ILLEGAL STRIKES ................................................... 607
3. COLLECTIVE BARGAINING AGREEMENT (CBA) ....................................... 552 i-a. PROCEDURAL BUT MANDATORY REQUISITES
1. MANDA TORY PROVISIONS OF CBA ....................................................555 FOR A VALID AND LEGAL STRIKE OR LOCKOUT .......................... 607
i. GRIEVANCE PROCEDURE ...........................................................556 i-b. REASONS FOR DECLARING ASTRIKE ILLEGAL ........................... 613
ii. VOLUNTARY ARBITRATION ........................................................... 557 i-c. LIABILITY OF UNION OFFICERS
iii. "NO STRIKE, NO LOCKOUT" CLAUSE ..............................................557 AND ORDINARY MEMBERS ....................................................... 617
iv. LABOR-MANAGEMENT COUNCIL .................................................... 558 b. PICKET ...... ......................................................................................622
2. BY EMPLOYER ....................................................................................626
E. UNFAIR LABOR PRACTICE ......................................................................562
1. NATURE, ASPECTS .............................................................................. 562
2. ULP BY EMPLOYERS ............................................................................ 564
- a. LOCKOUT ........................................................................................626
3. ASSUMPTION OF JURISDICTION ........................................................... 628
a. NATURE ..........................................................................................628
I. INTeRFERENCE WITH, RESTRAINT OR b. EFFECTS OF ASSUMPTION OF JURISDICTION ....................................636
COERCION OF EMPLOYEES IN THE EXERCISE OF THEIR
RIGHT TO SELF-ORGANIZA T!ON .......................................................566 CHAPTER EIGHT
II. YELLOW DOG CONTRACT ...... .......................................................... 576
JURISDICTION AND REMEDIES.....................................................................642
Ill. CONTRACTING OUT OF SERVICE$ AND FUNCTIONS .......................... 576 '"'
IV. COMPANY UNION ............................................................................ 580 PRELIMINARY CONSIDERATIONS
V. DISCRIMINATION ..............................................................................582 ON JURISDICTION AND REMEDIES ........................................................... 643
VI. FILING OF CHARGES OR GIVING OF TESTIMONY ............................... 586 A. LABOR ARBITER .................................................................................646
VII. CBAcRELATED ULPs ........................................................................ 587 1. JURISDICTION .................................................................................646
VIl-A. PAYMENT OF NEGOTIATION AND ATTORNEY'S FEES ............... 587 I. JURISDICTION OVER UNFAIR LABOR PRACTICE CASES .................... 649
V/1"8. VIOLATION OF THE CBA .........................................................589 II. JURISDICTION OVER ILLEGAL DISMISSAL CASES ............................ 650
VIII. BURDEN OF PROOF IN ULP CASES UNDER ARTICLE 259 [248] ...........590 Ill. JURISDICTION OVER MONEY CLAIMS CASES .................................652
IX. PERSONS CRIMINALLY LIABLE a. JURISDICTION OF LABOR ARBITER
FOR ULPs OF EMPLOYER ............................................................... 590 VERSUS REGIONAL DIRECTOR ................................................. 654
3. ULP BY LABOR ORGANIZATIONS ...........................................................591 IV. JURISDICTION OVER CLAIMS FOR DAMAGES ................................. 658
I. RESTRAINT AND COERCION OF EMPLOYEES V. JURISDICTION OVER
IN THE EXERCISE OF THEIR RIGHTTO SELF-ORGANIZATION .............. 592 LEGALITY OF STRIKES AND LOCKOUTS ........................................ 659
II. DISCRIMINATION .............................................................................593 V-A. JURISDICTIONAL INTERPLAY
Ill. DUTY OF UNION TO BARGAIN COLLECTIVELY ..... ~ .............................. 594 IN STRIKE OR LOCKOUT CASES ............................................. 660
IV. FEATHERBEDDING LAW ..................................................................596 VI. JURISDICTION OVER CASES INVOLVING
V. DEMAND OR ACCEPTANCE LEGISLATED WAGE INCREASES AND WAGE DISTORTION ............... 662
OF NEGOTIATION FEES OR ATTORNEY'S FEES .................................600 VII. JURISDICTION OVER ENFORCEMENT OR ANNULMENT
VI. VIOLATION OF THE CBA ..................................................................601 OF COMPROMISE AGREEMENTS .................................................. 663
VII. BURDEN OF PROOF VIII. JURISDICTION OVER EXECUTION AND ENFORCEMENT
OF DECISIONS OF VOLUNTARY ARBITRATORS ............................. 664
CHAPTER!

xvi
BAR REVIEWER ON lABOR lAW ' FUNDAMENTAl PRINCIPlES AND CONCEPTS xvii

IX. JURISDICTION OVER CASES 3. REINSTATEMENT PENDING APPEAL .........................................................697


OF OVERSEAS FILIPINO WORKERS (OFWs) ....................................665 ..,. B. NATIONAL LABOR RELATIONS COMMISSION (NLRC) ................................701
X. OTHER ISSUES OVER WHICH LABOR ARBITERS
HAVE JURISDICTION .....................................................................666 1. JURISDICTION ....................................................................................701
X-A. JURISDICTION OVER CASES INVOLVING EMPLOYEES
H. COURT OF APPEALS...............................................................................703
OF GOVERNMENT-OWNED AND/OR
CONTROLLED CORPORATIONS ............................ 667 1. APPEAL VIA RULE 65, RULES OF COURT ................................................ 703
X-B. JURISDICTION OVER DISPUTES 2. JUDICIAL REVIEW BY CA OF DECISIONS
INVOLVING ALIEN PARTIES ................ 667 OF VOLUNTARY ARBITRATORS ............................................................711
X-C. JURISDICTION OVER LABOR CASES D. SUPREME COURT .....................................................................................713
INVOLVING PRIESTS AND MINISTERS ....... 668
1. RULE 45, RULES OF COURT ..................................................................713
X-D. JURISDICTION OVER CASES OF
DOMESTIC WORKERS OR KASAMBAHAY .................................669 E. BUREAU OF LABOR RELATIONS ......................... 717
X-E. JUR!SDICTION OVER CASES OF I. LABOR OFFICIALS HAVING JURISDICTION
EMPLOYEES OF COOPERATIVES .. ..................... 670 OVER ARTICLE 232 [226] CASES ............................................................717
X-F. JURISDiCTION OVER COUNTER-CLAIMS II. CASES PROVIDED UNDER ARTICLE 232 [226] ...................................... .719
OF EMPLOYERS ....................................................................671 11-A. INTER-UN/ON AND INTRA-UN/ON DISPUTES .................................... 720
XI. ISSUES AND CASES OVER WHICH !1-B. OTHER RELATED LABOR RELATIONS DISPUTES .............. ;............. .723
LABOR ARBITERS HAVE NO JURISDICTION .............. 571 Ill. ORIGINAL AND EXCLUSIVE JURISDICTION
XI-A. CLAIMS FOR DAMAGES ARISING OF MED-ARBITERS, DOLE DIRECTORS AND BLR DIRECTOR ................... 726
FROM BREACH OF NON-COMPETE CLAUSE IV. APPELLATE JUF~ISD/CTION OF THE BLR DIRECTOR
AND OTHER POST-EMPLOYMENT PROHIBITIONS ............ ........ 672 <-' AS DISTINGUISHED FROM THAT OF THE DOLE SECRETARY .................. 733
XI-B. EMPLOYER'S CLAIMS FOR CASH ADVANCES, V. REMEDIES FROM DECISIONS OF
CAR, APPLIANCE AND OTHER PERSONAL BLR DIRECTOR AND DOLE SECRETARY
LOANS OF EMPLOYEES ......................................................... 672 RENDERED IN THEIR APPELLATE JURISDICTION ................................... 739
XI-C. DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS ........ 673 VI. ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs .......................... .739
XI-D. LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT ........ 677 F. NATIONAL CONCILIATION AND MEDIATION BOARD ...................................740
XI-E. DOCTRINE OF FORUM NON CONVENIENS ............................... 679
1. NATURE OF PROCEEDINGS .................................................................,740
XI-F. QUASI-DELICT OR TORT CASES .............................................681
2. CONCILIATION VS. MEDIATION .............................................................741
XI-G. CRIMINAL AND CIVIL ACTIONS ARISING FROM
3. PREVENTIVE MEDIATION .....................................................................743
VIOLATIONS OF THE PENAL PROVISIONS OF
THE LABOR CODE ................................................................682 G. DOLE REGIONAL DIRECTORS .................................................................747
XI-H. CONSTITUTIONALITY OF LABOR CONTRACT 1. JURISDICTION
STIPULATIONS .....................................................................683 (Recovery/Adjudicatory Power) ................................................................747
2. REQUIREMENTS TO PERFECT APPEAL TO NLRC .......................................684 I. LABOR STANDARDS ENFORCEMENT CASES ...................................... 750
/. APPEAL IN GENERAL ...........................................................................684 II. SMALL MONEY CLAIMS CASES ........................................................ .753
II. PERFECTION OF APPEAL .....................................:.............................. 685 Ill. OCCUPATIONAL SAFETY AND HEALTH VIOLATIONS ........................... 757
Ill. REGLEMENTARY PERIOD ....................................................................686 IV. COMPLAINTS AGAINST PRIVATE RECRUITMENT
IV. APPEAL FEE AND LEGAL RESEARCH FEE .............................................689 AND PLACEMENT AGENCIES (PRPAs)
V. MEMORANDUM OF APPEAL ..................................................................690 FOR LOCAL EMPLOYMENT .............................................................. 758
VI. PROOF OF SERVICE TO ADVERSE PARTY ............................................691 V. CASES SUBMITTED TO REGIONAL DIRECTORS
VII. POSTING OF BOND ............................................................................ 692 AND ASSISTANT REGIONAL DIRECTORS FOR
V/1-A. MOTION TO REDUCE APPEAL BOND ...........................................695
xviii BAR REVIEWER ON lABOR lAW

VOLUNTARY ARBITRATION IN THEIR CAPACITY


-
AS EX-OFFICIO VOLUNTARY ARBITRATORS (EVAs) ............................ .758 CHAPTER ONE
H. DOLE SECRETARY...................................................................................760 ""='
FUNDAMENTAL PRINCIPLES
1. VISITORIAL AND ENFORCEMENT POWERS ............................................ 760
2. POWER TO SUSPEND EFFECTS OF TERMINATION ................................ .764
AND CONCEPTS
3. REMEDIES ..........................................................................................767
i. JURISDICTION ...................................................................................767 TOPICS PER SYLLABUS
i-1. ORIGINAL JURISDICTION ............................................................. .767
i-1-A. ADMINISTRATIVE INTERVENTION
FOR DISPUTE AVOIDANCE {AIDA) ......................................... .768
I.
i-1-B. VOLUNTARY ARBITRATION BY DOLE SECRETARY .................. 770 FUNDAMENTAL PRINCIPLES AND POLICIES
i-2. APPELLATE JURISDICTION OF THE DOLE SECRETARY ................... .772 A. Legal basis
i-2-A. APPEALS FROM DOLE REGIONAL DIRECTORS ......................... 774
1. 1987 Constitution (State Policies, Bill of Rights & Social
i-2-B. APPEALS FROM MED-ARBITERS ..............................................777 Justice)
i-2-C. APPEALS FROM BLR DIRECTOR ............................................... 777 2. Articles 1700 and 1702, Civil Code
i-2-D. APPEALS FROM POEA ............................................................778
...,
B. Construction in Favor of Labor
I. VOLUNTARY ARBITRATOR. .......................................................................779 C. Social Justice
1. JURiSDICTION ..................................................................................... .781 -- ·-------------------------··'"'·----------------------------...................
....
I. JURISDICTION OVER UNRESOLVED GRIEVANCES ................................ 782
II. JURISDICTION OVER VIOLATION OF CBA ........................................... 785 A.
Ill. JURISDICTION OVER OTHER LABOR DISPUTES .................................. 786 ~ LEGAL BASIS
IV. JURISDICTION OVER NATIONAL INTEREST CASES .............................. .786
V. JURISDICTION OVER WAGE DISTORTION CASES ................................. 787 1.
VI. JURISDICTION OVER DISPUTES INVOLVING
THE PRODUCTIVITY INCENTIVES PROGRAM ......................................787
1987 CONSTITUTION
2. REMEDIES .....................................................................................................788 (State Policies, Bill of Rights & Social Justice)
2-A. PROCEDURE .................................................................................,793
In contrast to the past Syllabi in Labor Law, from the inception of the
J. PRESCRIPTION OF ACTIONS ....................................................................795 Syllabus-type of bar examinations in 2011 untl2016, the 2017 Syllabus does not
1. MONEY CLAIMS ...................................................................................795 mention the relevant specific provisions of the 1987 Constitution but merely
2.1LLEGAL DISMISSAL .............................................................................796 mentions the same three (3) topics of State Policies, Bill of Rights and Social
3. UNFAIR LABOR PRACTICE ....................................................................796 Justice. In the discussion below, the specific sections and articles of the
4. OFFENSES UNDER THE LABOR CODE ...................................................797 Constitution pertaining to these topics are expounded more comprehensively.
5./LLEGAL RECRUITMENT .......................................................................798
I.
STATE POLICIES
(Article II of the Constitution)
-----------000---------- 1. TWO DIVISIONS OF ARTICLE II.
CHAPTER I
FUNDAMENTAL PRINCIPLES AND CONCEPTS
2
BAR REVIEWER ON lABOR lAW """' 3

The provisions on State Policies fall under the second part of the 2-part 2. STATE POLICIES ARE NOT SELF-EXECUTING PROVISIONS.
Article II of the 1987 Constitution, namely: (a) Principles,' and (b) State 3
Policies.2 Seven (7) sections under State Policies are relevant to Labor Law and
they are Sections 9, 10, 11, 13, 14, 18 and 20 whose specific provisions are as
-- By its very title, Article II of the Constitution is a "declaration of
principles and state policies." These provisions are not intended to be self-
executing tenets ready for enforcement through the courts. 1 They are used by the
follows: judiciary as aids or as guides in the exercise of its power of judicial review, and
ARTICLE II by the legislature, in its enactment of laws. The disregard of these provisions
DECLARATION OF PRINCIPLES AND STATE POLICIES cannot give rise to a cause of action in the courts. The reason is that they do not
embody judicially enforceable constitutional rights but mere guidelines for
2
STATE POLICIES legislation. These broad constitutional principles need legislative enactments to
implement them. 3 The reasons for denying a cause of action based on alleged
Section 9. The State shall promote a just and dynamic infringement of broad constitutional ·principles are sourced from basic
social order that will ensure the prosperity and independence considerations of due process and the lack of judicial authority to wade "into the
of the nation and free the people from poverty through policies uncharted ocean of social and economic policy-making."4
that provide adequ::te social services, promote full
3. DISCUSSION OF SELECTED SIGNIFICANT STATE POLICIES.
~mployment, a rising standard of living, and an improved
......
quality of life for all. Since most of the provisions under this topic are self-explanatory, only
certain provisions will be discussed herein by reason of their constitutional
Section 10. The State shal! promote social justice in all significance and relevance to labor cases and situations.
phases of national development.
a. Section 10 (Social Justice).
Section 11. The State values the dignity of every human
person and guarantees full respect for human rights. Central Ban!C pronounces that equality is one ideal which cries out for
-r-- bold attention and action in the Constitution. The Preamble proclaims
Section 13. The State recognizes the vital role of the youth "equality" as an ideal precisely in protest against crushing inequities in
in nation-buildin2 and shan promote and protect their Philippine society. The command to promote social justice in Article II, Section
physical, moral, spiritual, intellectual, and social well-being. It 10, in "all phases ofnational development," further expounded in Article XIII,6
shall inculcate in the youth patriotism and nationalism, and are clear commands to the State to take affirmative action in the direction of
encourage their involvement in public and civic affairs. greater equality. There is thus in the Philippine Constitution no lack of doctrinal
support for a more vigorous state effort towards achieving a reasonable measure
Section 14. The State recognizes the role of women in of equality.
nation-buildinJ!, and shall ensure the fundamental equality
before the law of women and men. Our present Constitution has gone further in guaranteeing vital social
and economic rights to marginalized groups of society, including labor. Under
Section 18. The State affirms labor as a primarv social
economic force. It shall protect the rights of workers and 1 Ta'lada v. MJ!rll, G.R ~- 118295. t.'ay 2, 1997, citiij Bernas, The Constitution oflhe Philippines: A Commentary,
promote their welfare. Vol. II, 1988 Ed., p. 2. In lhe very recent case of Manna Prince Hotel vs. GSIS, G.R ~. 122156, Feb. 3, 1997, it
was held that 'A provision wlidllays down a general prilciple, such as those bJnd in Art II of the 1987
Constitution, is usually notself.executing.' See also Tendo Medical Center Employees Association v. CA, G.R No.
Section 20. The State recognizes the indispensable role of 167324, July 17, 2007 (En Bane).
the private sector, encourages private enterprise, and provides • a
2 f.s held ii the leading case Kilsbayill, incoqxJated vs. M:lrakl, G.R No. 118910, July 17, 1995 246 SCRA 540, 564.

incentives to needed investments. See also Tolentinovs. SeaefayctFnance, G.R No. 115455and<XX!SOiidated cases, Aug.25,1995.
3 Bascovs. Pagcor, G.R No. 91649, May 14, 1991, 197 SCRA52, 68.
4 Tmma v. Angara, supra; See also Oposa vs. Fac!ooln, Jr., G.R No. 101083, July 30, 1993, 224 SCRA 792, 817.
5 Central Bank (OON Bangko Sent!l ng Piipilas) Efr4lloyees AssociaOOo, h:. v. Boogko Sentll ng Pipinas, GR. No.
\ CO'Iering Sectioos 11o 61hereof. 148208, Dec.15, 2004.
6 Entil!ed "Social Juslk:e and Humil! Ri]hts."
2 Cove ling SectionS 7to 28 thereof.
These seven (7) sections were specifically cited in all past syllabi for Labor Law.. I
L
,.,..i CHAffiRl
FUNDAMENTAL PRINCIPLES AND CONCEPTS
BAR REVIEWER ON lABOR lAW 5
4 !

the policy of social justice, the law bends over backward to accommodate the employment opportunities, self-organization, collective bargaining and
interests of the working class on the humane justification that those with less negotiations, strike and other peaceful concerted activities, security of tenure,
privilege in life should have more in law. And the obligation to afford protection -.. humane conditions of work, and a living wage, including the right to participate
!
to labor is incumbent not only on the legislative and executive branches but also in policy and decision-making processes affecting their rights and benefits as
on the judiciary to translate this pledge into a living reality. Social justice calls may be provided by law. 1
for 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, · c. Section 18, not meant to oppress employers.
may at least be approximated! The constitutional policy to provide full protection to labor is not
meant to be a sword to oppress employers. The commitment of the Court to
b. Section 18 (Protection-to-Labor Clause).
the cause of labor does not prevent it from sustaining the employer when it is
Among the provisions afore-quoted, it is Section 18 which is often in the right. Certainly, an employer should not be compelled to pay employees
cited in labor cases. Along with Section 3 of Article XIII, infra, it is often for work not actually performed and in fact abandoned. 2 The employer should
referred to as the protectio11-to-labor clause in the Constitution. It is often not be compelled to continue employing a person who is admittedly guilty of
invoked in resolving doubts or ambiguities in the interpretation of the law, misfeasance or malfeasance and whose continued employment is patently
employment contracts, collective bargaining agreements and appreciation of inimical to the employer. The law, in protecting the rights of the laborer,
evidence. The constitutional tenet embodied in this provision is the basis for the authorizes neither oppression nor self-destruction of the employer. 3
1"'
following provisions in the law: i
! II.
(I) Article 1702 of the Civil Code which provides that all labor BILL OF RIGHTS
legislation and labor contracts should be construed in favor of the
safety and decent living for the laborer; artd
(Article III of the Constitution)
(2) Article 4 of the Labor Code which states that all doubts in the 1. SEVEN (7) RELEVANT SECTIONS.
-...
implementation and interpretation of its provisions, including its Out of the total of 22 Sections of the Bill of Rights (Article Ill), only
implementing rules and regulations, shall be resolved in favor of seven (7) are relevant to Labor Law, to wit: Sections 1, 4, 7, 8, 10, 16 and 18(2),
labor. 2 whose provisions are as follows:
Thus, when conflicting interests of labor and capital are to be weighed
on the scales of social justice, the heavier influence of the latter should be ARTICLE III
counter-balanced by sympathy and compassion the law must accord the BILL OF RIGHTS
underprivileged worker. 3 In interpreting the protection to labor and social justice Section I. No person shall be deprived of life, liberty, or
provisions of the Constitution and the labor Jaws or rules and regulations property without due process of law, nor shall any person be
implementing the constitutional mandates, the liberal approach, which favors the denied the equal protection of the laws.
4
exercise oflabor rights, should always be adopted.
Section 4. No law shall be passed abridging the freedom of
The same provision is the constitutional touchstone for the State's
speech, of expression, or of the press, or the right of the people
discharge of its avowed duty of protecting and promoting the exercise of all the
peaceably to assemble and petition the government for redress
rights granted to workers, such as the right to full employment and equality of
of grievances.

caa1ang vs. Wil'iams, G.R No. 47800, Dec. 2, 1940,70 Phil 726.
1 See Section 3, Article XIII of lhe Constilulion and Article 3of lhe Labor Code. See also Phii~Jpi'le National Bank v. Padao,

r
1
We9e/OO UnMlfsily-Ptlii~Jpiles v. Wesleyan UnWelsily·Philippines Faculty and Stall Associalioo, GR. No. 181806, Marth G.R. Nos. 180849 and 187143, Nov. 16, 2011; Spic N' Spa1 Secvices Colporalion v. Paje, G.R. No. 174084, Aug. 25,
12, 2014; Hdf Cross of Davao College, Inc. v. Hdf Cross of Davao Faculty \Mlm- KfiMIIPI, G.R. No. 156098, JiJle 27, 2010, 629 SCRA 261, 26~270; Bank of lhe Philippine islaids v. BPI Employees Uflion.Oavao Chapter-Federation of
2005; Plastic TaMl Center Corporation v. NLRC, GR. No. 81176, Aprn 19, 1989. Unions i1 BPIUnibank, G.R. No. 164301, Aug. 10, 2010; GSISv. CA. G.R. No. 132648, Mcrch4, 1999.
3 flmopper MnilJ Corpolalion v. NLRC, G.R. No. 103525, Marth 29, 1996; Zoo, Sr. v. NLRC, G.R. No. 103679, Dec.
17, 1993,228SCRA556;Hoiday Inn Manlav. NLRC, G.R. No.109114,Sept 14, 1993;226 SCRA417.
• Adamson &Adansoo, Inc. v. CIR, G.R. No.L-35120, Jan. 31, 1984, 127 SCRA 268.
I 2

3
Agabon v. NLRC, GR No. 158693, Nov. 17, 2004, dling Capi v. NLRC, G.R No. 117378, Marth 26, 1997,270 SCRA
488,495.
ld., citing Fiipro,lnc. v. NLRC, G.R. No. L-70546, Oct. 16, 1986, 145 SCRA 123.

(
I
I 7
6 BAR REviEWER. ON lABOR lAW ~

Section 7. The right of the people to information on b. Section 4 (Freedom of Speech, of Expression and of the Press
matters of public concern shall be recognized. Access to official and Peaceably to Assemble and Petition the Government for
records, and to documents and papers pertaining to official Redress of Grievances).
acts, transactions, or decisions, as well as to government This provision is the constitutional basis for the exercise of the right to
research data used as basis for policy development, shall be picket provided in the Labor Code, 1 as distinguished from its twin right to strike
afforded the citizen, subject to such limitations as may be which fmds its constitutional mooring in another provision thereof, particularly,
provided by law. 1 Section 3 of Article XIII. Broadly speaking, the right to picket is part of the right
guaranteed under the law "to engage in concerted activities for purposes of
Section 8. The right of the people, including those collective bargaining for their mutual benefit and protection" but it is
employed in the public and private sectors, to form unions, principally guaranteed under · the freedom of speech principle in the
associations, or societies for purposes not contrary to law shall
Constitution. 3
not be abridged.
To strike is to withhold or to stop work by the concerted action of
Section 10. No law impairing the obligation of contracts I employees as a result of an industrial or labor dispute. The work stoppage may
shall be passed. be accompanied by picketing by the striking employees outside of the company
cumpounJ. While a strike focuses on stoppage of work, picketing focuses on
Section 16. All persons shall have the right to a speedy li- publiciz!ng the labor dispute and its incidents to infonn the public of wilat is
disposition of their cases before all judicial, quasi-judicial, or happening in the company struck against. A picket simply means the marching
administrative bodies. to and fro in front of the employer's premises, usually accompanied by the
displ!ly of placards and other signs making known the facts involved in a labor
Section 18. xxx (2) No involuntary servitude in any form dispute. It is a strike activity separate :u1d different from the actual stoppage of
shall exist except a~ a punishment for a crime whereof the work.
party shall have been duly convicted.
According to Phimco Industries, Inc. v. Phimco Industries Labor
2. DISCUSSION OF SELECTED SIGNIFICANT PROVISIONS OF Association (PILA), 4 while the right of employees to publicize their dispute
ARTICLE lll. falls within the protection of freedom of expression and the right to peaceably
assemble to air grievances, these rights are by no means absolute. Protected
a. Section 1 (Right to Due Process and Equal Protection ofthe
picketing does not extend to blocking ingress to (entrance) and egress from
Law)
(exit) the company premises. That the picket was moving, was peaceful and
The constitutional due process and equal protection provision in was not attended by actual violence may not free it from taints of illegality if the
Section 1 of Article III has been declared not proper to be invoked in company- picket effectively blocked entry to and exit from the company premises.
level administrative cases leading to the imposition of certain sanctions, such as
c. Section 8 (Right to Organize Unions).
termination of employment. The reason is that these twin rights may only be
invoked when the party depriving an individual of such rights is the government This provision is the constitutional basis for the exercise of the right to
and not when it is a private party such as an employer. self-organization by workers in both public5 and private1 sectors. To breathe life
(NOTE: See discussion below on this topic entitled "V. CONSTITUTIONAL
to this constitutional tenet, the Labor Code: ·
PROVISIONS NOT APPLICABLE TO COMPANY-LEVEL ADMINISTRATIVE CASES").
1 Artide 279 [264],l.abor Code.
2 M31ayang Mlngg&;~awa sa Esse v. Esse Staldard Eastern, Inc., GR No. L-24224, Jutj ll, 1965, 14 SCRA 801.
3 De Leon v. Nama Labor Urian, G.R No. L·7586, Jan. 30, 1957, 100 Phi. 789; The llslD' l1e AssulalCe Co, Ltd.
1
The Freedool ci Information (FOQ Bill 1\!th sooght to proiTK)Ie and implement this ConstiWtional ~h~ has yet 1D be passed Enipklyees AssodaOOn • NATU v. The Insula' life Assurance Co., Ltd., G.R No.l-25291, J<r~. 30, 1971, 37 SCRA 244.
intllaw.Hs YefSion 11 the Senate, Senate Bill No. 1733, olherMse knO\\n as the 'People's Freedom a lnfonnatioo (FOI) Ad 4 G.R. No. 170830, Aug. 11, 2010.
ci2013,' wac; passed Mil 21 a1!irmaWe votes from all sena1ors present on Mard110, 2014.11s counteqlartversion in the 5 See Execu!Ne Older No. 180, Series of 1987 v.llidl proWles 11e guideines fa' the exen:ise of the l'ght ID cxganize d
House ci RepresenfaWes, House Bill No. 3237, otheMise knolll1 as ".Ali Ad to Strengthen the RiJht ci Ciizens to 90'.-emmenl e!T'(lloyees.
lnfoonation held by the G<Mlmmenf has yet to be approved as of this Yoliting (May03, 2014).
8 BAR REVIEWER ON IJ\BOR IJ\W ....l CHAPTER I
9
I FUNDAMENTAL PRINCIPLES ANO CONCEI'TS

(1) protects the right of workers to self-organization and to fonn, join,


Anucension v. National Labor Union. 1 - R.A. No. 33502 exempts
or assist labor organizations of their own choosing. 2 members of any religious sects, which prohibit affiliation of their members in
(2) declares as a policy of the State the fostering of a free and ..l- any labor organization, from being covered by a union security clause. The
voluntary organization of a strong and united labor movement. 3 ' union contends that R.A. No. 3350 is unconstitutional for impairing the
(3) declares that it shall be unlawful for any person to restrain, coerce, obligation of its contract, specifically, the "union security clause" embodied in
discriminate against or unduly interfere with employees and its Collective Baigaining Agreement (CBA) with the company, by virtue of
workers in their exercise of the right to self-organization, which which "membership in the union was required as a condition for employment for
includes the right to fonn, join, or assist labor organizations for the all pennanent employees and workers." This agreement was already in existence
purpose of collective bargaining through representatives of their at the time RA. No. 3350 was enacted on June 18, 1961, and it cannot,
own choosing and to engage in lawful concerted activities for the therefore, be deemed to have been incorporated into the agreement. But by
same purpose or for their mutual aid and protection. 4 reason of this amendment, Anucension as well as others similarly situated, could
d. Section 10 (Non-Impairment of Obligation of Contracts). no longer be dismissed from his job even if he should cease to be a member, or
A law authorizing interference, when appropriate, in the contractual disaffiliate from the union, and the company could continue employing him
relations between or among parties is deemed rt::ad into the contract and its notwithstanding his disaffiliation from the union. The Act, therefore, introduced
a change into the express tenns of the union security clause; the company was
implementation cannot successfully be resisted by force of the non-impairment
guarantee. There is, in that instance, no impingement of the non-impairment ... partly absolved by law from the contractual obligation it had with the union of
employing only union members in permanent positions. It cannot be denied,
clause. 5
therefore, that there was indeed an impainnent of said union security clause.
The purpose of the non-impainnent clause of the Constitution is to
safeguard the integrity of contracts against unwarranted interference by the The Supreme Court, however, ruled that the prohibition to impair the
State. As a rule, contracts should not be tampered with by subsequent laws that obligation of contracts is not -absolute and unqualified. In spite -of the
would change or modify the rights a..'ld obligations of the parties. 6 Impairment is constitutionai prohibition, the State continues to possess authority to safeguard
~mything that diminishes the efficacy of the contract. There is an impairment if a
subsequent law changes the terms of a contract between the parties, imposes
·- the vital interests of its people. Legislation appropriate to safeguard said interest
may modify or abrogate contracts already in effect. Otherwise, important and
valuable refonns may be precluded by the simple device of entering into
new conditions; dispenses with those a~ed upon or withdraws remedies for the
enforcement of the rights of the parties. The non-impainnent clause is limited in contracts for the purpose of doing that which otherwise may be prohibited. It
application to laws that derogate from prior acts or contracts by enlarging, follows that not all legislations which have the effect of impairing a contract are
abridging or in any manner changing the intention of the parties.8 Necessarily, obnoxious to the constitutional prohibition as to impairment, and a statute
the constitutional proscription would not apply to laws already in effect at tl1e passed in the legitimate exercise of police power, ··although it incidentally
time ofcontract execution.9 destroys existing contractual rights, must be upheld by the courts. This has
special application to contracts regulating relations between capital and labor
which are not merely ordinary but impressed with public interest and therefore
must yield to the common good.
1 The LOOor Code is tie g<Mllllilg law on the exen:ise of tile riJit to seii-<Xganizalioo i1 the pMte sector. What then was the purpose sought to be achieved by R.A. No. 3350?
2 Arti:les 3llld 253(243J; labor Code.
3 Mk:le 218(A)(c) (211(A)(c)J, l.abor Code. Its purpose was to insure freedom of belief and religion, and to promote the
• Mk:le 257 [246], Labor Code. general welfare by preventing discrimination against those members of religious
s Hacienda luisita, klc. v. PARC, G.R. No.171101,July 5, 2011. sects which prohibit their members from joining labor unions, confrrming
s Goldenway Metdlandisil;! Corporcrtion v. Equitable PCI Bcrlk, G.R No. 195540, M3rd113, 2013, citing Siska Development
Corporalioo v. Ofli::e of the PresK!e!ltofthe Phiippines, G.R No. 93176,Ap!i 22, 1994,231 SCRA674, 680.
,.
7 Gdderr.vdy Merdlandisilg Corporation v. Equilable PCI Bcrlk, supta; Siska Develqlment Caporalioo v. Office of the G.R No. L-26097, N<w. 29, 1977.
Presklentol the Phiippiles, dti1Q Clemons v. Nolting, G.R No. 17959. Jan. 24, 1922, 42 Phi 702, 717. See also Phiippi'le ~on June 18, 1961, anendi1g SecOOn 4(a), paragraph 4of RA No. 875, flus: '(4} Plwided, That nothing illhis />C.
AloosementlKld Gaming~~ (PAGCOR)v. Thelllleauoflolemal Revenue, G.R No.\72087, Mardl15, 2011. oc i1 ?Irf Ad or s1alule of 1he Reptillic of the Phlippiles shall preclude ill~ fran making an I)Jreement lli1h a labor
a Barcflgay Assodatioo lor Na1iooal Advancement and TranspaalC)' (SANAT) Pcrly-tist v. Camissi:ln on Elections, G.R. OfQMizalioo kli8:Jilie as acondi!i:Jn of err¢'tment membership llereil, if such lim' Ofgallizafion is the represeotatr.re of
No.\77508, Aug. 7, 2009, cif.i'IJ Senanov. GaRmtMaliline SeM:es, Inc., G.R. No. 167614, Marth 24,2009. the el11lklYees as proWled il Section twelve, but such &;Jreement shal not cover rnenters of aey rel'gioos sedS 'Mlich
9 Haciendal.uisila, Inc. v. PARC, G.R. No. 171101, JulyS, 2011. P!Ohilitaflirm alheirmembels i1 mt such labor 01ganiza!ion.'

l
10 BAR REVIEWER ON lABOR lAW

thereby their natural, statutory and constitutional right to work. It cannot be


-
\
i
i
CHAPTER I
FUNDAMENTAL PRINCIPLES AND CONCEPTS

"The prohibition [against impairment of the obligation of contracts]


11

gainsaid that said purpose is legitimate. It may not be amiss to point out here I is aligned with the general principle that laws newly enacted have only a
that the free exercise of religious profession or belief is superior to contract
rights. In case of conflict, the latter must, therefore, yield to the former. 4- prospective operation, 1 and cannot affect acts or contracts already
perfected; 2 however, as to laws already in existence, their provisions are
In another case where this issue was raised, Abella v. NLRC/ read into contracts and deemed a part thereor.J Thus, the non-
petitioner leased a farm land for a period of ten (1 0) years, renewable, at her impairment clause under Section 10, Article III [of the Constitution]
is limited in application to laws about to be enacted tbat would in any
option, for another ten (1 0) years. During the existence of the lease, she . way derogate from existing acts or contracts by enlarging, abridging
employed herein private respondents. Upon the expiration of her leasehold or in any manner changing the intention ofthe parties thereto." 4
rights, petitioner dismissed private respondents and turned over the hacienda to
its owners who continued the management, cultivation and operation of the Thus, in this case, the enactment in 1995 of R.A. No. 8042, otherwise
farm. In the illegal dismissal case filed by private respondents, petitioner claims known as the "Migrant Workers and O.;erseas Filipinos Act of 1995"
that she is not liable to pay separation pay because the basis for the award preceded the execution of the employment contract between petitioner and
thereof is Batas Pambansa Blg. 130 which was enacted only on August 21, respondents in 1998. Hence, it cannot be argued that R.A. No. 8042,
1981, amending Article 298 [283] of the Labor Code which grants separation particularly the subject clause, 5 impaired the employment contract of the
pay in case of closure of business operations. Petitioner contends that this parties. Rather, when the parties executed their 1998 employment contract,
amendatory law violates the constitutional guarantee against impairment of they were deemed to have incorporated bto it !!11 the provisions of RA. No.
obligations and contracts because when she leased the hacienda on June 27, 8042.
1960, neither she nor the lessor contemplated the creation of the obligation to Police Power vs. Non-Impairment Clause.
pay separation pay to workers at the end of the lease. In debunking 2this posture
It must be borne in mind that police power is superior to the non-
of petitioner, the Supreme Court cited the above case of Anucension where this
issue has been laid to rest. The purpose of Article 298 [283], as amended, is impairment clause. 6 The constitutional guarantee of non-impairment of contracts
is limited by the exercise of the police power of the State, in the interest of
obvious - the protection of the workers whose employment is terminated
because of the closure of establishment and reduction of personnel. Without said
law, employees like private respondents in the case at bar will lose the benefits
-- public health, safety, morals, and general welfare of the community. 7
Thus, in the same en bane case of Serrano, 8 it was further held that
to which they are entitled - for the thirty-three years of service in the case of even if the Court were to disregard the timeline when the law was enacted vis-a-
Dionele and fourteen years in the case of Quitco. Although they were absorbed vis the contract, the subject clause may not be declared unconstitutional on the
by the new management of the hacienda, in the absence of any showing that the ground that it impinges on the impairment clause, for the law was enacted in the
latter has assumed the responsibilities of the former employer, they will be exercise of the police power of the State to regulate a business, profession or
considered as new employees and the years of service behind them would calling, particularly the recruitment and deployment of OFWs, with the noble
amount to nothing. Moreover, to come under the constitutional prohibition, the
law must effect a change in the rights of the parties with reference to each other 1 OltiJao; &Co., Ul. v. CA, G.R No. 126102, De.c4, 2000, 346 SCRA 748.
and not with reference to non-parties. As correctly observed by the Solicitor 2 1b:41 ResoorteS, Inc. v. Base t1eta1s ~ Reswtes Colpaatm, G.R No. 163509, Dec. 6, 2006,510 SCRA400.
3 W...er v. Wilehead, 63 U.S. 314 (1873); Wood v. Lcvet!, 313 U.S. 362, 370 (1941); lnfrala.AssullllOO Caporalioo v.
General, Article 298 [283] as amended refers to employment benefits to farm
Reptji; d toe Pli!ppines, G.R No. 156571, Julf 9, 2008; Sm!rt Coomri:aOOns, Inc. v. Ciy of Darclo, G.R No. 155491,
hands who were not parties to petitioner's lease contract with the owner of the Sept 16, 2008.
hacienda. That contract cannot have the effect of annulling subsequent 4 lJndefsaxi1g supplied. .
legislation designed to protect the interest of the working class.
5 The SliJjecl clause is toe last clause illle Sf' paragraph of Sec6on 10 of RA No. 8042, b:> wit 'Sec. 10. Mx1ey Clains.-
xxx In ra;e d lem1i1aOOn d oveseas ~ Mthout jJst, valkl oc auG1olized cause ao; dEfued by law oc CMtract. lhe
As held in the 2009 en bane case of Serrano v. Gallant Maritime 'Mlkelsshal be entitled b:> toe till rei"rWsernentofhis placement lee 'M1h illerest of twet.<e pen:eill (12%) per annum, pluS
Services, lnc.: 3 ,. his sal!lies b" lhe unexpired portioo of his~ oontract or tJr ttree (3) roonths tJr every yea- of the tmexpied term,
'Midlewr is ess. xxx (8nphasis aid l.l1derscoli1g sup~ied illhe OOjilal text of the decision). This clause was declared
uncoostMonal in !his case.
6
Philip!ile National Bank v. Remgk>, G.R No. 78508, 21 Mirch 1994, 231 SCRA 362; MQkrFil Tra:flllQ
, G.R No. 71813, Ju~ 20, 1987. ColporU v. Lazaro, G.R No. L·54958, Sept 2, 1983,209 Phi. 400 (1983); Ortgas &Co., Ltd. Pamership v. Feati Bank
2 Mucensionv. National Labor Union, G.R No. L-26097, Nov. 29,1977. and Trust Co., G.R No. L-24670, Dec.14, 1979., 183 Phil. 1761979.
3 Senanov. Gallant Maritime Selvk:es, h:., G.R. No. 167614, Mirch 24, 2009.
I Barangay Assodatioo for Nationa AdVcr1cement and Transpamcy (BANAl) Pcrty.USt v. Coo1missioo on Elections,
~ Se!Tanov. Galla1t Maritime SeM::es, klc., GR No. 167614, Mcrch 24, 2009.

l
12 BAR REVlEWER ON LABOR LAW
CHAPTER!
TI
L.)
FUNDAMENTAL PRINCIPlES AND CONCEPTS
end in view of ensuring respect for the dignity and well-being of OFWs
wherever they may be employed. 1 Police power legislations adopted by the State implementations of E.O. No. 797, 1 which was enacted under the police
power of the State, they cannot be struck down on the ground that they

r
to promote the health, morals, peace, education, good order, safety, and general
violate the contract clause. To hold otherwise is to alter long-established
welfare of the people are generally applicable not orJy to future contracts but
constitutional doctrine and to subordinate the police power to the contract
even to those already in existence, for l!ll private contracts must yield to the clause."
superior and legitimate measures taken by the State to promote public welfare. 2
3
The stipulations in the contract must be valid.
The Conference of Maritime Manning Agencies, Inc. v. POEA, I While the contracting parties may establish such stipulations, clauses,
illustrates this point. The POEA issuances 4 were assailed, inter alia, as being
violative of the non-impairment clause in the Constitution as they were made terms and conditions as they may deem convenient, such stipulations should not
applicable to any Filipino seafarer already on-board any vessel. In upholding be contrary to law, morals, good customs, public order or public policy. 2
their validity, the Supreme Court pronounced that the constitutional prohibition Maynilad Water Supervisors Association v. Maynifad Water
3
against impairing contractual obligations is not absolute and is not to be read Services, Inc. - The agreement or contract between the parties is the fonnal
with litem! exactness. It is restricted to contracts with respect to property or expression of the parties' rights, duties and obligations. It is the best evidence of
some object of value and which confer rights that may be asserted in a court of the intention of the parties. Thus, when the terms of an agreement have been
justice; it has no application to statutes relating to public subjects within the reduced in writing, it is considered as containing all the terms agreed upon and
domain of the general legislative powers of th~ State and involving the public there can be no evidence of such tenns other than the ccntents of the written
rights and public welfare of the entire community affected by it. It does not agreement between the parties and their successors-in-interest. Time and again,
prevent the proper exercise by the State of its police power by enacting
regulations reasonably necessary to secure the health, safety, morals, comfort, or
general welfare of the community, even though contracts may thereby be
affected, for such matters cannot be placed by contract beyond the power of the
r the rule has been stressed that a contract is the law between the parties, and
courts have no choice but to enforce such contract so long as it is not contrary to
Jaw, morals, good customs or public policy. Otherwise, courts would be
interfering with the freedom of contr:Jct of the parties. Simply put, courts
State to regulate and control. Thus: j_ cannot stipul"'te for the parties or amend the latter's agreement, for to do so
would be to alter the real intention of the contracting parties when the primary
"Verily, the freedom to contract is not absolute; all contracts and all rights
are subject to the police power of the State and not only may regulations function of courts is to give force and effect to the intention of the parties. 4
which affect them be established by the State, but all such regulations must e. Section 16 {Speedy Labor Justice).
be subject to change from time to time, as the general well-being of the
community may require, or as the circumstances may change, or as "Speedy disposition of cases" or "speedy labor justice" is a relative term
experience may demonstrate the necessity. And under the Civil Code,5 and a flexible concept It is consistent with delays and depends upon the
contracts of labor are explicitly subject to the police power of the State circumstances of each case. What the Constitution prohibits are unreasonable,
because they are not ordinary contracts but are impressed with public arbitrary and oppressive delays which render rights nugatory. 5
interest. The challenged resolution and memorandum circular being valid
Speedy labor justice, in terms of period, is provided under Article 292(i)
[277(i)] of the Labor Code, thus:
"{i) To ensure speedy labor justice, the periods provided in this Code
1 See Executive Soo"e!ay v. CA., G.R. No. 131719, May 25, 2004, 429 SCRA 81, dtirVj JM\l Promo00n an:! Mana;Jement, within which decisions or resolutions of labor relations cases or matters
Inc. v. CA, G.R No. 120095, Aug. 5, 1996, 260 SCRA319. should be rendered shall be mandatory. For this purpose, a case or matter
2 OrtiJas&Co.,UI.v.CA,GR No.126102,Dec.4,2000, 346SCRA748.
3 G.R. No.114714,Apm21, 1995. shall be deemed submitted for decision or resolution upon the filing of the
4 POfA Govemhg 8uatd Resolution No. 01, Series o11994, Issued oo 14 J111. 1994 Clld POEA MemorandtJn CiraJiar No.
05, Sefies r! 1994, issood oo 19 Jan.19941111ich ~ lhe rates o1 compensation Md other benefits i1 Part II, SectkY1 C.
IJOO'J~ 1; Sectioo L, ~caphs 1!r1d 2; llld Appendix 1·A of U1e POEA S!rodali8nployment Cootracfs for Seafa"ers,
. 1
EnliUOO 'ReorgCYiizing Ule J.il6ty d Labor and ~ CreaOOg lt1e Pli!ppile Ovetseas En"4lloyment Administration,
lll1idl oojustmeo5 tool: effedoo 20 Marth 1994. and ((lr Oti1er Purposes.'
2
5 Article 1700 lh!reof expresstt pl"ll'Mes: 'M 1700. The relaticrJs belween capftalllld-labor are not merely coofrnctJaJ. They Article 1300, CMI Code.
3 G.R. No. 198935, Nw. 27, 2013.
are so iT1J!essed ~ publk: inlerest that labor cootlcl9lfust yield Ill lhe cormm good. Therefore, such coolracls are
No001 Resoorces and ~Corporation v. ,AJI Asia lllllk Colpolalkxt, G.R. No. 162523, Nov. 25, 2009, 605 SCRA
4
subject klltle speca laws oo labor Wlioos, cd!ecWe bargOOilg, sH<es and k:ckout!, closed shop, wages, ~
cooditions, hrus of labtT and srniar subjeds.. 370,380.
5
Cadain v. POf:A, NLRC, G.R. Nas.104776, 104911-14 and 105029-32, Dec. 05, 1994.

l
I
14 BAR REVIEWER ON LABOR LAW CHAPTER I 15
-r' FUNDAMENTAL PRINCirLES AND CONCEPTS

last pleading or memorandum required by the rules of the Commission or "assets and liabilities" transferred to the surviving bank, petitioner BPI, by
by the Commission itself, or the Labor Arbiter, or the Director of the
Bureau of Labor Relations or Med.Arbiter, or the Regional Director." virtue of the merger. The Supreme Court, however, did not agree to this

In the detennination of whether or not the right to a "speedy triaC' has


...... postulation. In legal parlance, human beings are never embraced in the tenn
"assets and liabilities." It is contrary to public policy to declare the former
been violated, certain factors may be considered and balanced against each FEBTC employees as fonning part of the assets or liabilities of FEBTC that
other. These are the length of delay, reason for the delay, assertion of the right were transferred and absorbed by BPI in the Articles of Merger. Assets and
or failure to assert it, and prejudice caused by the delay. The same factors may liabilities, in this instance, should be deemed to refer only to property rights and
also be considered in answering the judicial inquiry as to whether or not a obligations of FEBTC and do not include the employment contracts of its
person officially charged with the administration of justice has violated the personnel. A corporation cannot unilaterally transfer its employees to another
1
speedy disposition of cases. employer like chattel. Certainly, if BPI as an employer had the right to choose
While the speedy disposition of labor cases may be the policy of the who to retain among FEBTC's employees, FEBTC employees had the
law, it must be emphasized that speed alone is not the chief objective of a trial. concomitant right to choose not to be abgorbed by BPI. Even though FEBTC
It is the careful and deliberate consideration for the administration of justice, a employees had no choice or control over the merger of their employer with BPI,
genuine respect for the rights of all parties and the requirements of procedural they had a choice whether or not they would allow themselves to be absorbed by
due process, and an adherence to the principle that the disposition of cases BPI. Certainly nothing prevented the FEBTC's employees from resigning or
should always be predicated on the consideration t1.at more than the mere retiring and seeking employment elsewhere instead of goL11g along with the
convenience of the courts and of the parties in the case, the ends of justice and · proposed absorption. Employment is a personal consensual contract and
fairness would be served. These are more important than a race to end the trial.
2 absorption by BPI of a former FRBTC employee without the consent of the
employee is in violation of an individual's freedom to contract It would have
f. Section 18[2] (Involuntary Servitude). been a different matter if there was an express provision in the Articles of
"Involuntary servitude" is every condition of enforced or compulsory Merger that as a condition for the merger, BPI was being required to assume all
service of one to another, no matter under what fonn such servitude may be
disguised. 3 The 1987 Constitution categorically prohibits involuntary servitude.
4 L the employment contracts of all existing FEBTC employees with the conformity
of the employees. In the absence of such a provision in the Articles of Merger,
It is on the basis of this constitutional precept that employees are granted the then BPI clearly had the business management decision as to whether or not to
right to tenninate their employment relationship with their employers under employ FEBTC's employees. FEBTC employees likewise retained the
Article 300 [285]5 of the Labor Code. This article recognizes the equality of the prerogative to allow themselves to be absorbed or not; otherwise, that would be
parties to an employment relationship. Thus, an employee may resign from tantamount to involuntary servitude.
employment at any time he wishes and with or without just cause, subject only Compulsory (ul(illment ofmilitary or civic dutv.
6
to certain minimum conditions imposed by law.
Article 301 [286]1 of the Labor Code which provides for compulsory
Bank of the Philippine islands v. BPI Employees Union-Davao fulfillment of military or civic duty, may well be considered as the exception to
Chapter-Federation of Unions in BPI Unibank,7 involves the merger of BPI this constitutional proscription. This is so because the constitutional prohibition
with FEBTC, where the Voluntary Arbitrator ruled that, in accordance with should be subordinated to the right of the government to call upon its citizens to
Section 80 of the Corporation Code, the emp){)yees of FEBTC form part of the protect their State as provided under Section 4, Article II of the Constitution.
The survival of the State is the paramount justification for such involuntary
Cabalerov. A!ronso, Jr., 153 SCRA 153 [1987; Goozalesv. ~Cilbaycvl. 199SCRA 298. servitude.
Habanav. NLRC, G.RNo. 129418, Sept 10,1999.
3 Rubi v. Provilcial Board oiMndcro, G.R. No. L-14078. Mard17, 1919, 391'tlft. 660.
4
5
Section 18 [2], Article Ill [Bil of Rights], 1987 Consti1ulioo.
Enlilled 'Temmioo by Employee." This is CO!l'lll"Ol~ knO'M1 as 'resignalion."l>.s rerurilered pursuant to Section 5, R.A.
.
No. 10151, June 21, 2011 illd DOLE Depa!bnent Advisoly No. 01, Se!ies ol2015 (Rerlmileli1g of the labor Code of the
Philippines, as .Aroended), issued on Ju~ 21, 2015.
6 Such as v.i1en oo en1Jioyee resgns tt tenninales v.itilOOI~cause the~ rela\ionSil~ by~ allliltro
nOO::e on the empbyer at least one (1) monlh il advaoce (See Mide 300 [285]. Laxr Code). 1 En1med 'When ~Not Deemed Temlina!ed.' Under lhis ri:le, elf4lloyees may be caled to !ulfiH cerfatt1111!1itary or
7 G.R. No. 164301. Alg. 10, 2010. cMc duly but sud! shall not lenni1a1e employment

r
16 BAR REviEWERON.IABOR lAW

m.
- CHAPTER I
FUNDAMENTAL PRINCIPLES AND CONCEPTS

The State shall regulate the relations between workers and


17

SOCIAL JUSTICE
(Article XIll of the. Constitution) employers, recognizing the right of labor to its just share in the
....__ fruits of production and the right of enterprises to reasonable
1. FIVE (5) RELEVANT SECTIONS OF ARTICLE XIII. returns to investments, and to expansion and growth.
Article XIII embodies 19 Sections but only five (5) are relevant to Labor
II WOMEN
Law, viz.: Sections 1, 2, 3,13 and 14. Their provisions are as follows:
Section 14. The State shall protect working women by
ARTICLE XIII providing safe and healthful working conditions, taking into
SOCIAL JUSTICE AND HUMAN RIGHTS account their maternal functions, and such facilities and
Section 1. The Congress shall give highest priority to tbe opportunities that will enhance their welfare and enable them
enactment of measures that protect and enhance the right of all to realize their full potential in the service ofthe nation.
the people to human dignity, reduce social, economic, and 2. DISCUSSION OF SELECTED SIGNIFICANT PROVISIONS OF
political inequalities, and remove cultural inequities by ARTICLE XIIL
equitably diffusing wealth a11d political power for the common
good. a. Section 1 (Human Dignity, Inequality and Discrimination).

To this end, the State shall regulate the acquisition,


ownership, use, and disposition of property and its increments.
r This provision speaks of the constitutionally enshrined abhorrence to
inequality and discrimination for which Congress is mandated to prevent by
enacting laws that "enhanl:e the right of all people to human dignity, reduce
Section 2. The promotion of social justice shall include the
commitment to create economic opportunities based on
I social, economic, and political inequalities.''

freedom of initiative and self-reliance.


LABOR
L International School Alliance of Educators liSAEJ v. Quisumbing/
illuminates on this principle. The Supreme Court declared In this case that the
point-of-hire classification employed by respondent School to justify the
distinction in the salary rates of foreign-hires and local hires is an invalid
Sectwn 3. The State shall afford full protection to labor, classification. There is no reasonable distinction between the services rendered
local and overseas, organized and unorganized, and promote by foreign-hires and local-hires. The practice of the School of according higher
full employment and equality of employment opportunities for salaries to foreign-hires contravenes public policy and, certainly, does ·not
all. deserve the sympathy of the Cotut. In so holding, the Court cited Section I of
It shall guarantee the rights of all workers to self- Article XIII that public policy abhors inequality and discrimination; Our
organization, collective bargaining and negotiations, and Constitution and laws reflect the policy against these evils. Thus, the
peaceful concerted activities, including the right to strike in Constitution, in the Article on Social Justice and Human Rights, exhorts
accordance with law. They shall be entitled to security of Congress to "give highest priority to the enactment of measures that protect and
tenure, humane conditions of wor~ and a living wage. They enhance the right of all people to human dignity, reduce socia~ economic, and
shall also participate in policy and decision-making processes political inequalities." Moreover, the very broad Article 19 of the Civil Code
affecting their rights and benefits as may be provided by law. requires every person, "in the exercise of his rights and in the perfonnance of his
duties, [to] act with justice, give everyone his due, and observe honesty and
The State shall promote the principle of shared good faith."
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, • b. Section 3 (Protection-to-Labor Clause).
including conciliation, and shall enforce their mutual The most important provision among the 5 sections above is Section 3
compliance therewith to foster industrial peace. of Article XIII which, along with Section 18 of Article II, is the principal

I G.R No. 128845, .hr1e 1, 2000.

I
18 BAR REVIEWER ON LABOR LAW

protection-to-labor clause in the Constitution. The underlined keywords are


- CHAPTER I
FUNDAMENTAL PRINCirLES AND CONCErTS

Thus, Section 3, Article XIII cannot be treated as a principal source


19

worthy to be taken note of considering that they reflect the rights and principles of direct enforceable rights, for the violation of which the questioned clause
that encompass almost all of the provisions of the Labor Code and other related
laws.
...- may be declared unconstitutional. It may unwittingly risk opening the
floodgates of litigation to every worker or union over every conceivable
Section 3. Article XIII. not selfexecuting/actuating nor judiciallv violation of so broad a concept as social justice for labor. 1 Section 3, Article
en(orceable. XIII merely clothes it with the status of a sector for whom the Constitution
While all the provisions of the 1987 Constitution are presumed self- urges protection through executive or legislative action and judicial
executing,' there are some which the Court has declared not judicially recognition. Its utility is best limited to being an impetus not just for the
enforceable, Article XIII being one, 2 particularly Section 3 thereof, the nature executive and legislative departments, but for the judiciary as well, to protect
3
of which the Court, in Agabon v. NLRC, has described to be not self- the welfare of the working class. 2
actuating: Interpretation of some principles.
"Thus, the constitutional mandates of protection to labor and
security of tenure may be deemed as self-executing in the sense that these In the workplace, where the relations between capital and labor are
are automatically acknol'lledged and observed without need for any often skewed in favor of capital, inequality and discrimination by the
enabling legislation. Hol'lever, to declare that the constitutional provisions employer are all the more reprehensible. 3 Section 3, Article XIU of the
ar~ enough to guarali tee the full ex~rcis;: of the rights embodied therein,
and the realiw.tion of ideals therein expressed, would be impractical, if not .~.,.
Constitution specifically provides that labor is entitled to "humane
conditions of work." These conditions are not restricted to the physical
unrealistic. The espousal of such view presents the dangerous tendency of workplace - the factory, the office or the field - but include as well the manner
being overbroad and exaggerated. The guarantees of 'full protection to by which employers treat their employees. 4 The same provision of the
labor' and 'security of tenure', when examined in isolation, are facially Constitution also directs the State to promote "equality of emplo)ment
unqualified, and the broadest interpretation possibk suggests a blanket
shield in favor of labor against any form of removal regardiess of opportunities for all." Similarly, the Labor Code5 provides that the State shall
"ensure equal work opportunities regardless of sex, race or creed." It would be
circumstance. This interpretation implies an unimpeachable right to
continued employment - a utopian notion, doubtless - but still hardly
within the contemplation of the framers. Subsequent legislation is still
·- an affront to both the spirit and letter" of these provisions if the State, in spite
of its primordial obligation to promote and ensure equal employment
needed to define the parameters of these guaranteed rights to ensure the opportunities, closes its eyes to unequal and discriminatory terms and
protection and promotion, not only of the rights of the labor sector, but of conditions of employment. 6
thf employers' as well. Without specific and pertinent legislation, judicial Discrimination, particularly in tenns of wages, is frowned upon by
~Jlies will be at a loss, formulating their own conclusion to approximate
the Labor Code. Article 133 [135], for example, prohibits and penalizes7 the
at least the aims of the Constitution.
payment of lesser compensation to a female employee as against a .male
"Ultimately, therefore, Section 3 of Article XIII cannot, on its
own, be a source of apositive enforceable right to stave off the dismissal employee for work of equal value. Article 259 [248] declares it an unfair labor
of an employee for just cause owing to the failure to serve proper notice or practice for an employer to discriminate in regard to wages in order to
hearing. As manifested by several framers of the 1987 Constitution, the encourage or discourage membership in any labor organization.
provisions on social justice require legislative enactments for their
c
en1orce ab"l"
1 1ty.,4

1 Semulo v. Galoot Miriine SeMces, Inc., G.R. No.167614, Malth 24, 2009.

I Serranov. Gallant Marmme SeMces, Inc, G.R No. 167614, M3rch 24,2009, citing Mlli\a Piince Hotel v. GSIS, G.R. No.
122156, Feb. 3,1997, '}fj7 SCRA408.
.. 2
3
ld.
Mtemaliooal SdlodAiianceofEduca!ols[ISAE}v. Quisoolbing, GR. No.128845,June 1,2000 .
ld.
2 ld., tiling Bascov. Pll~ippine Amusementand{3aming Qxporatioo, G.R No. 91649, May 14, 1991, 197 SCRA 52. In A1X:Ie 3thereof.
3 G.R. No.158693, NcN.17,2004, 442 SCRA 573. This quotation wa<l lifted from the SepaJate Opklooof JusticeDMte T1119a 6 lntemafiona' Scllod A1iance of Educal!xs PSAE.l v. Quisul!'bing, suprcl; E.g., Miele 133 [135] of !heLm Code dedares it
i1 kjaboo v. NI..RC. unlavriul for 11e erT1IIoYer 1o require, nOt on~ as acondition of empbymeo~ but also as acond"rtion for lhe axltinualion of
4 Empha'iis added illhe Oliginal dedsioo il Senano v. Gam\ ~ SeMces, Inc. IW!ich quoled !his pOf1ion of the empioymenl1hat aWllll"IOO shall not get mallied.
7 In relalion Ill Arlicles 303 (288] and 304 [289] of the same Code.
Separate Opft101 of Jm Dante TIV,la i1 ,6{laboo v. NLRC, sup!ll.
"'
~
20 BAR REVIEWER ON. lABOR lAW CHAffiRI 21
""'" FUNDAMENTAL PRINCIPLES AND CONCEPTS

Last paragraph o{Section 3, Article XIII as basis. IV.


EXAMPLE OF A LAW WHICH VIOLATES
It bears noting that unlike all the rights granted thereunder, the last
paragraph1 of Section 3 of Article XIII has not been implemented by any
... _ SEVERAL CONSTITUTIONAL PRINCIPLES
provision in the Labor Code or in any other laws. It was, however, cited in l. THE SERRANO CASE WHERE THE PROVISION OF THE sm
Asia Brewery, Inc. v. Tunay na Pagkakaisa ng mga Manggagawa sa Asia PARAGRAPH, SECTION 10 OF R.A. NO. 8042 WAS DECLARED
(TPMAl/ in declaring that the DOLE Secretary has gravely abused her . VIOLATIVE OF SEVERAL CONSTITUTIONAL MANDATES.
discretion when she relied on the unaudited financial statements of petitioner
corporation in determining the wage award because such evidence is self- Serrano v. Gallant Maritime Services, Inc./ is illustrative of a case
serving and inadmissible. Not only did this violate the December 19, 2003 where a single provision of law has been declared violative of several provisions
Order of the DOLE Secretary herself to petitioner corporation to submit its of the Constitution. Here, the following underlined clause of the 5th paragraph of
complete audited fmancial statements, but this may have resulted to a wage Section 10 of R.A. No. 8042 has been declared unconstitutional for
award that is based on an inaccurate and biased picture of petitioner transgressing three (3) provisions of the Constitution, to wit: (I) Section 1,
corporation's capacity to pay - one of the more significant factors in making a Article III; (2) Section 18, Article II; and (3) Section 3, Article Xlll, in
wage award. Petitioner corporation has offered no reason why it failed and/or relation to labor as a protected sector:
refused tc submit its audited fmancial statements for the past five years "Ir. case of tennination of overseas employment without jus~
relevant to this case. This only further casts doubt as to the veracity and .., valid or authorized cause as defined by la·.v or contract, or any
accuracy of the unaudited financial statements it submitted to the DOLE unauthorized deductions from the migrant worker's salary, the worker
Secreta.ry. Verily, this procedure cannot be countenanced because this could shall be entitled to the full rdmbursement of his placement fee and the
unduly deprive labor of its right to a just share in the fruits of production3 deductions made with interest at twelve percent (12%) per annu~
and provide employers with a means to understaie their profitl\bility in order his salaries for the unexpired portion of his employment cvntr~
to defeat the right of labor to a just wage. for three (3) months for every year of the unexpirerl term,
whichever is less."
b. Section l4(Protection ofWoroen).
The provision of Section 14 of Article XIII which mandates that the ·- Petitioner worked as Second Officer for respondent recruitment agency
and its foreign principa~ Marlow Navigation Co., Ltd. (herein respondents),
State should accord recognition to the protection of working women, is also non
self-executory like' the other provisions in the Constitution as pronounced in a under a POEA-approved Contract of Employment with a fixed term of 12
number of cases. 4 It is a mere statement of principles and policies. As such, it is months. At the time of his repatriation, he had served oth.y two (2) months and
a mere directive addressed to the executive and the legislative departments. If seven (7) days of his contract, leaving an unexpired portion of nine (9) months
unheeded, the remedy will not lie with the courts; but rather, the electorate's and twenty-three (23) days. Petitioner's dismissal was declared illegal and he
displeasure may be manifested in their votes. 5 was awarded, under the rule then prevailing, US$8,770.00, ·representing his
salary for three (3) months of the unexpired portion of the aforesaid contract of
employment, his contract being for one year, in accordance with the afore-
quoted provision ofR.A. No. 8042. Petitioner claims that he is entitled to all his
salaries for the unexpired portion of his contract and not just to 3 months of the
unexpired portion thereof. He further questioned the constitutionality of said
clause in Section 10 contending, inter alia, that:
1 kjXtlllides: 'The State shal regulate lhe relaOOns between WllkeiS illd err(lk:rfers, leW,lnizing lhe 1\lht of labor Ill iL> ¢
shae illhe fruls of productioo ood lhe ~hi of en\elplises to ~ relums ID imsfrnenl\ ood i> expMSion illd (1) it unduly impairs the freedom ofOFWs to negotiate for and stipulate in
2
3
groNih."
G.R. Nos.171594-96, Sept 18,2013.
Miele XIII, Section 3 of lhe ConstihJiioo states il part XXX 'The State shaN regulate lhe relations between l'ttllters illd
.. their overseas employment contracts a determinate employment period
and a fixed salary package;
E01lfoyers, reroJniziYJ lhe 1\Jht aleW lc its jist share illhe tuils d producOOn and lhe rJ,Jht of enfefprises Ill reasonable
IWns on ilvesmenls, !lld to~ ood gi'O'Mh.'
4 Such as lhe cases of Basco v. Pllifippine Amusementilld Garttg CorporaOOo, G.R No. 91649, May 14, 1991, 197 SCRA
5211ld Tolenlilovs. Seaetay ofFmnce, G.R No.115455 and consti1ated cases, Aug. 25, 1995. 1 GR No. 167614, Ma!th 24, 2009.
5 Tondo Medical Center ~eesAssociaOOn v. CA, G.R No. 167324, Ju~ 17, 'lfJJ7 (En Bane).

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22 BAR REVIEWER ON lABOR lAW CHAPTER I 23
iO
FUNDAMENTAL PRINCIPLES AND CONCEPTS

(2) It impinges on the equal protection clause, for it treats OFWs subject to a 3-month cap, whereas no such limitation is imposed on
differently from local Filipino workers (local workers) by putting a cap local workers with fixed-term employment.
on the amount of lump-sum salary to which OFWs are entitled in case
of illegal dismissal, while setting no limit to. the same monetary award
for local workers when their dismissal is declared illegal;
- (2) The Court concludes that the subject clause contains a suspect
classification in that, in the computation of the monetary benefits of
(3) The disparate treatment is not reasonable as there is no substantial fiXed-term employees who are illegally discharged, it imposes a 3-
distinction between the two groups; and that it defeats Section 18; month cap on the claim of OFWs with an unexpired portion of one year
Article II of the Constitution which guarantees the protection of the or more in their contracts, but none on the claims of other OFWs or
rights and welfare of all Filipino workers, whether deployed locally or local workers with fixed-term employment. The subject clause singles
overseas. out one classification of OFWs and burdens it with a peculiar
disadvantage.
In upholding petitioner, the Supreme Court cited the following
ratiocinations: There being a suspect classification involving a vulnerable sector
protected by the Constitution, the Court, after subjecting the
(l) The subject clause has a discriminatory intent against, and an invidious classification to a strict judicial scrutiny, has determined that there is no
impact on, OFWs at three levels: First, OFWs with employment compelling state interese that the subject clause may possibly serve. In
contracts of less than one year vi:;-a-vis OFWs with employment
contracts of one year or rnore; Second, among OFWs with employment ,. fine, the Government has failed to discharge its burden of proving the
existenc~ of a compelling state interest that would justify the
contracts of more than one year; and Third, OFWs vi:;-a-vis local perpetuation of the discrimination against OFWs under the subject
workers with fixed-period employment. clause. Thus, the subject clause is violative of the right of petitioner and
On the jir:;t, the illegally dismissed OFW with employment contract of other OFWs to equal protection.
less than one year will be paid all his salaries for the unexpired portion (3) The declaration of the unconstitutionality of the subject clause cannot
thereof; while the OFW with employment contract of at least one year
(like that of herein petitioner) !!I..!!!Q.!] will only be awarded whichever
is less between three months' salary for every year of the unexpired
term or the salary for the unexpired portion thereof.
- be approached from the lone perspective that the clause directly
violates state policy on labor under Section 3, Article XIIl of the
Constitution. This is so because this provision is not self-executing.
Article XIII should be applied in conjunction with the equal protection
On the second, the subject clause creates a sub-layer of discrimination clause. Article XIII, by itsel~ without the application of the equal
among OFWs whose contract periods are for more than one year: those protection clause, has no life or force of its own..
who .are illegally dismissed with less than one year left in their (4) The subject clause does not state or imply any defmitive governmental
contracts shall be entitled to their salaries for the entire unexpired purpose; and it is for that precise reason that the clause violates not just
portion thereof, while those who are illegally dismissed with one year petitioner's right to equal protection, but also his right to substantive
or more remaining in their contracts shall be covered by the subject due process under Section 1, Article lli of the Constitution, for it
clause, and their monetary benefits limited to their salaries for three deprives him of property, consisting of monetary benefits, without any
months only. existing valid governmental purpose.
On the third, prior to R.A. No. 8042, OFWs and local workers with
fixed-term employment who were illegally discharged were treated
alike in terms of the computation of their money claims; they were
uniformly entitled to their salaries for the entire unexpired portions of
their contracts. But with the enactment of R.A. No. 8042, specifically
the adoption of the subject clause, illegally dismissed OFWs with an 1
Wnat coostiwtes canpellilg stale interest is meamd by Ule scale .(i "Jilt; and Jl(l'tWIS arrayed i1 V1e Coosti1ution and
unexpired portion of one year or more in their employment contract caib!ated by history. It is akin 1o V1e ~ ilterest ci \he state b' v.llich some indMdual Uberties must gM! wey, such
as \he pubic ilterest in safegu~ heat! oc mainlainilg medk:al strlldards, oc in main\aining access tl ilfomlalion on
have since been differently treated in that their money claims are matters of public concern.
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24 BAR REVIEWER ON lABOR lAW CHAPTER! 25
ill FUNDAMENTAL PRINCIPLES AND CONCEPTS

v. Then that is the time we speak ofnotice and hearing as the essence
CONSTITUTIONAL PROVISIONS NOT APPLICABLE of procedural due process. Thus, compliance by the employer with
TO COMPANY-LEVEL ADMINISTRATIVE CASES
1. INAPPLICABILITY PER JURISPRUDENCE.
- the notice requirement before he dismisses an employee does not
foreclose the right of the latter to question the legality of his
dismissal.
Certain constitutional rights and precepts may NOT be invoked in 3. The notice requirement under Articles 297 [282] and 298 [283] of
labor cases, particularly in company-level administrative investigations leading the Labor Code cannot be considered a requirement of the Due
to the termination of employment because they can only be asserted against the Process Clause since the employer cannot really be expected to be
government or the state but not against a private party like an employer. More entirely an impartial judge ofhis own cause.
particularly, the following rights, per well-entrenched jurisprudence, generally
b. The Agabon case.
fmd no application in company-level administrative proceedings by the
employer against an erring employee: In the en bane decision in the subsequent case of Agabon v. NLRC, 1
the Supreme Court further expounded on the doctrine laid down in Serrano by
(a) Right to due process; making a distinction between constitutional due process and statutory due
(b) Right to equal protection of the laws; process. Thus:
(c)
(d)
(e)
Right against seif-incrimination;
Right to counsel und to remain silent; and
Right against unreasonable searches and seizures and to privacy of
.• "Constitutional due process protects the individual from
the government and assures him of his rights in criminal, civil or
administrative proceedings; while statutory due process found in the
communication and correspondence. Labor Code and Implementing Rules protects employees from being
unjustly terminated without just cause after notice and hearing.
2. CONSTITUTIONAL DUE PROCESS.
Resultantly, where there is just cause for dismissal but due process has
a. The Se"ano case.
In the en bane decision in Serrano v. NLRC,' the Supreme Court
distinguished denial of due process by the State and denial of due process by the
- not been observed properly by an employer, it would not be right to order either
the reinstatement of the dismissed employee or the payment of backwages to
him. In failing, however, to comply with the procedure prescribed by law
(Article 292(b) [277(b)] of the Labor Code) in terminating the services of the
employer. It thus .concluded that the violation by the employer of the notice
requirement cannot be considered a denial of due process as would result in the employee, the employer must be deemed to have opted or, in any case, should
nullity of the employee's dismissal or layoff. The following reasons were cited: be made liable, for the payment of•separation pay. It might be pointed out that
the notice to be given and the hearing to be conducted generally constitute the
I. The Due Process Clause of the Constitution is a· limitation on two-part due process requirement of law to be accorded to the employee by the
governmental powers. It does not apply to the exercise of private employer. Nevertheless, peculiar circumstances might obtain in certain
power, such as the termination of employment under the Labor situations where to undertake the above steps would be no more than a .useless
Code. formality and where, accordingly, it would not be imprudent to apply the res
2. The notice and hearing required under the Due Process Clause ipsa loquitur rule and award, in lieu .of separation pay, nominal damages to the
applies before the powers of organized society are brought to bear employee.
upon the individual. This is obviously not the case of tennination of
employment under Articles 297 (282] and 298 [283] of the Labor c. The Abbott Laboratories case.
Code because the employee is not faced with an aspect of the A new doctrine on contractual due process, as distinguished from
adversary system. The purpose for the requirement of notice and statutory due process, has been enunciated in the 2013 en bane decision in
hearing is not to comply with the Due Process Clause of the Abbott Laboratories, Philippines v. Pearlie Ann F. Alcaraz. 2 Thus, in a
Constitution. The time for notice and hearing is at the trial stage.

1 G.R. No. 158693, Nov.17, 2004.


2 G.R No. 192571, July 23, 2013.
1 G.R. No. 117040, Jan. 27, 2000.
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CHAPTER! 27
26 BAR REVIEWER ON lABOR lAW 110 FUNDAMENTAL PRINCIPLES AND CONCEPTS

situation where there is an existing company policy enunciating the procedural the laborer should never be mired by the uncertainty of flimsy rules in which the
due process that must be observed in termination of emplo(lllent, compliance latter's labor rights and duties would, to some extent, depend.
alone with the statutorily-prescribed procedural due process, would not suffice. ..... d. The only relevant aspect of Section 1, Article ill, to labor cases.
Additionally, there must be compliance too with the company-prescribed due
process procedure or the so-called contractual due process. Otherwise, the The doctrine that labor is considered a "property" within the
same consequence as in Agabon will ensue, that is, the termination shall be constitutional guarantees remains constant to this day. Despite the changes in
considered legal and valid but for lack of contractual due process, the employer the concept of due process introduced by Serrano and Agabon, the Supreme
will be penalized with indemnity in the form of nominal damages in the amount Court continues to recognize to this day that labor is "property" falling within
ofP30,000.00. the ambit and protection of the due process clause in the Constitution.' In other
In this case, it was found that respondent Alcaraz, 2 who was hired as a words, even if it is not the constitutional due process that is violated if an
employee is dismissed sans due process, the legal notion that labor or
probationary managerial employee, was afforded both substantive and statutory
employment is "property" under the Constitution continues to be adhered to
procedural due process, when she was terminated3 for failure to qualify as a
and respected. 2 A worker cannot be deprived of his job, a property right, without
regular employee. Nonetheless, despite the existence of a sufficient ground to
satisfying the requirements of due process. As enshrined in our bill of rights, no
terminate Alcuraz's employment and Abbott's compliance with the Labor Code
person shall be deprived of life, liberty or property without due process of law. 3
termination procedure, it was found that petitioner Abbott breached its
contractual obligation to Alcaraz when it faiied to abide by its own procedure e. Constitutional due process, when neces8ary.
prescribed in its company rules in evaluating the performance of a probationa.-y '"'
Observance of the constitutional due process becomes necessary once a
employee.
case ripens into a full-blown case in proceedings before Labor Arbiters, the
Veritably, a company policy partakes of the nature of an implied Commission (NLRC) and other labor tribunals. As distinguished from
contract between the employer and employee. Hence, given such nature, employer's company-level due process, the government is now involved; hence,
company personnel policies create an obligation on the part of both the any deprivation of due process of either party to the labor suit by such labor
employee and the employer to abide by the same. While it is Abbott's
management prerogative to promulgate its own company rules and even
subsequently amend them, this right equally demands that when it does create
- officials/tribunals would constitute a violation of the constitutional due process
under Section I of Article HI of the Constitution.
its own policies and thereafter notify its employee of the same, it accords upon 3. RIGHT TO EQUAL PROTECTION OF THE LAWS.
itself the obligation to faithfully implement them. Indeed, a contrary . It is a settled principle that. the commands of the equal protection
interpretation would entail a disharmonious relationship in the work place for clause4 are addressed only to the state or those acting under the color of its
authority. The equal protection clause erects no shield against merely private
, As JlfrM:Ied i1 Miele 292(b) !277(b)J d lie t.m cooe ll1d as i1terpleled illle case rJ Kilg d Kilgs Transport, klc. v. conduct, however, discriminatory or wrongful it may have been.5
Mcmac, GR No. 166208, Jll1e 29, 'JJYJ7.
2 RespcC1denl Ak:aaz was hied as Medk:al iiXl RegUaby Aflais t~a:JaJer (RegUatay Afl<irs. Manage!) d petitmer,
suqea b a 6-m:xltl piOOali:my ~ Upon bei'Q len'ni1aled, she fled a ~ !or ilegal disntsal Md
dana;les dai1ivJ l1at she sl1ol*l hcNe aeacly been allSklered as a regulcr Md oot a probalionay ~ gPien 1 Sectix11, Altide 111 of lhe Bil ct Rig his pa1ly prcNk1es: 'til peiSOO shal be de¢ied of lfe, lilelty or plqlel!y wi1hoot due
PJJ!xts JaiMe b i1txm her d lhe leaSOOCille sli.l1dads b' her regularizatioo t.,oo her ergagement as reqlied under process of law xxx"; See S<ijales v. ~·s Coorneldal Colp., G.R No. 166554, N111. 27, m. cling Phif~ MMe
Miele 296 [281] dthe LlixlrCode.ln 1his relation, she ax1lended tha!IW!ie her~ contract stated that she was to Pictures Wcxke!S Association v. Premiere Productions, Inc., G.R No.l-5621, ~ 25, 1953, 92flhl. 843; RMce v. NI.RC,
be ergaged 011 a prOOalionay status, lhe same d'MI oot illf1Ca!21he sfaldards 011 Mttl her regulaizati:ln Wlltl be based. G.R No.l~147, June 30, 1988, 163 SCRA 279; Asia WOO:! Recnitmenl.lnc. v. Nl.RC, G.R. No. 113363, Aug. 24, 1999,
She fll1ler avened that lie iidMdua petiOOne!s mcililusly coonived to ilegaly !ismiss her v.tlen: (a) trey ttm!ned her 313 SCRA 1; Phiippine-Si'gapore Tmnsport SeMces, Inc. v. NtRC, G.R No. 95449, Aug. 18, 1997, 277 SCRA 506;
Yli1h tenrilaOOn; (b) she was Oldeled ootID enter~ prenises e\11!11 Jshe was stil an ~ lhereof; iiXl (c) they Tolentroo v. NlRC, G.R No.l-75380, Juo/ 31, 1987, 152 SCRA 717; See alsoOpinakio v. Ra'li1a, GR No. 196573, Oct
pubtly MI100!lCed flat she ~ resgned il ader b hurriale her. On the conbay, petili:xlels maillailed l1at Alcaraz 16, 2013; Polsotiw. De Guia Enterplises,lnc., G.R No. 172624, Dec. 5, 2011.
was Vl!id~ lenrinated frcxn her probationary en1jiJyment gNe!l her failure to salisfy lhe presai>ed sta1dcrds !or her 2 S<ijales v. Rllsfan's Con1neltial Corp., supra, citing Slaugha Hoose Cases, 16 Wal. (83 US) 36, 127.
regularization 1\!li:tl v.m nafe krlaMllo her at the lined her engagement 3 Polsolin v. De Guia Enleipfises.lnc., G.R No. 172624, Dec. 5, 2011; Opinaldo v. Ravina, G.R No. 196573, Oct 16,2013,
3
As the recads show, Alcarais d'ISilissal was ekted tlrough a letter dated May 19, 2005 v.tlich she received oo May 23,
2005 and agaiiOII May 27' 2005. Slated therein v.m the reasoos for her temi1ation, i.e., that after piqlel' Mluation, 4
citing POOotin v. De 1ia £il1erjlffies, Inc., supra. and Sagaes v. Rustan's Coo'vneltial Corp., SI4J3.
Also found il Section ,Alticlde Ill of lhe Constitution, 1hus: 'Section 1. No person shall be de¢led of life, lilerty, or property
.. Abbott detmniled lhal she failed 1D meet the reasoo001e stMdanls for her regulaization consideli1g her lacK ct time and v.ilhout due process law, nor shall any peiSOI1 bed~ lhe equal protecOOn of 1l1e law3.'
people nmagement and decisiorHnaking sldls, 1\!li::h ere necessary illhe pelfamance of her functions as RegtMloly 5 Duncan Association of Delaiman.PTGWO v. Glaxo Welconle Phippiles, Inc., G.R No. 162994, Sepl17, 2004; Yrasuegui
Atlairs Manager. Undeniallti. IllS v.m!en notice S!l'fl:ienfty mee1s the criteria set la1h me, tlereby legitimizi'9the cause v. Phifippine Airlines, Inc., G.R No.168081, Oct 17, 2008.
and rrooner of Abraz's dismissal as aprdlationaly ~ee under the paraiOOiefs set by the L.OOor Code. ~
f

L
28 BAR REviEWER ON l.ABOR l.AW
CHAPTER l 29
FUNDAMENTAl PRINCIPlES AND CONCEPTS
4. RIGHT AGAINST SELF-INCRIMINATION.
5. RIGHTS TO COUNSEL AND TO REMAIN SILENT.
It is enshrined in the Constitution that ''no person shall be compelled to
be a witness against himself." 1 This right against self-incrimination is accorded a. Rights to counsel and to remain silent may be asserted only in
to every person who gives evidence, whether voluntarily or under compulsion of ""' custodial interrogation; Distinguished from right against self-
subpoena, in any civil, criminal, or administrative proceeding. 2 incrimination.
a. Only an accused in a criminal case and by way of exception, a The rights to remain silent and to counsel apply to persons "under
respondent in an administrative case that partakes of the nature investigation for the commission of an offense," i.e., "suspects" under
of, or analogous to, a criminal proceeding can refuse to testify. investigation by police authorities; and this is what makes these rights different
from the right against self-incrimination which, as afore-stated, indiscriminately
But as distinguished from a mere witness, the accused in a criminal applies to any person testifying in any proceeding, civil, criminal, or
case or a respondent in an administrative case that partakes of the nature of, or administrative. 1
analogous to, a criminal proceeding, can refuse to testify altogether. As held in
Rosete v. Lim/ it is clear that only an accused in a criminal case can refuse to b. Effect of failure of employer to inform employee of his right to
take the witness stand. The right to refuse to take the stand does not generally counsel.
apply to parties in administrative cases or proceedings. The parties thereto can Would the failure of the employer to infonn the employee who is
only refuse to answer if incri.11inatir.g questions are propounded. The Suprerr,e undergoing administrative investigation of his right to counsel amount to
·Court applied the P,xception- a party who is not l!Il accused in a criminal case is '"' deprivation of due process?
allowed not to take the witness stand- in administrative cases/proceedings that
This was answered in the negative in Lopez v. Alturas Group of
partook of the nature of a criminal proceeding or analogous to a criminal
Companies/ where the Supreme Court pronounced that: "The right to counsel
proceeding. 4
and the assistance of one in investigations involving termin~tion cases is
b. No obligation on the part of the employer to advise respondent neither indispensable nor mandatory, except when the employee himself
employee or a witness of his right agai11st self-incrimination. requests for one or that he manifests that he wants a formal hearing on the
~

The Constitutions does not impose on the judge, or other officer charges against him. In petitioner's case, there is no showing that he
presiding over a trial, hearing or investigation, any affirmative obligation to requested for a formal hearing to be conducted or that he be assisted by
advise a witness of his right against self-incrimination. It is a right that a witness counsel."3
knows or should know, in accordance with the well-known axiom that everyone 6. RIGHT AGAINST UNREASONABLE SEARCHES AND SEIZURES
is presumed to know the law and that ignorance of the law excuses no one. AND RIGHT TO PRIVACY OF COMMUNICATION AND
Furthermore, in the very nature of things, neither the judge nor the witness cah CORRESPONDENCE.
be expected to know in advance the character or effect of a question to be put to
the latter.6 The question of whether the right against unreasonable searches and
seizures4 and right to privacy of communication and correspondences guaranteed
under the Constitution may be invoked by an employee against his employer has
1 Sectioo 17, Mal Ill [811 of Ri;lhfs), 1987 Coostihrtion. This was si11b1y p!fMlOO i1 Section 20 oflhe 1973 Consti1ulion and
Sectioo 18, Arti::le Ill ofl1e 1935 Constitution. This is siniar tl flat IICOllded by lhe Fllh Amel1dment oflhe AmeOCan People of the Phiippk1es v. Hon. Ruben Aysoo, supra
Constitution. (See Tcmda &Femcmo, Constitution oflhe Phi., An noW, 2d ed., pp. 378-379). GR No.191008,.A¢111,2011,647 SCRA568.
2 P• oflhe Phiippines v. Hon. RJJben Aysoo, G.R No. 85215, July 7, 1989. This case was deci:led lJ1der lhe re;~ime r1. En1>flasis suppied.
lhe 1973 Coosliutioo v.ttere lle ~htagailstseiHlainilatioo was pro'liJed lltderlhefifstsenlenee r1. Sectioo 20, Arti::le rv 4 Seclion2 d ArtX:Ie Ill (BilofRighis)o!tle 1987 Ca1stitJtia1 proiides: "SecOOn 2. The ~tt<tllle people to beseo.ue in their
lhen!ol. See also Bermldez v. Castilkl, 64 Phil. 483; Gonzales v. Secretay of Lalor, 94 Phi. 325; Suarez v. Tengco, 2 persons, houses, papers, llld etfecls against uoreasonable seMChes and seizues rl. M1aleYer nalu~ and for <rtf pu!pOSe
SCRA 71; Pascual, Jr. v. Board of Medk:al Exanilels, G.R No. L-25018, t&y26, 1969,28 SCRA344; 138 Phi. 361; Cabal ~
shall be inviolable, !lld no searth warr..nt or wamrnt of arrest shall issue except upoo proballe cause to be detennined
v. Hon. Kapunan, Jr., G.R No. L-19052, Dec. 29,1962, 116 Phi. 1361. personaltf by lhe jJG,Je after exanilation under oalh or affilll13tion of lhe COII'qliaMlt and lhe l'<itnesses he may produce,
3 Rosetev. Lin, G.R No.136051,June 8, 2006. This isacMicase. il1d partio.Jiaf1y desatirg lhe place to be searthed llld !he per.;oos or lhi"gs to be seized.'
4 Cililg cabal v. Hon. Kapunan, Jr., supra, 116 Phi. 1361, 1367·1368; Pascua, Jr. v. Board of Medical Exanilers, supm 28 5 Section 3 of ArtX:Ie 111 (Bill a Ri;lhfs) of lhe 1987 Coosti1ulion prcMdes: "SecOOn 3. (1) The p!Mq of communication and
SCRA 344; 138 Phi. 361, 363. oonespondence shaR be iMllable except upon lawful order oflhe court, or v.t1en public saety or Older requires olhe!wise,
5
See fist sentence of Section 20, Article rv alhe 1973 Constitution llld now SediJn 17, Article 111 oflhe 1987 CoostibJtion. as presaibed by law. (2) PJrf evidence oblained in violation of this or lhe precediY,J sectioo shaH be i1admissible ltv ~
6 See Cruz, ~ali A., Consti1utional Law, 1987 ed., p. 275. purpose in !lly proceeding.'

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30 BAR REviEWER ON lABOR lAW
CHAI'TER I 31
FUNDAMENTAL PRINCIPLES AND CONCEPTS
been answered in the case of Waterous Drug Corporation v. NLRC and
Antonia Melodia Catolico. 1 In this case, private respondent Catolico was a laid down in People v. Andre Marti/ that the Bill of Rights does not protect
pharmacist at petitioner company. She was charged and investigated for an citizens from unreasonable searches and seizures perpetrated by private
irregularity involving her and a supplier, Yung Shin Pharmaceuticals, Inc. individuals. It is not true, as counsel for Catolico claims, that the citizens have
(YSP), consisting in the overpricing of certain medicines. Catolico received a no recourse against such assaults. On the contrary, and as said counsel admits,
check issued in her name corresponding to the amount of the refund for the such an invasion gives rise to both criminal and civil liabilities."
overprice. The check was placed in an envelope which, when received by
Alleged violations against unreasonable search and seizure may only be
Catolico, was already open. Catolico asked Saldaii.a, the pharmacy clerk who
invoked against the State by an individual unjustly traduced by the exercise of
received the envelope, if she opened it to which the clerk answered "talagang
sovereign authority. To agree with appellant that an act of a private individual in
ganyan, bukas. " Because Catolico pocketed the amount of the refund for the
violation of the Bill of Rights should also be construed as an act of the State
overprice which was covered by the check, she was asked to explain her side
would result in serious legal complications and an absurd interpretation of the
and was placed under preventive suspension. In Catolico's reply, she protested
constitution. Similarly, the admissibility of the evidence procured by an
Saldana's invasion of her privacy when Saldaii.a opened the envelope addressed 2
individual effected through private seizure equally applies, in pari passu, to the
to her. She further explained, through her counsel, that the check she received
alleged violation, non-governmental as it is, of appellant's constitutional rights
from YSP was a Christmas gift and not a "refund of overprice." Consequentiy, il to privacy and communication.
she was terminated on the ground of dishonesty. l
~
The Labor Arbiter declared her dismissal and preventive suspension 2.
illegal because petitioners failed to "prove what [they] alleged as complainant's ARTICLES 1700 AND 1702, CML CODE
dishonesty," and to show that any investigation was conducted. On appeal, the
NLRC affrrmed the fmdings of the Labor Arbiter on the ground that petitioners 1. ON ARTICLE 1700.
were not able to prove a just cause for Catolico's dismissal. It found that Article 1700 of the Civil Code provides:
petitioners' evidence consisted only of the check for P640.00 drawn by YSP in "Art. 1700. The relations between capital and labor are not merely
favor of private respondent, which Saldana, her co-employee, saw when the ~'~
contractual. They are so impressed with public interest that labor contracts
latter opened the envelope. But, it declared that the check was inadmissible in
evidence Jlursuant to Sections 22 and 33 of Article III of the Constitution. The
NLRC thus concluded: "With the smoking gun evidence of respondents 4 being
I l~
mu~ yield to the common good. Therefore, such contracts are subject to
the special laws on labor unions, collective bargaining, strikes and

rendered inadmissible, by virtue of the constitutional right invoked by g


~ lockouts, closed shop, wages, working conditions, hours of labor and
similar subjects."3
complainant,5 respondents' case falls apart as it is bereft of evidence which '~;"'
Although provided in the Civil Code, the foregoing civil law principle
cannot be used as a legal basis for complainant's dismissal." ~":
has been applied in a catena oflabor cases.
While the Supreme Court afftrmed the ruling of the NLRC that ~
§
Catolico's dismissal was illegal, it disagreed with the NLRC's reason for
upholding the Labor Arbiter's decision, viz., that the evidence against private I II
respondent was inadmissible for having been obtained in violation of her m
constitutional rights of privacy of communication and against unreasonable i ii!
1 G.R No.81561, .la1.18, 1991,193 SCRA57.1n lhiscase, aa:used-appelalAndre Mcrtisentlhrough the"Mria Packing
illd Export FO!Waldels" b.r (4) gift Ytft!PilEld ~to a ftiend il Zlri:h, SMzerlood. Alita Reyes, the prqnietress of lhe
searches and seizures. It reasoned: "As regards the constitutional violation upon ~ aJI11lillY, asked 11e ~ Wshe coukf exanine and ilspect the pactages. ~~ however, refused, assumg her
which the NLRC anchored its decision, we find no reason to revise the doctrine ~ l1at lhe packages siJW contailed books, cigars, Cl1d gloves and were gifts ID tis ftiend hi ZlJiich. Before def!Ve!Y of
~ appeaoors box 1o 111e !mal o1 Cusloms Md/or ball of Posts, M"..100 Re,.es (prqlrieb) and OOsband or Anila (Reyes),
fdk1Mng standard ~ procedure, opened lhe boxes for final ilspeclioo and bind fM1uana therein. He repor1ed ~ kl
lhe NBI and requested alallolaby emmion !hereof. Fortwith, Job Reyes Clld flree (3) NBl agenls, aJd a phobgrapher,
G.RNo.113271,0ct.16, 1997,280SCRA735. went to lhe Reyes' aoce at Ennila, Mania and upon ilspedion of lhe box, foond dried marijuana leaves contained inskie lhe
See Seclkxl2 of Article Ill (8il oiRiJhls) orlhe 1987 Constib.rtioo, suprc1. cellophooe wrappers. The NBI agents made an iwenll:xy and ll:d charge ollhe box and ollhe contents lhereof, after
See SectiJn 3of Article Ill (8il oiRiJhls) ollhe 1987 Constib.Jtioo, SUpla. siJning a'Receipr ~OJ cus100y of !he said effecls.
PeliOOners illlis case. Pari passu is aLatin ptvase 1hat literally means 'v,;ih equal pace or progress; side by side' or '¥.ithout partiality, equably or
s P!tia!e respondent illhis case. fairty.· See dictioo31y.can athllp1/dictionaly.reference.comlo~-tpaSSU. Last accessed: May 06, 2014.
Section 2.- Contract of Labor, Chapter Ill (Work and Labor),TIIe VIII, Book IV (Obi;lations or Conlracls), Civil Code.
t
,L..,.
32 BAR REVIEWER ON lABOR lAW , CHAI'TER I 33
FUNDAMENTAl PRINCIPlES AND CONCEPTS

In Becmen Service Exporter and Promotion, Inc. v. Spouses employment is determined by law, regardless of any contract expressing
Simplicio and Mila Cuaresma, 1 the above rule was stressed thus, it was held otherwise. The supremacy of the law over the nomenclature of the contract and
that the relations between capital and labor are so impressed with public the stipulations contained therein is to bring to life the policy enshrined in the
interest/ and neither shall act oppressively against the other, or impair the Constitution to "afford full protection to labor." 1 Thus, labor contracts are placed
interest or convenience of the public.3 In case of doubt, all labor legislation and on a higher plane than ordinary contracts; these are imbued with public interest
all labor contracts shall be construed in favor of the safety and decent living for and therefore subject to the police power of the State.2 .However,
the laborer. 4 notwithstanding the foregoing iterations, project employment contracts which
In Innodata Philippines, Inc. v. Quejada-Lopez,S it was pronounced fix the employment for a specific project or undertaking remain valid under the
that in the intetpretation of contracts, obscure words and provisions shall not law. In the case at bar, the records reveal that the officers and the members of
favor the party that caused the obscurity. Consequently, the terms of the contract petitioner union signed employment contracts indicating the specific project or
6 phase of work for which they were hired, with a fixed period of employment. As
of employment should be construed strictly against petitioner, which prepared
it. Indeed, a contract of employment is impressed with public interest. For this clearly shown by petitioner union's own admission, both parties had executed
reason, provisions of applicable statutes are deemed written into the contract. the contracts freely and voluntarily without force, duress or acts tending to
Hence, the "parties are not at liberty to insulate themselves and their vitiate the workers' consent. Thus, there is no reason not to honor and give
relationships from the impact of labor laws and regulations by simply effect to the terms and conditions stipuiated therein.
coatracting with each other." 7 Moreover, in case of doubt, the tenns of a Davao Inte::rated Port Stevedoring Services v. Abarguez.3 • The
contract should be construed in favor oflabor. 6 CBA in Article 263 [252] 4 of the Labor Code, refers to a contract executed upon
In Leyte Geot!:Jermal Power Progressive Employees Union-ALU- request of either the employer or the exclusive bargaining representative
TUCP v. Philippine National Oil Company-Energy Development incorporating the agreement reached after negotiations with respect to wages,
Corporation/ which involves the issue of whether the members of petitioners hours of work and all other terms and conditions of employment, including
are project employees or regular employees, it was pronounced that Article 295 proposals for adjusting any grievances or questions arising under such
10
[280] of the Labor Code, as worded, establishes that the nature of the agreement. While the terms and conditions of a CBA constitute the law between
the parties, it is not, however, an ordinary contract to which is applied the
principles of law governing ordinary contracts. A CBA, as a labor contract
t GR Nos. 182973-79 &184298-99, April7, 2009. within the contemplation of Article 1700 of the Civil Code, is not merely
2 CM Code, Article 1700. contractual in nature but impressed with. public interest, thus, it must yield to the
3 ld., Article 1701.
common good. 5
• ld., Mcle 1702.
5 GR No. 162839, Oct 12, 2006. 2. ON ARTICLE 1702 OF THE CML CODE,
6 The coOOads d ~ il VIis case provide for w.o perilds. Asile ioollle fixed cre-ye~r em set il PM~Qraph 1, IN RELATION TO ARTICLE 4 OF THE LABOR CODE.
pn;Jraph 7.4 prMies for alfvee.lroolh peOOd dutb;l v.tlch petibler has lhe 191t t> prHJnnlna1e lhe ~for lhe
'lailre c1 t.e el1lJioyees t> meet em pass lhe ~ em str1datls set by lhe ~ 5ld made ~<na.m t> 11e (NOTE: See discussion below on these two (2) kindred articles).
~prier to' llei' ~ TM, allhough cooched 11 i!ITtliJuous ~uage. ~ 7.4 nm 11 really Ill a
probi6Jnay peOOd. Cleirtt. to II'IOi! regldarization, peliixler has !WJail sooght tl resat lilmaWely to probationcry
~ Md Efl1llctfmert for afixed em. Fnatj, 1ism nr:OY:Jilat after is pas1 ~ ma::ts 1100 been
decli.ml Vlli:! by lhe Supfene Coot petitioner was expeded b enSlll! llallhe ~ma:ts woofd a1reaat oornptj
v.ilh lhe str1datls set by ~a>~ em by llis Court. Regretlal!f, petitioner failed to do so.
1 k1nodafa f'liwi1es, he. v. ~ G.R No. 162839, Oct 12. 21Xl6, d1i1g Pcidsla1 M1es Cctporalioo v. Ople, An ~shall be deemed 1D be casua II is not oovered by l1e preced'rg paragraph: Provided, That any emplOyee
G.R No. 61594, Sept 28, 1990, 190 SCRA 90, 99; See also t,1aJsarn v. Natiooal Olgaizatioo ofWorkiYJ Men, G. R No. who has rendered at least cne yecr of service, vt.et.er &JCh service is coolilJoos or broken, shal be oonsileled aregula'
148492, ~9. 2003,451 PIW.254; Benwdov. NLRC,GR No. 122917,July 12, 1999,369Phl.443. eJI1lklyee will1 respect to lhe aciMty 11 'llilk:h he is empk7fed em his~ sha'l oonlilue vt1e sud1 ac:tivcy exists.
See Ph~ile FedEia!ioo d Cre<it CooperaWes, he. v. NLRC, G.R No. 121071, Dec. 11, 1998, 360 Phil. 254, 261. (As rentMrilered ptJISUMIID Section 5, RA No.10151, June 21,2011 em DOLE Depa1mertMvisory No. 01, Series of
s G.R No. 170351, Marth 30,2011. 2015 {ReniJIT'berirrJ of the LalxrCodeofthePh~. ~Amended), issuedooJuly21, 2015).
10 Miele 295 [280J. Regula' and Casual ~ - The proo.isioos of 'Millen WJreemenl kl the oonllal'f nolwi1hsllming 1
See Section 3, Miele XIII, 1987 Constihl100.
cl1d ~ d the aal ~~of the parties, an ef1llbyment shal be deEmed kl be regulcr where the employee has See Articles 1700 em 1702oflhe CM Code; Vilav. NLRC, G.R No.117043,Jan.14, 1998,348 Phil. 116,140-141.
been engaged to pelform adM1ies \\t1ich are usualt)' neressay or desiable 111he usual busi1ess or !Jade d lhe emplcrfer, G.R No. 102132. March 19,1993.
except v.i1ere 1he employment has been fixed for aspOOfic ~or under1akiij lhe COfl'llleli:xl or ..-roh13tion cl whi:h has 4 As renurrllered pursuant to Section 5, RA No. 10151, June 21. 2011 em DOLE Department Mvisory No. 01, Series cl
been detemli1ed at the line of t1e etlQWJemenl of the eR'jibyee or where lhe \100: or service to be pecfonned is 2015 ~ oflhe Labor Code of the Phfllpiles, ~.Amended), issued oo Ju~ 21, 2015.
seasooa111 nature em the employment is for tie duration of 11e seasoo. 5 SeealsoCi1ek~LaborUnKJn.fFWv. CftkElecl!ooics, Inc., GRNo. 190515, N<N.15, 2010.

L
34 BAR REYIEWER.ON lABOR lAW CHAPTER! 35
FUNDAMENTAL PRINCIPLES AND CONCEPTS

B. influence of the latter should be counter-balanced by sympathy and compassion


CONSTRUCTION IN FAVOR OF LABOR the law must accord the underprivileged worker. 1
1. ARTICLE 1702 VS. ARTICLE 4. Compared to the provision of Article 4 of the Labor Code, it appears
Both Article 1702 of the Civil Code and Article 4 of the Labor Code that Article 1702 is broader in scope in that it pertains to "all labor legislation
speak of the rule on interpretation and construction provisions of law and labor and all labor contracts" and not merely to the "implementation and
contracts. Because of their close interrelation, these two important provisions interpretation of the provisions of the Labor Code, including its implementing
will be discussed herein jointly. rules and regulations," as enunciated in Article 4. Moreover, the Civil Code
mentions a standard which would justify the invocation of the rule of
Article 1702 of the Civil Code provides: interpretation in favor of labor in that the same should be done "in favor of the
"Article 1702. In case of doubt, all labor legislation and all labor safety and decent living for the laborer."
contracts shall be construed in favor of the safety and decent living for the
laborer."1 Having made the foregoing observation, it may well be said that the
provisions of the Civil Code and the Labor Code do not really differ in essence
Congruently, Article 4 of the Labor Code states: since the policy of the law is clear- any doubt should always be interpreted or
"Article 4. Construction in Favoi' of Labor. - All doubts in the construed in favor of labor - which means, in more specific terms, the safety and
implementation and interpretation of the provisions of this Code, including decent living for the laborer. 2
its implementing rules and regulations, shall be resolved in favor of This is, of course, not a harsh rule. The framers of the law (Labor Code
labor."
and the Civil Code) had fully taken cogr.izance of the disparity in terms of
Article 4 of the Labor Code enunciates the time-hcnored principle that resources and standing between labor and capital. In any legal controversy
all doubts in the implementation and interpretation of its provisions should be between them, the former always suffers the most. Hence, the common adage
resolved in favor of labor. 1 This rule applies not only in the interpretation of the that those who have less in life should have more in law is best exemplified and
provisions of the Labor Code but also of its Implementing Rules. 3 It applies to made real in Articles 4 and 1702 of the Labor Code and Civil Code,
all workers - whether in the government or in the private sector- in order to give respectively. The worker must look up to the law for his protection. The law
flesh and vigor to the pro-poor and pro-labor provisions of the Constitution. 4 regards him with tenderness and even favor and always with faith and hope in
It is in ·keeping with the constitutional. mandate of promoting social his capacity to help in shaping the nation's future. He must not be taken for
justice and affording protection to labor. 5 Thus, when conflicting interests of granted.3
labor and capital are to be weighed on the scales of social justice, the heavier ~
;!i"
In the area of employment bargaining, the employer stands on higher
footing than the employee. The law must protect labor to the extent, at least, of
~

i raising him to equal footing in bargaining relations with capital and to shield
him from abuses brought about by the necessity to survive.
4
I
~ Certainly, this rule of interpretation and construction in favor of labor
~
1 RlWle NatKx1al Ccoslrtsdbl Colpcxalion v. NLRC, GR No. 101535, Jal. 22, 1W3, 217 SCRA 455; Ph~ Airiles ~
does not mean that capital should, at all times, be at the losing end of a
~ AssOOaOOn v. ~i'le Aitiles, R:. Md Ph~ Anles, klc. v. Phiippile M1es ~Association, li
GR Nos. L-31341 Cl1d 31343, March 31, 1976. ~
~
controversy. The law does not say so. For while the Constitution and the law
2 kB1 TltllSillission Caporatkxw. CA, G.R No. 144664, IJath 15, 2004; Aquino v. Nl.RC, G.R No. 87653, Feb. 11, 1992, ~ tend to favor the working man, protection to the employer is also assured.
~
200 SCRA 118; kltematiooall'hcrma:eu1ical, Inc. v. Secreay of Lm, GR Nos. 92981-83, Jill. 9, 1992, 205 SCRA 59; ~ Protection of the rights of the laborer authorizes neither the oppression nor self-
Abella v. NLRC, G.R No. 71812, July 20, 1987, 152 SrnA 140, 146; Perezv. NLRC, G.R No. 71813, .kl~ 20, 1987,152
SCRA140. destruction of the employer. While the Constitution is' committed to the policy
3 Mk:le 4, tm Code; Section 3. Preiminaly l'ro'lisklns, IU!s t> ~ 1t1e t.axr Code; Insula' BCI1k a ASa Cl1d
AmeOCa Employees Union PBAAEU] v. lnciong, G.R No. L-52415, Oct 23, 1984.
~ LMd IJld Housi1g DeYelopment Colp. v. Esquillo, G.R No. 152012, Sept 30, 2005 citg PPA Employees Hied Afilr Ju~ 1 Martopper t.i1ilg Corporation v. tolRC, G.R No. 103525, March 29, 1996; Zllbcrlo, Sr. v. NLRC, G.R No. 103679, Dec.
1, 1989v. CoomssiononAud'rt, G.R. No.160396, Sept 6, 2005. 17, 1993, 228 SCRA 556; Holiday mMcllia v. NLRC, G.R No. 109114, Sept 14, 1993, 226 SCRA 417.
5 See Section 18, AIOCie II of the Conslitution. Manila Eledric ConlJCI1Y v. NLRC, {3.R. No. 78763, Jufj 12, 1989; Em! 2 Philippile National Coostruction Colpaa1ion v. NLRC, G.R No. 101535, Jal. 22, 1993, 217 SCRA 455; Plastic Ta.m
~Liles, Inc. v. POEA, G.R. No. L-76633, Oct 18, 1988, 100 SCRA 533;fu'o.tilea, Phis., Inc. v. NLRC, G.R No.
Cenll!rCapaaroov. NLRC, G.R No.81176,Apri119,1989, 172SCRA580.
7fi182, Dec. 1, 1987; Abela v. NLRC, G.R. No. 71812, J\Jy 20, 1987; The Chartered Balk Employees Association v. Ople, 3 Cebu Roya Plant ]Sa:! Mguel Capoatoo] v. Mnister of Labor, G.R No. 58639, ~· 12. 1987.
G.R. No. L-44717, AIJJ. 28, 1985.
I ~ Soochezv. Hilly Lyons ConslriJcOCvt CO!paation, G.R No.L-2799, Oct 19, 1950.

L __
36 BAR REVIEWER ON lABOR lAW
CHAPTER I 37
FUNDAMENTAL PRINCIPLES AND CONCEPTS
of social justice and the protection of the working class, it should not be
supposed that every labor dispute will be a~tomatically decided ill favor of In the case of a CBA, the Highest Court laid down the rule that while
labor. Management also has its own rights, which, as such, are entitled to its terms and conditions constitute the law between the parties, it is not an
respect and enforcement in the interest of simple fair play. Out of its concern ordinary contract to which is applied the principles of law governing ordinary
for those with less privilege in life, the Supreme Court has inclined more often contracts. Not being an ordinary contract as it is impressed with public interest,
l~·
than not towards the worker and upheld his cause with his conflicts with the a CBA must be construed liberally rather than narrowly and technically, and the
~
employer. Such favoritism, however, has not blinded the Court to rule that courts must place a practical and realistic construction upon it, giving due
justice is, in every case, for the deserving, to be dispensed in the light of the consideration to the context in which it is negotiated and the purpose for which
established facts and applicable law and doctrine.' it is intended to serve.'
The Philippine Constitution, while inexorably committed towards the Insofar as overseas employment is concerned, the POEA Standard
protection of the working class from exploitation and unfair treatment, Employment Contract (POEA-SEC) which is required to be signed by every
nevertheless mandates the policy of social justice so as to strike a balance OFW deployed abroad, should be construed liberally in favor of the OFW. A
between an avowed predilection for labor, on the one hand, and the maintenance strict and literal construction of the 2010 POEA-SEC, 2 especially when the same
of the legal rights of capital, the proverbial hen that lays the golden egg, on the would result into inequitable consequences against labor, is not subscribed to in
other. The Supreme Court, in Philippine Long Distance Telephor.e Co. v. this jurisdiction. Concordant with the State's avowed policy to give maximum
NLRC/ underscored that although it is bound by the social justice mandate of aid and full protection to labor a:; enshrin~d in Article XIII of the 1987
the Constitution and the laws, such policy of social justice is not intended to Philippine Constitution, contracts of labor, such as the 2010 POEA-SEC, arc
countenance wrongdoing. deemed to be so impressed with public interest that the more beneficial
2. DOUBT OR AMBIGUITY IN LABOR CONTRACTS. conditions must be endeavored in favor of the laborer. The rule ther~fore is one
In case of doubt or ambiguity, labor contracts should be interpreted of liberal construction. As enunciated in the case of Philippine Transmarine
liberally in favor of the worker. 3 Article 1702 of the Civil Code and Article 4 of Carriers, Inc. v. JVLRC)
the Labor Code should be applied in resolving such. doubt or ambiguity in "The POEA Standard Employment Contract for Seamen is designed
contracts between management and the union. 4 Contracts which are not primarily for the protection and benefit of Filipino seamen in the
ambiguous are to be interpreted according to their literal meaning and not pursuit of their employment on board ocean-going ves5els. Its
beyond their obvious intendment.5 In Colegio de San Juan de Letran - provisions must [therefore] be construed and applied fairly,
Calarnba v. Villas/ the Supreme Court re-affrrmed the rule that the ambiguity reasonably and liberally in their favor (as it is only) then can its
4
in labor contracts should be strictly construed against whoever is the author beneficent provisions be fully carried into effect."
thereof.'
Applying the rule on liberal construction, the Court is thtis brought·to
the recognition that medical repatriation cases should be· considered as an
exception to Section 20 of the 2000 POEA-SEC. Accordingly, the phrase
1 RoiMdo Re.ml v. NI.RC Md Alloo&:, Gulf and Pacific <:on1)ai1Y of Mria, klc., G.R No. 111105, June 'll, 1995; "work-related death of the seafarer, during the term of his employment
Horneort.TlEis SaWgs Md l.oM Association, klc. v. NLRC, G.R No. 97ffil, Sept 26, 1900; Pa'gasilill HI EJecmc contract" under Part A (1) of the said provision should not be strictly and
~. Inc. v. NL.RC, GR No. 89876, Nov. 13, 1992, 215 SCRA 669; Ulbl Callide I.Jilor Unkxi v. Llnkln C11b«1e
Phfclpiles, klc., G.R No. 41314, NaJ. 13, 1992, 215 SCRA 554; Mro..IIY !Aug COipor.llion v. NL.RC, G.R No. 75662, Sept literally construed to mean that the seafarer's work-related death should have
m
15, 1989, SCAA 580. precisely occurred during the term of his employment. Rather, it is enough that
2 G.R No. L~.Aug. 23, 1988, 164 SCAA671. the seafarer's work-related injury or illness which eventually causes his death
3 D1ir1 v. POEA, GR No. 79560, Dec. 3, 1990, 191 SCRA 823.
4 Biix:ock-Hi1a:hi [Phils.llnc. v. Baboock-Hitachi [Phis.], Inc. Maka1i Enl!loyees lkOOn [BHPIMEU]. GR No. 156200, Matth
10, 2005; ~SEe! QxporatMln v. t.i1Sieel Free W<rteiSO!glllizaOOn [MiNf'RE'M).NFL] Ca;jayoo de()Io, GR No.
130693, Mcrch 4, 2004. 1 Marcopper Mni1g Corpaati:Jn v. N\.RC, G.R. No. 103525, Mrdl 29, 1996, citing D<Noo lnlegraBI Port Stevedoring
5 Biix:ock-Hitaclli (Phils-1 Inc. v. Biix:ock-Hillm [Phils.J, Inc. Makati Err!Jioyees tmi:ln IBHPIMEU], Sllfllll; Mndoooo Steel SeM:es v. Pbarquez. 220 SCRA 197 (1993].
Caporali:Jn v. MI1Sieet Free WO!ke!S OrgMizaOOn [M!NfREWO.NFL] CWJt!'fcll de Oro, supra; Plastic TIMTI Centre Amended Strldard Tenns and Cond'llions Governing the <Nerseas Erl1>1oyment of Fifipino Sealaers CJn.8oald Ocean-
C<xporalion v. NlRC, G.R No. 81176, Apii 19, 1989; Herrera v. Petrophil Cap., GR No. L-48349, Dec. 29, 1986, 146 Going ShiJ!; (POEA Merllo!a1dtJm CiitUiar No. 10, Series of 2010, Ocb:lber 26, 2010). FOII1lellt, 2000 POEA-SEC
SCRA385. (Stlnda'd Tenns and CondiOOns Govemi1Q the Employment of ~ro Seafarers On Boald ~ Vessels, issued
G.R No.137795, Matth 26, 2003. pulSI.a1t lo DOLE Oepartmenl Older No. 4, Series of 2000 (May 31, 2000]).
3
Ci1i1g Article 1377, CMI Code. G.R.No.123891.Feb.28,2001,405Phn.487.
! 4 ~suppled.

L
CHAPTER! 39
38 BAR REviEWER ON lABOR lAW fUNDAMENTAL PRINCIPLES AND CONCEPTS

"xxx Unsubstantiated suspicions, accusations, and conclusions of


should have occurred during the tenn of his employment. Taking all things into employers do not provide for legal justification for dismissing employees.
account, the Court reckons that it is by this method of construction that undue In case of doubt, such cases should be resolved in favor of labor, pursuant
1
prejudice to the laborer and his heirs may be obviated and the State policy on to the social justice policy of labor laws and the Constitution."
labor protection be championed. For if the laborer's death was brought abouf t
•f
Consequently, if the employer failed to adduce substantial evidence to
(whether fully or partially) by the work he had harbored for his master's profit, prove that the employees' dismissal from their employment was for a just or
then it is but proper that his demise be compensated. Hence, if it has been ~
~:;:
~ authorized cause, the conclusion is ihescapable that they were illegally
established that (a) the seafarer had been suffering from a work-related t
injury or illness during the term of his employment, (b) his injury or illness ~
dismissed. 2
was the cause for his medical repatriation, and (c) it was later determined
~
J
c.
that the injury or illness for which he was medically repatriated was the SOCIAL JUSTICE
proximate cause of his actual death although the same occurred after the The following are the social justice provisions in the Constitution
term of his employment, the above-mentioned rule should squarely apply. which were already cited and/or discussed above:
3. DOUBT OR AMBIGUITY IN EVIDENCE. (1) Section 10, Article II; and
The rule emmciated in Article 4 of the Labor Code likewise applies in (2) Section 2, Article XIII.
the appreciation of evidence in labor proceedings. Consequently, when there is a
doubt between the evidence presented by the employer and the employee, such
doubt should be resolved in favor of the latter. 1 Time and again, the Supreme
----oOo------
Court has pronounced that "if doubt exists between the evidence presented by
the employer and the employee, the scales of justice must be tilted in favor of
the latter." 2 The policy is to extend the doctrine to a greater number of
employees who can avail themselves of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and
protection to labor.
3
I
In illegal dismissal cases, the consistent rule is that the employer must I1
affrrmatively show rationally adequate evidence that the dismissal was for a
justifiable cause, failing in which makes the termination illegal. 4 As aptly stated ;l;
in Century Canning Corporation v. Ramil: 5 :f.
:1
~
:;;
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~~
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:!i··~
1 South East klll!maliooaiRatlal, lnc:.v. JesusJ. Cooi"g, G.R No. 186621, M:lfch 12, 2014; Masilg 1l1d SmiDeYelopment
Caporalion v. flDJEil, GR No. 161787, Jut)' 27, 2011, 654 SCRA 490, 502; Dealoo Flll11S, h:. v. NLRC, G.R No.
153192, Ja1. 30, 2009, 577 SCRA 280, 295;.Ptillflile En1Jk7/ SeNicesand Resooroes, Inc. v. Plmlb, G.R No. 144786, "
!&
-.~
April15, 2004 ci!i1g Asunciln v. NL.RC, G.R No. 129329, July 31, 2001, 362 SCRA 56; See aso ())casta v.l.ilerty
BroadcasliVJ Nelv«rt. klc., G.R No.165153,Aug.25, 2010. '
i
IA'ecmand Ho1e1 Rescxt v. Johnsoo, G.R No. 191455, Mard112, 2014; SHS flerfom\ed Matelials, Inc. v. [Mz, G.R No.
2
185814, Oct 13, 2010, 633 SCRA 258, 275; Dalsart Security Folte &Ali!d SetW:esCo. v. -Balpf, -G.R No.168495, Julf !
2, 2010; Lina l..ood, k1c. v. CUevas, G.R No. 169523, June 16, 2010; 1m;, Heavy lndusl!ies and Consboctioo Co, L.kl. v.
llmez, GR No.170181, June 26, 2008; Bele Clxp. v. Macasusi, G.R. No.168116, April22, 2008; MwTv.HilOOJ, Inc. v.
NL.RC, G.R No. 169600, June 26, 2007, 525 SCRA 708, 731; G & Mf'hiiWines, Inc. v. OJanilot, G.R No.
162308, Nov. 22, 2006,507 SCRA 552, 569-570.
3 Webopo1i1an 1mk 31d Trust Corr!Jany v. Nl.RC, G.R no. 152928, June 18, 2009; l.epan!o Consoidaled Mllilg Co. v.
I:Mnapis, G.R No. 163210, Aug. 13, 2008; Travelai"e &Tours Corp. v. NLRC, G.R No. 131523, Aug. 20, 1998, 294 SCRA 1 See also DJty Free f'hiWileS Se!vieeS, Inc., v. Tlia, G.R No. 174809, June 27, 2012; CeniJJiy CaYling Coqxxation v.
505, 511;VIOietav.Nl.RC, G.R No.119523,0ct. 10,1997,280 SCRA520, 531; LT. DaiJJ and Co., lnc.v.NLRC, G.R No. Rani!, G.R No. 171630, Aug. 8, 2010, 627 SCRA 192, 202; t.andlex lndus1ries v. CA, G.R No. 150278, Aug. 9, 2007;
113162, Feb. 9, 1996, 253 SCRA 440, 44S. Skippers Pacific, Inc. v. Mra, GR No. 144314, Nov. 21,2002.
HantexTil!di'I:J Co., Inc. v. CA. G.R No.148241, Sept 27,2002. Ncrarjo v. Biomedica Heallh care, h:., G.R No 193789, Sept 19, 2012.
G.R. No. 171630, Aug. 8, 2010,627 SCRA 192, 202.
i
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40
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CHAPTER II
RECRUITMENT AND PLACEMENT
41
~
i
CHAPTER Two I. employment is concerned, the sole basis thereof is Article 38 and nothing more,
unlike recruitment for overseas employment where new laws' have been enacted to
RECRillTMENTANDPLACEMENT govern and regulate it, if not to supersede it. Under these new laws2 as well as their
I implementing rules,3 the concept of illegal recruitment under the Labor Code has
~~~ been broadened.4 Thus, while under the original rendering of the Labor Code, the
TOPICS PER SYLLABUS ., prohibited activities enumerated in Article 34 constitute illegal recruitment only
II.
',,
:~
when undertaken by non-licensees or non-holders of authority, 5 the commission
-~;
thereof is now considered illegal recruitment, in cases of recruitment for ~
RECRUITMENT AND PLACEMENT ~ employmen~ both under RA. No. 8042 and its amendatory law, RA. No. 10022,
~
when the same are committed by "any person, whether a non-licensee, non-holder,
A. Illegal recruitment
licensee or holder ofauthority.',6
1. Elements
2. Prohibited Activities Although there is no similar corresponding amendment to Article 38 that
3. Types of Illegal Recruitment would have justified the same "broadening" of its application to illegal recruitment
4. Illegal Recruitment Versus Eotafa involving local employment, the 2014 Rules1 have now likewise reflected the same
5. Liability of Local Recruitment Agency and Foreign Employer broadened coverage as to include prohibited acts when committed by "any person,
a. Solidary Liability whether or net a holder of a license or authority." 8 This is as it should be since
b. Theory of Imputed Knowledge the intendment of the law can never be enl!vened and vivified unless such co·;erage
6. Termination of Contract of Migrant Worker Without Just or is broarlened as is now provided in the prevailing Rules.
Valid Cause 2. WHAT CONSTITUTES RECRUITMENT AND PLACEMENT
7. Direct Hiring ACTMTIES.
B. Regulation of Recruitment and Placement Activities a. As defined in the Labor Code.
C. Employment of Non-Resident Aliens The Labor Code, in its Article 13(b), defines "recruitment and placement"
D. Training and Employment of Special Workers
1. Apprentices and Learners
i" activity as referring to any act of:
:~ (a) canvassing,
2. Disabled Workers s
~ (b) enlisting,
a. Equal Opportunity ·.~
(c) contracting,
b. Discrimination on Employment
-----------· ---------------- J
_;~

,.:~
(d) transporting,
(e) utilizing, or
·J. (f) hiring procuring workers.
A.
ILLEGAL RECRUITMENT ~
:!
(NOTE: The presentation of the topics In this portion of the Syllabus 1 4 1 Suchaslle 1995lal¥, RA No.8042, and itamendabylaw, RA. No. 10022, Yttthwas passedi12010.
ld.
1 2
has been altered to provide for amore comprehensive and orderly discussion). dj 3 Such as 11e Orrius rues and Regurams ~ 11e !Ji:l1311 Wtrtas and Ovelseas Fqli1os M. d 1995, as
Amended by RA No. 10022, issued on July 8, 2010; Revised POEA ~les and Regulations GovmJi1g lt1e Reauibnent
1. APPLICATION OF ARTICLE 38 TO BOrn LOCAL AND OVERSEAS ~ and ~ dla1dilased Overseas Fipilo Woltlers d 2016; 2016 ReVIsed POEA Rules and Regulalions GovemirYJ
EMPLOYMENT. l1e Reauitrnentcnl ~to! Sealarers issued on Febnay 26, 2016.
4
The S14Jreme ewt has declcred that R. A. No. 8042 has broadened 11e cm:ept ct ikiga reaUtment undEr 1t1e t.a1xr
The concept of "illegal recruitmel?!." under Article 38 applies to Code. (Poople Y. Tolentil:J, G.R No. 208686, Julf 01, 2015; People v. Daud, G.R No. 197539, June 02. 2014; People v.
recruitment and placement for both local ~~:>overseas employment But a Oalen, G.R No. 173198, June 1, 2011; People v. Trilml, GR No. 181244, Aug. 09, 2010; People v. Nqjla, G.R No.
distinction must be pointed out at the very outset :i:hat as far as recruitment for local 170834, Aug. 29, 2008).
it 5 People v. Ccilacq, G.R No. 113917, Ju1y 17, 1995, 246 SCRA 530.
See Section 6o!RA No. 8042, as !l11ellded by Section 5d RA No. 10022.
Revised~ cnl RegufaOOos Govemilg Recruitnent and Pfacemenlfur Local ~ ~ O!der No. 141-
.\:
Retermg to 1t1e 2017 Syllabus. 14, SeOOs of2014[Noverrber20, 20141
1

j 8
See Section 4211lereof.

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42 BAR REVIEWER ON lABOR lAW
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43

It also includes: People v. Panis/ the issue of whether there is recruitment and placement was raised
(a) referrals,
(b) contract services,
(c) promising, or
(d) advertising for employmen~ locally or abroad, whether for profit or
'

considering that the four (4) separate criminal informations filed against the accused
for operating a fee-charging employment agency without being duly licensed to do
so, merely mentioned one person in each of the information as having been recruited
by him. The accused contends that under Article 13(b) of the Labor Code, there
not. could only be illegal recruitment when two or more persons in any manner were
b. No change in meaning as these terms are defined in special laws and promised or offered any employment for a fee.
rules. The Supreme Court declared that the above-quoted proviso in Article 13(b)
Both the applicable laws for recruitment and placement for local was intended neither to impose a condition on the basic rule nor to provide an
employment1 and~ employmenf have retained the above definition and exception thereto but merely to create a presumption. The presumption is that the
concept of recruitment and placement as originally rendered in Article 13(b) of the individual or entity is engaged in recruitment and placement whenever he or it is
Labor Code.3 dealing with two or more persons to whom, in consideration of a fee, an offer or
promise of employment is made in the course of the "canvassing, enlisting,
3. MEANING OF THE PROVISO IN ARTICLE 13(B).
contracting, transporting, utilizing, hiring or procuring of workers."
Article ·13(b) contains a proviso that states: "Provided, That any person
The number of persons dealt with is not an essential ingredient of the act of
or entity which, in any manner, offers or promises for a fee, employment to two
recruitment and placement of workers. Any of the acts mentioned in the basic rule in
or more persons shall ~deemed engaged in recruitment and placement."
Article 13 [b] will constitute recruitment and placement even if only one prospective
The bottcmline element is such recruitment and placement activities are worker is involved. The proviso merely lays down a rule of evidence that where fee
generally legal and valid when undertaken by licensees or holders ofauthority. Only is collected in consideration of a promise or offer of employment to two or more
when the same are under+.aken by non-licensees or non-holders of authority when prospective workers, the i..'ldividual or entity dealing with them shall be deemed to
they· become acts cf illegal recruitment. Thus, the above-quoted proviso simply be engaged ilL the act of recruitment and placement The words "shall be deemed"
makes a presumption, as far as non-licensees or non-holders of authority are should, by the same token, be given the force of a disputable presumption or of a
concerned, that they are engaged in recruitment and placement activity for local or prima facie evidence of engaging in recruitment and placement
overseas employment when, in any manner, they offer or promise for a fee
employment to two (2) or more persons. Evidence should be presented by them to 1.
debunk such legal presumption. 4 aLEGALRECR~NT
It bears to stress that the number of persons so offered or promised IN LOCAL EMPLOYMENT
employment is not an essential element of the act of recruitment and
I. LOCAL ILLEGAL RECRUITMENT.
placement of workers. Only one person recruited is sufficient to convict one for
illegal recruitment. Thus, in a case involving recruitment for overseas employmen~ Local illegal recruitment is committed under any of the following
situations, to wit:
(1) When any of the following acts are undertaken by a non-licensee or
~~ non-holder o[authorl!v:
I SedOO 42, 1ist~,ld.; SedOO 1, Rule IV, OrmixJs Rlresilld RegUalklns ~the Mgr.rrtWorkersand
CNelseas Aipi1os lv:i. ct 1995, as M1ended by RA No. 10022. issued oo Jutt 8, 2010; See aso Sectial 76, Rule x. • · Any act of canvassing, enlisting, contracting, utilizing, hiring or
Revised POEA Rules il1d RegulaliJns GoYemilg Die Reauitment Clld Empkr,ment ct Land-Based Ovelseas Fd~ ~~ procuring workers, and includes referrals, contract senices,
WOOrels of 2016; Sectial 72, Rule X. 2016 ReJised POEA Rlres Md Regulatioos GovemiBJ the Recruitment and
~or Seafarels issued oo Februaly 26, 2016. promising or advertising for local employment, whether for profit
2 SedOO 6ofRA No.8042, as amended by Section 5ofRA No.10022. ornot.1
3 ~. i1 the definition i1 lhe 2014 Rules kr klcal ~ of -Mlat oonstitiJtes illegal recruilment. the \\\lid
'transpor&lg' is missilg. (See Seciion 42, Re'lised Rules and Regulalions GovemW1g Recruibneot and Aacerneot for Local
Employment. Department Order No. 141·14, Series ci 2014 [N.7<errber 20, 2014D.
4
Seclioo 6ci RA No. 8042, as oo1ellded by SectiJn 5d R.A. No. 10022; See also Section 1, Rule IV, Omnibus Rules em
Regulation!; kropiemeotir1J lhe Mgrant':'.'oi'~ers and Ove!seas Fipilos M ci 1995, as Amended by RA. No. 10022, issued
oo Jilif 8, 2010. See also Seclioo 76, Rule X. Revised POEA Rules and RegulaOOns Governing the Recrui1ment and 1
G.R Nos. L-58674-n,Ju~11,1986,142SCRA664.
En'(lloyment of land-Based 0/erseas Fiipilo Wooers ci 2016; Section 72, Rule X. 2016 Re<lised POEA Rlres and 2 Section 42, Revised Rules em Regulations Governing Reauitment em f'lac:emoot 1or local Employment. Department

L
Reg~ Govemrg lhe Reauib'nent and Employment aSeafarers issued onfebrual}' 26,2016. Order No. 141-14, Se!ies or 2014 [NoYerrber 20. 2014].
,q
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44 BAR REviEWER ON lABOR lAW
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CHAI'TERll
RECRUITMENT AND PLACEMENT
45

(2) When any of the following acts which have been declared by law as ~ The acts enumerated in No. 2 above, being unlawful, well constitute illegal
prohibited are committed by any person, whether or not a holder o(a license or recruitment when the same are committed by anyofthe following: (a) Any person;
authority: ~ (b) A licensee; (c) A holder of authority; (d) A non-licensee; or (e) A non-holder of
a) To charge or accept directly or indirectly any amount or to make a J
~•:, authority.
worker pay the agency or its representatives any amount greater than The word "person" in letter (a) above may refer to an "individual" or
that actually loaned or advanced to him; "entity" per Article 34 of the Labor Code. 1
b) To furnish or publish any false notice or information in relation to 2.
recruitment or employment; ILLEGAL RECRUITMENT
c) To give any false notice, testimony, information or document or IN OVERSEAS EMPLOYMENT
commit any act of misrepresentation for the purpose of securing a
license or authority; 1. ACTS CONSTITUTING ILLEGAL RECRUITMENT.
d) To induce or attempt to induce a worker already employed to quit his RA. No. 8042, as amended by RA. No. 10022, 2 classifies the acts
employment in order to offer him another unless the transfer is constituting illegal recruitment in accordance with the offender, viz.:
designed to liberate a worker from oppressive terms and conditions of (1) When any of the following acts are undertaken by a non-licensee or
employment; non-holder o(authoritv:3
e) To influence or attempt to influence any person or entity not to employ • Any act of canvassing, enlisting, contracting, transporting, utilizing,
any worker who has not applied for employment through his agency; hiring, or procuring workers, and includes reft!rring, contract
f) To engage in the recruitment or placement of workers in jobs harmful services, promising or advertising for employment abroad, whether
to public health or morality or to the dignity of the Republic of the for profit or not. 4
Philippines; (2) When ar.y of the following acts which have been declared
g) To obstruct or attempt to obstruct inspection by the DOLE Secretary or prohibited by law,5 are committed by anv person, whether a non-licensee, non-
by his/her duly authorized representatives; i holder, licensee or holder ofauthoritv:
h) To substitute or alter to the prejudice of the worker, employment I (a) To charge or accept directly or indirectly any amount greater than that
contract prescribed by the DOLE from the time of actual signing SPecified in the schedule of allowable fees prescnbed by the Secretary
thereof by the parties up to and including the period of the expiration of of Labor and Employment, or to make a worker pay or acknowledge
the same without the approval of the DOLE.' . any amount greater than that actually received by him as a loan or
All the foregoing acts are embodied in Article 34 of the Labor Code, with advance;
the exception of certain acts which apply exclusively to overseas employment 2
2. DISTINCTION BETWEEN THE TWO (2) SETS OF ACfS.
The acts described in No. 1 above are, as a general rule, lawful and valid 1 The openrg paagraph d Article 34 (11001li!ed Pradices) stares: 't shal be ooi<MU for atl'f ilcividual, El1tily, li:ensee, or
acts of recruitment and placement of workers for local employment when holderd dlorilyl.r
2 Sediln6dRA.No.8042,asanendedlrfSeclion5dRANo.10022.
undertaken by licensees or holders of authority to recruit. What makes it unlawful 3
The tern 'aJhriy' is defiled it Artie 13(1) of 11e Latxr Code v.ti:h relefs1D a!bunent issued by ltle llepiltment d
and therefore constitutive of illegal recmitment is when the same acts are undertaken Labor a:toizilg aperson or association merY:Jage it recruilmoot ir1d placementadivities as apMie recruitment entity.

1
2
by any of the following: (a) A non-licensee; or (b) A non-holder ofauthority.

ld.
Such as the~ ac1s:
/l ~ Sedioo 6cf RA. No. 8042, as amended lrf Seclion 5d RA No. 10022; See

5
aso
Sedion 1, Rule IV, Ormllus ~les and
Regulam ~ting the M,jran!Worke!S and <Ne'seas ~Pdd1995, as Amended byRA tb.10022, issued
on Jlif a, 2010. See also Section 76, Rule x, RevisEd POEA Rules ir1d P.egwms Govemi1g the Reauirrent and
En1Jioyment d l..and-8ased Oiefseas AiJito WOOie!S of 2016; Seclion 72, ~ X, 2016 Re't'ised POEA Rules and
Regulations Governing Ule Reallirnenl and Empbymeot of Se<mrs issued on Fexuay 26, 2016.
As e1Ull'l1e!lEd under Article 34 of ltle t.m Code Wid now pll'Jided IJ1der Seclion 6 of RA No. 8042, as amended by
'(h) To fail to file reports on the status of~ placaneot vacancies, remillllnre cl ~n exchange eamilgs,
~!rom )lls, depa1ures ir1d such olher matters a mrrnaoon as may be requred lrf the Sel:relal)' of lalxJ.
'fj) To become M officer a member of the ~load of trrt caporation engaged i'llravel ~ oc mbe engaged direclly or
i~'
Section 5 d RA. No. 10022: See also Section 1, Rule IV, Otmbls Rules Wid Regulations hnplementilg the M;Jrant
WOOie!S and Overseas Alpines Act ol1995, as Amended lrf RA No. 10022, issued on Ju~ 8, 2010. See also Section 76,

L
-.,~
ildirectly illtle ~of atravel agency; and Rule X. RMed POEA Rules and RegOOlions Governing lhe Recruilment and ~ cll..ald-llased Overseas
·~)To v.ithhold or deny travel doo.Jmenls from appicanl Y«llKees before depmefor nmeay or finMcial cooside!ations
Aipino Wcxkers of 2016: Section 72, Rule X, 2.016 Re\ted POEA Rli!s and Regllati:lns Govemrg llie Reauiment and
other 11an !lose auttlorizg;f under lh5 Code and its~ rules and regulalions." ~of Seafarels issued on February 26, 2.016.
~

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46 BAR REviEWER ON lABOR lAW
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RECRUITMENT AND PlACEMENT 47
. (b) To furnish or publish any false notice or information or document in
relation to recruitment or employment;
I
ri
(m) Failure to reimburse expenses incurred by the worker in connection
~
(c) To give any false notice, testimony, information or document or with his docwnentation and processing for purposes of deployment, in
cases where the deployment does not actually take place without the

'
commit any act of misrepresentation for the purpose of securing a
license or authority under the Labor Code, or for the purpose of worker's fault;; and
i
documenting hired workers with the POEA, which include the act of (n) To allow a non-Filipino citizen to head or manage a licensed

l
reprocessing workers through a job order that pertains to non-eXistent recruitment/manning agency. 1
work, work different from the actual overseas work, or work with a 2. DISTINCTION BETWEEN THE TWO (2) SETS OF ACTS.
different employer, whether registered or not with the POEA; The distinction applicable to illegal recruitment for local employment
(d) To induce or attempt to induce a worker already employed to quit his earlier cited equally applies to the above two (2) sets of acts constituting illegal
employment in order to offer him another unless the transfer is
!
I recruitment in overseas employment Consequently, the acts described in No. 1
'
designed to liberate a worker from oppressive tenus and coi1ditions of above constitute illegal recruitment only when they are undertaken by any of the
employment; following: (a) a non-licensee; or (b) a non-holder of authority; and the acts
(e) To influence or attempt to influence any person or entity not to enumerated in No. 2 above, being prohibited, are considered illegal recruitment
employ any worker who has not applied for employment through his when they are committed by any of the following: (a) any person/ regardless of
agency or who has formed, joined or supported, or has cuntacted or is whether: (b) a licensee; (c) a holder of authority; (d) a non-licensee; or (e) a non-
supported by any union or workers' organization; holder of auihority.
(t) To engage in the recruitment or placement of workers in jobs harmful 3. PROHIBITED ACTIVITIES.
to public health or morality or to the dignity of the Repubiic of the To the above enumeration of acts constituting illegal recruitment, the
Philippines; following prohibited acts wem added by R.A. No. 10022: 3
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor (1) Grant a loan to an overseas Filipino worker with interest exceeding
and Employment or by his duly authorized representative; eight percent (8%) per annum, which will be used for payment of
(h) To fail to submit reports on the status of employment, placement I legal and allowable placement fees and make the migrant worker
vacancies, remittance of foreign exchange earnings, 5eparation from i issue, either personally or through a guarantor or accommodation
· jobs, departures and such other matters or information as may be i party, post-dated checks in relation to the said loan;
required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment ! (2) Impose a compulsory and exclusive arrangemellt whereby an
overseas Filipino worker is required to avail of a loan only from·
specifically designated institutions, entities or persons;

i
contracts approved and verified by the Department of Labor and
.Employment from the time of actual signing thereof by the parties up (3) Refuse to condone or renegotiate a loan incurred by an overseas
to and including the period of the expiration of the same without the Filipino worker after the latter's employment conttact has been
approval of the Department of Labor and Employment;
G) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation engaged
II prematurely terminated through no filult of his or her own;
(4) Impose a compulsory and exclusive arrangement whereby an
overseas Filipino worker is required to undergo health examinations
in travel agency or to be engaged directly or indirectly in the only from specifically designated medical clinics, institutions, entities
management of travel agency;
(k) To withhold or deny travel documents from applicant workers before "
t ld.;kl.;ld.;ld.;ld.
departure for monetary or financial considerations, or for any other 2
The w.xd 'person' may ref;!r to eiU1er "' 'ildMduar or 'entity' per Ali:le 34 d !he 11tor Code. This is so be:ause lhe
reasons, other than those authorized under the Labor Code and its opening paa;Jraph of this aJ1ide (ProhiJited Practices) slates: 'K shal be unlawful for artf ~ enliy, l.icensee, or
( holder d authorily[.r
inlplementing rules and regulations; -e: 3
Sec00n 6 of RA No. 8042, as amended by Section 5 d RA No. 10022; See also Se<fu11, RUe IV, Qml)us Rules illd
(1) Failure to actually deploy a contracted worker without valid reason as RegutaOOns lmplemeoting lhe Mgrant Wake!S il1d OvefSeas Fipinos M. of 1995, as Amended by RA No. 10022, issued
determined by the Department of Labor and Employment; on Ju~ 8, 2010. See also Section 76, Rule X. Revised POEA Rules Mel Regulations ~ l1e Reauiboont and
~
Ernpt;r,mant of land-Based 0Jerseas Flipino Wodle!S d 2016; Section 72, Rule X, 2016 Revised POEA Rules ard
RegUialixls Governing the Reauilmen!Md Employment of Seaf!m issued on Februaly 26,2016.

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48 BAR REVIEWER ON lABOR lAW
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49

or persons, except in the case of a seafarer whose medical


examination cost is shouldered by the principaVshipowner;
I
~
However, the Supreme Court ruled that Section 6 is constitutional and thus
ratiocinated:
"But 'illegal recruitment' as defined in Section 6 is clear and
(5) Impose a compulsory and exclusive arrangement whereby an
overseas Filipino worker is required to undergo training, seminar, \ unambiguous and, contrary to the RIC's finding, actually makes a
distinction between licensed and non-licensed recruiters. By its terms,
instruction or schooling of any kind only from specifically designated
institutions, entities or persons, except for recommendatory trainings 1 persons who engage in 'canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers' without the appropriate
mandated by principals/shipowners where the latter shoulder the cost
of such trainings;
(6) For a suspended recruitment/manning agency io engage in any kind
I I
government license or authority are guilty of illegal recruitment whether
or not they commit the wrongful acts enumerated in that section. On the
other hand, recruiters who engage in the canvassing, enlisting, etc. of
of recruitment activity including the processing of pending workers' !; OFWs, although with the appropriate government license or authority,
are gJilty of illegal recruitment only if they commit any of the wrongful
applications; and acts enumerated in Section 6."
(7) For a recruitment/manning agency or a foreign principaVemployer to Earlier, the Supreme Court, in the case ofThe Executive Secretary v. The
pass on the overseas Filipino worker or deduct from his or her salary Hon. CA, 1 has declared that any issue of validity or constitutionality of the same
the payment of the cost of insurance fees, premium or other Section 6 and Section 72 of R.A. No. 8042 has been rendered moot and academic
insurance related charges, as provided under the compulsory worker's since the Court, from R.A. No. 8042's effectivity on July 15, 1995, had, in a catena
insurance coverage. 1 of cases, applied the penal provisions· in Section 6 and imposed the penalties
An example of a case where the accused was convicted for com.-nitting the provided in Section 7 thereof. By its rulings, the Court thereby affirmed the validity
acts enumerated under the provisions of Section 6 (a), (l) and (m) above is Suliman of the assailed penal and procedural provisions of R.A. No. 8042, including the
v. People/ when: (1) they separately charged the private complainants the amounts imposable penalties therefor. 3
of Pi32,460.00, Pl20,000.00 and P21,400.00 as placement fees; (2) they failed to
3.
actually deploy the private complainants without valid reasons, and; (3) they failed
to reimburse the said complainants after such failure to deploy. ~: TYPES OF ILLEGAL RECRUITMENT
4. CONSTITUTIONALITY OF "ILLEGAL RECRUITMENT" AS i AND THEIR ELEMENTS
DEFINED IN SECTION 6 OF R.A. NO. 8042. ~
ii 1. TWO (2) TYPES OF ILLEGAL RECRUITMENT.
In Republic v. PASEI,l respondent PASEI filed on August 21, 1995, a
There are two (2) types of illegal recruitment, to wit:
petition for declaratory relief and prohibition with prayer for issuance of TRO and
writofpreliminacy injunction before the RTGofManila, seeking to annul Section 6,
among others, of R.A. 8042 for being unconstitutional. Section 6 defines the crime
I (1) Simple illegal recruitment; and
(2) Illegal recruitment involving economic sabotage consisting ofeither:

I
a) illegal recruitment committed by a syndicate; or
of"illegal recruitment" and enumerates the acts constituting the same. The RTC of
b) illegal recruitment committed in large scale.
Manila declared Section 6 unconstitutional after hearing on the ground that its
definition of "illegal recruitment'' is vague as it fails to distinguish between licensed Further discussion of these topics follows.
and non-licensed recruiters and for that reason gives undue advantage to the non-
licensed recruiters in violation of the ript to equal protection of those that operate
with government licenses or authorities.
I SIMPLE ILLEGAL RECRUITMENT
3-A.

J I. CONCEPT.
1 Jd.;ld.;ld.;ld. Simple illegal recruitment or simply, illegal recruitment, covers any
2 Su1imir1 v. People, G.R No. 190970, Nov. 24, 2014. recruitment and placement activity undertaken by a non-licensee or a non-holder of
Republic of 1l1e PllirqlPiles v. Phq>pile Assodation of Seivice Exporte!s, Inc. (PASEI), G.R No. 167500, Nov. 13, 2012.
This is ooe of 1l1e cases consolidated -Mth olha' siniar cases in Hon. Slo. Tomas v. Sal<¥:, GR Nos. 152642, 152710,
167500,18297S.79&184m.99, Nov.13,2012. 1 GRNo.131719,May25,2004.
4 NOOl: As deli1ed in People v. EfV. Diaz, 328 Phil. 794, 806 [1996J, a I'IOO-I'mlsee or norHloldef of d10fity means any 2 Enlitled 'Penalties.'
peiSOI'I, caponmn or entity v.ilich has n<t been issued a valid lkense or aJihority kl enQWJe In reauilment illd placement 3
For ilslance, 1l1e validity of Sedion 6 IX RA No. 8042 v.l1ich proWies llat eJ1'4lloyees of reauilment CJJencies may be
by lhe Secrelay of l..lilor, or v.1lose license 01' authOOty has been suspended, reo.ded or canceled by the POEA or lhe
~ aimilaly lmle for illegal recnilmenthasbeen upheld in Peqllev.Olow:lliiY, G. R Nos.129577~. Feb. 15,2000.

L_.
Secretay.
so BAR REviEWER ON lABOR lAW f~ CHAPTER II
RECRUITMENT AND PlACEMENT
51

authority. It also includes the commission of prohibited acts as enumerated under


the law, 1 not only by a non-licensee or a non-holder of authority but also by a ~-~·
The above enumeration of the elements curiously failed to consider that under the
broadened' concept of illegal recruitment under the 1995 2 law, RA. No. 8042,
licensee or holder ofauthority.
2. ELEMENTS PER JURISPRUDENCE. Il which, it must be noted, has not been changed by the latest amendment introduced
3
thereto in 2010 by RA. No. 10022, the term "illegal recruitment", unlike illegal
recruitment as defined under the Labor Code which is limited to recruitment
Most pieces of jurisprudence2 have, over the years, consistently declared
that simple illegal recruitment is committed when two (2) essential elements concur,
viz.: i ij
activities undertaken by non-licensees or non-holders of authority, 4 now includes the
commission of the prohibited acts enumerated thereunder, "whether committed
by any person, whether a non-licen~ non-bolder, licensee or holder of
(1) that the offender has no valid license3 or authorit/ required by law to I 5
authority." Therefore, under Section 6 of RA. No. 8042, as amended, 6 illegal
enable him to lawfully engage in the recruitment and placement of If recruitment (for overseas employment) may be committed not only by non-licensees
workers; and
or non-holders of authority but also by licensees or holders of authority. 7 Section 6,
(2) that the offender undertakes any activity within the meaning of 8
as ar.:J.ended, enumerates fourteen (14) acts or practices [(a) to (n)] plus seven (7)
''recruitment and placement" defined under Article 13(b),5 or any
additional prolubited acts, which constitute illegal recruitment, whether committed
prohibited practices enumerated under the law. 6
by any person, whether a non-licensee, non-holder, licensee or holder of authority.
3. ADDITITIONAL ELEMENTS PER LAW. Except for the last three (3) acts [(1), (m) and (n)] as well as the seven (7) additional
A survey indicates that the criminal cases where the foregoing elements prohibited acts, on the list under Article 6 ofRA 8042, as amended,9 the first ele·.ren
were used as the guidepost in determining the culpability of the accused for illegal (11) acts or practices are also listed in Article 34 of the Labor Code under the
recruitment, involve persons who are non-licensees and non-holders of authority. heading "Prohibited practices." Thus, under Article 34 of the Labor Code, it is
unlawful for any individual, entity, licensee or holder of authority to engage in any
of the enumerated prolnbited practices, but such acts or practices do not constitute
1 Spedficaly, as enumernted under Article 34 ci the Labor Code Cl1d 001'! prOOied under Sec1ion 6 of RA No. 8042, as illegal recruitment when undertaken by a licensee or holder of authority. 10 However,
<Jnended by Secli:ln 5 of RA No. 10022; See also SecOOn 1, Rule r-J, Cllmilus Rules <Vld REgufatioos ~lemen1i'lg the
M,jr.rt Wal<efs a1d Ovefseas ~Pd. ci 1995, as Amended by RA No.10022, issued oo Jut; 8, 2010. See also under Article 38(a) of the Labor Code, when a non-licensee or non-holder of
Sedil1 76, RIJe X. Revised POEA Rules a1d Regulations GoYemi'g the Reauibnent and ~ ci l.sH3ased authority undertakes such ''prohibited practices," he or she is liable for illegal
~ Fi'~ Wodle!S ct 2016; Sedioo 72, Rule X. 2016 RIMsed POEA Rules and Reguiatioos Golemi'g the
recruitment. RA. No. 8042, as amended, broadened the definition of illegal
RecMnentald ~~of Se<mls issued on Febru<ry26, 2016.
2 Jioosl a1 cases l'tt!ere these elenells ere mentioned iMile reauib1Jer( b" cwerseas erJ1lb(menl. Mlst noleiWI1hy of recruitment for overseas employment by including the afore-said prohibited acts or
these cases ere: Cameo ~ v. People, G.R No. 178337, JIJ'Ie 25, 2009; See also People v. Chua, G.R No. 187052, practices which now constitute as illegal recruitment, whether committed by a non-
Sept 13, 2012; Romero v. People, G.R No.171644, Nov. 23, 2011; Nasi-Vibv. People, G.R No. 176169, NaY. 14, 2008, licensee, non-holder, licensee or holder of authority. 11 .
571 SCRA 202, 208; People v. Qtiz~e, G.R Nos. 115338-39, Sept 16, 1997, 279 SCRA 180, 193; People v. Pasrua,
GR No. 125081. Oct 3, 2001; PEqlle v. Navarra, G.R No. 119361. Feb. 19, 2001; Abaca v. Hoo. CA. G.R No. 127162. Simply put, under RA. No. 8042, as amended, a non-licensee or non-
..lllle 5, 1WS; People v. COOaarlQ, G.R No. 113917, Ju1i 17, 1995, 246 SCRA 530; People v. Cola!, G.R Nos. 97849-54, holder of authority commits illegal recruitment for overseas employment in two
Mlth 1, 1994, 230 SCRA 499; f'ecPe v. Sendoo, G.R Nos. L-1015m2, ~ 15, 1993, 228 SCRA 489; People v. Ondo,
GR No. 101361, NaY. 8, 1993, 'OJ SCRA 562; ~ v. ~.Jr., G.R No. 98443, Aug. 30, 1993, 225 SCRA 714;
1
Peqllev. Bodozo, G.R No. 96621. O:t.21, 1992,215 SCRA33. ~ The Supreme Court has decBed llat R A. No. 8042 has broadened the concept ci ilegal recruitment lllder the Labor
~
3 Deti1ed i1 Altide 13 (d) ci toe Llilcr COOe, as anended, as 'a doameot issued by the IJepartnent ct labor authori2i1g a ~ COOe. (People v. Abella, G.R ttl. 195666, Jan. 20, 2016; People v. Daud, G.R No. 197539, June 02, 2014; People v.

..
peson oc entity tl ~a Jlli'.'* af4ll7jment agency.' (See People v. <:alacmg, G.R No. 113917, Jutj 17, 1995, 246 !i' Oalen, G.RNo.173198,.111le1, 2011; ~v. Nogra, G.R No.110834,Aug. 29, 2008).
2 JIJle 7, 1995.
SCRA530). ~
;;. 3
4 Deti1ed i1 Altide 13 (f) ctthe laborCOOe, as amended, as 'a dooJmentissued by the Depar1meot ci labor authori2i1g a Mirth 10, 2010.
peson oc association t> enga:~e i1 reauilment md pa:ement ~as a¢.'ate recruilroont entity.' (See People v. ~ 4
People v. Tolentilo, G.R No. :aJ8686, Ju~{)1, 2015.
5
~ ). See e!1IM11efl!b1 under SecbJ 6 ci RA No. 8042, as amerded by Sec00n 5 of RA No. 10022; See also Section 1, Rule
5 Article 13(b) ci D1e labor Code deli1es 'iecrui1ment a1d placemenf as: lvrf act of canvassi"g, ~. contacli'g, r-J, Ormibus Rules Cl1d RegiAa&x1s ~ling V1e l.tJr.rt WOikers Md Ovelseas F~ hl of 1995, as Amended by
mpor&YJ, utilzilg, hii'g, (J ~ 'MX!Ie!S, a1d i1dudes refeq;, <Xlll1Iact sel'lk:es, prorrisiY;! (J Mtsirg b' RA No. 10022, issued oo .kif 8, 2010. See also Secli:ln 76, RUe X. Revised POEA Rules Cl1d Reg(ja(joos GovemiYd the
• employment. b3ly oc abroad, Ytt1elher lor profit oc not Provi:led,llal2lrf PefSOI1 or entity m, i12lrf manner, <A!ers or Reat.ifment Mel ~ ci l.il1d-Based Overseas ~ WOikers ci 2016; SecOOn 72, RUe X. 2016 Revised POEA
proo1ses b" afee efl'4llcyment 10 tv.o or more petSOOS shall be deemed E".Ja:Jed il reauirnent ood placement
6
Rtk.s Mel Reguialioos ~ the Retrui!ment and ~of Seafarels issued on February 26, 2016.
6
See ern.meration IJ1der Article 34 ct l1e labor Code a1d oo.v pltM:led ll1der Section 6 ci RA. No. 8042, as llnended by Sedion6ofRA.No.8042,asanendedbySection5ofRA.No.10022: .
7
Sedion 5 ci RA No. 10022; See also Section 1, Rule IV, OrrniJus R!ils a1d Regulations ~ the Mgrant People v. Tolentino, SUjlfa
8
Wolkefs Md ~ Fiipilos Pd. of 1995, as Amended by RA No. 10022, issued oo Ju~ 8, 2010. See also Section 76, SecOOn 6 of RA No. 8042, as anended by Section 5of RA No. 10022.
Rule X. Revised POEA Rules in! Regulations GMmi1g the Recninent a1d ~ ct l.ald-Based 0ie1seas 9 ld.
10
~ WOike!S It 2016; Section 72, IUl X. 2016 Revised POEA RUes Md RegulaOOns ~ U1e Ra:ruilment and Peoplev. Tolentino, supra.
11 ld.

L
Employmeot ci Seafllel5 issued on Februaly 26, 2016.
52 BAR REviEWER ON lABOR lAW

ways: (1) by any act of canvassing, enlisting, contracting, transporting, utilizing,


II CHA~TER
RECRUITMENT AND PlACEMENT
II
53

i! (3) The number of recruiters and/or recruitees should not be more than two
hiring, or procuring workers, and includes referring, contract services, promising or ~. (2) persons. 1
advertising for employment abroad, whether for profit or not; and (2) by undertaking

'I
any of the acts enumerated under Section 6 ofRA. No. 8042, as amended. On the No. 3 above is a significant element considering that in illegal recruitment
other hand, a licensee or holder of authority is also liable for illegal recruitment for cases, the tota! number of recruiters or the persons victimized is detenninative of the
overseas employment when he or she undertakes any of the prolubited acts or nature of the crime. Thus, where illegal recruitment is committed against a lone
practices listed under Section 6 of RA 8042, as amended. 1 Consequently, if a victim, the accused may be convicted of simple illegal recruitment only, which is
recruiter is charged with violation of any of the prohibited acts uuder Section 6, as punishable with a lower penalty. 2 Corollarily, where the offense is committed by or
against three (3) or more persons, it is qualified to illegal recruitment involving
amended, there is no more need to prove whether he is a licensee or holder of
authority or not because it is no longer an element of the crime.2 I~ economic sabotage which provides a higher penalty.3
And it bears noting that this broadened concept of illegal recniitment also 4. APPLICABILITY TO BOffi LOCAL AND OVERSEAS
~
applies to recruitment for local employment where the 2014 Revised Rules explicitly EMPLOYMENT.
states that the acts enumerated thereunder "shall be unlawful when committed by Although the cases surveyed where the foregoing elements were asserted
any person, whether or not a holder of a license or authority.,J by the High Court involve recruitment and placement activities for overseas
Moreover, since illegal recruitment becomes qualified if committed by employment, the same concept and principles may well apply with t.i.e same force
three (3) or more recmiters (syndicated) or when there are three (3) 01 more and effect to those conunitted for local employment.
recruitees (large-scale), as the case may be, the total number of recruiters and/or
rew1itees in order for a case to remain one for simple illegal recruitment should not 3~.

be more than two (2) persons. aLEGALRECR~NT

3.1. RE-STATEMENT OF THE ELEMENTS. INVOLV1NGECONON:UCSABOTAGE


In the light of the foregoing disquisition, the elements of simple illegal ,.~

it 1. ELEMENTS.
recruitment should now be re-stated as follows: r,
~ The first two (2) elements for simple illegal recruitment as cited ar..d
(l) That the offender has no valid license or authority required by law to ii
~ discussed above likewise apply to illegal recruitment involving economic sabotage.
enable him to lawfully engage in the recruitment and placement of ~
A third element is added4 regarding the requirement that there be at least three (2)
workers; li recruitees, in the case of large-scale illegal recruitment, or at least three (3)
~
(2) That the offender undertakes any activity within the meaning of ~ recruiters, in the case of syndicated illegal recruitment.
recruitment and placement defined under Article l3(b), or any ~ 2. WHEN CONSIDERED ECONOMIC SABOTAGE.
prohibited practices enumerated under the law, 4 irrespective of whether ~
ii To iterate, illegal recruitment is considered a crime involving economic
the offender is a non-licensee, non-holder, licensee or holder of ~ sabotage when the commission thereof is attended by any of the following
authority; and ~
w
qualifying circumstances:
II
m

1
2
ld.
People v. Jimly Ari;J, GR No. 181245, Aug. 06, 2008; ~le v. tb;}1a, GR No. 170834, Aug. 29, 2008; People
Iw
1
Accolding kl People v. Sadiosa, G.R No. 107084, Miff 15, 1998: 'Wlen 1he peiSOIIS recruited ae lllee or 100re, 1he aine
llecanes ilega J'e'l\li1mentillalge scale under M. 38 (D) of the Labor Code.'
2 See People v. Or1iz-Mjake, G.R Nos. 11533S-39, Sept 16, 1997, 344 Phil. 598, ~. tl ~ case, f1e proolision
refen'ed loIs pa<rJraph (c)o!Artide 39 o!lhe LOOOI'Code, OONpaagraph(a), Section 7,o!RA. No. 6042, as amended by
v.Gasac<Kl, GR No.168445, No¥.11, 2005. Section6ofRA No.10022.
See Sedi:xl42, Revised Rules MC1.Regulations Go'lemil:! Reatinenl ood Placement l:lr Local Erqlkrjmenl, Depment 3 SeePeoplev. Or1iz-My<J<e, SJ.Vo!. ThepnM;Dl referred ilispaagraph(a) of Ar0Cie39cllle tmCode, llCNipalaJI1lph
O!t!er No. 141-14, Series of 2014 JNCNel1'ller 20, 20141. foc kJcat efl'llklyment. (b), Section 7, of R.A. No. 8042, as ll!lel'ded by Sedion 6of R.A. No. 10022. ·
4 See enumeralioo under Artide 34 of lhe labor Code ood OON plrMded under Sedion 6 of RA No. 8042, as amended by ~ See People v. Pascua, G.R No.125081. Oct. 3, 2001, v.llerelwasstaEd lhai"Theee is lcrge-S!3e Alegal reauitmeotl ~is
Sedioo 5 of R.A. No. 10022; See also Section 1, Rule IV, OnriJus RuleS !l1d Regulalioos Implementing lhe Mgrant <XlOYTiitled agilinst llvee (3) or more pelSOIIS ild'M:Iualy or as a910!41: its elements, lherebe, ae lhe tv.o abcMHnen!ioned
WO!Ker.; Clld OlefSeas Flipi'losActof 1995, as Amended by RA. No. 10022, issued 011 Ju~ 8, 2010. See aSo Section 76, plus !he !act lhat ~is axmilled against lhree or 100re pelSOIIS.' See also Peoplev. Salvaliem!, G.R No. 200884, June 4,
Rule X. Revised POEA Rules and RegulaOOns GaJemi'g lhe Reauiment and Et1'!lklyment of Land-Based Qve:seac; 2014, v.11ele it is stated: 'xxx a tllid elemelllls added: that lhe offender COO'iTils <rrf ollhe a:Z of recrui1ment and
Fqlioo WOO.e!S a! 2016; Sedioo 72, Rule X. 2016 R~ POEA Rules and Regulatioos Gove~rir~Jile Reaui1ment and Pllcement agcinst lhree or more pelSOIIS, ildMdually a as a g~.· See also People v. Olua, G.R No. 187052, Sept 13,
~of Seafcms issued 011 Februaly 26, 2016.

L
2012,680 SCRA 575, 587, v.Me lhe same pronouncement was eiriermade.
I
CHA~TER II
54 BAR REviEWER ON LABOR LAW
RECRUITMENT AND PlACEMENT
55

I) when conunitted by a syndicate; or Lolita to Malaysia; and (3) illegal recruitment was committed by three persons
2) when committed in large scale. 1 n (Aringoy, Lalli and Relampagos), conspiring and confederating with one another. 1
2.1. SYNDICATED ILLEGAL RECRUITMENT.
lUegal recruitment is deemed committed by a syndicate if it is carried out
~ In People v. Guevarra/ the accused-appellants3 asserted that the offense
should not have been qualified into illegal recruitment by a syndicate since there was
by a group of three (3) or more persons conspiring or confederating with one no proof that they acted in conspiracy with one another. However, the acts of
another. 2 The law, it must be emphasized, does not require that the syndicate should accused-appellants showed unity of purpose. Guevarra would visit each of the
recruit more than one (l) person in order to constitute this crime. Recruitment of one complainants in their houses for several times, convincing them to work abroad, and
giving them the impression that she had the capability of sending them abroad. She
(1) person would suffice to qualify the illegal recruitment act as having been
would accompany them to the house of the other accused, spouses Bea, who, in tum,
committed by a syndicate.
would collect the placement fees and process the passports and plane tickets. All
The core of this kind of illegal recruitment is the conspiracy among the these acts of the appellants established a common criminal design mutually
perpetrators, without which, no syndicated illegal recruitment could be committed. deliberated upon and accomplished through coorciinated moves.
Under Article 8 of the Revised Penal Code, there is conspiracy when two or· more
2.2. LARGE-SCALE ILLEGAL RECRUITMENT.
persons come to an agreement concerning the commission of a felony and decide to
commit it. 3 Thus, in finding the accused-appellants guilty of syndicated illepl Illegal recruitment is deemed committed in large scale if it is committed
recruitment in People v. Lalii, 4 the High Court noted that Lalli, Aringoy and against three (3) or more persons, individually or as a group. 4 Therefore, a
Relampagos have conspired and confederated wit.1 one another to recruit and place conviction for large scale illegal recruitment must be based on a finding in each case
Lolita for work in Malaysia, without a POEA license. The three elements of of illegal recruitment of three {3) or more persons having been recruited, whether
syndicated illegal recruitment are present in this case, in particular: (1) the accused individually or as a group. 5 The failure to prove at least three (3) persons recruited
have no valid license or authority required by law to enable them to lawfully engage makes the crime a case of simple illegal recruitment. 6 This is so because in offenses
in the recruitment and placement of workers; (2) the accused engaged in this activity in which the number of victims is essential, failure of the prosecution to prove
of recruitment and placement by actually recruiting, deploying and transporting

i
I
1
See also PEqlle v. Hema1dez, G.R Noo. 141221·36. !Joo:h 7, 2002 v.11ere llle 3 ~· IXllM:tion was
aflimed becaJse l has been sulli::ienlly shcMn that U!ey ronspi'ed wi1h eadi ~ il corwiic:i'g prM!Ie ~t; 1D
;wly for Cll overseas P> ood gNV'g them the gunty that 1hey v.OOd be hied as tbneslk: ~ il t1att al1hough Uiey
1 M:le 38(b), l..lilor Code; See aso Sectioo 2. Rule rv. Oimibus Rules em Regootions ~ ttte Mgla'lt WorKers
I were net l:ensed 1D do so. They were hekl iable lor legal reauilment aJilll'iEd by a syrD:ate and were meled 1he
ald Overseas Ff~pinosActof1995, as Amended by RA No.10022, issued on Julf8, 2010.llms klpointoutthatlherei;
no sirlb' proviSion on illegal recMiment i'IvWirg econorric sabolage (large-scale oc syndk:ated) i1 both 1he Revised POEA
I 2
penalty of lfe ir¢sarnent and afine of F'100,000.00 under Artk;le 39 ollhe t.axr Code.
Peoplevs.GUev!rta;GRNo.120141,Ap!i121, 1999.
Rules em Regulations GoveiTt;;llle Reauilmert ald EfTllklyment of la1<Hlased Oveseas ~ Wallers d 2016 ald
the 2016 Rellised POEA Rules axl ReglMtions Go'iemi'g the Recruibnent !lid ~ d Seafcrers issued on
Februay 26, 2016. See Peqlle v. ND;jra, G.R No. 170834, Aug. 29, 2008; People v. Sadilsa, G.R No. 107084, May 15,
I The three (3} ~ illhis case ere Lana B. Gueva'a, Josie Bea and flEOo Bea, Jr.
Article 38(b}, t.axr Code; Sedkx16, RA No. 8042. as !lllellded by SecOOn 5, RA. th 10022 !Marth 8, 2010]; See aso
Sedkx12, Rule t~~, cmmus Rules Cl1d ReglMtions ~the lliJr.lltWcrters ax1 CNerseas ~Act 1995, a

II
1998; People v. Goce, GR No. 113161, Aug. 29, 1995, 247 SCRA 780; Peqlle v. Avenda'lo, GR Noo. 96277-82, Dec. 2, as Nnended by RA No. 10022, issued on Ju1i 8, 2010; Peoplev. Cagailgal, GR No. 198664, Nov. 23, 2016; Peqlle v.
1992,216 SCRA 187. Bayl<er, GR No. 170192, Feb. 10, 2016; People v. Abela, G.R No. 195666, Jat 20, 2016; PeqJie v. Taemno, G.R No.
z M:1e 38(b}, l..lilor Code; Sectkr16, RA No. 8042, as anended by SecOOn 5, RA No. 10022 J.1irdi 8, 2010]; SecOOn 6, 208686,JII[01,2015; Peoplev. Fenmdez, G.R No.199211,Jt~~e4,2014, 725SCRA 152, 156-157; PEqllev. Rea, GR
RA No. 8042, as anended by Sectioo 5, RA No. 10022 [Mcrth 8, 2010]; See also Sectkrl2. IU! rv, OnriJus Rules ald No. 197049, June 10, 2013; PEqJie v. Espenla, G.R No. 193667, Feb. 29, 2012; People v. Tuglilay, G.R No. 186132,
Re:J~ ~the tq.riWallers Md <Nerseas Fipiios Act or 1995, as AmeRied by RA No. 10022, issued
Feb. 27, 2012; ~v. Ochoa, GR No.173792, Aug. 31, 2011; Cl1d Peoplev. Dalen, G.R No.173198,.11Jne 1, 2011;
Peoplev. Pbal, G.R No.168651, Mcrch 16, 2011; Peqllev. DOilingo, G.R No.181475,Apri 7, 2009; Peqlle v. Lo, G.R
onJltf 8, 2010; See Peoplev.lid, G.R No. 195419, Oct 12, 2011;f'lqllev. Gallo, G.R ~ 187730,29 June 2010,622
SCRA439; Peoplev. Soliven, G.R No. 125081, Oct 3, 2001; Peoplev. BoOOzo, G.R No. 96621. Oct 21, 1992,215 SCRA
33.
I No. 175229, Jat 29, 2009; People v. GlrlgM, G.R No. 178204 [Formerly GR No.156497)] Aug. 20, 2008; People v.
Bartolome, GR No. 129486, Jltf 04, 2008; People v. Cesar, G.R No. 176737, Apri 16, 2008; People v. Olenro, G.R No.
3 kl People v.l.ago, G.R No. 121272, June 6, 2001, the H'gh COlli. discussed conspiacy i11Iis 1\ise: 'The elements of
conspiracy ere llle ~: (1} lw:l or more peiSOI1S came 1o Cll agreemoot, {2} the agreement concerned tie coornission
of afelony, and (3} llle execution d llle felony was deOOed upon. PlOOf of llle conspiracy need net be based on direct
I
~
127848. Jltf 17, 2003; People v. Ballesteros, G.R Nos. 116905-908, Aug. 6, 2002; People v. Oela Piedra, G.R No.
121m. Jan. 24,2001,350 SCRA 163; People v.l.ixem, G.R No. 132311. Sept 28, 21XX!; People v. G1rrboa. G.R No.
135382, Sept 29, 2(XX), 341 SCRA 451; People v. Castillon; GR No. 130940; Apli 21, 1999; People v. Too T1011Q Mef'9,
G.R. Nos. 120835-40, Apri 10, 1997; People v. Goce, G.R No. 113161, Aug. 29, 1995, 247 SCRA 780; People v.
eVidence, because l may be iiferred from 1he parties conduct i'I<i:atir'J aCOil1I10I1 uroderstlldiYJ among tlemselves IWh
respect 1D the oorrvrisskJn of llle airoo. Neither is l necessasy 1D show that two or more peslllS met lrx;lether ood entered
il1D Cll explicit agreement setti1g oot 1he detafts of oolllli8Nful scheme oc objecltie 1D be C!lli!d out. The conspiiacy may be
I
~
Avendaiio, G.R Noo. 96W-a2, Dec. 2, 1992, 216SCRA 187.
5 People v. Jimny ~. G.R No. 181245, Aug. 06, 2008; People v. Honrada, GR Noo. 112178-79, April21, 1995, 243
SCRA 640; PEqllev. Reyes, G.R. No. 105204, Maid\9, 1995, 242 SCRA 264; See also Peqlle v. Oltiz-Miyake, G.R Nos.
deduced tool 1he !rode 'l manner i1 v.ilich 11e aime was peq>ellaled; l may also be ilfe!red from l1e acts of the accused
~ e~orCOI11TOO ~ Md desi;!n, concerted adion oodronmu!Wf cifi:lterest.'
I 115338-39, Sept 16, 1997,344Phil598, 608-009.
~ ~v.Lafti,G.RNo.195419,0ct.12,2011. I 6
Peoplev. Hu, G.R No.182232, Od. 06,2008.

l~"~
s6 BAR REVIEWER ON IASOR lAW

by convincing evidence that the offense is committed against the minimum


number of persons required by law is fatal to its cause of action. ·
1
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~-
CHAPTER II
RECRUITMENT AND PLACEMENT

An example of a case where persons were charged with violation of


Section 6 in relation to Section 7 of R.A. No. 8042 for "large scale illegal
57

recruitment committed by a syndicate" is People v. Trinidad. 1 After due


Moreover, there can be no illegal recruitment in large scale if the same is
....-b-ased--.-o_n_s-ev-e-ra,..,linformations filed by only one complainant This was the ruling in
People v. Hernandez/ where the High Court agreed with the accused-appellants'
l proceedings, accused Trinidad was ultimately found "guilty of illegal recruitment
large scale, sentencing her to suffer the penalty of life imprisonment and ordering
m
argument that the trial court erred in convicting them of illegal recruitment in large her to pay a fine and actual damages."
scale by cumulating the eight (8) individual informations filed by private 3. APPLICABILITY TO BOTH WCAL AND OVERSEAS
complainants. It noted that each information was filed by only one complainant As EMPWYMENT.
3
held in People v. Reyes: Albeit the illegal recruitment cases involving economic sabotage studied
"xxx When the Labor Code speaks of illegal recruitment
'committed against three (3) or more persons individually or as a group,'
I and surveyed involve recruitment and placement activities for overseas employment,
it must be understood as referring to the number of complainants in each i the same concept and principles may also apply with the same force and effect to
those committed for local employment Notably, however, there is no single
case who are complainants therein; otherwise, prosecutions for single I
!. provision in the 2014 Rulel dwelling or pertaining to large-scale or syndicated
crimes of illegal recruitment can be cumulated to make out a case of large ~:
illegal recruitment 3 But since the governing law, Article 38 of the Labor Code,
scale illegal recruitment In other words, a conviction for large scale
illeg:U recruitment must be based on a finding in each case of illegal
recruitment of three or more persons whether individually or as a group."
I
&
contains a provision thereon, th.e same should likewise apply to iocal illegal
recruitment cases.
2.3. SYNDICATED VS. LARGE-SCALE. 3-C.
As distinguished from illegal recruitment committed by a syndicate, illegal SOME PRINCIPLES ON JLl,EGAL RECRUITMENT
recruitment in large scale may be committed by only one (1) person. What is
important as a qualicying element is that there should be at least three (3) victims of 1. JURISPRUDENTIALLY DECLARED PRINCIPLES.
4
such illegal recruitnent, individually or as a group. • Mere impression is sufficient to eonstitute illegal recruitment To convict a
The number of offenders is not material in illegal recruitment in large scale. pei"oOn for illegal recruitment, it suffices to show that he gave the victim the
As held in People v. Laurel/ the number of offenders, whether an individual or a l distinct impression that he had the power or ability to send him abroad for work

II
syndicate, is clearly not considered a factor in the determination of the commission such that the latter was convinced to part with his money in order to be
of illegal recruitment in large scale. Counsel for accused-appellant was misled by the employed. 4
fact that illegal recruitment in large scale is defined immediately after illegal • Mere promise of employment abroad amounts to recruitment To .be
recruitment by a syndicate. However, the only reason therefor is that they are both engaged in the practice of recruitment and placement, it is plain that there must,
considered offenses involving economic sabotage as the law itself so provides.
In situations where there are three or more illegal recruiters and there are
three or more recruitees involved in one case, the illegal recruiters may be convicted i
either as a syndicate or in large-scale, depending on the evidence presented. In any
6
case, the penalty imposable is the same for both since the law does not make any I penaly sllall be irclooed f the persoo legatj recniled is less am ei;ID1 (18) yellS rJ. age " IXXII16ld by a1100-

I
distinction between these two. tensee "noo-tdler of arthorily.'
1 Thispronooncementwao; rnadeil Peqllev. Triri:lad, GR No. 181244,hJ;j. 09,2010, d&1g Peoplev. Gmla, G.R No.
135382. Sept 29, 2000, 395 Phi. 675,682,683.
1ld. 2 Revised rues and Reg~Mm Ga.oeni'G Rooumrem and f'lacerie1t tr 1..oca1 fnl*lyment, Depatret Order No. 141-
2 G.R.Nos.141221-36. Mild\7,2002 i! 14, Series r/.2014 (No¥errber 20, 2014!.
3 G.R. No. 105204, MM:h 9,1995,242 SCAA264.
4 Peojlle v. AAlaiz, G.R. No. 205153, Sept. 9, 2015; Peojlle v. Bautista, G.R. No. 113547, feb. 9, 1995, 241 SCRA 216;
~ 3 kt l1e scm! lllliM that although there is aprovision on ~ Md S')'OOk3ed ilaga recn1rnent il Sedioo 2, ~ rJ
~.
rJ. the ClrrrDJs Rules <H1d Regulations ln'4Jiernen!i'l;l the M;}Iant Wcxkers Md OveBeas A~os Pd. r/.1995, ao; Amended
Peojlle v. Taglba, G.R Nos. 95207-17, Jan. 10,1994,229 SCAA 188; Peqllev. Bodozo, G.R No. 96621. Oct 21, 1992, by RA No. 10022, issued on Jutt 8, 2010, there is aso no sinilcr p«Msixx on legal IeaUifJnert iMlNiv;l economc
215SCRA33;Peoplev. Bugaoan, G.RNo. 87542,MM:h6, 1990, 183SCRA62. ~
~ sabofage (1a'ge-stale " syndicated) i1 both the Reo.ised POEA rues and Rsgwms GalemilQ 11e Reauiment and
s G.R. No. 120353, Feb.12, 1998. /.;' Err(>loyrnent d l.a'd-Based Overneas Ripino WIXXers rJ. 2016 and the 2016 Re.tal POEA Rules Md Rei}Jations
Sedioo 7(b) of RA No. 8042, ao; anended by Secbl6 rJ. RA. No. 10022, jl(tNkleS: "(b) Tl'e penaty r/.lfe ~ ~~ GcNemi1g the Reauilmert and ~klyment rJ. SeamiS issued on February 26, 2016.
Md a me of rd. lesS than Two milion pesos (P2~~:00) ra mere tal FIVe mllion pesos (1'5,000,000.00) sha1 be
I•'
iq People v. Fem<lldez, G.R No. 199211, Jllle 04, 2014; People v. Abat, GR No. 168651, tiM:h 16, 2011; People v.l.aogo,
~ Wlegal recruilmert OOlSti1u1es eccaorrt S!ilciage as defiled tlereil; FW~kled, howe'ler, That toe ImXirum ~
GR No. 176264, Jan. 10, 2011; carmen Ritualov. People, G.R. No. 178337,.klle 25, 2009;
~

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58 BAR REVIEWER ON LABOR LAW
CHAPTER!!
RECRUITMENT AND PlACEMENT 59
at least, be a promise or an offer of employment from the person posing as a 1
or license from the POEA. Even in the absence of money or other valuables
recruiter whether locally or abroad.' '9. given as consideration for the "services" of the recruiter, he is considered as
• There is no need to show that accused represented himself as a liceused being engaged.in recruitment activities. 2
recruiter. Evidencewise, it suffices that the prosecution has established that the • Absence of receipt not essential. Receipt issued by the recruiter is a
POEA did not authorize or license the recruiter to engage in recruitment ( documentary evidence that proves that he/she is engaged in recruitment and
activities and that despite the absence of such authority or license, he still 3

recruited his victims. 2 ~ placement activities. However, the absence of receipts to prove payment of
recruitment fees is not material nor fatal. 4 The absence of receipts to evidence
• Referrals may constitute illegal recruitment. Article l3(b) of the Labor Code
includes "referrals" in the definition of what constitutes ''recruitment and
placement.',3 In convicting the accused-petitioner in Rodolfo v. People,4 the
Supreme Court declared that the act of referral within the contemplation of the
I
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~
~
payment to the recruiter would not warrant an acquitta~ a receipt not being fatal
to the prosecution's cause. 5
• Absence of documents evidencing the recruitment activities strengthens,
not weakens, tbe case for illegal recruitment.6
law, is "the act of passing along or forwarding of an apolicant for employment &
~~ • Non-prosecution of another suspect, immateriaL It is well settled that only
after an initial interview of a selected applicant for employment to a selected ~
one person recruited is sufficient to convict one for illegal recruitment 7 The
~
employer, placement officer or bureau." Petitioner's admission that she brought non-prosecution of another suspect provides no ground for an accused-appellant
private complainants to the agency whose owner she knows and her acceptance to fault the decision of the trial court convicting her. 8
of fees including those for processing betrays her guilt.5
• Execution of affidavit of desistance affects only the civil liability but has no
• Cooduct of interviews may amount to illegal recruitment. The conduct of effect on the criminal liability for illegal recruitment. 9
interviews by the representatives of the foreign principal amounts to illegal
recruitment under Section 6 ofR.A. No. 8042. 6 2. ON NON-LICENSEE OR NON-HOLDER OF AUTHORITY.
• It is immaterial whether the recruitment is done for profit or not. The a. Meaning.
argument of the accused-appellants that there was no proof that they received The term ."non-licensee" or "non-holder of authority" refers to any
money from the private complainants deserves no <;redence because money is person, partnership or corporation With no valid licensei 0 or authority" to engage in
not material to a prosecution for illegal recruitment considering that the
definition of "illegal recruitment" under the law includes the phrase "whether i recruitment and placement of OFWs or whose license or authority is revoked,
cancelled, terminated, expired or otherwise delisted from the roll of licensed

li
for profit or not. "7 recruitment/manning agencies registered with the POEA. 12
• Actual receipt of fee, not an element of the crime of illegal recruitment.
Thus, even if the accused recruiter did not actually receive any fee, his Peoplev.llallesleos, G.R Nos. 1169J5.9JS, Aug. 6, 2002.
representation that he had the capacity to secure employment for private • Peoplev.Jarilsa, G.R No. 169076,Jan. 27,2007.
complainants made him liable for illegal recruitment since he had no authority 3 Peoplev.~.G.RNo.198664,Nov.23,2016.
4 Peoplev.!miJJo, G.R No. 181475,.6l)Ii 7, 2009.
5
People v.1bal, G.R No. 168651, Mlfdi 16, 2011; People v. Bilaber. G.R Nos. 114967.s!. Jan. 26, 2004; People v.

Ii
1 People v. Laogo, G.R No. 176264, Jal. 10, ~11; People v.l:mlilgo, G.R No. 181475, April7, 2009; People v. Galardo, ForUla, GR. No.148137,Jal.16, 2003; Peoplev.Juego, G.R No.123162. Oct 13,1998.
G.R Nos. 140067-71, Aug. 29, 2002,436 Phi. 698, 711; People v. Angeles, G.R No. 132376, Apri111, 2002,380 SCRA s Peoplev. PatlaleM, G.R No.108107, .kl1819, 1997.
7
519, 526-527. Peoplev. Pans, G.R Nos. L-58674-77, JlJtf 11, 1986,142 SCRA664.
8
2 People v. Balemos, G.R Nos. 116905-00S,hlg. 6, 2002; People v. Clilac<nj, G.R. No. 113917, July 17, 1995, 2-16 People v. Sendon, G.R Nos. 101579-89, Dec. 15, 1993, 228 SCRA 489; See also People v. Goce, G.R No.113161, AIJJ.
SCRA530. 29, 1995, 247 SCRA 780.
3 Article 13(b) a 11e LaJoc Co:le deftnes "recruiiment ood placement.' as '{a)\)' a:t 01 ~. enlisfug, ~.
~. uliizilJ, hiv-19 a procuring wern. ood mtdes referrals, mact services, jli'OOisilg or ~ ill'
erf1)io)moot.localy or cmJad, l'lilether for proft or not.'
I
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9 P.v.l..a.lei,G.RNo.120353,Feb.12,1998.
1
0 The tenn 'bnse' Iefeis tJ 11e document lisued by toe DOlE Secretly aJIIorizh;j apersoo, ~ (J oorporation to
operae ap!We ~ CJJeflCY. (Sectm1(w). RUe II, Qmi!us Rules ood RegiAaOOns ~ lhe
~ G.R No. 146964, kig. 10, 2006.
~ Mgllllt Wakes !lld CM!Iseas Fiq!ilos /Jd. d 1995, as Amended by RA No. 10022, issued m Jlij 8, ~10}.
s SeeaisoPeqllev. Goce, G.R No. 113161, Aug.29, 1995,247 SCRA 780; Peoplev. Alfale, G.R Nos. 91711·15, M3Jlt,'j, 11 The tenn 'aJ!Ixriy' Iefeis ma doc:uiTell issued by lhe DOLE Seaelily aJfhcxizing the officers, perme1, agents a
1993,219 SCPJ. 458; See also Peq>le v. Buga<m, G.R No. 87542, Marth 6,1900, 183 SCRA 62. '' representatives cia lcensed recruilmenlhnanning agency ID oondJct recruitment ood placement activities it apla:e slated
c.rShai> erew tJooaJement. h1c. v. Hm. ~.Jr.. G.R No. 155903, Sept14, '!JJ7. it the lkense (J it a specified pi:Ice. (Sectioo 1(b), Rire II, Onr.ilus Rules and RegulatO!s ~ the Mgrant
7 P~ v. iieteo, G.R.No. 19PJl12, ilpril22, 2015; People v. Chua, G. R No. 187052, &;pt. i~. ~12; Romero v. People,
12
Wakets!lld Overseas Fipim Acta 1995, as hnended by RA No. 10022, issued m Ju~ a. 2010).
G.R No.171644, Nr:Neii'dler 23,2011,661 SCRA 143, 154-155; carmen Ri11100v. People, GR No. 178337, June 25, Ontj the tenn 'ncJn.i:ensee" ll'Jnot "nm-hoodera aufhcxi!y'l\tiich is defined il Section 1(o::), Rule II, Orrnbus Rules Md
2009; People v. Valenciano, G.R No. 180926, Dec. 10, 2008; People 'i. J;rnOOsa, G.R No. 169076, Jan. 23, 2007, 512 Regulatioos ~ the Mgrnnt WalletS and <Nerseas Flipinos Acid 1995, as Amended by RA No. 10022, issued
SCRA 340, 352; Rodolfo v. People, GR No. 146964, Aug. lu, 2006; People v. Sagaydo, G.R Nos. 12-1671-75, Sept 29, f' on Jlij 8, 2010, See also lhe delilition ci the lelm "nooi::ensee' it No. 25, Rule II, Revised POEA Rules ood Regulations

L GwernnJ 111e Recrulment and ~~ a lMd-Based CNerseas Fipino WmefS a 2016; See a1so the delililion a
2000.
BAR REVIEWER ON lABOR lAW CHAPTER I! 61
60 RECRUITMENT AND PlACEMENT

The acts mentioned in Article 13(b) of the Labor Code can lawfully be Illegal recruitment and estafa cases may be filed simultaneously or
undertaken only by licensees or holders of authority to engage in the recruitment and separately. 1 The filing of charges for illegal recruitment does not bar the filing of
placement of workers. 1 To reiterate for emphasis purposes, non-possession of a estafa, and vice versa.1 lllegal recruitment and estafa are entirely different offenses
license or authority to recruit is, under the law, an essential ingredient of the crime of
illegal recruitment penalized under the law.
2
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!.(
and neither one necessarily includes or is necessarily included in the other?
2. CONVICTION FOR ILLEGAL RECRUITMENT, NOT A BAR TO
b. Recruiter may be a natural or juridical person. CONVICTION FOR ESTAFA.
A recruiter may be a natural person or juridical person like a partnership or In cases where swindling or estafa is committed in the process of illegal
corporation.
3 recruitment, conviction under the Labor Code, a special law, does not preclude
c. Certification from POEA, sufficient evidence. punishment therefor under the Revised Penal Code, a general law. 4 It is well
The certification issued by the POEA Licensing Branch that the offender established in jurisprudence that a r_rson may be charged and convicted for
has no valid license or authority required by law to enable him to lawfully engage in
the recruitment and placement of workers is sufficient evidence to prove this element
4
I*
,,
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both illegal recruitment and estafa. The reason therefor is not hard to discern:
illegal recruitment is malum prohibitum, while estafa is malum in se. In the first, the
criminal intent of the accused is not necessary for conviction; the fact alone that the
~-
of the crime of illegal recruitment. ~~ accused violated the law warrants his conviction.6 In the second, such an intent is
4. ~
(
imperative.7
ILLEGAL RECRUITMENT VERSUS ESTAFA It must be stressed that not all acts which constitute the felony of estafa
under the Revised Penal Code necessarily establish the crime of illegal recruitment
1. FILING OF ILLEGAL RECRUITMENT CASE, NOT A BAR TO FILING
under the Labor Code. Estafa is wider in scope and covers deceits, whether related
OFESTAFA. or not related to recruitment activities.8 This is clear from the following elements of
R.A. No. 10022 has introduced an amendment to R.A. No. 8042, which estafa, in general, to wit (1) the accused defrauded another by abuse of confidence
now statutorily recognizes the jurisprudentially settled fact that the filing of an or by means of deceit; and (2) the offended party or a third party suffered damage or
offense punishable under said law, such as for illegal recruitment, "shall be without prejudice capable of pecuniary estimation.9 However, the elements of estafa by
prejudice to the filing of cases punishable under other existittg laws, rules or
regulations," 5 such as swindling or estafa, under Article 315, paragraph 2(a) of the l means of deceit under Article 315, paragraph 2(a) of the Revised Penal Code are the
following, viz.: (a) that there must be a false pretense or fraudulent representation as
Revised Penal Code, or trafficking in persons, under R.A. No. 9208, as
6
8
amended I to his power, influence, qualifications, property, credit, agency, business or
by R.A. No. 10364,7 Clearly, illegal recruitment is an independent action.

I imaginary transactions; (b) that such false pretense or fraudulent representation was
made or executed prior to or simultaneously with the commission of the fraud; (c).
that the offended party relied on the false pretense, fraudulent act, or fraudulent
Ole em~· i1 No. 31, ~II, 2016 ReVIsed POEA Rules llld Regulalb"ls Gowmi"l;l Ole Reaui1Jnent llld
Efr4llcrimenl rJ. Seafarers issued on Febnay 26, 2016; See also Sedi:xl1(d), ~ ~lilg P.O. No. 1920, .ktj 12, I 1 Syv.People,GRNo.183879}4Jfl14,2010.
ld.

II
1984 Mlele 11e terns "11oMcenSee'llld 'rmholder of illlhorily' a-e defiled as re!eniYd ., etrt pei50I\ QlJlOI1Ition or 2
entityv.tlk:h has rn been issued avali:l il8lse cr aihait)' 1D engage il recniJ11ert Clld ~by 11e DOlE Secreay, 3 ld.
crv.tlose il8lse or IIJI1crily has been suspEilded, reYdr.ed cr coocelled by lie P0EA cr lhe DOLE Secrelary. ~ People v. Fanclldez, GR No. 199211,.krle 04, 2014; People v. Turda, G.R Nos. 97Q4.4..16, Jltf6, 1994, 233 SCRA 702;
1 Peqllev.Bodozll,GR No. 96621.Clct. 21,1992.215 SCRA33. Peoplev.~GRNo.100285,Nj.13, 1992,212SCRA607. .
z Peoplev. T~uba. GR Nos. 95207-17,Ji11.10, 1994,229 SCRA 188; Peoplev. Sendon, GR Nos.L-101579-82. Dec. 15, 5 Ci11nen RWl v. People, GR No. 178337, June 25, 2009; People v. Donilgo, G.R No. 181475, Apri 7, 2009; ~
v. People, GR. No. 179907, Feb.12, 2009; People v. Y!ilut, G.R Nos. 115719-26, Oct 5, 1999. .
3
1993,228 SCRA 489.
Peoplev. Saulo, GR No. 125903. NaY. 15,2000.
~ People v. Ca;jailgal, G.R No. 198664, Nov. 23, 2016; People v. Rea, G.R No. 197049, June 10, 2013; Cannen RibJalo v.
Ifi 6 People v. TeRllOfllda, G.R No. 173473, i)ec. 17, 2008; People v. Gil1toa, G.R. No. 135382, Sept 29, 2000, 341 SCRA
451,462.
~ 1
People v. Bafesleros, GR Nos. 11fi!K5.908, kg. 6, 2002, 435 f'llil. 205, 228; See also Peqlle v. Enriquez. GR. No.
People, G.R No.178337, June 25, 2009.
Section 6, RA. No. 8042, as IJT1el1ded by Seclion 5, RA No. 10022.
;!! 127159, Mf( 5, 1999; People v. Reyes. G.R Nos. 10473944, NaY. 18, 1997, 282 SCRA 105; See also People v. Cornia,
s Qt,erMse kllooMl as 'AnHraffickilg ill'e!sons Actol2003.' GR No. 171448, Feb. 28, 2007, 517 SCRA 153, 167-168; People v. Gharbia, G.R. No. 123010, Ju~ 20, 1999.
1 <Jt,er,o,ise kllooMl as lhe 'Elcpil1ded AnHraiOCkilg il Persoos AclrJ. 2012.' fiis ill Aclexpand'119 RA No. 9208 en1i1led
8 Peoplev. TUlda, G.R. Nos. 97()44.46,~6. 1994,233 SCRA 702. ·
'hi MID ~Policies Ill Elini:lale Traffickirg il Persons Espedaly Waneo arKI Children, Estabishing 1he Necesscry 9
l'eq>le v. Amaiz, G.R No. 205153, Sept 9, 2015; People v. Tolenlitlo, G.R No. 208686, JIAy 01, 2015; People v. Mateo,
k1stitutional Mechil1ismS b" lhe ProlecOOn llld Support of Trafficked Pernons, PrMliY;I PeMOOs for ils Vdations and for G.R. No. 198012, ~1 22, 2015; Peqlle v. &Watierra, G.R No. 200884, June 4, 2014; People v. Espenila. G.R No.
Other Pu!poses.' 193667, Feb. 29, 2012; Peoplev. Tlgli\:rf, G.R No. 186132, Feb. 27, 2012; ~lev. Ochoa. G.R No. 173792, Al1J. 31,
8 Seclion 8, Rille r-1, O!mbuS Rules and RegootionS ~ 1he tJqil1l WOOiers !lld Overseas Fiipilos M ol1995, ,, 2011; ll1d People v. Ocden, G.R No.173198, June 1, 2011; People v. Callais, G.R No. 129070, Mard116, 2001, 354
as Amended by RA No. 10022, issued on July 8, 2010. SCRA 553; Peoplev. Banzales, G. R No.132289, July 18,2000.

L
CHAPTER II 63
SAR REviEWER ON lABOR lAW RECRUITMENT AND PlACEMENT
62
person is convicted for both illegal recruitment and estafa for one and the same act. 1
means and was induced to part with his money or property; and (d) that, as a result The initiation of an illegal recruitment case does not bar the filing of estafa against
thereof, the offended party suffered damage. 1 To emphasize, under this class of one and the same person since these two crimes are entirely different offenses and
~
estafa, the element of deceit is indispensable. Likewise, it is essential that the false neither one necessarily includes or is necessarily included in the other. Double
statement or fraudulent representation constitutes the very cause or the only motive ~ jeopardy could not result from prosecuting and convicting the accused-appellant for

I
2
which induces the complainant to part with the thing ofvalue. both crimes considering that they were entirely distinct from each other not only
Thus, in convicting the accused spouses for estafa in People v. from their being punished under different statutes but also from their elements being
Cagalingan/ the High Court found that private complainants were led to believe by different. 2 A person who is convicted of illegal recruitment may, in addition, be
accused spouses that they possessed the power and qualifications to provide them
with work in Macau when in fact they were neither licensed nor authorized to do so.
Accused spouses made it appear to private complainants that Beatriz was requested
by her employer to hire workers for Macau, when in fact she was not They even
I"
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~
convicted of estafa under Article 315 2(a) of the Revised Penal Code. There is no
problem ofjeopardy in this situation.3
5. SAME EVIDENCE TO PROVE ILLEGAL RECRUITMENT MAY BE
~ USED TO PROVE ESTAFA.
recruited their own relatives in the guise of helping them get better jobs with higher ~
'·1
[",_; To successfully prosecute the illegal recruiter for estafa, the prosecution
pays abroad for them to improve their standard of living. Likewise, private ~~
needs only to present t!J.e very same evidence proving his commission of the crime
complainants were deceived by accused spouses by pretending that the latter could
of illegal recruitment4 It is thus enough to show thct the recruiter and his cohort
arrange their employment in Macau, China. With these misrepresentations, false
acted with unity of purpose in defrauding the victims by misrepresenting that they
assurances and deceit, they suffered damag~s and they were forced to part with the!r
had the power, influence, agency and b1JSiness to obtain overseas employment for
hard-earned money, as one of them even testified to have mortgaged her house and
them upon payment of a placement fee, which they did pay and deliver to the
another, to have borrowed money from a lending institution just to raise the alleged recruiter. 5
processing fees.
5.
3. ACQlliTfAL IN THE ILLEGAL RECRUITMENT CASE, NOT A BAR
TO CONVICTION FOR ESTAFA. LIABILITY OF LOCAL RECRUITMENT AGENCY
Considering that illegal recruitment and estafa.are distinct crimes, a person AND FOREIGN EMPLOYER
4
acquitted of illegal recruitment may be held liable for estafa A person's acquittal in l
II
the illegal recruitment case does not prove that she is not guilty of estafa. Double a.
5
jeopardy will not set in as discussed below. SOLIDARY UABll.1TY
4. CONVICTION FOR BOTH ILLEGAL RECRUITMENT AND ESTAFA,
1. APPLICABILITY TO ALL FORMS OF LIABILITY.
NOT DOUBLE JEOPARDY.
For the same reason as above, that is, that illegal recruitment is malum
prohibitum, whereas estafa is malum in se, there can be no double jeopardy if a
I The joint and several nature of the liability of the principal/employer and
the recruitment/placement agency applies to any and all monetary claims arising out
of the implementation of the employment contract involving Filipino workers for

II overseas deployment'

, SUil1iJl v. P• • G.R. No. 1!10970, Nt:N. 24, 2014; P~ v. Chua, G.R No. 187052, Sepl13, 2012, 680 SCRA 575,

I
1
For dooble jecpMfy 1o exS, flee (3) requisites ll'liSt be present (1) a fist jeopaldy ll1JSt hale altd1ed prilr kl1he secood;
592; Syv. ~. G.R. No.183879,Apri 14, 2010,cililg RR l'iledesv. ~. G.R. No.156055, March 5, 2007,517

P.
seRA 369; Cosme. Jr. v. People, G.R No. 149753, Nt:N. 'll, 2006, 508 SCRA 190; Jm{)ec Ccnstruclion Corporafion v.
CA. G.R No. 146818, Feb. 6, 2006,481 SCRA 556; See also l'eqllev. Cornia, G.R. No. 171448, Foo. 28, 2007;
~ G.R. Nos. 141221-36. M!rth 7, 2002; Pef:411ev. Salb, G.R No.125903. Nov.15,2000; Peoplev. Till TIOilJ
MeriJ, G.R Nos. 12083540, Apri110, 1997; P . v. calonzo, G.R Nos. 11515().55, Sepl27, 1996; People v. Roolero,
v. ~
~
2
3
4
(2) tile fist jeopaldy ll'liSt M.oe been~ 1errrilated; ll1d (3) fie second jeopaldy l1liSt be fa'fle same offense as l1al i1
fie first
~v.Bayker,G.RNo.170192,feb.10,2016.
~ v. Billaber, G.R Nos. 114967-&, Jan. 26, 2004.
People v. ~atiena. G.R No. 200884, June 4, 2014; ~ v. Chua, G.R No. 187052, Sept. 13, 2012; Qrmen Riluab v.
G.R Nos. 97044-46. July 6, 1994, 233 SCRA 713; P~ v. MruYJas, Jr., GR Nos. 91552·55, March 10, 1994, 231 People, G.R No. 176337, J111e2S, 2009; People v. T~ G.R No. 173473, Dec. 17, 2008.
~ 5
People v. Alzona, G.R. No. 132029, Ju~ 30, 2004.
SCRA1. 6
2 Pec4lle v. Gw;Jalhgan, GR No. 198664, Nw. 23, 2016. Sectioo 10, RA No. 8042, as emended by Section 7, RA No. 10022; Section 3, Rule VII, OlmiJus Rules and Regulalioos
3 ld. ~
kllplementi1g tile ~rant W<Xke!S and ~ Fqlilos Pd. of 1995, as Amended by RA No. 10022, issued on July 8,
Syv. P~. G.R. No.183879, Apli 14,2010. 2010; See also No. 17, Rule II, Pert I, Revised POEA Rules and RegOOOOrls Gaiemirg the Recni1ment ll1d ~of
4
5 ld. i
L
BAR REVIEWER ON lABOR lAW CHAI'TERII 6s
64 RECRUITMENT AND PlACEMENT

2. A PRE-QUALIFICATION REQUIREMENT. nature of liability of partners, or officers and directors with the partnership or
corporation over claims arising from employer-employee relationship.•
It is one of the pre-qualification requirements, both under the 2016 ~
Revised Rules for Land-based and Sea-Based OFWs, that any person applying for
a license to operate a recruitment agency/manning agency, should, together with the
written application, file with the POEA, a duly notarized undertaking by the sole I 5. CONTINUING LIABJLITY.
The joint and several liabilities discussed above shall continue during the
entire period or duration of the employment contract and shall not be affected by any

Ii
proprietor, the managing partner, or the president of the corporation stating that the substitution, amendment or modification made locally or in a foreign country of the
applicant• shall assume full and complete responsibility for all claims and liabilities said contract 2
which may arise in connection with the use of the license2 and assume joint and
several liability with the employer/shipowner/principal for all claims and liabilities 6. EFFECT OF COMPULSORY INSURANCE COVERAGE ON JOINT
which may arise in connection with the implementation of the contract, including, ~
AND SEVERAL NATURE OF LIABJLITY.
but not limited to, unpaid wages, death and disability compensation and Under a new provision3 introduced by RA. No. 10022 to RA. No. 8042,
repatriation.3 And in case of a corporation or partnership, it is further required that a eve!)' OFW should now be compulsorily covered by insurance to answer, among
duly notarized undenaking be executed by the corporate officers and directors, or ~
others, his/her monetary claims. 4 This compulsol)' insurance coverage, however,
<
partners, that they shall be jointly and severally liable with the corporation or ',~
should not affect the joint and several liability of the foreign employer and the
partnership for claims and/or damages that may be awarded to the workers.
4
~
recruitment/manning agencf as provided in the law. 6 TIJs topic on insura11ce
3. INCORPORATION IN THE EMPLOYMENT CONTRACT. coverage is discussed extensively below.
The joint and several obligation must be incorponted in tfJ.e contract for b.
5
uverseas employment and shall be a condition precedent for its approval. THEORY OF IMPUTED KNOWLEDGE
4. WHO ARE LIABLE IN CASE OF JURIDICAL PERSONS? This theol)' refers to a cognizance of a circumstance or fuct attributed to a
If the recruitment/manning agency is a juridical being, the corporate party because of its position, or its relationship with or responsibility for another
officers and directors and partners, as the case may be, shall themselves be jointly party. The relationship of the local recruitment agency/local manning agency vis-a-
and severally liable with the corporation or partnership for the aforesaid claims and vis its foreign principal is that of agent-principa~ the former being the agent and the
damages.' This is so because joint and several liability shall likewise refer to the latter, the principal. Consequently, the theory of imputed knowledge ascribes the
knowledge of the agent to the principal.

1
No. 17, Rule II, Pert I, Revised POEA Rules and ~ Govemilg the Reauirnent iD1 ~of l..aJd.Based
l..a1d-Based ~ Fiipilo Wtrte; of 2016; No. 20, RIJe II, Pat I, 2016 ReviSed POEA Riles Clld Regulations Overseas ~ Worke; a 2016; No. 20, RiJe II, Pat I, 2016 Revised POEA Rules IVld Regulc'dioos Govemilg the
G.:wemi'9 the Recruitment and ~of Seafcres issued oo Fellnay 26, 2016. See also 'Realimrtinl ~of Seafirefslssued 00 Febuay26, 2016.
SectOO 4(1), Rule II, Pert II, Revised POEA Rules !lld RegUa!iooS QNerni1g the Recruitment iDI ~ ct Lm 2 Soctioo 10, R.A. No. 8042, as ;mended by Section 7, RA No. 10022; Section 3, Rule VII, cmmus IU!s !lld RegUa!ions
Based <Ne!seaS ~ Worke; rJ. 2016; Section 4(F), Rule II, Pat I~ 2016 Revised POEA ~ Clld Regulations ~the WiJill1t Workers !lld <Ne!seaS ~hi. ct 1995, as Amended by RA No. 10022, issued on Mf 8,
Gowmi1g the Recruitment Cl1d ~of Seafcres issued oo Fellnay 26, 2016. 2010.
3 Soctioo 37-A, RA. No. 8042, as added by Sedion 23, R.A. No. 10022; Sedion 1, RiJe XVI, Oimllus Rle and
2 SectOO 4(F)(2), Rule II, Part II, 2016 Revised POEA Rules trld RegUalixls Govemi'g lhe RecnJiment Clld fnllloyment of
Seafarers issued oo Fellnay 26, 2016. RegtAaOOns ~11ilg lle ~ Wort<e; and CNBseas Fipi1os hi. ct 1995, as Anmded by RA No. 10022, issued
3 SectOO 4(1){8), Rule II, Pat II, Revised POEA Rules and Regulalioos G!Nemilg the Reauibnert Clld ~loyment of l.Md- 00 .Mt 8, 2010.
Based <Ne!seaS Flipilo Worke; of 2016; Section 4(F)(3), Rule II, Part II, 2016 Revised POEA IUls Clld Regulations
4
See ~(f) ctSedion37-A, RA No.8042, asOOded bySection23, R.A. No.10022; SectOO 1(~, Rule XVI, OlmiJus
GoYemi1g the Recruitment il1d ~of Seaflms issued oo February 26, 2016. Rules Clld Regulations ~ the Mgrant Worke; iDI Overseas Flipilos Ad. ct 1995, as Amended by R.A. No.
4 SeealsoSeclion 4(g), Rule II, Pat II, Revised POEARulesiVld RegtJatms ~the Recruitmentclld Empk7jmentof 10022, issued oo Ju~ 8, 2010.
5
Lm&sed <Nerseas fii4lioo Worke; ct 2016; Section 4(G), Rule II, Pirt II, 2016 Re.ised POEA Rules Clld Regulations See Section 37-A (6), RA No. 8042, as added by Sedion 23, RA No. 10022; Seem 10(6), RUe XVI, Ormbus Rules and
GcNemi1g the Recruitment and Err!Jioyment of Seafarefs issued oo Fellnay 26, 2016. '" Regulations lmplementilgthe MgrantWcners and CNBseas Fipinos Mol 1995, asAmeoded by R.A. No. 10022, issued
s SectOO 10, RA No. 8042, as emended by Section 7, R.A. No. 10022; Section 3, Rule VII, OiMIJus Rules and RegulationS
~ling the Mglallt WorkeiS and CNE!ISOOS Fffipinos M of 1995, as Amended by R.A. No. 10022, issued oo Mj 8,
2010.
~ ~
6
oo Ju~ 8, 2010.
Section 10, R.A. No. 8042, as 8l11el1ded by Section 7, RA No. 10022; Section 3, Rule VR, Omnilus Rules and Regulations
ifllllementing the M'gnrtWorkers and Overseas ~Actof1995, as Amended by RA No.10022, issued on Juli 8,
6 Section 10, R.A. No. 8042, as crrended by Section 7, R.A. No.10022; Section 1(s) of Rule II and SecOOn 3, ~ parc¥Jicipll, ~:' 201o; See a1so No. 11. rue n, Part 1. Revised POEA Rules and RegtAaOOns Governing 111e Recruiment and ~~ ot

L
Ride VII, Olmilus Rules and Regulafals Implementing lhe Mglllll Worke; and CNerneas Fipilos Ad. of 1995, as LlvJd.Based CNerneas Fipi1o Wo!Xe; of 2016; No. 20, Rule II, Part I, 2016 Reo.ised POEA Rules and Regula!Xlns
Amended by R.A. No. 10022, issued oo Ju~ 8, 2010. G!Nerni1Q the Recruilmertinl ~loymerltof Seafcrels issued oo Februaly 26, 2016.
66 BAR REviEWER ON lABOR lAW

This was, however, not the case in Sunace,1 where the OFW (Divina), a
domestic helper in Taiwan, has extended her 12-month contract after its expiration
for two (2) more years after which she returned to the Philippines. It was established
I CHAPTER II
RECRUITMENT AND PlACEMENT

and severally liable with the corporation or partnership for the aforesaid claims and
damages. 1
6.
67

by evidence that the extension was without the knowledge of the local recruitment
agency, petitioner Sunace. The CA, however, affirmed the Labor Arbiter's and TERMINATION OF CONTRACT OF MIGRANT WORKER
NLRC's finding that Sunace knew of and impliedly consented to the extension of WITHOUT JUST OR VALID CAUSE
Divina's 2-year contract. It went on to state that "It is undisputed that [Sunace] was 1. OFWs DESERVE TO BE PROTECTED BY OUR LAWS.
continually communicating with [Divina's] foreign employer." It thus concluded
that "[a]s agent of the foreign principal, 'petitioner cannot profess ignorance of such OFWs belong to a disadvantaged class. Most of them come from the
extension as obviously, the act of the principal extending complainant (sic) poorest sectors of our society. Their profile shows they live in suffocating slums,
employment contract necessarily bound it."' ~ trapped in an environment of crimes. Hardly literate and in ill health, their oaly hope

~
lies in jobs they can hardly find with difficulty in our country. Their unfortunate
In finding that the application of this theory of imputed knowledge was circumstance makes them easy prey to avaricious employers. They will climb
misplaced, the High Court ruled that this theory ascribes the knowledge of the agent, ~ mountains, cross the seas, endure slave treatment in foreign lands just to Sllivive.
Sunace, to the principal, employer Xiong, not the other way around. The knowledge ~ Out of despondence, they will work under sub-human conditions and accept salaries
~-
of the principal-foreign employer cannot therefore be imputed to its agent Sunace. [ below the :ninLrnum. The least we can do is to protect t.iem with our laws.2
There being no substantial proof that S•mace knew of and consented to be bound
under the 2-year employment contract extension, it cannot be said to be privy There is an extreme need for the strict enforcement of the law and the rules
thereto. A5 such, it and its "owner" cannot be held solidarily liable for any of and regulations governing Filipino contract workers abroad. Many hapless citizens
Divina's claims arising from the 2-year employment extension. As the New Civil of this country who have soug."tt foreign employment to earn a few dollars to ens!lfe
Code provides: "Contracts take effect only between the parties, their assigns, and for their fanlilies a life worthy of human dignity and provide proper education and a
heirs, except in case where the rights and obligations arising from the contract are decent future for their children have found themselves enslaved by foreign masters,
not transmissible by their nature, or by stipulation or by provision oflaw." harassed or abused and deprived of their employment for the slightest cause. No one
should be made to unjustly profit from their suffering. Hence, recruiting agencies
Furthermore, as Sunace correctly points out, there was an implied must not only faithfully comply with government-prescribed responsibilities; they
revocation of its agency relationship with its foreign principal when, after the must impose upon themselves the duty, home out of a social conscience, to help
termination of the original employment contract, the foreign principal directly citizens of this country sent abroad to work for foreign principals. They must keep
negotiated with Divina and entered into a new and separate employment contract in in mind that this country is not exporting slaves but human beings, and above all,
Taiwan. Article 1924 of the New Civil Code reading: "The agency is revoked if the fellow Filipinos seeKing merely to improve their lives.3
principal directly manages the blisiness entrusted to the agent, dealing directly with
third person.S" thus applies. As defined, a "principal" refers to an employer or 2. APPLICABILITY OF TilE SECURITY OF TENURE DOCTRINE.
foreign placement agency hiring or engaging Filipino workers for overseas OFWs, regardless of their classifications, have the right to security of
2
employment through a licensed private recruitment/manning agency. tenure guaranteed under the Constitution,4 notwithstanding the fact that their place of
It bears stressing, however, that the nature of the liability of the local work is overseas.5 Thus, for the entire duration of employment agreed upon in their
recruitment agency/local manning agency and its principal is "joint and severaL" contracts, they cannot be dismissed without observing both substantive and
This holds true for any and all claims arising out of the implementation of the
employment contract involving Filipino workers for overseas deployment. If the
local recruitment agency/local manning agency is a juridical being, the corporate 1 Section 1[s], Rule II, Ormilus Rules and Regulations knplementing l1e ~ WlxkeiS and OJelseas Flipi1os M. of
officers and directors and partners, as the case may be, shall themselves be jointly t: 1995, AsAmendedbyRA No.10022 {Marr.f108, 2010].
t;
2 Yap v. Thenamais Ships M<mJement G.R. No. 179532, May 30, 2011, cilirq ~ v. Nayooa, G.R No. 148407, Na.t. 12,
I 3
2003; Chavezv. Bont!rPerez, GR. No.109808, Mard11, 1995,242 SCRA 73, 82, 312Phl88.
JSS lndochinaColp. v. femr, G.R No.156381, Oct 14,2005, citing TeW:a Sills nHrade SeMces, Inc. v. NLRC, G.R.

L
1 Suna::e inEmational ManagementSeMces, Inc. v. N!RC, G.R No. 161757, Jal. 25,2006. No.100399, Aug. 4, 1992,212 SCRA 132.
2 Sf£tion 1[poL Rule II, Ormilus Rules ~ Reglliatioo<; 1n1J1ementi19 the Mgrant Wal\eiS aoo <Nerseas Ripioos M of 4
Ssdion 3, Article XIII, Phi~ Constib.JOOn.
1995, As Amended by RA No.10022 [Man:h 08, 2010].
5
SarneerCNelseasi'Lnmslt~ency. Inc. v.JoyC. Cables, G.R No.170139,Aug.05,2014.
68 BAR REviEWER ON LABOR LAW CHAPTER !I 6g
RECRUITMENT AND PlACEMENT

procedural due process. If they were illegally dismissed, their right to security of Court ruled that the act of the dismissed seamen in asking for increases in their
tenure is violated. 1 salaries does not constitute a breach of their employment contracts. 1
It bears underscoring that the rights violated when, say, a ftxed-period local Any ambiguity in the overseas employment contract shall be interpreted
worker is illegally tenninated are neither greater nor iess than the rights violated against the parties that drafted it.2 Labor contracts must be interpreted liberally in
when a ftxed-period overseas worker is illegally tenninated. It is state policy to favor of the worker? The provisions contained in the POEA-SEC are manifestations
protect the rights of workers without qualification as to their place of employment
In both cases, the workers are deprived of their expected salary, which they could
have earned had they not been illegally dismissed For both workers, this deprivation
translates to economic insecurity and disparity. 2
3. THE POEA STANDARD EMPWYMENT CONTRACT (POEA-SEC).
'I of the State in favor of the working class, consistent with the social justice and
protection of the working class provisions of the Constitution.4
4. PROHIBITION ON UNAUTHORIZED SUBSTITUTION OR
ALTERATION OF POEA-APPROVED EMPLOYMENT CONTRACT.
RA. No. 8042 explicitly prohibits the substitution or alteration, to the
Under the POEA Rules, all employers and principals are required to adopt
the POEA- SEC. The provisions, however, differ for land-ba;;ed and sea-based I
r~
prejudice of the worker, of employment contracts already approved and verified by
the POEA from the time of aetna! signing thereof by the parties up to and including
the period of their expiration without the approval of the POEA.5 Consequently, it
OFWs. They are discussed hereunder. w

The POEA is tasked to secure the best possible terms and conditions of
employment for OFWs. As such, it shall develop and continually review
~ was held in Chavez, 6 that the subsequently executed side agreement of an OFW with
her foreign employer which reduced her salary below the amou.•1t approved by the
~ f'OEA is void because it is against our existing laws, morals and public policy. The
employment standards in accordance with policy thrusts and markP.t developmcnts. 3 ~ said side agreement cannot supersede her standard employment contract approved
~
The POEA-SEC for OFWs is designed primarily for their protection and &
~'
by the POEA. 7 In addition w such voiding, disciplinary sanctions may be imposed
benefit in the pursuit of their employment overseas. It~ provisions must therefore be !: upon the errant employer/principal.8
construed and applied fairly, reasonably and liberaliy in their favor. Only then can its
5. PARTY INVOKiNG THE FOREIGN LAW HAS THE BURDEN TO
beneficent provisions be fully carried into effect. 4

'
PROVE IT; APPLICATION OF THE DOCTRINE OF PROCESSUAL
In Vir-Jen Shipping/ an issue was raised by the movants on wheth.er or PRESUMPTION.
not the seamen violated their contracts of employment when they demanded 500/o It is a hornbook principle that the party invoking tiJ.e application of a
increase in salaries and benefits. The Supreme Court ruled that the fonn contracts foreign law has the burden of proving such law, under the doctrine of processual
approved by the National Seamen Board (now POEA) are designed to protect presumption or "presumed-identity approach "9 an International Law doctrine
Filipinos, not foreign shipowners who can take care of themselves. 'The standard
forms embody the basic minimums .which must be incorporated as parts of the
employment cOntract.6 They are not collective bargaining agreements or irmnutable 1 SeeasoFIS!Asian TlliiSpOrtcnl Si1Wi1Q.&~Jencyv. Ople, G.R. No. L~.Ju~9, 1986,142 SCRA542.
contracts which the parties cannot improve upon or modi1Y in the course of the 2 Calai1 v. POEA's Admilislrator, G.R No.104n6, Dec. 5, 1995, 238 SCRA 721.
3 Oimv. POEA,GR No. 79560, Dec. 3,1900,191 SCRA823.
agreed peril of time. To state therefore that the affected seamen cannot petition their 4 Easlem Sl~lileS, Inc. v. POEA,G.R No. L·76633,M18, 1988,166 SCRA533.
employer for higher salaries during the 12 months' duration of the contract runs 5 See Sec. 6[iJ, RA No. 8042, as il1lel1ded by Seclioo 5, RA No. 10022; See Seclioo 1(i), ROO IV, Olmilus Rules llld
counter to established principles oflabor legislation. Thus, in Suzara,7 the Supreme
I Reguicmns in1Jiementing the Mgllllt WaXers cn1 Overseas~ M of 1995, as .ArneOOed by RA. No. 10022, issued
on~8,2010.

1 kl. I 6
7
8
Chavezv. Boo1o-P~ G.R No. 109808, Mcrth 1, 1995, 242 SCRA 73, 82; 312 Phil. 88.
See aso Placewelllnlemalional SeM:es COip. v. ~. G.R No. 169973, m 26, 2006.
For land-based OFWs, such subs1i1u1ion or aJielatOO of the ~ oordiact ID the pre;.xlice ci ll1e OFW will merit

i
2 kl. lhe iJ1lOSiOOn ci lhe penally of pemmeot dsquablioo cnl deisting flan lle roster d acaded pli1¢ferr¢yers.
3 Sectioo 134, Rule I, Part V, Revised POEA Rules and Regulations Governing 1he Recruilmenl and Efillloyment of l.Md- (Section 144(1)(i), Rule IV, RMied POEA Rules and Re;~ulalions GaJemirg lhe Realilment and ~~ of ~.and­
lmed<Nelseas Fiipilo WO!Kers of2016. Based Overseas Fiipilo WOO:ers of 2016). For sea-based OFWs, sud! 5lMJtion or alteralioo ci ll1e POEA-approved
4
Pllirl)pine TIMSI1Bine Galiels, Inc. v. NLRC, G.R No. 123891, Feb. 28, 2001; Walem Maritine Se!vices Inc. v. NLRC, cootract Y.'iU be penalized as folows: 1d Offense· File of PSO,OOO.OO; 2'11 Offense· Fne ci P100,000.00; 3"' Offense •
G.R No. 130n2, NoY.19, 1999, 318 SCRA 623; 376 Pllil. 738. Suspensi:ln tum pri:ipation n1he OYe!SI!8S errc>lo'fment prcgram (Six nmt11s kl One year); 4~ Of!eose • PeiTI1allellt
s Vr.Jen Shippi1g cn1 Mrine SeiVicesv. NLRC, G.R Nos. 58011-12, .lui)' 20, 1982, 115SCRA.347. ~ification em delisling from 1he roster of accredited (l!indpalslerrc>I:!Yers. {Section 127(BX2), Rule IV, 2016 Rellised

L
s See Sec1ioo 15, ~ V, R1Aes cn1 Regulatioos lrnplerreltillJ fie Lalla Code. POEA Rl*ls and Regulations GcNemi1g lhe Recrui1mentcnl ~of Sealarefs issued on February 26, 2016).
7 &Jzaav.NLRC,G.R.No.57999,Aug.1, 1989. 9 ld.

.
70 BAR REviEWER ON lABOR lAW
CHAPTER II 7l
RECRUITMENT AND PlACEMENT

which dictates that where a foreign law is not pleaded or, even if pleaded, is not that the employee is subject to a probationary period of one (I) year and that the host
proved, the presumption is that such foreign law is the same as Philippine law. Thus, countcy's Civil Service Laws and Regulations apply; a translated copy (Arabic to
under this situation, Philippine labor laws should apply in detennining the issues English) of the termination letter to respondent stating that she did not pass the
presented in a case. 1 L probation terms, without specifying the grounds therefor, and a translated copy of
f:
It must be noted that the Philippines does not take judicial notice of foreign the certificate of termination, both of which documents were certified by Mr.
laws, hence, they must not only be alleged; they must be proven. This is so because Mustapha Alawi, Head of the Department of Foreign Affairs-Office of Consular
in international law, the party who wants to have a foreign law applied to a dispute Affairs Islamic Certification and Translation Unit; and respondent's letter of
or case has the burden of proving the foreign law. The foreign law is treated as a reconsideration to the Ministry, wherein she noted that in her first eight (8) months
question of fact to be properly pleaded and proved as the judge or Labor Arbiter of employmen~ she was given a rating of "Excellenf' albeit it changed due to
cannot take judicial notice of a foreign law. He is presumed to know only domestic changes in her shift of work schedule. The Supreme Comt, however, ruled that these
or forum law. 2 To prove a foreign law, the pa1ty invoking it must present a copy documents, whether taken singly or as a whole, do not sufficiently prove that
thereof and comply with Sections 243 and 25 4 of Rule 132 of the Revised Rules of respondent was validly terminated as a probationary employee under Kuwaiti civil
Court. service laws. Instead of submitting a copy of the pertinent Kuwaiti labor laws duly
authenticated and translated by Embassy officials therea~ as required under the
In EDI-Stajjbuilders, 5 the employment contract signed by the private Rules, what petitionerf submitted were mere certifications attesting only to the
respondent OFW specifically states that the Saudi Labor Laws will govern matters correctness of the translations of the MOA and the termination letter which doe~ not
not provided for in the contract (e.g., specific causes for termination, termination .. prove at all that Kuwaiti civil servke laws differ from Philippine laws and that under
procedures, etc.). Being the law intended by the parties (lex loci intentiones) to apply I
f such Kuwaiti laws, respond~nt was v~lidly terminated.
to the contrac~ Saudi Labor Laws should govern all matters relating to the [~

[
termination of the employment of the OFW. Unfortunately for petitioner, it did not Indeed, the parties to an overseas employment contract may select the law
l by which it is to be governed. A basic policy of contract is to protect the expectation
prove the pertinent Saudi Labor Laws on the matter; thus, the International Law
doctrine ofpresumed-identity approach or processual presumption comes into play.
! of the parties and such party expectation is protected by giving effect to the parties'

Petitioners in ATCI Overseai contend that Philippine labor laws on


l own choice of the applicable law. In such a case, the foreign law is adopted as a

probationary employment are not applicable since it was expressly provided in t "system" to regulate the relations of the parties, including questions of their capacity
to enter into the contr.!c~ the formalities to be observed by the parties, matters of
respondent's employment contract, which she voluntarily entered into, that the terms performance and the like. Instead of adopting the entire mass of the foreign law, the
of her engagement shall be governed by prevailing Kuwaiti Civil Service Laws and parties may just agree that specific provisions of a foreign statute are to be deemed
Regulations, as in fact POEA Rules accord respect to such rules, customs and incorporated in their contract "as a set of terms." By such reference to the
practices of the host countiy. To prove the Kuwaiti law, petitioners submitted the provisions of the foreign law, the contract does not become a foreign contract to be
following: MOA between respondent and her foreign employer, the Ministry of governed by such foreign law since the said law does not operate as a statute but
Public Health of Kuwait (the Ministry), as represented by ATCI, which provides merely as a set of contractual terms deemed written in the contract
The choice of law must, however, bear some relationship to the parties or
1 kl.• ~ E!JI.S1aflbut:l klimalional,lnc. v. NLRC, G.R !t1.14558,0ct. 26,2007.
2 8JI.S1afftxilel ~.he. v. M.RC, • · their transaction. For instance, as Cadalin1 pronounced, where the services of the
3 11is jii1Msion states: 'SEC. 24. Pmol ct ati:ial record. -The reaxd ct Pld: dtnmenls referred kl i1 paa;J~ (a) d claimants were rendered in Bahrain, there is no question that the contracts sought to
Section 19, m missille fa" any PlJPQSe, may be eWiena!d by oo ariCial pubi:alioo f1ereof or by acql)' ~by be enforced have a direct connection with Bahrain. Consequently, where the claims
f1e officer haW1g l1e legal rusiDdy ct l1e recoid. (J" by his deputy, a1d ~. llle recad is not kept illhe
1'1111qJpiles, will aCEftiftaE 1hal sud1 officer has the ~.file ollice il'Afli:tl lie record is kept is i1 a~ COI.mby, are for benefits granted under the Bahrain law, only the claimants who worked in
the certificafe may be made by a~ d lle entassy oc legalioo, CIJI1Stj genera, amd, vk:e consul, oc COOSilar agoot Bahrain should be entitled to file their claims in a class sui~ excluding those who
<r by IJTf officer ilthe fcxegn seNice ct the Phif~ statiooed illle forei;Jn IXU1by il\Wlidllle record is kept, Md
aJ1hen1k:ated by lle seal ct his alice. worked elsewhere.
~ This section provKles: 'SEC. 25. VIM! at1eslatioo d cql)' llllSI slate. - 'M1eneYer a CfYt1f d a doo.Jment a record is
attested for l1e pwpose ct 1he evidence, lhe mtestaOOn llllSI state, in subslillce, llat 1he copy is a cooect rtfr'/ a the
i"
aiJilal, or aspd:: pat lheroof, as lhe case may be. The a!testaOOn l1lJSI be ll1der 1he olfidal seal of lhe attesli'lij dficer,
f 1here be fffi, <r Jhe be 1he cleit ct acourt haW1g aseal, under lhe seal ct such coot'

L
5 ~-
6 ATCI CNe!seasGaporalkxlv. Echil, G.R No.178551, Od. 11,2010. 1 Cadaio v. POEA's Admi1Stratlr, GR No. 104776, Dec. 5, 1995, 238 SCRA 721.
72 BAR REVIEWER ON lABOR lAW
I CHAl'TERll
RECRUITMENT AND PLACEMENT
73

6. OFWs MAY ONLY BE TERMINATED FORA JUST ORAUTIIORIZED


CAUSE AND AFTER COMPLIANCE WITII PROCEDURAL DUE
PROCESS.
I
!
I
In PCL Shipping/ petitioners contend that the twin requirements of notice
and hearing apply strictly only when the employment is within the Philippines and
that the same need not be strictly observed in cases of international niaritime or
j
't, overseas employment. The Supreme Court, however, disagreed The provisions of
By our laws, OFWs may only be tenninated for a just or authorized cause the Constitution as well as the Labor Code which afford protection to labor apply to
and after compliance with procedural due process requirements. 1 Article 297 [282] Filipino employees whether working within the Philippines or abroad Moreover,
of the Labor Code enumerates the just causes of tennination by the employer2 and the principle of lex loci contractus (the law of the place where the contract is made)
Articles 298 [283] and 299 [284] thereof enumerate the authorized causes. The governs in this jurisdiction. In the present case, it is not disputed that the Contract of
fundamental procedural rights afforded by Philippine laws to workers equally apply Employment entered into by and between petitioners and private respondent was
toOFWs. 3 executed here in the Philippines with the approval of the POEA. Hence, the Labor
The 2014 en bane case of Sameer v. Cabiles, 4 is a classic example of Code, together with its implementing rules and regulations and other laws affecting
illegal dismissal of an OFW. Respondent's dismissal grounded on inefficiency and labor, apply in this case. Accordingly, as to the requirement of notice and hearing in
negligence less than one year from hiring and her repatriation on the same day show ihe case of a seafarer, the Court has already ruled in a number of cases that before a
not only failure on the part of petitioner to comply with the requirement of the seaman can be dismissed and discharged from the vessel, it is required that he be
existence ofjust cause for tennination; they patently show that t'Ie employers did not given a written notice regarding the charges against him and that he be afforded a
comply with the due process requirement. Thusly: formal investigation where he could defend himself personally or through a
representative. Hence, the employer should strictly comply with the twi.r1
"A valid dismissal rtxtuires both a valid caliSe and adherence requirements of notice and hearing without regard to the nature and situs of
to the valid procedure of dismissal. 5 The employer is required to give the employment or the nationality of the employer. Petitioners failed to comply with
charged employee at ieast two written notices before termhation. 6 One
of the written notices must inform the employee of the particular acts these twin requirements.
that may cause his or her dismissal. 7 The other notice must '[inform]the 7. DUE PROCESS"
employee of the employer's decision.' 8 Aside from the notice
requirement, the employee must also be given 'an opportunity to be a. In the absence of proof of applicable foreign law, OFWs are
heard.'9 entitled to due process in accordance with Philippine laws.
"Petitioner failed to comply with the twin notices and hearing As a general rule, in the absence of proof of the applicable laws of the
requirements. Respondent started working on June 26, 1997. She was foreign employer, it is the provisions of the Labor Code which govern
told that she was terminated on July 14, 1997 effective on the same day termination of employment of OFWs. This was the holding in the case of EDI,
and barely a month from her first workday. She was also repatriated on Staffbuilders International, Inc. v. NLRC/ where no proof of the Saudi laws
the same diiy that she was informed of her termination. The abruptness was presented. In such absence, Philippine labor laws and regulations shall
of the termination negated any finding that she was properly notified and govern the relationship between the OFW and his employer. Our laws and rules
given the opportunity to be heard. Her constitutional right to due process
on the requisites of due process relating to termination of employment should
oflaw was violated." 3
therefore apply.
4
In Philemploy Services and Resources, Inc. v. Rodriguez, the
respondent employee was hired as a domestic helper in Taiwan under a one-year
contract, with 40 days probationary period before she would become a regular
1 &mlerOverseas Plocement.AI;}ency, lnc.v. Joy C. Gables, G.R No.170139,AuJ. 05,2014. domestic helper. Terminated after ten (10) days of work, she filed an illegal
2 ld. dismissal case. The Supreme Court affirmed the validity of her termination
3 ld.
J within the probationary period but noted that the twin requirements of notice and
4 Sarreer Overseas Placemeot Agency, Inc. v. Jaj C. Cabiles, G.R No. 170139, Aug. 05, 2014. The loregn empbye- [~

aleged illhis case flat respondeofs dismissal was due to i1elliciency i1 her'Mrt Cl1d neglgence i1 her duties. ~
5
6
7
ld., citi1g Skippers United Pdl:, Inc. v. Doza, etal., G.R No.175558, FebruayB, 2012,665 SCRA412,426.
ld., ld.
ld., ld.
I 1

2
PCI.~ Phif1ppiles, lnc.v.NlRC, G.R No.153031, Dec.14,200l.
G.R No. 14558, Oct 26, 2007.
6
9
ld., ld.
ld.,ld.
I 3
4
See Oriental ShipmalagemertCo., Inc. v. Hoo. CA,G.R. No. 153750, Jeri. 25, 2001.
G.RNo.152616,M!fcl131,200l.

L.
74 BAR REviEWER ON lABOR lAW CHAPTER II 75
RECRUITMENT AND PLACEMENT

hearing were not observed. Respondent is therefore entitled to the award of Cabillar,' and PlO,OOO.OO in the case of PCL Shipoing Philippines, Inc. v.
P30,000.00 as nominal damages for failure to observe due process. · NLRC. 2
b. Due process in case of termination of employment of seafarers. ..I 9. BURDEN OF PROOF IN TERMINATION CASES INVOLVING OFWs.
PCL Shipping Philippines, Inc. v. NLRC. 1 - Contrary to petitioners' I The burden of proof devolves on both the foreign-based employer and
contention that the twin requirements of notice and hearing apply strictly only \ the local agent Because of the joint and solidary nature of the liability of the
when the employment is within the Philippines and that the same need not be foreign-based employer and the local recruitment agency, the burden of proof to
strictly observed in cases of international maritime or overseas employment, the show that the dismissal of the OFW is legal and valid devolves upon the both of
provisions ofthe Constitution as well as the Labor Code which afford protection them. Hence, in the case of EDI-Staffbuilders/ it was held that even though EDI
to labor apply to Filipino employees whether working within the Philippines or and/or ESI were merely the local employment or recruitment agencies and not the
abroad. Moreover, the principle of lex loci contractus (the law of the place foreign employer, they should have adduced additional evidence to convincingly
where the contract is made) governs in this jurisdiction. show that the OFW's employment was validly and legally terminated. The burden
Centennial Transmarine, Inc. v. Dela Cruz/ however, is more devolves not only upon the foreign-based employer but also on the recruitment
categorical in declaring that for officers and crew who are working in foreign agency for the latter is not only an agent of the former but is also solidarily liable
vessels involved in overseas shipping, there must be compliance with the with the foreign principal for any claims or liabilities arising from the dismissal of
applicable laws on overseas employment as welt as with the regulations issued the worker.
by the POEA, such as thJse embodied in the Siandard Contract for Seafarers
10. QUANTUM OF EVrDENCE IN OFW CASES.
Employed Abroad (Standard Contract).3
a. Substantial evidence required.
Skippers Pacific, Inc. v. Mira/ instructs that under the said Standard
Contract, the ''two-notice rule" is indicated. An erring seafarer is given a written A fact may be deemed established in cases filed before administrative or
notice of the charge against him and is afforded an opportunity to explain or quasi-judicial bodies like the POEA, if it is supported by substantial evidence.
defend himself. Should sanctions be imposed, then a written notice of penalty POEA is not bound by the technical rules of procedure and evidence and the rules
4
and the reasons for it should be furnished the erring seafarer. It is only in the obtaining in the courts oflaw. Its proceedings are non-litigious innature.
exceptional case of clear and existing danger to the safety of the crew or vessel
that the required notices are dispensed with; but just the same, a complete report 6-1.
should be sent to the manning agency, duly supported by substantial evidence of AWARD OF MONETARY CLAIMS
the fmdings. 5 AND DAMAGES TO OFWs
8. AWARD OF INDEMNITY IN THE FORM OF NOMINAL DAMAGES t rfHE RELIEFS UNDER ARTICLE 294 [279] OF THE LABOR CODE
IN CASE OF DISMISSAL OF OFWs FOR JUST OR AUTHORIZED ARE NOT AVAILABLE TO OFWs; LEGAL BASIS FOR THEIR
CAUSE BUT WITHOUT DUE PROCESS. RELIEFS IS SECTION 10, R.A. NO. 8042, AS AMENDED.
The Agabon doctrine6 of awarding indemnity in the form of nominal
damages in cases of valid termination for just or authorized cause7 but without
I Any and all money claims arising from the employment of OFWs,
including those for death, disability or illness benefits, are not rooted in the
procedural due process also applies to termination ofOFWs. The amount of
indemnity of P30,000.00 was awarded in DMA Shipping Philippines, Inc. v.
I Labor Code.5 It is R.A. No. 8042, otherwise known as the "Migrant

,I
'
~
1 GR No. 153031, Dec. 14, 2006. ~
2 GR No. 180719, Aug. 22, 2008. li I G.R No. 155389,Feb. 28, 2005.
G.R. No.148418,J~ 28, 2005; See also Dela Rosav. Michaelmar Philippines, Inc., G.R No.182262, Apli 13,2011.
3 See Section 1711lereoii\!1K:h prescriles tile DisdprMy ProcedlRS" be followed in le!mination of seafarers.
~ GRNo.144314,NoY.21,2002,392SCRA371.
5 See also !lela Rosa v. Mchaemar Phifwines, Inc., G.R No. 182262, ~ 13, 2011; NFD lnlemamal Manni1g ~l!llls v.
I 2
J ErJt.S1allbui:! lillem<6:xlal, Inc. v. NLRC, G.R No. 14558, Oct 26, '}ffJ7. .
Rase v. NlRC, G.R. No. 110637, Oct. 7, 1994,237 SCRA 523; Manalo v. Roldal-Confesor, G.R No. 102358, Nov. 19,

I
4
NlRC, G.R No.165389, Oct 17, 2008;Centennial Transmarine, Inc. v. !lela Cruz, GR. No. 180719,AIJ;J. 22,2008. 1992,215 SCRA808.
6 Agabon v. NLRC, GR No.158693,NoY.17,2004. 5 NYK.fil Sh~ Managtll1ent, Inc. v. The NLRC, GR. No. 161104, Sept 27, 2000; See also Sealooes Marine SeMces, Inc., v.
7 Also per Jaka doctrine based on Jaka Food~ Corpora1ixl v. I'm, G.R 151378, MKth 28,2005.

L
NLRC, G.R. No. 84812, Oct 5, 1990, 190 SCRA 337, 346.
76 CHAPTER II
BAR REVIEWER. ON lABOR lAW 77
RECRUITMENT AND PlACEMENT

Workers and Overseas Filipinos Act of 1995, "1 and not Article 294 [279]2 of the 2. A VALIDLY DISMISSED OFW IS NOT ENTITLED TO IDS SALARY
Labor Code, which is the appropriate legal basis for such claims, thus: FOR THE UNEXPIRED PORTION OF IDS EMPLOYMENT
CONTRACT.
"SEC. 10. Money Claims. - Notwithstanding any provision of Jaw to
the contrary, the Labor Arbiters of the National Labor Relations Commission An OFW who is dismissed from employment for a valid cause is not
(NLRC) shall have the original and exclusive jurisdiction to hear and decide, entitled to any salary for the unexpired portion of his employment contract.
within ninety (90) calendar days after the filing of the complaint, the claims However, if he is dismissed without observance of procedural due process, he is
arising out of an employer-employee relationship or by virtue of any law entitled to an indemnity in the form of nominal damages. 1
or contract involving Filipino workers for overseas deployment including
claims for actual, moral, exemplary and other forms of damage. Consistent 3. THE SERRANO DOCTRINE: ILLEGALLY DISMISSED OFWs ARE
with this mandate, the NLRC shall endeavor to update and keep abreast with NOW ENTITLED TO ALL THE SALARIES FOR THE ENTIRE
the developments in the global services industry. UNEXPIRED PORTION OF THEm EMPLOYMENT CONTRACTS,
XXX IRRESPECTIVE OF THE STIPULATED TERM OR DURATION
"In case of termination of overseas employment without just, valid THEREOF.
or authorized cause as defined by law or contract, or any unauthorized
deductions from the migrant worker's salary, the worker shall be entitled Prior to the Serrano doctrine which was enunciated in the en bane
to the full reimbursement of his rtacement fee and the deductions made ruling in the 2009 ~ase of Ar.tonio M. Serrano v. Gallant Maritime Services,
with interest at twelve percent (12%) per annum, plus his salaries for the Inc} the following provision of the 51h par~graph of Section 10 of R.A. No.
unexpired portion of his employment contract or for three (3) months for 8042, which is again quoted below for ready reference, viz.:
every year ofthe unexpired term, whichever is less.
XXX;' "In case of termination of overseas employment without just,
valid or authorized cause as defmed by law or contract, or any
A plain reading of above-quoted section readily shows that it applies unauthorized deductions from the migrant worker's salary, the worker
only to cases of illegal dismissal or dismissal without any just, authorized or shall be entitled to the full reimbursement of his piacement fee and the
deductions made with interest at twelve percent (12%) per annum,h
valid cause and finds no application in cases where the OFW was not illegally
his salaries for the unexpired portion of his employment contract or
dismissed.3 for three (3) months for every year of the unexpired term,
To iterate, the remedies under Article 294 [279], such as reinstatement whichever is less."
or separation pay in lieu of reinstatement or full backwages, are not available to has been interpreted to mean that the entitlement to monetary claims of an
OFWs. This is as it should be since OFWs are contractual employees whose illegally dismissed OFW depends on the duration of his contract.3 Basically, the
rights and obligations are governed primarily by the POEA Standard rule then may be stated as follows:
Employment Contract (POEA-SEC), the Rules and Regulations Governing
Overseas Employment and more importantly, by said R.A. No. 8042, as lately 1. If the duration of the employment contract is less than one (1) year,
amended by R.A. No. 10022.4 an illegally dismissed OFW shall be entitled to all his salaries for the
unexpired portion thereof; 4 or
2. If the duration of the employment contract is at least one (1) year1
1
2

3
SeeSediat 10dRA tb.8042v.tlk:hwas IWilelldedcn MM:h8, 2010bySectioo 7.dRA No.10022.
apiMicls: 'Arlk:le 294 [279l Security ofTernre.- k1 cases a18JIW ~ 11e ~ sha1 not lemW1ale lhe
seNkEs d <11 ~except for aiJS1 cause« u aJihorized by tlis Tille. lvl en1Jbyee v.f10 is UljJSitf dismissed
tan Wllk shall be riUed " reilstalement v.ilhrul bss of seliority ,gtrts Cl1d dher prNisges S1d Ill his tJII ~.
idlsM! d alcMances, S1d kl his olher benefits« 8lei' lllOOeQy eqLWalent ~ toot 11e line lis~ was
Ylflhheld tom hin ~ kllhe line ahis actual reinstalement•
PoseOon ~ M1itire Selvices, Inc. v. TCillCIIa, GR No. 186475, June 26, 2013; See also k1lemational
I
~
i
1
or more,2 an illegally dismissed OFW shall be entitled to

DelaRosa v. Waemlrf'hilippiles, klc., supra; Sada;lnd. v. Rei1er Pdc k1Emationa ShWng, Inc., Sl.fJI3; Pl1ieflllkly
SefVices ard Resrut:es, tic. v. ~uez, G.R No. 152616, t.'arch 31, 2006.
G.R No. 167614, MM:h 24, 2009.
..

~ SeMces v.ID;Jcrfa, G.R tb. 163657, 1\pfj 18, 2012, 670 SCRA 22, 36-37; SadagiKt v. Reinief Pacific
See for ils1Mce: SkWem Pacific, Inc. v, Mra, G.R No. 144314, N<w. 21, 2002, 392SCRA 371; Alheona klEmalional
~ SeNDls, loc. v. ViMls, G.R No. 151303, April15, 2005; wasanm MCI1ni1g A~Jec'q, Inc. v. NLRC, G.R. tb.
~ ~. Inc., G.R tb. 152636, kYJ. 8, 75YJ7, 556 Pfll252, 262; ll1d Dela Rosa v. Mcl1aekTa' Ph~iles,
Inc., G.R tb.182262, Apli 13,2011,648 SCRA 721,731. 127195, ktg. 25, 1999, 313 SCRA 88; Ali. Ertllk7f Ser.tes Cl1d Resooltes, k1c. v. Plrcmio, G.R. tb. 144786, Aplil15,
2004; l!ii1ia SlWifg Selvices, klc. v. Chua, G.R No. 162195, Ap,i.S, 2008.
~ l.kred Pdt, loc. v. NLRC, G.R No. 148893, Jutj 12, 2006; Gu-Mro v. Ackx3lle, G.R tb. 160952, Aug. 20,
I
4
2004; Penlagon klenamal ShWilg, Inc. v. Ade!Ciltr, G.R No.157373, Jut,t 'll, 2004; Ra'/agov. ESSO Eastern Marne, • See for exBIJ1lle: Skippers Un~ed Pacific, Inc. v. Maguad, G.R. No. 166363, ~. 15, 2006; Skippers Pdlc, Inc. v.
ll!!, G.R tb. 158324, Marth 14, 2005, 453 SCRA 381, 402. tka, ~; Phi.~ SefVices Clld Resourtes, Inc. v. F'arllnio, supra

L ,._J,,.
CHAPTER II
78 BAR REVIEWER ON lABOR lAW
RECRUITMENT AND PlACEMENT
79

1
whichever is less" between his "salaries for the unexpired portion
'
issue. Did such replication result in curing its patent nullity and
unconstitutionality?
of his employment contract" or his salaries 'for three (3) months for
every year o1·"h 'd term. " 3
t e unexprre In the light of the rationale behind such pronouncement of
The· foregoing rule has been rendered nugatory by the Serrano tuling unconstitutionality and nullity which was eloquently ventilated and articulated
which declared the afore-quoted qualification - "or (or three f11(Jnths (or every in Serrano, it is opined that such replication does not operate to cure the nullity
vear o(the unexpired term, whichever is less" in paragraph 5, Section 10 of and unconstitutionality of the provision. Notably, the very raison d' etre for so
R.A. No. 8042 null and unconstitutional for being discriminatory and violative nullifying it cannot be wiped out by the simple expedience of re-enacting it in
thenewlaw.
of the equal protection of the law clause, among other significant reasons cited .
therein, thusly: 5. THE SAMEER DOCTRINE.
"The Court concludes that the subject clause contains a suspect It was only in the 2014 en bane ruling in Sameer Overseas Placement
classification in that, in the computation of the monetary benefits of Agency, Inc. v. Joy C. Cabiles, 1 that the unconstitutionality of the said reinstated
fixed-term employees who are illegally discharged, it imposes a 3- 2
clause introduced by R.A. No. 10022 in the 5lh paragraph of Section 10 ofRA. No.
month cap on the claim of OFWs with an unexpired portion of one
year or more i11 their contracts, but none on the claims of other OFWs 8042, was finally declared by the Supreme Court. The finding in Serrano3 was
or local workers with fixed-term employment. The subject clause reiterated tl'.at limiting the wages that should be recovered by an illegally dismissed
singles out one classification of OFWs and burdens it with a peculiar OFW to three (3) months is both a violation of due process and the equal protection
disadvantage." clauses of the Constitution.4 Respondent Joy Cabiles is entitled to her salary for the
unexpired portion of her contract, in accordance with Section 10 ofR.A. No. 8042.
Consequent to the Serrano ruling, an illegally dismissed OFW is now The award of the three-month equivalence of respondent's salary must be modified
entitled to all the salaries for the entire unexpired portion of their employment accordingly. Since she started working on June 26, 1997 and was terminated on July
contracts, irrespective of the stipulated term or duration thereof. 4 Resultantly, all 14, 1997, respondent is entitled to her salary from Jllly 15, 1997 to June25, 1998. To
past decisions subjecting the monetary award to the afore-mentioned qualifying rule otherwise would be iniquitous to petitioner and other OFWs, and would, in
clause no longer apply. effect, send a wrong signal that principalsiemployers and recruitment/manning
4. mE PROBLEM IS THE SAME UNCONSTITUTIONAL RULE WAS agencies may violaie an OFW's security of tenure which an employment contract
REPLICATED IN THE AMENDATORY R.A. N0.10022 (MARCH 8,
2010). 1
GR No. 170139, AIJJ. 05, 2014. Respondent Jaf Cabiles was recruited by peliOOner 8cmeef for a ooe-yea ~
CXJntractil Tai.wn. Hermon1hly my was NT$15,360.00. She alleged tha!Saneer required her to pay a piocementfeeof
Despite the 20095 en bane declaration of the Supreme Court in Serrano t-70,000.00 ilflen she signed the ~conkact. She was depbyed r>'m for TaMa'l Ww:tJa. Co.lil. (N~ oo
that the said qualifying provision in the 5m paragraph of Section 10 of R.A. No. June 26, 1997. She alleged lhat i1 her~ <OObacl. she agreed ID v.ak as quality conia for ooe ye;s. kl Taiw<rl,
ha.Yever, she was asked tl v.ak as a ruuer. Accad'RJ mSaneer, she was later d'tsmEsed due kl her i1e!&:iency,
8042 is uncOnstitutional, R.A. No. 10022 that was passed in 20106 to amend the negigence il her Wties, llld her '!abe b coow Ylith the v.ak requiemerlt [dl her forei;Jn ~-· On Octdler 15,
said sm paragraph still contained the same qualifying provision. 1997, Jaf lied aCOf1lllai1l wlh the NLRC 3Jiins! petitioner llld ~ S1e clai1led !1at she was ilegift lisrrissed. She
asked for lhe reun of her placement lee, the Mtlhekl cmmfor repalriaOOo coot, payment c1 her salaryb 2311D11hs as
The insistence by Congress on this provision despite its earlier well as nmlllld ~ danages. S1e iden!ified WCK;Oai as SMleer ().leseas Placement h}ero/s W;ln pilcipa.
declaration of unconstitutionality and nullity, certainly creates a constitutional The Laxr MliB dismissed Ja{s ~~ becaJse l was based oo mere alegations. On appeal, the NLRC ~ lhat
Jaf was legatj dismissed. The NLRC awaded Jl]f ooly 3 mooths \Qih cl Sliay ilthe lmJlllt cl NT$46,0SO, the
reiltursemfrtt cl the NT$3,000 Ylittlleld from her, llld atkxne/S fees rJ. NT$300. On cediorcri, the CA. afimed the decision
c1 the NLRC wiiJ1 respect m11e 1ildiY;I c1 ilegal disnissaf, Jf!ls entitfement mthe eqtMient of. 3monlhs m c1 salary,
t See lor exa!llJie: Oriental Shipmanagement Co., Inc. v. Hon. CA, G.R. No. 153750, Jan. 25, 2006; Olarte v. reimwsement of IWhheld repa!rialion expense, and aU!xney's fees. Belote the 5upltme Court. petitioner rcised the issue
Nayona, G.R. No. 148407, Nov. 12, 2003; Talidano v. Falcon Maritime & Anied SefVices, Inc., G.R. No. 172031, c1 v.llelher 11e Court of Appeals erred m kalfirmed 11e 1\fqJ d the NLRC ~ respondent JIJf 1eg~ aiSO'issed and
July 14, 2008. CMaiOOg her 3months' Ytllllh of salcly, 11e reirrblmrent of the oost ci her repa\Jiation, ood alklmey's fees desple the
Universal Staffing SeNices, Inc. v. NLRC, G.R. No. 177576, July 21, 2008; Flourish Maritime Sh~ping v. Almanzor, aleged exisB1ce of~ causes of mri1ation.
G.R No. 177948, March 14, 2008; JSS Indochina Colporation v. Ferrer, G.R No. 156381, Oct. 14, 2005, 473 2 The dispos(M! porOOr1 of lhe decisi:Jo ill1is case pal1ly s1a1es: 1he clause, 'oc lor U1ree (3) mooths for fNfJ'f year cl the
SCRA 120; Athenna International Manpower SeNices, Inc. v. Villanos, G.R. No. 151303, Aprtl15, 2005. unexpired tmn, r.t1ichever is klss' i1 Sedioo 7cl Republic flD. No. 10022 ameod'lllQ Section 10 of Reptillic Ad. No. 8042 is
3 ld. declared l.fiCrtiStitLdk ood, lherefcre, 001 and void.'
4 In other words, lhe Supreme Court reverted to lhe old rule prior to lhe effectivity of RA. No. 8042 on August 25, Antonio M. Serrlllo v. Gai!Mt Mlritine Selvices, Inc., and Marlow Navgation Co., Lid., supla.
1995. Section 1, MD! Ill of the Coosti1utioo prMies: "No person shaD be deplived of life, libErty, or ~ without due process
5 Mml24, 2009. of law, nor shall arrt person be denMld the equal protection of lhe lavts."
s MarcM. 2010.

L
80 BAR REviEWER ON lABOR lAW CHA!'TER II 81
RECRUITMENT AND PLACEMENT

embodies and actually profit from such violation based on an unconstitutional • Unauthorized substitution or alteration of POEA·approved employment
provision of law. contract from the time of actual signing thereof by the parties up to and
including the period of their expiration without the approval of the POEA is
6. SOME PRINCIPLES ON MONETARY AWARDS TO OFWs.
prohibited. 1
• Monetary award to OFW is not in the nature of separation pay or • Effect of a final and executory judgment against a foreign
backwages but a fonn of indemnity. 1 employer/principal. - It shall be automatically disqualified, without further
• Only salaries are to be included in the computation of the amount due for proceedings, from participating in the Philippine Overseas Employment
the unexpired portion of the contract. Overtime, holiday and leave pay2 and Program and from recruiting and hiring Filipino workers until and unless it
allowances are not included. 3 However, this rule on exclusion of allowance fully satisfies the judgment award. 2
does not apply in case it is encapsulated in the basic salary clause. 4
7. OFWs ARE NOT ENTITLED TO THE RELIEFS OF BACKWAGES,
• Entitlement to overtime pay of OFWs.- As far as entitlement to overtime
REINSTATEMENT OR SEPARATION PAY IN LIEU THEREOF.
pay is concerned, the correct criterion in detennining whether or not sailors
are entitled to overtime pay is not whether they were on board and cannot OFWs are not entitled to backwages, reinstatement or separation pay in
leave ship beyond the regular eight (8) working hours a day, but whether lieu thereof since these reliefs provided under Article 294 [279] of the Labor
they actually rendered service in excess of said number ofhours. 5 An OFW Code, as earlier pointed out, are not available to them. Their employment being
is not entitlecl to overtime pay, even if guaranteed,' if he failed to present purely fiXed tenn in character, they are entitled only to ALL the salaries for the
any evidence to pi'Ove that he rendered service in excess of the regular eight unexpired portion of their employment contract per Serrano doctrine.3
(8) working hours a day. 7
8. OFWs ARE ENTITLED TO ACTUAL OR COMPENSATORY
• In case of unauthorized deductions from OFW's salary, he shall be
DAMAGES.
entitled to the full reimbursement of the deductions made with interest at
twelve percent (12%) per annum. This is in addition to the full In the following cases, the OFWs were awarded actual or compensatory
reimbursement of his placement fee with the same interest of twelve percent damages becatise of the failure of the recruitment agency to deploy them abroad,
(12%) per annum plus his salaries for the unexpired portion of his after signing a POEA-approved employment contract, an act constitutive of
employment contract if he is terminated without just, valid or authorized breach of contract:
cause as defined by law or contract.8
(1) Santiago v. CF Sharp Crew Management, lnc.,4 where
• Costs ·of repatriation and transport of personal belongings should be
respondent recruitment agency was held liable to pay petitioner actual and
included in the monetary award to an illegally dismissed OFW. 9
compensatory damages of US$4,635.00 in the fonn of the loss of nine
• Right of the employer to recover cost of repatriation from OFW's wages (9) months' worth of salary as provided in the contract.
hinges on whether the latter was legally or illegally dismissed. If validly
discharged, employer has the right to recover therefrom; otherwise, he (2) Bright Maritime Corporation v. Fantonial,s where petitioner
cannot so recover. 10 ~ company was held liable for actual· damages for the loss of respondent's one-
year salary as provided in the contract.'

t 5qlpels United PacifK:, "· v. NLRC, G.R No.148893, July 12,2006.


z Antonio M. Serrano v. Gallant Mafitime Selvices, Inc., G.R No. 167614, Mrch 24, 2009; See also flhiiWine
I
Tla1SI1l1Jile CMiefs, Inc. v. Cilia, G.R No. 157975, June 26, 'lfJJ7. 1 See Soc. 6{i], RA No. 8042; Placewellntemational Selvices Corp. v. Camote, GR No. 169973, June 26, 2006;
3 PCL Shipping Philippines, Inc. v. NLRC, G.R No. 153031, Dec.14, 2006. f Chavez v. BontcrPerez, GR ~.109808, Marth 1, 1995,242 SCRA 73, 82; 312 Phi. 88.
4 Yap v. Thenamaris Ship's Management GR No. 179532, May 30, 2011. t 2 Secib110, R.A. No. 8042, as amended by Secfioo 7, RA No. 10022 \MKth 8, 2010.
5 Stolt-Nielsen Mri1e Se1Vi:es (Phis.), Inc. v. NLRC, GR No. 105396, Nov. 19, 1996, 264 SCRA 307; 332 Phl340, 352. 3 In a 2001 case, ha.vever, ATCI <Nerseas Corpcxatioo v. CA, G.R. No. 143949, Aug. 9, 2001, lle tNo p!Mlle respondent
6 Elm ShWilg SeM:es, Inc. v. Chua, G.R No. 162195, Aptll8, 'lfJJS; &rl\iagov. CF Sharp Crew Mrlcgernent, Inc., G.R t OFWs were grooted ~ CK1d separation pay by lhe Supreme Couil on \he basis of ils ruivJ l1at lley were regtS
No. 162419,Ju~ 10, 'lfJJ7; CKldlheearliercaseclStolt-Nielsen t,1aine Selvioos(Phis.), Inc. v. NLRC, supra ~ However, because of \he 2nd ruing illhe 'lfJJ2caseclM\Iaresv. NLRC, GR No.110524, J~29, 2002,385
7 PCL Shipping Philippines, Inc. v. NLRC, G.R No. 153031, Dec. 14, 2006; See aso Centennial Transmame, Inc. v. Dela SCRA 306, IW1ere lhe Court ruled 8lat 0FWs can never becoo1e regula' emplc7fees, lhe decisioo illhis case of ATCI may
Cruz, G.R No. 180719, Aug. 22, 'lfJJS. no ~hokl ils validitf.
a Section 10,RA No.8042,asanmdedbySectioo7, RA No.10022. 4
G.RNo. 162419,Ju~10,2007.
9
Sevil\ana v.\.T. [lntemalionaq COfJl., GR No. 99047,.A4Jnl16, 2001. ;
5
GR No. 165935, Feb. 8, 2012.
to PCL Shipping PhHippines, Inc. v. NLRC, G.R. No.153031, Dec.14, 2006.

L
6
The roon\11~ salary stipulated illhe con1ract is US$670, ildustie of a\k1Nance.
82 BAR REviEWER ON lABOR lAW CHAffiRII 83
RECRUITMENT AND PLACEMENT

9. OFWs ARE ENTITLED TO MORAL AND EXEMPLARY DAMAGES c. Compulsory insurance policy covers repatriation due to illegal
AND ATTORNEY'S FEES. termination or death ofOFW.
Because of the attendant bad faith and breach of contract, an illegally The compulsory insurance policy coverage for an agency-hired OFW
dismissed OFW is entitled to moral and exemplary damages and attorney's fees. includes the payment of repatriation cost of the worker when his employment is
Additionally, because the OFW was compelled to litigate and thus incur terminated by the employer without any valid cause, or by the employee with
expenses to protect his rights and interests, he is entitled to attorney's fees just cause, including the transport of his personal belongings.
equivalent to ten percent {10%) of the total award. 1 Thus, in the same case of In case of death, the insurance provider shall arrange and pay for the
Bright Maritime, respondent, in addition to the actual and compensatory repatriation or return of the worker's remains. 1
damages, was awarded moral damages in the amount ofP30,000.00, 2 exempla.)'
damages ofP50,000.003 and 10% of all recoverable amounts as attorney's fees. 4 7.
Similarly, based on the same grounds of breach of contract and bad faith, the DIRECT-HIRING
respondent in Athenna International Manpower Services, Inc. v. Villanos,5
was awarded P50,000 as moral damages and P50,000 as exemplary damages, in 1. DEFINITION.
addition to attorney's fees of ten percent (10%) of the aggregate monetary "Direct Hiring" refers to the process of directly hiring workers by
awards. 6 employers for overseas employment as authorized by the DOLE Secretary and
pro~essed by the POEA, including:
iO. OTHER REMEDIES AVAILABLE TO OFWs.
I. Those hired by international organizations;
a. Repatriation as a remedy.
2. Those hired by members of the diplomatic corps;
Whatever ground is cited for the pre-termination of employment, the 3. Name hires or workers who are able to secure owrseas employment
OFW has the right to insist that he be repatriated to the Philippines. The only opportunity with an employer without the assistance Oi participation
exception is when he is charged for certain crimes or cases in foreign courts and of any agency. 2
thus may not be allowed to go home until the case is terminated in his favor.
2. BAN ON DIRECf-HIRING; EXEMPTION.
b. Repatriation when an OFW requests for early termination.
It is the general rule under Article 183 that no employer shall directly hire
A seafarer who requests for early termination of his contract shall be an OFW for overseas employment4 The following, however, are exempted from
liable for his repatriation cost as well as the transportation . cost of his this ban on direct hiring:
replacement. 7
a) Members of the diplomatic corps;
b) futernational organizations;
1 See also Sil11iago v. CF Shap Crew t.tmgement, klc., GR No. 162419, Ju)f 10, '1SIJ7; PCL ShWilg Pli~. Inc. v. c) Heads of state and government officials with the rank of at least deputy
NLRC, G.R. No. 153031, Dec. 14, 2006.
2 Based on lis flldilJ llat the breach d ~was tainted wilh bad faih, 001Sideri1g llat respondeot's Medical Ceni1icate minister; or
slaled flat he was rt tl wen on the day rt his scheduled depaUe, yet he was na alklwed to le<Ne alleged~ for medical
reasons.
3 This was ~ by Wti'f ci exanple or axredion for the p.lbl«: good i1 view ci petitiooel's act ci prevenli1g respondent
from bei'I;J deployed on the ground that he was na yet dedared ft tl m on lhe~ IX his depOOure, despm evidence tl 1 See paragraph (d) of the new Section 37-A of RA. No. 8042, as amended by Section 23 of R.A. No. 10022. See
lhe !XlllbiJy. &JCh act. wklle!ated, v.wkl ~d'ICe the ernpklyment ~ ct oor seafare!s v.t10 ire quaified to be also Section 2(d), Rule XVI (Compulsory Insurance Coverage of Agency-Hired Wtrters) and Section 1, Rule XIII
deployed, but prevented to do so by a rravilg agency for ~ reasons. Ex~ mages ire illJosed not to (Repattiation of Wor11ers), Omnibus Rules and Regulations Implementing the Mgm Walkers and Overseas
erri::h one party or iTlloYerish MOther, but kl ser1e as adelerrent agai1st or as a r.egative ilcen!Ne to QJ!b social~ Fnipinos Act of 1995, as Amended by R. A. No. 10022 {tach 08, 2010).
delemlus actions. 2 Section 1[i}, Rule II, Omnibus Rules and Regulations Implementing lhe M~grant Wor11ers and Overseas Filipinos Act
~ This a.van! is based on the fact lhat becaJse ci petitionet;' faiMe kl depby respondent based on <11 lfljuslli3d ground, of 1995, as Amended by R. A. No. 10022 (Man:h 08, 2010).
respondent was bt:ed kl fie this case. 3 Article 18 provides as folows: 'Miele 18. Ban on arect-HiiY;I. - No ~er may hire a Fif¢lo V«Jri<er for ove!Se8S
GR No.151303,April15, 2005.
See also Ofienlal Shipmanagement Co., Inc. v. Hon. CA, G.R No. 153750, Ja1. 25, 2006; ATCl CNelseas ColporaOOn
v. CA, G.R No. 143949, Aug. 9, 2001,414 PM. 883,893.
II
,.
empk7fment except through lhe Boilds and entities autliJized by lhe Secretay of labor. !Jirecl.lliirg by rrerrbers of lhe
diJion'aOC corps, illemaliofla cxg<11izations and such oller employe!s as may be ~ by the Seaetry of l..aba is
exempled !root this ptrNisioo.'
7 Section 19.G, Standard Terms and Conditions Governing 11le Employment of Fnipino Seafarers on Board Ocean- 4 Miele 18, Labor Code; See also SecOOn 123, rue II, Pill Ill, R!Msed POEA Rules Clld Regulations Governing lhe

L
Going Vessels. Recruilrnentand Employmentcii..Cild-Based Ovecseas Fiipilo W<rters of 2016.

~
84 BAR REVIEWER ON lABOR lAW
I CHAI'TERII
RECRUITMENT AND PlACEMENT
ss
d) Other employers as may be allowed by the DOLE Secretary, such
as:
1) Those provided in (a), (b) and (c) above, who bear a lesser rank, if
I
l
I
same wages and benefits without regard to the nationality or nationalities of the
vessels on which they serve.
1

I 5. SUABILITY OF FOREIGN CORPORATIONS DIRECTLY lllRING


endorsed by the POLO, or Head of Mission in the absence of the
POLO; FILIPINO WORKERS.
2) Professionals and skilled workers with duly executed/authenticated 1 A non-resident foreign corporation domiciled outside of the Philippines
contracts containing terms and conditions over and above the
standards set by the POEA. The number of professional and skilled
I which recruits Filipino workers for employment abroad is, in law, doing business in
the Philippines. Indeed, if a foreign corporation not engaged in business in the
OFWs hired for the first time by the employer shall not exceed five Philippines is not barred from seeking redress from courts in the Philippines, a
(5). For the purpose of determining the number, workers hired as a fortiori, that same corporation cannot claim exemption from being sued in Philippine
2
group shall be counted as one; or courts for acts done against a person or persons in the Philippines.
3) Workers hired by a relative/family member who is a permanent
resident of the host country .1 B.
REGULATION OF RECRUITMENT
3. RATIONALE FOR THE BAN.
AND PLACEMENT ACTIVITIES
The reason for banning direct hiring of Filipinos for overseas employment
is to ensure that such employm\:nt is fully regulated by the government through its J. PRIVATE SECTOR CAN PARTICiPATE IN BOTH LOCAL AND
agencies, such as the POEA. In this way, adverse exploitation of the migrant OVERSEAS RECRUITMENT AND PLACEMENT.
workers by foreign employers is minimized, if not eradicated. Under Section 25 of the Labor Code, the private sector is allowed to
4
4. NATIONALITY OF EMPLOYER NOT MATERIAL. participate in the recruitment and placement of workers for locatl and overseas
employment. This is pursuant to national development objectives and in order to
rt must be emphasized that pertinent laws and regulations generally make harness and maXimize the use of private sector resources and initiative in the
reference to employment of Filipinos overseas, i.e., outside the Philippines. They do development and implementation of a comprehensive employment program. This
not limit the coverage to non-Filipino employers. Filipinos working overseas share participation., however, is subject to such guidelines, rules and regulations as may be
the same risks and burdens whether their employers be Filipino or foreign. 2 For issued by the DOLE Secretary.
5

instance, it is well-known that foreign-owned and foreign-registered vessels have


frequently also secured Philippine registration where the interest of convenience of For local employment, the policy is to protect every citizen desiring to avail
the owners dictated such second or dual registration. The underlying regulatory of the services of private employment agencies by ensuring the best possible terms
policy is that Filipino seamen working in ocean-going vessels should receive the and conditions of employment.6 For overseas employment, the POEA is mandated
to regulate private sector participation in the recruitment and overseas placement of
workers by setting up a licensing and registration system.' The private sector shall
thus participate in the recruitment of Filipino workers for overseas employment in
1 Miele 18, ld.; See li;o Section 124, Rule II, Pill Ill, ld.; The OFWs hied by hlse ~ exEfl1lled tom lle bcrl oo
cfrect IWi1g may be registered by the Mliisbatioo upoo Sl.lbrrUssioo dlle tlbWig doaJmenl\1:
a) Velified/aulhenticated Of\lilall!f11lloymenl oordract \\tlich is 0'1€1' ald iiloYe 8le POEA-presailed ~ c.ootr00;
b) Passpmvalid atleastsix{6) nmf1s from lle date ofiltended depatue; 1 Eastern Shippilg Lrles, R:. v. POEA, G.R. No. 77828, Feb. 8, 1989, 170 SCRA 54.
c) Va!Kl and appropnare visa ora pemj; 2 Facirties~ement~v. DelaRosa,GR No. L-38649,Martt\26, 1979,89SCRA131.
d) Cef1ifica!e of medical hss; . 3 Section 1(a), Revised Rules and Regulations <lovEmiYJ Recruibnent and l"'a:ement b' Local Employmen~ Depme0t
e) Proof of certiOCale of i'lsurcl1ce ~covering at least the benefits pllNided under Sedion 37-A of RA 8042, as Older No. 141-14, Series of2014ll'JCNen'ber 20, 2014l
irnellded; See Section 1, Rule I, Part ~ Revised POEA Rules and Regulmls Governing the Realinenl Mil ~~of f.a1d.
~ Cef1ifica!e d attendance i:l the requred ~ orienta~io~Wfie; Md Based Overseas Ff!pino WOOiern of 2016; Seclion 1, Rule I, Pill II, 2016 Revised POEA IU!s and Regulations Ga.oelni:lg
g) Clealance from the DOLE Secretary b' tlose covered under Section 124 (d) d these Rules. The Adnilistration shall the Recruitment and Empklymentof SeafcleiS issuedoo February 26, 2016.
ensure that the WO!ker is made !ultj aware d the lelms and conditions of lle employment coolract and the advantages and 5 See Article 25, labor Code.
disadvcrl~ d d'!reCI-hirill;J. (Sedkxi 125, Rule II, Part Ill, Revised POEA Rules ami Regulatioos Governing the 6 Section 1(d), Revised Rules ald Regulations Governing Reauitment and Placefrent tr Local Employment, DepmeOt
Recruifment and Employment of lald-Based Overseas FriPino Wo!iern ct 2016.). OrderNo.141-14, Seresd2014 [Noverrber20,2014].
2 Phil~apore Ports Corpomtioo v. NlRC, G.R No. 67035, .lal. 29, 1993, 218 SCRA 77; Eastern Shipping Lrles, 7 Section 3, Rule X[Role of DOLE], Omnilus Rules and Regulations Implementing the M,Jrant WorkeiS and <Ne;seas
Inc. v. POEA, G.R No. 77828, Feb. 8, 1989, 170 SCRA 54. Fiipinos Act of 1995, as Aroonded by R.A. No. 10022, issued oo Ju~ 8, 2010.

L
86 BAR REVIEWER ON lABOR lAW I CHAPTER 11
RECRUITMENT AND PLACEMENT
87

accordance with the Rules and any subsequent guidelines that may be issued by the 1) Omnibus Rules and Regulations Implementing the Migrant Workers
POEA Governing Board and the Administration.1 and Overseas Filipinos Act of 1995, as Amended by RA. No. 10022,
issued on July 8, 201 0; 1
2. GRANT OF POWER TO THE DOLE SECRETARY.
2) Guidelines on Insurance Coverage, issued on September 8, 2010;2
To achieve the purposes mentioned in Article 25, the DOLE Secretary is
empowered to issue such rules and regulations as may be necessary to regulate and 3) Department Order No. 130, Series of 2013, issued on JW1e 14, 2013,
supervise private sector participation in the recruitment and placement of workers, enunciating the Rules and Regulations on the Employment ofSeafarers
locally or overseas, in the context of a comprehensive national employment Onboard Philippine Registered Ships Engaged in International
program.2 Voyage;

3. RULES ISSUED PURSUANT TO TillS POWER. 4) Revised POEA. Rules and Regulations Governing the Recruitment and
Employment ofLand-Based Overseas Filipino Workers of2016;3 and
The DOLE Secretary has issued several edicts on the private sector
participation in the local and overseas recruitment and placement of workers. Some 5) 2016 Revised POEA Rules and Regulations Governing the Recruitment
of the recent issuances are as follows: and Employment ofSeafarers issued on February 26, 2016. 4

(a) For local employment. 4. REGULATORY AND VISITORIAL POWERS.

The latest major issuance for local employment is Deparunent Order No. As far as recruitment and placement of workers for local and overseas
141-14, Series of 2014 [November 20, 20 14) which promulgated the Revi~ed Rules employment are concerned, the Labor Code contains two (2) separate provisions
and Regulations Governing Recruitment and Placement for Local Employment. 3 on the regulatory and visitoriai powers of the DOLE Secretary, namely:

(b) For overseas employment. l. Article 36 - Regulatory Power; and


2. Article 37 - Visitorial Power.
In the past, there have been numerous issuances4 made by the DOLE
4.1. REGULATORY POWER.
Secretary to implement the Labor Code's provisions on overseas recruitment and
placement of workers. Because of recent laws,5 the DOLE Secretary has issued new a. Article 36, Labor Code.
rules to implement them, the latest of which are as follows: The regulatory power is embodied in Article 36, to wit:
"Article 36. Regulatory Power.- The Secretary of Labor shall have
the power to restrict and regulate the recruitment and placement activities
of all agencies within the coverage of this Title and is hereby authorized
1 Sectioo 1, Rule I, Part II, Revised POEA Rules Mel RegulaOOns GcNemilg the Recruitmeot and ~of l..a1d-Sased to issue orders and promulgate rules and regulations to carry out the
CNerseas ~ ~ of 2016; Sectioo 1, Rule I, Part II, 2016 ReVised POEA Rules Md Regulations Govemilg lhe objectives and implement the provisions of this Title."
Recni1ment Mel ~b;ment of Seafarelslssued oo February 26, 2016.
2 Section 1, Rule II, Book I, Rules 1D ~ lhe Labor Code. b. Nature of regulatory power.
3 Foonedy, the Rules Mel Regufali:Jns Govemilg I'IMite RecruimentMd P'anent Agencies b' Local ~Issued
by Seaetay RWen D. Torres oo A(lril4, 1991. The power to regulate and restrict the recruitment and placement
4 &Jdl as fie folk:NMg issuances tiat were made pOOl' kl the 00vert of RA No. 8042 ii 1995, kl wit (1) Rules and activities of all agencies conferred by Article 36 to the DOLE Secretary is a
Regulalms Govemilg CNerseas ~~ issued by Seaelay Rldlen D. Torres oo May 31, 1991; (2) Poftey valid grant of police power.5
tnsmJcms such as Policy klstructions No. 22, Series of 1977 IGuidefi1es Govemilg the ~ of Cooslrudion

I
W~EIS Olelseas by Apri 1, 1977) Md it; ~lemenling Rules Md ReglAafioos; Poicy Instructions No. 34, Series of 1978
[Onrilus lnsbudions Gcmmi1g the Oepklyment of Conslrudi:xi Waters OVelseast and Pcky lnslrudims No. 45, Series
of 1981 [l)ieding the OEDB il tlooi\:J, Deveql Mel Adnilister the Hmg Mel ~ of rtl(lilos il F~n 1 Formerlj, Omnbus RUes Mel Regulations ifr4Jiemenlilg R.A. No. 8042jlillly issuedl7flleSecrellllyofF!Xei;JnAifairS and
liousehoij;); (3) Cio.dars such as Citula' No. 01-91, issued by Seaetay Ruben D. Torres oo Noveniler 20, 1991 Seae!ary of l..aboc Md ErrCJioyment oo Febnay 29, 1996.
~ additiooal requirement;, coodiOOns and procedures b' lhe dep~t at pedo!m'ng artists; and (4) DOLE I
2 Entitled 'tnsumce Guideliles on Rule XVI or the arroous Rules and Regulam ~ Republc M 8042 {The
Order No. 35, Series of 1994, issued oo October 14, 1994 by Seaeay Ma. Nieves Con!esor regcrtli1g lhe CoolJrehensive I Mg!Cilt ~EIS em 0/e!seas F~ilos M of 1995), as Alrended by RepubE M 10022 Relative il ConlXJisoly

5
wem Program b' Artists Overseas.
&Jdl as: (1) Republic Act No. 8042, otherMse knct.m as the 't.i:Jr.WW~ers and Oie~SeaS ~Act of 1995," v.f!idi I 3
Insurance Coierage b' Agency-Hied Oierseas Fapilo WatEIS."
FOITTIE!IIj, POEA Rilles and Regulations Governilg l1e Recrui1ment and ~of l.al:I-Based Overseas WatEIS
became e!lecWe oo August 25, 1995 (approved oo June 7, 1995]; (2) RA No. 9422, enacted oo Apri 10, 2007, I 4
issued oo Februay 4, 2002.
FOITTIE!IIj, POEA Rules em Regulations Govern~ the Recruitment and ~of Seliaels issued on May 23, 2003.
~ lhe regulakxy functions of the POEA; and (3) RA No. 10022, enacted on fv4arch 8, 2010, emend~ certai1

L
pnMsions of RA No. 8042. 5 Philippine Associatm of Se!vice Exponels, Inc. v. Torres, G.R No. 101279, Aug. 6, 1992, 212 SCRA 298.
88 BAR REviEWER ON lABOR lAW CHAPTER II 89
RECRUITMENT AND PlACEMENT

Being regulatory, the DOLE Secretary may validly issue rules and Article 289 [2741 dwells on the visitorial power of the DOLE Secretary
regulations restricting or otherwise regulating the recruitment and placement to inquire into the fmancial activities of legitimate labor organizations.
activities of persons and entities engaged in the recruitment and placement of c. Effect of obstruction of exercise of visitorial power.
workers locally or overseas.
c. Exercise of the regulatory power. The act of any person, whether a non-licensee, non-holder, licensee or
holder of authority, in obstructing or attempting to obstruct inspection by the
Pursuant to Article 36 and in accordance with other pertinent and DOLE Secretary or by his duly authorized representative under Article 37 of the
related provisions of the Labor Code, the DOLE Secretary has issued several Labor Code is one of the prohibited practices and unlawful acts which
implementing rules, circulars, guidelines and regulations. 1 constitutes "illegal recruitment. "1
4.2. VISITORIAL POWER.
a. Article 37, Labor Code.
c.
The visitorial power is found in Article 37, viz.:
EMPLOYMENT OF NON-RESIDENT ALIENS
"Article 37. Visitorial Power.- The Secretary of Labor or his duly 1. POLICY DECLARATION.
authorized representatives may, at any time, inspect the premises, books
of accounts and recurds of any person or ent:ty cover~d by this Title,
The Alien Employment Permit (AEP) is not an exclusive authority for a
require it to submit report3 regularly on prescribed fonns, and act on foreign national to work in the Philippin.es. It is just one of the requirements in the
violation of any provisions of this Title." issuance of a work visa (9g) to iegally engage in gainful employment in the COlh'1try.
b. Distinctions of the visitorial powers of the DOLE Secretary 'I11e foreign national must obtain the required Special Temporary Pennit (STP) from
under Articles 289 [274] and 128 of the Labor Code. the Professional Regulation Commission (PRC) in case the employment involves
practice of profession and Authority to Employ Alien from the Department of
The visitorial power of the DOLE Secretary or his duly authorized Justice (DOJ) where the employment is in a nationalized or partially nationalized
representatives described in Article 37 of the Labor Code should be industry.2
distinguished from the other visitorial powers granted to him by other provisions '
of the Labor Code such as the ones provided for under Article 128 and Article j 2. ALIEN EMPWYMENT PERMIT (AEP), DEFINED.
289 [274] thereof.
Here, the visitorial power pertains to the inspection of the premises,
books of accounts and records of persons and entities engaged in the recruitment
Ii An Alien Employment Permit (AEP) is a document issued by the DOLE
Secretary through the DOLE-Regional Director who has jurisdiction over the
intended place of work of the foreign nationa~ authorizing the foreign national. to
and placement of workers for local or overseas employment. It also includes the f work in the Philippines.
ti
power to require the submission of reports regularly on certain prescribed forms •
~
3. WHO ARE REQUIRED TO PROCURE AEP?
and to act on any violation ofTitle I, Book I of the Labor Code.
"& All foreign nationals who intend to engage in gainful employment in the
The visitorial and enforcement power of the DOLE Secretary or the ~ Philippines are required to apply for AEP. The term "gainful employment" refers
DOLE Regional Directors, his duly authorized representatives, treated in Article
128 pertains to the inspection of premises, books of accounts and records of
I to a state or condition that creates an employer-employee relationship between the
i Philippine-based company and the foreign national where the former has the power
local employers to determine violations of the Labor Code and any labor laws,
wage orders or rules and regulations issued pursuant thereto.3
I
i
to hire or dismiss the foreign national from employment, pays the salaries or wages
.

1 Such as, iller alia, !he POEA Rules and Regulatioos GcNemi1g l!le Recruitment and ~of Land-Based Overseas
~ 1 See Mi:le 34 ~]. bid; Section 6, RA. No. 8042; Section 9 (V~ Ormibus Rules Cl1d Regulalions iiTlJiementirl: 11e "<!rant
WOO<ers issued oo Febrlay 4, 2002; POEA Rules and RegUations Govelni"9 the Reaumneot and Employment of W00<ers and Overseas Fqli1os Act of 1995 dated Feb. 29, 1996.
Seafarers issued 00 May 23, 2003; and MemoranOOm CiaJiar No. 10, Series of 2010, Odcber 26, 2010 [Amended 2 See PdtyOecaation, Depment Older No. 146-15, Series of 2015 (August 20, 2015), Revised Rules fa lhe Issuance of
St:r1dard Tenns and Conditions Govw.irg l!le Overseas ~loyment of Filipoo Seafarers On-Board Ocem-Going Sllips. El11lloYment Pemits tl Rxegn Natic".Ms. This latest issucro! repeals ex- m:xfles aa:ordi'IJIY,ia' guideliles, rules and
2 Mi:le 37 ,llilorCode. regul<mns, procedures Clld a;Jreetneols incoosistent i1et'eM1h 'lXI (per i1s SecOOn 16. Repealirg Oalse). These Rules tool<
t
3 Article 128,1lid.; Sal Josev. NLRC, G.R No. 121227,Aug.17,1998. etlect 'c& (15) days fltm the dale ofils pubicalion" (per i1s Section 17. EffeciMiy).

L . -.·
go BAR REVIEWER ON lABOR lAW (HAPTIRll 91
RECRUITMENT AND PlACEMENT

thereof and has authority to control the perfonnance or conduct of the tasks and c) Those providing Consultancy services who do not have employers in
duties. 1 the Philippines.
d) Intra-corporate transferee who is a manager, executive or specialist as
4. EXEMPTED CATEGORIES OF FOREIGN NATIONALS.
defmed below in accordance with Trade Agreements and an employee
The following categories of foreign nationals· are exempt from securing an of the foreign service supplier for at least one (1) year prior to
employment permit deployment to a branch, subsidiary, affiliate or representative office in
the Philippines:
a) All members of the diplomatic service and foreign government officials
accredited by and with reciprocity arrangement with the Philippine (i) an Executive: a natural person within the organization who
government; primarily directs the management of the organization and
b) Officers and staff of international organizations of which the Philippine exercises wide latitude in decision making and receives only
government is a member, and their legitimate spouses desiring to work general supervision or direction from higher level executives, the
in the Philippines; board of directors, or stockholders of the business; an executive
c) All foreign nationals granted exemption by law; would not directly perform tasks related to the actual provision of
d) Owners and representatives of foreign principals whose companies are the service or services of the organization;
accredited by the Philippine Overseas Employment Administration
(ii) a Manager: a natural person within the organization who
(POEA), who come to the Philippines for a li'llited period and solely
primarily directs the organization/department/subdivision and
for the purpose of interviewing Filipino applicants for employment
exercises supervisory and control fimctions over other
abroad;
supervisory, managerial or professional staff; does not include
e) Foreign nationals who come to the Philippines to teach, present and/or
ftrst-line supen~sors unless employees supervised are
conduct research studies in universities a.'ld colleges as visiting,
professionals; does not include employees who primarily perform
exchange or adjUflct professors under formal agreements between the
· tasks necessary for the provision of the service; or
universities or colleges in the Philippines and foreign universities or
colleges; or between the Philippine government and foreign (iii) a Specialist: a natural person within the organization who
government: provided that the exemption is on a reciprocal basis; and f
~
possesses knowledge at an advanced level of expertise essential to
f) Permanent resident foreign nationals and probationary or temporary the establishment/provision of the service and/or possesses
resident visa holders under Section 13 of the Philippine Immigration proprietary knowledge of the organization's service, research
Act ofl940.Z equipment, techniques or management; may include, but is not
limited to, members of a licensed profession..
5. EXCLUDED CATEGORIES OF FOREIGN NATIONALS.
e) Contractual service supplier who is a manager, executive or specialist
The following categories of foreign nationals are excluded from securing
and an employee of a foreign service supplier which has no commercial
an employment permit:
presence in the Philippines:
a) Members of the governing board with voting rights only and do not
(i) who enters the Philippines temporarily to supply a service pursuant
intervene in the management of the corporation or in the day-t<Hiay
to a contract between his/her employer and a service consumer in
operation of the enterprise.
the Philippines; c
b) Corporate officers as provided under the Corporation Code of the
(ii) must possess the appropriate educational and professional
Philippines, Articles of Incorporation, and By.J.aws of the Corporation
qualifications; and
such as President, Secretary and Treasurer.
(iii) must be employed by the foreign service supplier for at least one
( l) year prior to the supply of service in the Philippines.' ·

, Section 1, Depa'tmelltOrder No. 14&-15, Sefiesof2015 (August20, 2015), Revised RUes for lhe lsstmce of~byment
Pennils 1o Forei;Jn NatiooaS.
2 Section 2, ld. 1 Section 3, ld.

L
92 BAR REVIEWER ON lABOR lAW CHAPTER[[
93
RECRUITMENT AND PlACEMENT

6. LABOR MARKET TEST AND OTHER OBJECTION AGAINST THE date of appointment or election, the foreign national shall submit to the issuing
FOREIGN NATIONAL. o

The DOLE Regional Office shall publish in a newspaper of general


circulation all applications for new AEP, change or additional position in the same
company or subsequent assignment in related companies within (2) two work days
,
~
I
Regional Office the Board Secretary's Certification.
The Regional Director shall revoke the AEP after one (1) month from its
issuance, if no Certification is filed. 1

from receipt of application. The same shall be published in the DOLE website and 9. DENIAL OF APPLICATION FOR NEW OR RENEWAL OF AEP.
posted in the PESO. Such publication and posting shall be for a period of thirty (30) An application for AEP or the renewal thereof may be denied by the
days and shall contain the name, position, employer and address, a brief description Regional Director based on any of the following grounds:
of the functions to be performed by the foreign national, qualifications, monthly
salruy range and other benefits, ifthere are any. (a) Misrepresentation of facts in the application;
Misrepresentation offacts includes fraudulent misrepresentation that is
It shall also indicate in the same notice of publication that any person in the a false statement that will have a negative effect in the evaluation of the
Philippines who is competent, able and willing at the time of application to perform application, was made knowingly, or without belief in its truth, or
the services for which the foreign national is desired may file an objection at the recklessly whether it is true or false.
DOLE Regional Office. Any objection or information against the employment of the (b) Submission of falsified documents;
foreign national relative to labor market test must be filed with the Regional Office (c) The foreign national has been convicted of a criminal offense or a
within thi.rty (30) days after publication. fugitive fro:n justice in the country or abroad;
The DOLE Regional Office shall refer to the DOLE Skills Registry (d) Grave misconduct in dealing with or ill treatment of workers; or
System, the Professional Regulation Commission's (PRC) registry of professionals, (e) Availability of a Filipino who is competent, able and willing to do the
and the Technical Education and Skills Development Authority (fESDA) registry of job intend~ for or being performed by the foreign national.
certified workers to establish availability or non-availability of able and qualified ~ The Regional Director shall issue an Order denying the application for new
Filipino worker. ! or renewal of AEP which shall have the effect of forfeiture of the fees paid by the
Information or criminal offense and grave misconduct in dealing with or ill f applicant. 2
~
treatment of workers may be filed with the Regional Offices any time. 1 10. CANCELLATION/REVOCATION OF AEP.
7. VALIDITY OF AEP. The Regional Director may, motu proprio or upon petition, cancel or
The AEP shall be valid for the position and the company for which it was revoke an AEP a..fter due process, based on any of the following grounds:
issued for a period of one (1) year, unless the employment contract, or other modes (a) Non-compliance with any of the requirements or conditions for which
of engagement provides otherwise, which in no case shall exceed three (3) years. 2 the AEP was issued;
8. RENEWAL OF AEP. (b) Misrepresentation of facts in the application;
Misrepresentation offacts includes fraudulent misrepresentation that is
An application for renewal of AEP shall be filed not earlier than sixty (60) a false statement that will have a negative effect-in the evaluation of the
days before its expiration. In the case of officers whose appointment or election application, was made knowingly, or without belief in its truth, or
takes place before the expiration of AEP, the application must be filed not later than recklessly whether it is true or false.
fifteen (15) working days after appointment, or before its expiration, whichever (c) Submission of falsified or tampered documents;
comes later. In case the appointment or election will take place after the expiration of (d) Meritorious objection or information against the employment of the
the AEP, the application for renewal must be filed before the expiration of the AEP foreign national;
which can be renewed for one (1) year. Within fifteen (15) working days after the (e) Foreign national has been convicted of a criminal offense or a fugitive
i from justice;
t
1 Seclm6,1d. 1 Section 10, ld.
2 Seclm9,1d. 2 Section 11' ld.

L'
BAR REVIEWER ON lABOR lAW CHAPTERll 95
94 RECRUITMENT AND rLACEMENT

(t) Employer terminated the employment of foreign national; approval of the DOLE Secretary, is prohibited from committing any of the following
(g) Grave misconduct in dealing with or ill treatment of workers"; acts:
(h) Disapproval of the application for an Authority to Employ Alien by the
a) To transfer to another job; or
Department of Justice (DOJ) or Special Temporary Permit by the
b) To change his employer.
Professional Regulation Commission (PRC), if applicable.
Such transfer to another job or change in position or in employer requires
In such cases, the Regional Director shall issue an Order cancelling· or
1
the filing of an application for new AEP. 1
revoking the AEP .
11. EFFECT OF DENIAUCANCELLATION OR REVOCATION OF AEP. D.
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS
A foreign national whose AEP has been denied or cancelled is disqualified
to re-apply within a period of ten (10) years, in case the grounds for denial or The term "special workers" under the law refers to the following:
cancellation is any of the following: 1. Apprentices;
(a) Conviction of criminal offense or fugitive from justice in the country or 2. Learners; and
abroad; or 3. Persons with Disability (Called Disabled Worleers, per Syllabui).
2
(b) Grave misconduct in dealing with or ill treatment ofworkers. These are discussed below.
12.APPEAL 1.
Tne aggrieved foreign national or his authorized representative may file an APPRENTICES AND LEARNERS3
appeal with the DOLE Secretary wit.1in ten (10) days after receipt of the copy of
denial/ cancellation/ revocation order. The decision of the DOLE Secretary shall be 1. DISnNCTIONS BETWEEN LEARNERSHIP AND
tmal and executory unless a motion for reconsideration is filed within ten (10) days3 APPRENTICESHIP.
after receipt of the decision. No second motion for reconsideration shall be allowed. The following are the distinctions:
13. PENALTY FOR WORKING WITHOUT AEP. 1) Practical training. Both ·leamership and apprenticeship involve
The Regional Director shall impose a fine ofPlO,OOO.OO for every year or a practical training on-the-job.
fraction thereof to foreign nationals found working without a valid AEP. Employers 2) Training agreement. Leamership is governed by a learnership
found employing foreign nationals without a valid AEP shall also pay a fine of agreement; while apprenticeship is governed by an apprenticeship
PlO,OOO.OO) for every year or a fraction thereof. agreement
Newly hired or appointed officers may file the application for new AEP 3) Occupation. Learnership involves learnable occupations consisting
without penalty thereof within fifteen (15) working days after signing of contract ~r of semi-skilled and other industrial occupations which are non-
appointment If the commencement of employment is later than the fifteen (15) apprenticeable; while apprenticeship concerns apprenticeable
working days grace period, the application for new AEP may be filed before the ~
occupations or any trade, form of employment or occupation
4
commencement of employment without penalty. approved for apprenticeship by the DOLE Secretary.
14. PROHIBITION AND GROUNDS FOR CANCELLATION OF THE AEP. !!
~<
4) Theoretical instructions. Learnership may or may not be
supplemented by related theoretical instructions; while
Paragraph (a) of Article 41 enunciates another ground for the cancellation
of the employment permit issued to an alien. Here, the alien, without the prior
II 1 Section 4(c), Depal1met1t Order No. 146-15, Series of 2015 (August 20, 2015), Revised PJJies kr lhe Issuance of

1 Section 12, ld. I Employment Pennits 1o Forego Nai:lnals. This paragraph slates: 'c) Adcfl1ional position ollhe berJn national in the same
~ or subsequent assgnment il related COO"jlallies dllilJ lhe vai:lity or renewal of l1e AEP \WI be subject for
pt.blk:aliori requi'emenl Acha1ge of position or emplafer shall reqlire an application for new AFP.'

L
2 Section 13, ld. 1
3 Sedion141d Remingllthe2017Sylla00s.
3 Section 8, Ibid.
~ Section 15: ld:
96 BAR REviEWER ON lABOR lAW CHAPTER II
97
RECRUITMENT AND PlACEMENT

apprenticeship should always be supplemented by related apprenticeship, the enterprise is given only an "option" to hire the
theoretical instructions. apprentice as an employee. 1
5) Ratio o{theoretical instructions and on-the-job training. For both 11) Wage rate. The wage rate of a Ieamer or an apprentice is set at
leamership and apprenticeship, the·· normal ratio is one hundred seventy-five percent (75%) of the statutory minimum wage. 2
(100) hours of theoretical instructions for every two thousand
12) Qualifications. The law does not expressly mention any
(2,000) · hours of practical or on-the-job training. Theoretical
qualifications for learners; while the following qualifications are
instruction time for occupations requiring less than two thousand
required to be met by apprentices under Article 59 of the Labor
(2,000) hours for proficiency should be computed on the basis of
Code:
such ratio. 1
(a) Be at least fourteen (14) years of age;
6) Competencv-based svstem. Unlike in apprentice&hip, it is required 2
(b) Possess vocational aptitude and capacity for appropriate tests;
in leamership that it be implemented based on the TESDA-
and
approved competency-based system.3
(c) Possess the ability to comprehend and follow oral and written
7) Duration o(training. Leamership involves practical training on the instructions.
job for a period not exceeding three (3) mor.ths; while
apprenticeship requires for proficiency, more than three (3) However, the Implementing Rules presciibe the following four (4)
months but not over six (6) monthi of practical training on the qua Iifications:
job. a) Be at least fifteen (15) years of age, provided those who are at
8) Circumstances justifving hiring of trainees. Unlike in least fifteen (15) years of age but less than eighteen (18) may be
apprenticeship, in leamership, the law, Article 74 of the Labor eligible for apprenticeship only in non-hazardous occupations;
Code, expressly prescribes the pre-requisites before learners may be b). Be physicaily fit for tlJ.e occupation in which he desires to be
validly employed, to wit: trained;

(a) When no experienced workers are available; I c) Possess vocational aptitude and capacity for the particular
occupation as established through appropriate tests; and
(b) The employment of learners is necessary to prevent curtailment
· of employment opportunities; and
(c) The employment does not create unfair competition in terms of
labor costs or impair or lower working standards.5
II d) Possess the ability to comprehend and follow oral and written
instructions.
• Conflict in the age requirement, how resolved.

9). Limitation on the number of trainees. In leamership, a i Notably, there is a difference in the age requirement between the 14-
participating enterprise is allowed to take in learners only up to a I year old prescnbed in the law and the 15-year old enunciated in the
Implementing Rules. Generally, the well-settled rule of legal
maximum of twenty percent (20%) of its total regular workforce. 6 ! hermeneutics dictates that if there is a conflict between the law and its
No similar cap is imposed in the case of apprenticeship.
10) Option to emplov. In leamership, the enterprise is obliged to hire
I implementing rule or regulation, the provision of the former should

I
prevail over the latter. The implementing rule cannot certainly operate
the learner after the lapse of the leamership period; while in to amend the law. Consequently, the minimum age requirement
~ should have been fotnteen (14) years of age except for the fact that the
i
age requirement in the said Implementing Rules is based on and more

1 Se::tiJn 28, Rue VI, Book II, Ibid.


2 UndEr lhe 2004 TESDA RMe:t GuiOOiines illhe mperrentaiKln of ~m~ and Leamrsh~ flrogarrs.
th 11, lESDACirua"f-b. 16.Seresof2004, da81Aug.lst 12,2004.
1
• oo.E Cicula" f-b. 2. Seres of200i, [ftmendi1g Ceriain l'roYisiJns ofllepnrent Q1lEr No. Ql.Q4j issued on Augusl11, 200i by 1:xmer oo.E See No. 3.10 ofTESDA Circular No. 16, Seriesof2004 and DOLE Circular No.2, Serlesof2006.
Se::retl!y (na.v Associae.Justre oflhe &Jpere Cotr1) Ml1o D. BliJo
2
Se::00n 29, Ruia VI, Book II, llid.; Se::00n 5, Rep.Jti: f>d No. 6640; Section 10, Rules ~ RA f-b. 6640; Section 10, Rues
See al9.l SediJn 2, Rue VII, Book II, Rules tl mperrent the Lat;q Code ~ting RA No. f;/l/; No. I [HI. DCXE HaldxJol( oo Worl<ers Staluby ~ Benefit; No. 3.8. lESDA Citutar !lb. 16, Series of
[
No.3.7.,1bid 2004, dalld August 12,2004 [1leiised GuiOOiines nlhe mpemenlaiKln of Appenli:eship and Leanersh~l'lo!J;m;.

L
98 BAR REV! EWER ON lABOR lAW
CHAPTER II
RECRUITMENT AND PLACEMENT 99
congruent with latest legislation, more particularly, the 2003 law, R.A. 7277 is now the prevailing law. Subsequently, however, R.A. No. 9442' was
No. 9231, 1 where it is provided that: enacted for purposes, inter alia, of changing the title ofR.A. No. 7277 to read as
(1) All persons under eigl)teen (18) years of age shall be considered the "Magna Carta for Persons with Disability," and all references in the said
as a "child"; and law to "disabled person" were likewise amended to read as "person with
(2) Children below fifteen (15) years of age shall not be employed disability" or "PWD." The term "handicapped workers" therefore should no
except if he/she falls under any of the excepdon; mentioned and longer be used to describe persons with disability as this is no longer legally
correct
enumerated in the law.3
Apprenticeship is not one of the exceptions, therefore, this prolnbition It bears noting that despite the developments in the law as above
on employing an apprentice below the age of fifteen (15) years applies discussed, the latest Syllabui still describes these workers as "disabled
to apprentices. Consequently, the proper age qualification is fifteen
workers."
(15) years but not because of the Implementing Rules' provision as 2. DEFINITION OF IMPORTANT TERMS.
mentioned above but by reason ofR.A. No. 9231.
The following terms are specifically defmed in the law:
2.
DISABLED WORKERS 1. "Persons with Disability" are those suffering from restriction or
different abilities, as a result of a menta~ physical or sensory
(PERSONS WITH DISABILIT¥)4
impainnent, to perfonn an activity in the ma!lller or within the range
1. LEGAL BASIS. considered nonnal for a human being.
Prior to the advent ofR.A. No. 7277,5 otherwise known as the "Magna 2. "Impairment" refers to any loss, diminution or aberration of
Carta for Disabled Persons," the relevant provisions are found in the Labor psychological, physiological, or anatomical structure or function.
Code on handicapped workers, namely: Articles 78 to 81 thereof. R.A. No. i 3. "Disability" means {1) a physical or mental impairment that

1 Entitled 'AN ACT PROVIDING FOR THE ELIM1NATION OF n£ WORST FORMS OF CHILD LABOR AND AFFORDING
SlRONGER PROTECTION FOR THE WORKING CHJU), AMeiDING FOR THIS PURPOSE REPUBLIC ACT NO. 7610,
~ MIENDED, OTHERWISE KNOWN AS THE 'SPECfAL PROTECTION OF CHILDREN AGAINST CHilD ABUSE,
I
I
substantially limits one or more psychological, physiological or
anatomical functions of an individual or activities of such
individual; (2) a record of such an impairment; or (3) being
regarded as having such an impairment.
4. "Handicap" refers to a disadvantage for a given individual,
EXPLOITATION AND DISCRIMINATION ACT'~ on Oealnilef 19, 2003.
2 Theexcepbls,asenllllelllledil Section12of RA No. 7610,ascmendedby SecOOn2ofRA No. 9231 oce as foiklw.;: resulting from an impairment or a disability that limits or prevents
(1) \\l1en adlil V«rts d'~ lllderh! sae respoosiliily ofhis.tler p.nnts a !ega guaroian Clld rdlere rrlf mermers of the function or activity that is considered nonnal given the age and
lt.!1e' firlit oce ~: P!Mled, hcMever, That~~ neither endqefs tis/her li!e, safely, heiflh, Clld sex of the individual.
rmna
nmls, lXI' i11laifs hisil1er ~ flramed, UUler, That the paent a legal gucrdial sh?J pnMje the saKI
chid WG!Ile prescriled prin<ly lrldlcr seoonday ~;a 5. "Marginalized Disabled Persons" or more appropriately,
(2) W1ere a dlil's ~ a ~ it puli: ~ a i1foonation ftlroogh merna. theater, rad'10,
lefe>.tion oc oller bins of rredia is essential: Provkled, Thallle ~ c:ontr.n is aJlCklded by the chid's p!len6 oc "Marginalized Persons with Disability" refer to persons with
disability who lack access to rehabilitative services and

I
legal guard'oo, v.ilh tJe e'(JJil!SS agreement of the did COOCE!IlOO, WpossiJie. md lle ~ ci h! Depa1Vnent ofl..alxr
Clld ~ Pro'lkled, U1he", That lle ~ reqLi'emenls i1 al i1slances ae stJX:tty coolJied v.ith: opportunities to be able to participate fully in socio-economic
(a) The~ shal ensure h! proB:OOn, healh, safely, rraals Clld normal development oflhe ctild;aalaw
(b) The ~shall i1stilute mea9JI'eS to ~the chtrs exploilatioo or disainilatioo taki'l;! ilto acoount lle system activities and who have no means of livelihood and Whose incomes
Clld level ci ll!m.J!'IelliOO, Clld the dun*xl Clld ~Emenl ci 'Mifu:l time; and fall below the poverty threshold.
(c) The en1lio'fer shal bmJla1e Clld ir(Jiement. ~ to 11e app!MI Clld supervision of COfl1lEllenl au!horities, a
!XXIIiouilg pr<:1JflliTl for trainilg and skils acquisition oflhe chikl.
In lhe ~ceptional cases v.i1ere aey such chid may be ~ed. the erJllbyer shal first secure, before engagirg
ruch chid, a Yol)f1\ penni! from l1e Depa1ment of l..alxr Cl1d ~ 'Mlich shalt ensure 00se1vance of 11e me
~· ' See SectiJn 41teoof. Tiis tr« b&;ane elb:tive oo ~ ll, YJI. Sectioo 4stalls: 'SEC. 4. The tile of RA No. 7iJ7 is t'eeby il'lla'1dld tl
3 Article59,l..alxrCode; Section 11, ROO VI, Book. II, Rules to ~the Labor Code. read asfle 'Mag1a Catll:rPmons v.iflllisatit(, and al reiJenoosoo f1e sai:llawll'disalled persons' shalllteMse oo l¥reflded tl read
4 ReiMIII!rK. RA No. 7277, as anended byRA No. 9442. as'\lefsonsllilhdisabi.~.' ·
~lolhe2017~.
2
5 ~mMath24, 1992.
CHAPTER II 101
BAR REVIEWER ON lABOR lAW
100 RECRUITMENT AND PLACEMENT

"All qualified handicapped workers shall receive the full amount of


a. the minimum wage rate prescribed herein pursuant to Republic Act No.
EQUAL OPPORTUNITY 7277, otherwise known as the Magna Carta for Disabled Persons. "1
1. EQUAL OPPORTUNITY FOR EMPLOYMENT. Moreover, in case of legally-mandated wage increases enunciated in
Under the law, 1
PWDs are entitled to equal opportunity for wage orders issued by the RTWPBs, the employment agreements with persons
employment. Consequently, no PWD shall be denied access to opportunities for with disability are deemed automatically modified insofar as their wage clauses
suitable employment. A qualified employee with disability shall be subject to are concerned to reflect the said increases. 2
the same terms and conditions of employment and the same compensation, 4. WAGE RATE AS APPRENTICE OR LEARNER.
privileges, benefits, fringe benefits, incentives or allowances as a qualified able-
A PWD hired as an apprentice or learner shall be paid not less than
bodied person.
seventy-five percent (75%) of the applicable minimum wage.
Five percent (5%) of all casual emergency and contractual positions in ~
the Departments of Social Welfare and Development, Health, Education and
other government agencies, offices or corporations engaged in social
2
I
ff"
If the PWD, however, is hired as a learner and employed in piece or
incentive-rate jobs during the training period, he shall be paid one hundred
percent (100%) ofthe applicable minimum wage.
development shall be reserved for PWDs. ~
2. PWDs ARE ELIGIBLE FOR APPRENTICESHIP AND ~ DISCRIMINATION ON EMPLOYMENT
b.
LEARNERS HIP.
Under R.A. No. 7277,3 it is provided that subject to the provisions of 1. DISCRIMINATION ON EMPLOYMENT PROHIBITED.
the Labor Code, as amended, PWDs shall be eligible as apprentices or learners; No entity, whether public or private, shall discriminate against a
ptovided that their handicap is not as much as to effectively impede the qualified PWD by reason of disability in regard to job application pro~dures,
performance of job operations in the particular occupation for which they are the hiring, promotion, or discharge of employees, employee compensation, job
hrred and provided further that after the lapse of the period of apprenticeship, if training, and other terms, conditions and privileges of employment. The
found satisfactory in the job performance, they shall be eligible for following constitute acts of discrimination:
employment.
(a) Limiting, segregating or classifying a job applicant with disability
3. WAGE RATE. in such a manner that adversely affects his work opportunities;
Under Article 80 of the Labor Code, handicapped workers are entitled (b) Using qualification standards, employment tests or other selection
to not less than seventy-five percent (75%) of the applicable adjusted minimum criteria that screen out or tend to screen out a PWD unless such
wage. 4 In view, however, ofR.A. No. 7277,5 the wage rate ofPWDs is 100% of standards, tests or other selection criteria are shown to be job-
the applicable minimum wage. related for the position in question and are consistent with business
necessity;
Wage orders issued by the Regional Tripartite Wages and Productivity
Boards (RTWPBs) normally reflect this principle. To cite an example, Section 7 (c) Utilizing standards, criteria, or methods of administration that:
6
of Wage Order No. NCR-20, which was approved on May 17, 2016 by the (1) have the effect of discrimination -on the basis of disability; or
RTWPB-National Capital Region, states:
Ili

i
(2) perpetuate the discrimination of others who are subject to
common administrative control.
(d) Providing less compensation, such as salary, wage or other forms
of remuneration and fringe benefits, to a qualified employee with
1 UnOOrRA No. rm,otmire l<roMl as te'Ma<}la cata u~Persons' [nowl<roMl as 'Ma!Jia catauPerronsWtil ~lit(. ~
2 Se:m 5, ChapEl 1, Tile II, RA No. Tm. ~
r
l Sdln 7, 01ape" I, Tile Ht.ereol 1
SeealooSecfun8,Rtlleii,RuEs~Wa;JeQMNo.NCR·20iljl!X1lWdbyteOO£~oolo1ay27,2016.
M:le 00 [bl, l.rb:r Code; Se:&:xl 5, llepuli: hi No. 6640; Se:li:ln 10, RuEs mpiefreniriJ fl.etluiM: hi No. 6640; £ectill10, RUes
~ Repubic hiNo. IS/'ll; No.I[H]. DOlE Ha!dxxll<oo Wa\<8S Sta1utri !.bnetay llel1elm;.
rr, 2 Mde 124, LabJ Code as M1ellded by Sec1Xx13, ReptiJfr; tv;t No. &27; Seci:ln 10, RUes ~ling RepJ!Jii: PC. No. fjf'll; Seclkln 5,
I' Republi: PC. No. 6640; SecOOn 10, Rues inpmenfng Repubic hi No. 6640 [~ by analogy silU ~ns appli:able 'D
s Se:m5, ChapU 1, TilE 1\ofRA No. 7277. appenliresh~ ir1d meship~ rrenlbned lhereil.

L
• Thewagecni!Jv.as pJiilshed il The PhifiWine Slaroo May 18,2016. ~is rue\!ectMloo 2. 2016.
102 BAR REviEWER ON lABOR lAW
CHAI'TER III
LABOR STANDARDS 103
disability, by reason of his disability, than the amount to which a
non-disabled person performing the same work is entitled; CHAPTER THREE
(e) Favoring a non-disabled employee over a qualified employee with
disability with respect to promotion, training opportunities, study LABOR STANDARDS
and scholarship grants solely on account of the latter's disability;
(f) Re-assigning or transferring an employee with a disability to a job TOPICS PER SYLLABUS
or position he cannot perform by reason ofhis disability;
(g) Dismissing or tenninating the services of an employee with
disability by reason ofhis disability unless the employer can prove Ill.
that he impairs the satisfactory performance of the work involved LABOR STANDARDS
to the prejudice of the business entity; provided, however, that the
employer frrst sought to provide reasonable accommodations for A. Conditions of Employment
persons with disability; I. Scope
2. Hours of Work
(h) Failing to select or administer in the most effective manner
employment tests which accurately reflect the skills, aptitude or a. Principles in Determining Hours Worked
b. Normal Hours of Work
other factor of the applicant or employee with disability that such
tests purports to measure, rather thun t~e Lrr1paired sensory, manual i. Compressed Work Week
or speaking skills of such applicant or employee, if any; and ii. Power Interruptions/Brownouts
c. Meal Break
(i) Excluding PWD from membership in labor unions or similar d. Waiting Time
organizations. 1 e. Overtime
f. Night Shift Differential
g. Rest Periods
---<oOo--- b. Holiday Pay, 131h Month Pay
i. Service Charge
B. Wages
1. Wage Versus Salary
2. Payment of Wages
3. Facilities Versus Supplements
4. Non-Diminution of Benefits
5. Prohibitions Regarding Wages
6. Wage order, Wage Distortion
C. Leaves
1. Service Incentive Leave
2. Maternity Leave
3. Paternity Leave
4. Parental Leave for Solo Parents
5. Special Leaves for Women Workers (Magna Carla for Women)
D. Special Groups of Employees
1. Women
a. Discrimination
b. Stipulation Against Marriage
I Seci:ln32,0iapllri,Ttlel\i,ltid. c. Prohibited Acts

L
CHAPTER Ill 105
BAR REVIEWER ON lABOR lAW
104 lABOR STANDARDS

e. Workers paid by results;


d. Sexual Harassment £ Non-agricultural field personnel; and
2. Minors g. Members of the family of the employer.
3. Kasambahay
4. Homeworkers 2.
5. Night workers HOURS OF WORK
------------------------------------------------
A. a.
PRINCIPLES IN DETERMINING HOURS WORKED
CONDITIONS OF EMPLOYMENT
1. COMPENSABLE HOURS WORKED.
1.
SCOPE The following shall be considered as compensable hours worked:
1. PROVISIONS ON WORKING CONDITIONS. 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 workplace;
The provisions on working conditions in the Labor Code are as follows. and
A.iticle 83- Nonnal hours of work; b) All time during which an employee is suffered or permitted to
Article 84 - Hours worked; work. 1
Article 85 - Meal periods; 2. SOME PRINCIPLES IN DETERMINING HOURS WORKED.
Article 86- Night shift differential;
Article 87 - Overtime work; The following general principles shall govern in determining whether
Articie 88 - Undertime not offset by overtime; the time spent by an employee is considered hours worked:
Article 89 - Emergency overtime work; a) All hours are hours worked which the employee is required to give
Article 90 - Computation of additional compensation;
to his employer, regardless of whether or not such hours are spent in
Article 91 - Right to weekly rest period; productive labor or involve physical or mental exertion;
Article 92 - When employer may require work on a rest day;
Article 93- Compensation for rest day, Sunday or holiday work; b) An employee need not leave the premises of the workplace in order
Article 94 - Right to holiday pay; · that his rest period shall not be counted, it being enough that he
Article 95 - Right to service incentive leave; and stops working, rests completely and leaves his worJcplace to go
elsewhere, whether within or outside the premises of his workplace;
Article 96 - Service charges.
c) If the work performed was necessary or it benefited the employer or
2. COVERAGE. the employee could not abandon his work at the end of his nonnal
Employees in all establishments, whether operated for profit or not, are working hours because he had no replacement, all time spent for
covered by the law on labor standards. such work shall be considered as hoW'S worked if the work was with
the knowledge of his employer or immediate supervisor;
3. EXCLUSIONS. d) The time during which an employee is inactive by reason of
The following are excluded from the coverage of the law on labor interruptions in his work beyond his control shall be considered
standards: working time either if the imminence of the resumption of work
requires the employee's presence at the p{ace of work or if the
a. Government employees; '

I
L . . . ,. . .
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic servants and persons in the personal service of another; I 1
Alti:le 34, labor Code; Section 3, Rille I, BOO\ Ill, Rilles kl ~Iemen! the Labor Code; Rada v. Nt.RC, GR. No. 96078, Jan.
~,

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BAR REVIEWER ON lABOR lAW CHAPTER l!l 107
106 lABOR STANDARDS

interval is too brief to be utilized effectively and gainfully in the 4. STAGGERED WORKING TIME.
1
employee's own interest. Staggered working time is a valid scheme which may be resorted to by
It bears emphasizing that .the employer retains the management employers. As a matter of precedence, Memorandum Circular No. 81 was issued
prerogative, whenever exigencies of the service so require, to change the by the Office of the President on December 14, 2004 which implemented the
working hours of its employees.
2 Staggered Working Time in the Executive Department in relation to the other
branches of government and the private sector in Metro Manila during the
Moreover, the age-old rule which governs the relationship between Christmas Season from December 15, 2004 to January 6, 2005. According to
labor and capital or management and employee of a "fair day's wage for a fair this issuance, the "Staggered Working Time" is meant to improve the delivery of
day's labor," remains the basic factor in determining the employees' wages a.'ld goods and services.
3
backwages.
5. WORK IN DIFFERENT SHIFTS.
b. In establishments where work is in different shifts, work done by the
NORMALHOURSOFWORK employee beyond his eight-hour shift is considered overtime work which should
be compensated accordingly. For example, if there are three (3) eight-hour
1. NORMAL HOURS OF WORK PER DAY. shifts in a "work day, " say, the first shift is from 6:00 a.m. to 2:00 p.m.; second
The total number of working hours shall not exceed eight (8) hours shift from 2:00p.m. to 10:00 p.m.; and the third shift from 10:00 p.m. to 6:00
daily. This eight (8) hour period is called the normal hours o.fwork. Any work in a.m. of the followbg day, the employee whose regular eight-hour work is in the
excess of eight (8) hours is considered overtime work. first shift (6:00 a.m. to 2:00p.m.), once required to work in the second or third
shift, should be given additional compensation for such work done beyond hi8
2. REDUCTION OF 8-HOUR WORKING DAY BY EMPLOYER. regular working hours which legally is .considered overtime work.
The employer, in the lawful exercise of its prerogative, is not prohibited 6. REDUCTION OF WORKDAYS ON ACCOUNT OF LOSSES.
from reducing the eight-hour normal working time per day provided that no Workdays may be reduced in situations where the reduction in the
corresponding reduction is made on the employee's wage or salary equivalent to number of regular working days is resorted to by the employer to prevent
an eight-hour work day. serious losses due to causes beyond his control, such as when there is a
In instances where the number of hours required by the nature of work substantial slump in the demand for his goods or services or when there is lack
is less than eight hours, such number of hours should be regarded as the ofraw materials.'
employee's full working day. 7. FLEXIBLE WORK SCHEDULE UNDER R.A. NO. 8972.
3. BROKEN HOURS. Under R.A. No. 8972, otherwise known as "The Solo Parents' Welfare
Act of2000," solo parents are allowed to work on a flexible schedule, thus:
The normal eight (8) working hours mandated by law do not always
mean continuous and uninterrupted eight (8) hours of work. As may be required "Sec. 6. Flexible Work Schedule. - The employer shall
by peculiar circumstances of employment, it may mean broken hours of say, provide for a flexible working schedule for solo parents: Provided,
That the same shall not affect individual and company productivity:
four hours in the morning and four hours in the evening or a variation thereof:

I
Provided, further, That any employer may request exemption from
provided that the total of eight (8) hours is accomplished within one "work day" the above requirements from the DOLE on certain m¢torious
as this term is understood in law. Hence, even if the 4-hour work is done in the grounds."2
evening as in the example above, it should not be considered overtime work
since the eight-hour period has not yet been exceeded.
f
I

~ 1
Explanatory Bulletin on the Elfect of Reduction of WOO<days on WageWkig Allowances issued by the DOLE on Ju~ 23,
1
2
SecOOn 4, Rule I, Book Ill, Rules to Implement the Labor Code.
lklkln GalbklelaborUnionv. Unioo cabide Phiippines, Inc., 215 SCRI\554{1992).
[)Jrabil Recapping Plant~ v. NLRC, G.R No. L-76746, Ju~ 27, 1987, 152 SCRA 328.
! 2
1985.
Section 6, RA No. 8972.

L
3
108 BAR REviEWER ON lABOR lAW
CHAPTER Ill 109
lABOR STANDARDS
The phrase "flexible work schedule" is defined in the same law as the 3. OTHER FORMS OF FLEXIBLE WORK ARRANGEMENTS.
right granted to a solo parent employee to vary his/her arrival and departure time
1
I Other than the CWW, the following are flexible work arrangements
without affecting the core work hours as defined by the employer.
which may be considered, among others:
i. 1. "Reduction of Workdays" refers to one where the normal workdays
COMPRESSED WORK WEEK per week are reduced but should not last for more than six (6)
months.
1. DEFINITION UNDER DEPARTMENT ADVISORY NO. 2, SERIES OF 2. "Rotation of Workers" refers to one where the employees are
2009. rotated or alternately provided work within the workweek.
The Labor Code provides that the normal work hours per day shall be 3. "Forced Leave" refers to one where the employees are required to
eight (8) hours. Work may be performed beyond eight hours a day provided the go on leave for several days or weeks utilizing their leave credits, if
employee is paid for the overtime work. there are any.
On the other hand, the normal number of workdays per week shall be 4. "Broken-time schedule" refers to one where the work schedule is
six (6) days, or a total offorty-eight (48) hours based on the normal workday of not continuous but the work-hours within the day or week remain.
eight (8) hours. This is without prejudice to fmns whose normal workweek is 5. "Flexi-ho/idays schedule" refers to one where the employees agree
five (5) days, or a total of forty (40) hours based on the normal workday of eight to avail of the holidays at some other days provided there is no
(8) hours. 2 diminution of existing benefits as a ;esult of such arrangement. 1
''Compressed Workweek" or "CWW" refers to a situation where the Under these flexible work arrangements, the employers and the
normal workweek is reduced to less than six (6) days but the total number of employees are encouraged to explore alternative schemes under any agreement
work-hours of 48 hours per week remabs. The normal workday is increased to and company policy or practice in order to cushion and mitigate the effect of the
more than eight (8) hours but not to exceed twelve (12) hours, without loss of income of the employees.2
corresponding overtime premium.3 This concept can be adjusted accordingly in 4. CONDITIONS.
cases where the normal woikweek of the firm is five (5) days. 4
DOLE shall recognize GWW schemes adopted in accordance with the
Z. CWW, A KIND OF FLEXIDLE WORK ARRANGEMENT. following:
CWW is a kind of flexible work arrangement which is considered as 1. The CWW scheme is undertaken as a result of an express and
better alternative to the outright termination of the services of the employees or voluntary agreement of majority of the covered employees or their duly
the total closure of the establishment. Anchored on voluntary basis and authorized representatives. This agreement may be expressed through
conditions. mutually acceptable to both the employer and the employees, it is collective bargaining or other legitimate workplace mechanisms of participation
recognized as beneficial in terms of reduction of business costs and helps in such as labor-management councils, employee assemblies or referenda.
saving jobs while maintaining competitiveness and productivity in industries.5
2. In firms using substances, chemicals and processes or operating
"Flexible work arrangements" refer to alternative arrangements or under conditions where there are airborne contaminants, human carcinogens or
schedules other than the traditional or standard work hours, workdays and noise prolonged exposure to which may pose hazards to the employees' health
workweek. The effectivity and implementation of any of the flexible work and safety, there must be a certification from an accredited health and safety
arrangements should be temporary in nature. 6 organization or practitioner or from the firm's safety committee that work
beyond eight (8) hours is within the threshold limits or tolerable levels of
exposure, as set in the Occupational Safety and Health Standards (OSHS).
1 See Secliln 3(e] Ulefeof.
2 llepar1men!Mviso!y No.2, Seliesof2004, issued by the DOLE Secretary on [);cember2, 2004 i11plementing compressed
w:ll1\week (ONW) schemes.
3 DepartmeotAdvisoly No.2, Sefiesof2009, issued on January 29, 2009by DOLE Secrelaiy Malianito D. Roque enunciating

lhe Guideliles on the Adqltion of~ WO!K Arrmgemerns.


4 Depa1mentMviso!y No. 2, Selies of 2004, supra
s 0epar1rnent AdvisOiy No. 2, Selies d 2009, supra. 1 kl.
6 \d.

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2 kl.
BAR REVIEWER ON lABOR lAW CHAmRIII 111
110 lABOR STANDARDS

3. The employer shall notify the DOLE, through its Regional Office Tryco informed the Bureau of Working Conditions (BWC) of the
having jurisdiction over the workplace, of the adoption of the CWW scheme. Department of Labor and Employment of the implementation of. the said
1 compressed workweek in the company.
The notice should be made in DOLE CWW Report Form.
In upholding the validity of the compressed workweek, it was noted
S.EFFECTS. that Department Order No. 21 sanctions the waiver of overtime pay in
A CWW scheme which complies with the foregoing conditions shall consideration of the benefits that the employees will derive from the adoption of
have the following effects: a compressed workweek scheme, thus:
1. Unless there is a more favorable practice existing in the firm, work "The compressed workweek scheme was originally conceived for
beyond eight (8) hours will not be compensable by overtime premium establishments wishing to save on energy costs, promote greater work
provided the total number of hours worked per day shall not exceed twelve efficiency and lower the rate of employee absenteeism, among others. Workers
(12) hours. In any case, any work performed beyond twelve (12) hours a day favor the scheme considering that it would mean savings on the increasing cost
or forty-eight (48) hours a week shall be subject to overtime pay. of transportation fares for at least one ( 1) day a week; savings on meal and
snack expenses; longer weekends, or an additional 52 off-days a year, that can
2. Consistent with Article 852 of the Labor Code, employees under a
be devoted to rest, leisure, family responsibilities, studies and other perscnal
CWW scheme are entitled to meal periods of not less than sixty (60) minutes. matters, and that it will spare them for at least another day in a week from
Nothing, however, shall impair the right of employees to rest days as well as to certain inconveniences that are the normal incidents of employment, such as
holiday pay, rest day pay or leaves in accordance with law or applicable CBA or commuting to and from the workplace, travel time spent, exposure to dust and
company practice. motor vehicle fumes, dressing up for work, etc. Thus, under t'Jis scheme, the
3. Adoption of the CWW scheme shall in no case result in diminution generCI1iy observed workweek of six (6) days is shortened to five (5) days but
of existing benefits. Reversion to the normal eight-hour workday shall not prolonging the working hours from Monday to Friday without the employer
constitute a diminution of benefits. The reversion shall be considered a being obliged for pay overtime premium compensation for work performed in
legitimate exercise uf management prerogative provided that the empioyer shall excess of eight (8) hours on weekdays, in exchange for the benefits above-cited
that will accrue to the employees."
give the employees prior notice of such reversion within a reasonable period of
3 In declaring the compressed workweek arrangement in the 2007 case of
time. 4 Linton Commercial Co., Inc. v. Hellera,1 as unjustified and illegal and in
A case in point is Bisig Manggagawa sa Tryco v. NLRC, where
holding that petitioners are guilty of illegal reduction of work hours, the
private respondent Tryco and the petitioners signed separate Memorand[a) of
Supreme Court found specious the petitioners attempt to justify their action by
Agreement (MOA), providing for a compressed workweek schedule to be
alleging that the company was suffering from financial losses owing to the
implementedin the company effective May 20, 1996. The MOA was entered
Asian currency crisis. Petitioners' claim of financial losses was not supported by
into pursuant to DOLE Department Order (D.O.) No. 21, Series of 1990
evidence. A close examination of petitioners' fmancial reports for ·1997-1998
enunciating the Guidelines on the Implementation of Compressed Workweek. As
provided in the MOA, 8:00a.m. to 6:12p.m., from Monday to Friday, shall be shows that while the company suffered a loss of P3,645,422.00 in 1997, it
retained a considerable amount of earnings and operating income. Clearly then,
considered as the regular working hours, and no overtime pay shall be due and
payable to the employee for work rendered during those hours. The MOA while Linton suffered from losses for that year, there remained enough earnings
to·· sufficiently sustain its operations. In business, sustained operations in the
specifically stated that the employee waives the right to claim overtime pay for
work rendered after 5:00 p.m. until 6:12 p.m. from Monday to Friday black is the ideal but being in the red is a cruel reality. However, a year of
considering that the compressed workweek schedule is adopted in lieu of the financial losses would not warrant the immolation of the welfare of the
regular workweek schedule which also consists of forty-six (46) hours. employees which in this case was done through a reduced workweek that
I resulted in an unsettling diminution of the periodic pay for a protracted period.
However, should an employee be permitted or required to work beyond 6:12
p.m., such employee shall be entitled to overtime pay. I Permitting reduction of work and pay at the slightest indication of losses would
be contrary to the State's policy to afford protection to labor and provide full
employment. All taken into account, the compressed workweek arrangement
1 Depar1ment MiW.y No. 2, Series c( 2004, supta
z ~provides: 'Mk:le 85. Mlal Perods.- SUbject to such regula6ons as !he Secretary d Labor may presaibe, ~shall be ll1e
duty cf fNf!ft erJ1lbyer to gP/e his empklyees not less 11m st<ly (60) minutes time<J!f foc their regular meals.'
3 Depar1men1Adviso!y No.2, Series of2004, SUpta
1
4 G.R. No. 151309, Ocl15, 2008. G.R. No.163147, Ocl10, 'IIXJ7.

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112 BAR REVIEWER ON lABOR lAW
I CHAI'TER Ill

was unjustified and illegal. Thus, petitioners committed illegal reduction of I lABOR STANDARDS 113

work hours." ! 2. SHORTENING OF MEAL TIME TO NOT LESS THAN 20 MINUTES,


WHEN COMPENSABLE.
ii.
POWER INTERRuPTIONS/BROWNOUTS In the following cases, a meal period of not less than twenty (20)
The following are the effects of work interruption due to brownouts: 1 minutes may be given by the employer provided that such shorter meal period is
credited as compensable hours worked of the employee:
1. Brown-outs of short duration but not exceeding twenty (20) minutes
shall be treated as worked or compensable hours whether used a. Where the work is non-manual work in nature or does not involve
productively by the employees or not. strenuous physical exertion;
2. Brown-outs running for more than twenty (20) minutes may not be b. Where the establishment regularly operates for not less than
treated as hours worked provided any of the following conditions sixteen (16) hours a day;
are present: c. In cases of actual or impending emergencies or when there
a. The employees can leave their workplace or go elsewhere is urgent work to be performed on machineries, equipment or
whether within or without the work premises; or installations to avoid serious losses which the employer would
b. The employees can use the time effectively for their own otherwise suffer; and
interest. d. Where 1the work is necessary to prevent serious loss of perishable
3. In each case, the employer may extend the working hours of his goods.
employees outzide the regular schedules to compensate for the loss
of productive man-hours without being liable for overtime pay. 3. SHORTENING OF ME.AL TIME TO NOT LESS THAN 20 MINUTES,
WHEN NOT COMPENSABLE.
4. Industrial enterprises with one or two workshifts may adopt any of
the workshifts prescribed for enterprises with three (3) workshifts to The law allows a situation where the employees themselves request for
prevent serious loss or damage to materials, machineries or the shortening of meal period to not less than twenty (20) minutes (say, thirty
equipment that may result in case of power interruptions. 2 minutes, or from 12:00 to 12:30 p.m. instead of 12:00 to 1:00 p.m.) for the
5. 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
l
I
purpose of allowing them to leave work earlier than the lapse of the eight (8)
hours required by law (say, 4:30p.m. instead of 5:00 p.m.). This shortened
period, however, shall not be considered compensable working time provided
worked. 3 ~ the following conditions are complied with:
~
c. a. The employees voluntarily agree in writing to a shortened meal
MEAL BREAK period of thirty (30) minutes and are willing to waive the overtime
pay for such shortened meal period;
1. GENERAL RULE ON MEAL PERIOD.
As a general rule, every employer is required to give his employees, b. There should be no diminution in the benefits of the employees
regardless of sex, not less thim one (1) hour (or 60 minutes) time-off for regular which they receive prior to the effectivity of the shortened meal

I
period;
meals. 4
c. The work of the employees does not involve strenuous physical
Being time-off, it is not compensable hours worked. In this case, the exertion and they are provided with adequate coffee breaks in the
employee is free to do anything he wants, except to work. If he is required, morning and afternoon;
however, to work while eating, he should be compensated therefor. f d. The value of the benefits derived by the employees from the
proposed work arrangement is equal to or commensurate with the
1 PrAicy lnsb\JCOOns No. 36 dated Way 22, 1978 was issued byfle Undernecrelary of um and Empklyrnentlodarily lhe
effects d. power intenupOOns oc bro\m-ou!s on producti.le nmhouls. compensation due them for the shortened meal period as well as the
2 PrA'K.)' lnslruclions No. 36, May 22, 1978.
3 DJrabiltReccwilg PlantCompanyv. NLRC,G.R No. L-76746,Ju~27, 1987, 152SCRA328.
4 Article85, l.abocCode; Sectklo 7, Rule I, Book Ill, Rules kl~ lhe IAilorC«<e.
1

L
Section 7, Rule I, Book Ill, lbKl.
114 BAR REviEWER ON lABOR lAW CHAI'TER Ill 115
lABOR STANDARDS

overtime pay for 30 minutes as determined by the employees eight (8) hours without violating the Labor Code. Besides, the new schedule
concerned; applies to all employees in the factory similarly situated whether they are union
members or not."
e. The overtime pay of the employees will become due and
demandable if ever they are permitted or made to work beyond 4:30 6. MEAL TIME INVOLVING SEVERAL SHIFTS.
p.m.; and In a company where work is continuous for several shifts, the mealtime
f. The effectivity of the proposed working time arrangement shall be breaks should be counted as working time for purposes of overtime
for a temporary duration as determined by the DOLE Secretary.1 compensation. Consequently, the workers who are required to work in two (2)
full successive shifts should be paid for sixteen (16) hours and not fourteen (14),
4. SHORTENING OF MEAL TIME TO LESS THAN 20 MINUTES, the two hours for rest or mealtime breaks being included as compensable
EFFECT. working time. The idle time that an employee may spend for resting wherein he
The law does not allow that meal time be shortened to less than twenty may leave the work area should not be counted as working time only when the
(20) minutes. If so reduced, the same shall no longer be considered as meal time work is not continuous. 1
but merely as rest period or coffee break and, therefore, becomes compensable d.
working time. 2 WAITING TIME
5. CHANGL~G FROM 30-MINUTE .PAID "ON CALL" LUNCH BREAK
TO ONE (1) HOUR MEAL TIME WITHOUT PAY, EFFECT. 1. WHEN WA!T!NG TIME COMPENSABLE.
Waiting time spent by an employee shall be considered as working time
The case of Sime Darby Pilipinas, Inc. v. NLRC,3 is illustrative of
if waiting is an integral part of his work or the empioyee is required or engaged
this point. Prior to the pn:sent controversy, all company factory workers in by the employer to wait. 2
Mariki..1a including members of private respondent union worked from 7:45a.m.
to 3:45p.m. with a 30-minute paid "on cal/"lunch break. Petitioner, by way of In Arica v. NLRC/ it was ruled that the 30-minute assembly time
a memorandum, changed the meal time schedule from 30 minutes to one (1) practiced by the employees of the company cannot be considered "waiting
hour without pay. Since private respondent union felt affected adversely by the time" and should not therefore be compensable.
change in the work schedule and discontinuance of the 30-minute paid "on call" Although it is clear that employers must compensate employees for
lunch break, it filed on behalf of its members a complaint with the Labor Arbiter time actually spent working, questions arise as to whether the minimum wage
for unfair labor practice, discrimination and evasion ofliability. In declaring the and overtime provisions also apply to time spent waiting to perform productive
change in. the work schedule as valid, the Supreme Court held: work. Under the regulations, whether waiting time is time worked depends on
the particular circumstances. ·
"(The petitioner) rationalizes that while the old work schedule
included a 30-minute paid lunch break, the employees could be called upon to do Time spent waiting for work is compensable if it is spent "primarily for
jobs during that period as they were 'on call. ' Even if denominated as lunch the benefit of the employer and [its] business." Conversely, if the time is spent
break, this period could very well be considered as working time because the primarily for the benefit of the employee, the time is not compensable. In
factory employees were required to work if necessary and were paid accordingly determining whether waiting. time constitutes hours worked, the amount of
for working. With the new work schedule, the employees are now given a one- control the employer has over the employee during the waiting time, and
hour lunch break without any interruption from their employer. For a full one- whether the employee can effectively use that time for his own purposes is
hour undisturbed lunch break, the employees can freely and effectively use this
material.
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 2.0NDUTY.
are no longer required to work during this one-hour lunch break, there is no Waiting time while on duty is included in compensable time, especially
more need for them to be compensated for this period. We agree with the Labor when it is unpredictable, or is of such short duration that the employees cannot
Arbiter that the new work schedule fully complies with the daily work period of

Letler-Opi'lion dated Nov. 27,1989ofSecretaty Frankfn DrbltoKodakPhilippi1es. NalklnaHJeveqJinent Coolpanyv. Court of lndusbial Reialioos, G.R No. L-15422, Nov. 30, 1962
ld. Section 5[a), Rule I, Book Ill, Ibid.
3
3 GR No. 119205, April15,1998, 289 SCRA 86. G.R No. 78210, FebruaJY 28,1989,170 SCRA n6.
116 BAR IUVIEWER ON lABOR lAW CHAPTER Ill 117
lABOR STANDARDS

use the time effectively for their own purposes. In those instances, the time to sleep, eat, watch television, exercise, play ping pong or cards,
employees are to be compensated whether their work is on or off the employer's read and engage in other personal amusements; and
premises, even if the employees spend the time engaging in such amusements as • Truck drivers responsible for picking up and delivering the mail who
playing cards, watching television or reading. Examples in American were free to attend to personal matters and occupy their time as they
jurisprudence where employees were found to be engaged in compensable desired during the waiting time between scheduled runs.
waiting time include: 4. IDLE TIME.
• Assembly line workers who experienced idle time of 45 minutes or A close variance of "waiting time" is "idle time" during which an
less due to delays in delivery and mechanical failures; otherwise off-duty employee remains available to be called to work may or may
not be compensable, depending upon the situation. As a general rule, the issue
• A well pumper who resided on the employer's premises and who
of compensability depends on whether the time is spent primarily for the
was required to be on duty at least eight hours per day, seven days
employer's benefit as opposed to the employee's. The answer usually turns
per week to pump wells and repair machinery when needed;
upon the extent to which employee is able to and does use the time effectively
• Restaurant employees who were required by their employer to
for personal purposes.
report to work at a certain time even though they could not punch in
U..'ltil enough customers were present to make work available; An evaluation of all the relevant facts become necessary to determine
• Truck washers who were idle while waiting for the arrival of the r;ompensability. The following, among others, should be considered:
next truck; a. The employer requires the employte to remain on the employer's
• Truck drivers carrying the mail who had periodic layovers lasting premises;
two hours or less due to loading or unloading problems; b. The employer requires the employee to wait at home for calls or
• Oil well casing crews who had to wait for casings after they set up messages or confines the employee to a highly-restricted
their equipment; geographical area;
• Truck drivers and helpers who were required by their employer to c. The employee receives numerous or frequent work assignments
wait on premises for assignments; and during the on-call period;
• Employees who experienced occasional idle time caused by d. The employee must respond within a short timeframe under the
machinery breakdowns. circumstances (especially if the employee must travel somewhere to
3.0FFDUTY do the work);
e. Requires the employee to be on-call frequently, never relieves the
Based on U.S. jurisprudence, periods during which an employee is
employee from on-call status, does not permit the employee to
completely relieved from duty and which are long enough to enable him to use
exchange calls or call periods with another worker, or does not
the time effectively for his own purposes are not hours worked. Whether the
time off is truly sufficient to enable employees to effectively use the time for
their own purposes is a factual issue dependent upon the circumstances. I allow the employee to turn down at least some calls; and
f. There is an agreement or understanding covering the arrangement.
Some combination of the foregoing factors is present when idle on-call
Circumstances considered by the courts include the duration of the time
time is found to be compensable work.
off and any other facts which may place restrictions on the employees.
Examples of cases where courts have found that employers are justified in 5. COMMUTING TIME AND TRAVEL TIME.
denying compensation for idle time include: a. Travel from home to work.
• A telephone dispatcher who only had to answer a small number of An employee who travels from home before his regular workday and
telephone calls for non-emergency ambulance care each night and returns to his home at the end of the workday is engaged in ordinary home-to-
who was allowed to pursue her own personal, social and business work travel which is a normal incident of employment and therefore not
activities during the evening hours; considered as hours worked. This is true whether he works at a fixed location or
• Employees who were required to live on the employer's premises at different jobsites.
during their off-shift hours, but who were free during their off duty But while normal travel from home to work is not working time, if an
employee receives an emergency call outside of his regular working hours and is
118 BAR REviEWER ON lABOR lAW CHAPTER Ill
119
lABOR STANDARDS

required to travel to his regular place of business or some other work site, all of 2) In computing overtime work, "regular wage;' or "basic salary"
the time spent in such travel is considered working time. means "cash" wage only without deduction for facilities provided
·b. Travel that is all in the day's work. by the employer.
Time spent by an employee in travel as part of his principal activity, 3) "Premium pay" means the additional compensation required by law
such as travel from jobsite;to jobsite during the workday, must be counted as for work performed within eight (8) hours on non-working days,
hours worked. Where an employee is required to report at a meeting place to such as regular holidays, special holidays and rest days.
receive instructions or to perform other work there, or to pick up and carry tools,
the travel from the designated place to the workplace is part of the day's work 4) "Overtime pay" means the additional compensation for work
and must be counted as hours worked regardless of contract, custom or practice. performed beyond eight (8) hours.
If an employee normally finishes his work on the premises at 5:00p.m. and is 5) Illustrations on how overtime is computed:
sent to another job which he fmished at 8:00p.m. and is required to return to his
employer's premises arriving at 9:00 p.m., all of the time is working time. a) 'For overtime work performed on an ordinary day, the
However, if the employee goes home instead of returning to his employer's overtime pay is plus 25% ofthe basic hourly rate.
premises, the travel after 8:00p.m. is work-to-home (home-to-work) travel and b) For overtime work performed on a rest day or on a
is not hours worked. special day, the overtime pay is plus 30% of the basic
c. Travel away from home. hourly rate which includes 30% additional compensation as
Travel that keeps the employee away from home overnight is travel provided in Article 93 [aJ o[the Labor Code.
away from home. Travel away from home is cleariy working time when it cuts c) For overtime work performed on a rest day which falls
across the employee's workday. The employee is simply substituting travel for on a speci!l.l d~y, the overtime pay is plus 30% o(the basic
other duties. The time is not only hours worked on regular working days during I, hourly rate which includes 50% additional compensation as
normal working hours but also daring the corresponding hours on non-working provided in Article 93 [cl o[the Labor Code.
days. Thus, if an employee regularly works from 9:00 a.in. to 5:00 p.m. from
Monday through Friday, the travel time during these hours is working time. d) For overtime work performed on a regular holiday, the
overtime pay is plus 30% of the basic hourly rate which
Regular meal period is not counted. As an enforcement policy, the Department I includes 100% additional compensation as provided in
of Labor and Employment does not consider as working time the time spent in I
travel away from home outside of regular working hours as a passenger on an I Article 94 [bl o[the Labor Code.

I
airplane, train, boat, bus or automobile. e) For overtime work performed on a rest day which falls
Any work which an employee is required to perform while travelling on a regular holiday, the overtime pay is plus 30% o[the
must be counted as hours worked. An employee who drives a truck, bus, basic hourly rate which includes 160% additional
automobile, boat or airplane or an employee who is required to ride therein as an compensation.
assistant or helper, is working while riding, except during bona-fide meal 2. PREMIUM PAY VS. OVERTIME PAY.
periods or when he is permitted to sleep in adequate facilities furnished by the
employer. "Premium pay" refers to the additional compensation required by law
for work performed within eight (8) hours on non-working days, such as rest
e. days and regular and special holidays. 1
OVERTIME
"Overtime pay" refers to the additional compensation for work
1. SOME PRINCPLES ON OVERTIME WORK.
performed beyond eight (8) hours a day. Every employee who is entitled to
1) Work rendered after normal eight (8) hours of work is called premium pay is likewise entitled to the benefit of overtime pay. 2
"overtime work."
1
No. Ill, DOLE Handbook on Wo!l<ers Statutory Monetary Benefits.
2
No. IV, Ibid.
(HAI'TER Ill 121
BAR REVIEWER ON lABOR lAW lABOR STANDARDS
120
3. When there is urgent work to· be performed on machines,
3. BUILT-IN OVERTIME PAY. installations or equipment, or in order to avoid serious loss or
In case the employment contract stipulates that the compensation damage to the employer or some other causes of similar nature;
includes built-in overtime pay and the same is duly approved by the Director of 4. When the work is necessary to prevent loss or damage to
the Bureau of Employment Services (now Bureau of Local Employment), the perishable goods;
non-payment by the employer of any overtime pay for overtime work is justified 5. When the completion or continuation of work started before the g1h
and valid.' hour is necessary to prevent serious obstruction or prejudice to the
business or operations of the employer; and
In PAL Employees Savings and Loan Association, Inc. !PESALA]
v. NLRC,l where the period of normal working hours per day was increased to 6. When overtime work is necessary to avail of favorable weather or
twelve (12) hours, it was held that the employer remains liable for whatever environmental conditions where performance or quality of work is
deficiency in the amount for overtime work in excess of the frrst eight (8) hours, dependent thereon.
after recomputation shows such deficiency. c. May an employee validly refuse to render overtime work under
4. VALIDITY OF CBA PROVISION ON OVERTIME WORK. any of the afore-said circumstances?
Generally, the premium pay for work performed on the employee's rest No, an employee cannot validly refuse to render overtime work if any
days or regular and special holidays is included as part of the regular rate of the of the afore-mentioned circumstances is present. When an employee refuses to
employee in the computation of overtime pay for any overtime work rendered render emergency overtime work under any of the foregoing conditions, he may
on said days, especially if the employer pays only the minimum overtime rates be dismissed on the ground of insubordination or willful disobedience of the
prescribed by law. The employees and employer, however, may stipulate in their lawful order of the employer.
CBA the payment of overtime rates higher than those provided by law. Such 6. UNDERTIME NOT OFFSET BY OVERTIME.
agreement may be considered valid only ifthe stipulated overtime pay 3
rates will The following rules shall apply:
yield to the employees not less than the minimum prescribed by law. 1. Undertime work on any particular day shall not be offset by
overtime on any other day.
5. EMERGENCY OVERTIME WORK. 2. Permission given to the employee to go on leave on some other day
a. General rule. of the week shall not exempt the employer from paying the

I
The general rule remains that no employee may be compelled to render additional compensation required by law such as overtime pay or
night shift differential pay.
overtime work against his will.
7. WAIVEROFOVERTIMEPAY.
b. Exceptions when employee may be compelled to render The right to claim overtime pay is not subject to a waiver. Such right is
overtime work: governed by law and not merely by the agreement of the parties.'
1. When the country is at war or when any other national or local While rights may be waived, the same must not be contrary to law,
emergency has been declared by the National Assembly or the
I public order, public policy, morals or good customs or prejudicial to a third
Chief Executive; person with a right recognized by law.Z
2. When overtime work is necessary to prevent loss of life or But if the waiver is done in exchange for and in consideration of certain
property or in case of imminent danger to public safety due to valuable privileges, among them that of being given tips when doing overtime
actual or impending emergency in the locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other
disasters or calamities;
1 Mercader v. Mania POOCUJ, G.R. No. L·8373, Sept 28, 1956; Cruz v. Yee Sing, G.R. No. L-12046, Oct 1959; Manila
Terrnb1a1Co.,lnc. v. CR, G.R. No. L-9265, Apfif 29, 1957,480. G. 7, p. 2725,91 PhD. 625.
1 Erf:!ileeri'tg~~ Inc. v. Mnisterofl.abor,G.R. No.L-64967,Sept23,1985 2 Article 6, CMI Cede;~ Sugar Develop!rent Co., Inc. v. Court of Industrial Relations, G.R. No. L-39387, June 29,
2 G.R. No. 105963, August 22, 1996. 1982.
3 No. rv [DJ, DOLE Handbocl< on WC!kers SlabJ1Dty M:lnetar{ Benefit.
122 BAR REviEWER ON lABOR lAW CHAPTER III 123
lABOR STANDARDS

work, there being no proof that the value of said privileges did not compensate b. On a rest day or special day or regular holiday. Plus 10% of
1
for such work, such waiver may be considered valid. 130% of regular hourly rate on said days or a total of 110% of
130% of the applicable regular hourly rate.
f.
NIGHT SHIFT DIFFERENTIAL g.
REST PERIODS
1. HOW RECKONED.
Night shift differential is equivalent to 10% of employee's regular wage
1.
for each hour of work performed between 10:00 p.m. and 6:00 a.m. of the
WEEKLY REST DAY
following day.
2. NIGHT SHIFT DIFFERENTIAL PAY VS. OVERTIME PAY. 1. DURATION.
When the work of an employee falls at night time, the receipt of It shall be the duty of every employer, whether operating for profit or
overtime pay shall not preclude the right to receive night differential pay. The not, to provide each of his employees a rest period of not less than twenty-four
reason is the payment of the night differential pay is for the work done during (24) consecutive hours after every six (6) consecutive normal work days.'
the night; while the payment of the overtime pay is for work in excess of the 2. PREROGATIVE OF EMPLOYER TO SCHEDULE; EXCEPTION-
regular eight (8) working hours. RELIGIOUS GROUND.
3. COMPUTATION OF NIGHT SHIFT DIFFERENTIAL PAY. The employer shall determine and schedule the weekly rest day of his
employees subject to CBA and to such rules and regulations as the DOLE
1) Where night shift (10 p.m. to 6 a.m.) work is regular work. Secretary may provide. Howev::r, the employer shall respect the preference of
a. On an ordinary dav: Plus 10% of the basic hourly rate or a employees as to their weekly rest day when such preference is based on
. . grounds..2
reItg10us
total of 110% of the basic hourly rate.
In other words, the employer's right and prerogative is subject to the
b. On a rest day, special day or regular holiday: Plus 10% of preference in the choice by the employee of his rest day based on religious
the regular hourly rate on a rest day, special day or regular grounds. Article 91, in fact, makes the employer duty-bound to respect such
holiday or a total of 110% of the regular hourly rate. preference of the employee if based on religious grounds.
2) Where night shift (10 p.m. to 6 a.m.) work is overtime work. Where, however, the choice of the employees as to their rest day based
on religious gronnds will inevitably result in serious prejudice or obstruction to
a. On an ordinary day: Plus 10% of the overtime hourly rate on the operations of the undertaking and the employer cannot normally be expected
an ordinary day or a total of 110% of the overtime hourly rate to resort to other remedial measures, the employer may so schedule the weekly
on an ordinary day. rest day of their choice for at least two (2) days in a month. 3
b. On a rest day or special day or regular holiday: Plus 10% 3. SUNDAY NOT THE REST DAY DESIGNATED BYLAW.
of the overtime hourly rate on a rest day or special day or With the repeal of the Blue Sund«y Law4 by the Labor Code,5 Snnday is
regular holiday. no longer the rest day designated by law. Consequent to such repeal, the rule
3) For overtime work in the night shift. Since overtime work is not now is that all establishments and enterprises may operate or open for business
usually eight (8) hours, the compensation for overtime night shift
work is also computed on the basis of the hourly rate.
1 Article 91 (a), Labor Code.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate 2 Article 91(b), ld.
or a total of 110% of 125% ofbasic hourly rate. 3 Section 4, Rule Ill, Bcxi Ill, Rukls 1o lf1'4llemen!the Labor Code.
4
RA No. 946 (June 20, 1953], olherMse kn<MI1 as toe '!fllue &mday Law; prc7Mes that no COIMle!dal, ildustrial or
agliculb.nal enle!plise or establishment, id.Jdirg stores and shops of 8trf kind, shall be ~ oo arrJ Sunday, Christmas
Day, New Veal's Day, HolyThtnsday, <VldGood FOOa'{, from 12:00 midnghl1o 12:00 11Dlght
1 Merak:o WO!kers Unbn v. Mania EledOC Co., G.R. No. L-11876, tMj 29, 1959. s Article 317 [302], Labor Code; Section 1[q], Rule Ill, Bcxi VII, Rukls 1o Implement the Labor Code.
124 BAR RI:VIEWER ON lABOR lAW
I CHAPTER Ill
lABOR STANDARDS
125

on Sundays and holidays provided that the employees are given the weekly rest
day and the resultant benefits as provided in the law and its implementing rules. 1
4. SOME PRINCIPLES ON WEEKLY REST DAY.
I e) Where the nature of the work is such that the employees have to
work continuously for seven (7) days in a week or more, as in the
case of the crew members of a vessel to complete a voyage and in
• Where the weekly rest is giveri to all employees simultaneously, the other similar cases; and
employer should make known such rest period by means of a written notice f) When the work is necessary to avail of favorable weather or
posted conspicuously in the workplace at least one (1) week before .it environmental conditions where performance or quality of work is
becomes effective? dependent thereon. 1
• Where the rest period is not granted to all employees simultaneously and 2. EXCLUSIVE NATURE OF THE ENUMERATION.
collectively, the employer shall make known to the employees their No employee sh~ll be required against his will to work on his
respective schedules of weekly rest day through written notices posted scheduled rest day except under the circumstances provided therein where work
conspicuously in the workplace at least one (I) week he fore they become on such day may be compelled. 2
effective.3 However, in case work on rest day i~ required and not one of the said
• An express waiver of compensation for work on rest days and holidays circumstances is present, the employee may work during such rest day but only
provided in an employment contract which fixes annual compensation of on voluntary basis. And once an employee volunteers to work on his rest day,
the employees is not valid and does not operate to bar claims for extra he should express such willingness and desire to work in writing. Accordingly,
compensation therefor. 4 he should be paid the additional compensation ior working on his rest day under
• Rest day cannot be offset by regular workdays. 5 the law. 3
2. h.
EMERGENCY REST DAY WOILT( HOLIDAY PAY, 13mMONTHPAY
1. WHEN EMPLOYER MAY REQUIRE WORK ON A REST 1.
DAY. HOLIDAY PAY
The employer may require any of its employees to work on their 1. COVERAGE; EXCLUSIONS.
scheduled rest day for the duration of the following emergency and exceptional
conditions: Generally, all employees are entitled to and covered by the law on
holiday pay, 4 except:
a) In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster a) Those of the government and any of the political subdivisions,
or calamity, to prevent loss of life and property, or in case of force including government-owned and controlled corporations;
majeure or imminent danger to public safety; b) Those of retail and service establishments regularly employing less
b) In case of urgent work to be performed on machineries, equipment, than ten (10) workers;
or installations, to avoid serious loss which the employer would c) Domestic workers or Kasambahays;5
otherwise suffer; d) Persons in the personal service of another;
c) In the event of abnormal pressure of work due to special e) Managerial employees as defined in Book III of the Labor Code;
circumstances, where the employer cannot ordinarily be expected to f) Field personnel and other employees whose time and performance
resort to other measures; is unsupervised by the employer;
d) To prevent serious loss of perishable goods;
1 Section 6, Rule Ill, Book Ill, Rules to lmplem€ntthe Labor Code; Alticle92, l.abo'Code.
I Section 2, Rule 1\1, Book 1\1, ibid. 2 ld.
2 Section 5(a], Rule Ill, Book Ill, Ibid. 3 k!.
3 Section 5[b], Rule Ill, Book Ill, Ibid. Alticle 94' l.alxr Code.
4
k, held in Mercury Drug Co., Inc. v. Dayao, G.R No.l-30452, Sept 30, 1982. Formerly called domestic helper or househelper. See R.A. No. 10361, otherwise known as the ~Domeslic Worl<ers
s Lagatic v. NLRC. GR No.121004, Jan. 28, 1998. Acf [January 18, 2013].
126 BAR REviEWER ON lABOR lAW CHAPTER l!l · 127
lABOR STANDARDS

g) Those who are engaged on task or contract basis or purely 9492. 1 For the movable holidays, the President is required to issue, at least six
commission basis; (6) months prior to a movable holiday, a Proclamation fiXing the specific date of
h) Those who are paid a fixed amount for performing work that holiday.
irrespective of the time consumed in the performance thereof; For year 2017, Proclamation No. 50 was issued on August 16, 2016 by
i) Other officers and members of the managerial staff; the President declaring the following regular holidays and special (non-working)
j) Members of the family of the employer who are dependent on him days:
for support. 1
2. HOLIDAY PAY, MEANING AND PURPOSE. A. Regular Holidays
Holiday pay is a legislated benefit enacted as part of the Constitutional • New Year's Day -January 1, 2017 (Sunday)
imperative that the State shall afford protection to labor. 2 Its purpose is not • Araw ng Kagitingan - April9, 2017 (Sunday)
merely to prevent diminution ofthe monthly income of the workers on account • Maundy Thursday - April13, 2017 (Thursday)
of work interruptions. In other words, although the worker is forced to i.ake a • Good Friday - April14, 2017 (Friday)
rest, he earns what he should earn, that is, his holiday pay.3 It is also intended to • LaborDay -May 1, 2017 (Monday)
enable the worker to participate in the national celebrations held during the days • Independence Day -June 12, 2017 (Monday)
identified as being imbued with great historical and cultural significance. • Eid'l Fitr - to be announced
Independence Day (June 12), Araw ng Kagitingan (April 9), National • National Heroes Day -August 28, 2017 (Monday)
Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal • Eidul Adha - to be announced
Day (December 30) were declared national holidays to afford Filipinos with a • Bonifacio Day -November 30, 2017 (Thursday)
recurring opportunity to commemorate the heroism of the Filipino people, • Christmas Day - December 25, 20 17 (Monday)
promote national identity, and deepen the spirit of patriotism. Labor Day (May • Rizal Day -December 30, 2017 (Saturday)
1) is a day traditionally reserved to celebrate the contributions of the working
class to the development of the nation; while the religious holidays designated in B. Special (Non-Working) Days
Executive Order No. 203 [lately under R.A. No. 9177 (November 13, 2002) and
R.A. No. 9492 (July 25, 2007) on Eidul Fitr; and R.A. No. 99849 (December • Additional special
11, 2009) on Eidul Adha] allow the worker to celebrate his faith with his family. 4 non-working day -January 2, 2017 (Monday)
Article 94 of the Labor Code, as well as the subsequent amendments • Chinese New Year -January 28,2017 (Saturday)
thereto, afford a worker the enjoyment of twelve (12) paid regular holidays. • EDSA Revolution
The provision on holiday pay is mandatory, regardless of whether an • Anniversary -February 25, 2017 (Saturday)
employee is paid on a monthly or daily basis. 5 • Black Saturday -April 15, 2017 (Saturday)
3. LIST OF REGULAR HOLIDAYS. • Ninoy Aquino Day - August 21, 2017 (Monday)
• Additional special
A fixed list of dates of holidays presents a challenge because some of non-working day - October 31, 2017 (Tuesday)
the regular holidays and nationwide special holidays are movable, per R.A. No. -November 1, 2017 (Wednesday)
• All Saints Day
• Last Day of the Year -December 31, 2017 (Swiday)

1 M:;ie 82, Labor Co:le; See also Section 1, RukliV, Book Ill, Rules kl inlJiement l!le Labor Code; No. II (A], OOLE
The proclamations declaring national holidays for the observance of
Hanttlook on Worke!S Sla1uloly Mlnetay Benefifs. Eidul Fitr and Eidul Adha will be issued after the approximate dates of the
2 Section 3, M XIII, 1987 Constitution.
3 Jose Rizal College v. NLRC Clld NATOW, G.R No. 65482, Dec. 1, 1987.
4 Asm TllllS11"issoo Co!pcJatkJn v. CA, G.R No. 1«664, Mcvch 15,2004.
5
lnsulcr~kd Asiaandl'inericaEftl>loyees' Unoo{IBMEU)v. ~. G.R. No.L-52415, Ocl23,1984,132 SCRA663;
1 Approvied on July 25, 2007, entitled 'M Act Rationalizirg the Celeblalion of National Holidays Amendi1g lor the Pul)l05e
0\artered Bank ~ees Association v. Ople, G.R No. L-44717, Aug. 28, 1985, 138 SCRA 273; Man1radetfM\IC Section 26, Chapter 7. Book Iof Exeartive Order No. 292, as Mlended, OtherMse l<nct.m as Ble Adrni16b'ative Code of
DMsloo ~loyees ood Workers Unoo v. BacungM, G;R No. L-48437, Sept 30, 1986, 144 SCRA 510. 1987.'

•...
,...,....__,
CHAPi'ER Ill 129
BAR REvi£W!'R ON LABOR LAW LABOR STANDARDS
128
• ![the employee worked, he/she shall be paid 200 percent of his/her
Islamic holidays have been determined in accordance with the Islamic calendar regular salary for that day for the first eight hours. Computation:
(Hijra) or the lunar calendar, or upon Islamic astronomical calculations, (Daily rate + COLA) x 200%. The COLA is also included in
whichever is possible or convenient. To this end, the National Commission on computation of holiday pay.
Muslim Filipinos (NCMF) shall inforni. the Office ofthe President on the actual
1 • If the employee Worked in excess of eight hours (overtime work),
dates on which these holidays shall respectively fall. he/she shall be paid an additional30 percent of his/her hourly rate
For 2017, President Rodrigo Duterte declared June 26, 2017 as a on said day. Computation: Hourly rate of the basic daily wage x
regular holiday nationwide in observance of the Eid'l Fitr or end of Ramadan. 200% x 130% x number of hours worked.
The declaration was cited in his Proclamation 235 which he signed on June 16, • !{the employee worked during a regular holiday that also falls on
2017. his/her rest dav, he/she shall be paid an additional 30 percent of
4. TOTAL OF 12 REGULAR HOLIDAYS. his/her daily rate of 200 percent. Computation: (Daily rate +
COLA) x 200%) + (30% [Daily rate x 200%)].
It is important to note that the total number of regular holidays is
twelve (12) days per year. This is important for purposes {lf reckoning certain • If the employee worked in excess of eight hours (overtime work)
divisors and computation of employee benefits. during a regular holiday that also (ails on his/her rest dav, he/she
shall be paid an additional30 percent of his/her hourly rate on said
S.PREMWMPAY. day. Computation: (Hourly rate of the basic daily wage x 200% x
"Premiam pay" refers to the additional compensation required by law 130% x 130% x number of hours worked);
to be paid for work performed within the regular eight (8) hours on non-working Simplified Computatio!':
2
days, such as rest days, regular and special holidays.
a. If "TfofK is rendered on an employee's regular wcrkday-
This term should not be confused with "overtime pay" which refers to
the additional compensation for work performed beyond or in excess of the • If unworked - l 00%
regular eight (8) hours of daily work. • If worked - 1st 8 hours - 200%
Premium pay and overtime J}ilY are not mutually exclusive. Every • Work in excess of 8 hours -plus 30% of hourly rate on said day
employee who is entitled to premium pay is likewise entitled to the benefit of b. If it is an employee rest day-
3
overtime pay if overtime work is actually rendered.
• If unworked- 100%
6. COMPUTATION OFPREMIUMPAYFORHOLIDAYS. • If worked- first 8 hours - plus 30% of 2\JO%
4
Labor Advisory No. 06, Series of 2013, on the Payment of Wages for • Work in excess of 8 hours- plus 30% of hourly rate on said day
the Regular Holidays, Special (Non-working) Days, and Special Holiday (For all
Schools) for the Year 20 14, specifically promulgated the following rules that 2. SPECIAL (NON-WORKING) DAYS
shall apply: • ![the emplovee did not work. the "no work, no pay'' principle shall
apply, unless there is a favorable company policy, practice, or
1. REGULAR HOLIDAYS CBA granting payment on a special day.
• If the emplovee did not work, he/she shall be paid 100 percent of
• I[ the employee worked. he/she shall be paid an additional 30
his/her salary for that day. Computation: (Daily rate + Cost of
Living Allowance) x 100%. The COLA is included in the percent of his/her daily rate on the first eight hours of woJ:k..
Computation: [(Daily rate x 130%) +COLA).
computation of holiday pay.
• If the employee worked in excess of eight hours (overtime work), ·
he/she shall be paid an additional 30 percent of his/her hourly rate
1 See Section 2, f'roclanation No. 50 Ssued on August 16, 2016 on said day. Computation: (Hourly rate of the basic daily wage x
2 No.lll, DOlE HMdbook on W0111e;s Statukxy M:lneti:My Benefits.
3 No.IV,W.
130% x 130% x number of hours worked).
~ Issued on October 1, 2013 by Acting Secretay Dania P. Cruz.
130 BAR REVIEWER ON iABOR lAW
CHAPTER Ill 131
lABOR STANDARDS
• If the employee worked during a special day that also falls on 4) When day preceding regular holiday is a non-working day or
his/her rest day, he/she shall be paid an additional fifty percent of scheduled rest day - should not be deemed to be on leave of
his/her daily rate on the first eight hours of work. Computation: absence on that day, in which case, employees are entitled to the
((Daily rate x 150%) +COLA]. regular holiday pay if they worked on the day immediately
• If the employee worked in excess of eight hours (overtime work) preceding the non-working day or rest day.'
during a special dav that also falls on his/her rest day, he/she shall 8. RIGHT TO HOLIDAY PAY IN CASE OF TEMPORARY CESSATION
be paid an additional30 percent of his/her hourly rate on said day. OF WORK.
Computation: (Hourly rate of the basic daily wage x 150% x 130%
x number of hours worked). a. Temporary or periodic shutdown or cessation of work not due
to business reverses.
Simplified Computation: In cases of temporary or periodic shutdown and temporary cessation of
a. If unworked- work of an establishment, as when a yearly inventory or when the repair or
cleaning of machineries and equipment is undertaken, the regular holidays
• No pay, except if there is a company policy, practice, or collective falling within the period should be compensated in accordance with the
bargaining agreement (CBA) which grants payment of wages on Implementing Rules. 2
special days even ifunworked. b. Temporary cessation of operation due to business lo~ or
b. if worked - r~verses.

• First 8 hours- plus 30% oft.1e daily rate of 100% The regular holidays during the temporary cessation of operation of an
enterprise due to business losses or financial reverses as authorizt:d by the
• Work in excess of8 hours- plus 30% of hourly rate on said day
DOLE Secretary may not be paid by the employer. 3
c. If falling on th;! employee's rest day and if worked - 1-A.
• First 8 hours- plus 50% of the daily rate of 100% HOLIDAY PAY/PREMIUM PAY OF
• Work in excess of 8 hours - plus 30% of hourly rate on said day TEACHERS, PIECE WORI(ERS, TAKAY:
SEASONAL WORKERS, SEAFARERS
7. RIGHT TO HOLIDAY PAY IN CASE OF ABSENCES.
1. RIGHT TO HOLIDAY PAY OF TEACHERS.
1) ·Employees on leave of absence with pay- entitled to holiday pay
when they are on leave of absence with pay. 1 ·
a. Private school teachers, in general.
2) Employees on leave of absence without pay on the day Private school teachers, including faculty members of colleges and
immediately preceding the regular holiday - may not be paid the universities, may not be paid for the regular holidays during semestral vacations.
required holiday pay if they have not worked on such regular They shall, however, be paid for the regular holidays during Christmas
holiday. 2 vacation. 4
3) Employees on leave while on SSS or employee's compensation b. Holiday pay of hourly-paid teachers.
beneflls - Employers should grant the same percentage of the A school is exempted from paying hourly-paid faculty members their
holiday pay as the benefit granted by competent authority in the pay for regular holidays, whether the same be during the regular semesters of
form of employee's compensation or social security payment, the school year or during semestral, Christmas, or Holy Week vacations.
whichever is higher, if they are not reporting for work while on However, it is liable to pay the faculty members their regular hourly rate on days
such benefits? declared as special holidays or if, for some reason, classes are called off or

1 Section 6(c}, Rule IV, Book Ill, Ibid.; No. II [EJ, Ibid.
1 SecOOn 6 (a}, Rule IV, Book Ill, Rules '> 1fr91ement the \.abor Code; No. II {E}, OOLE Handbook on Workers Stali.Jtoly 2 Section 7(a}, Rule IV, Bed Ill, lbi:l.; No.I! [F], llid.; See also Rule IV [Holidays With Pay], Bed Ill of lhe Rules to Implement
M:lnetaly Benefits. lhe l.aboc Code.
2 SecOOn 6(a}, Rule IV, Book Ill, Ibid.; No. II [EJ.Ibid. 3 Section 7[b], Rule IV, Book Ill, W.
3 Section 6[b), Rule IV, Book Ill, lbkl.; No. II {E}, Ibid.

L
~ SecOOn 8[a}, Rule IV, Book Ill, Ibid.; No. II G}, Ibid.


132 BAR REVIEWER ON lABOR lAW
CHAPTER Ill 133
lABOR STANDARDS
shortened for the hours they are supposed to have taught, whether extensions of plantations where the work is performed in bulk or in volumes,
class days be ordered or not; and in case of extensions, said faculty members hence, difficult to quantify. 1
shall likewise be paid their hourly rates should they teach during said

extensions.·
1
3. RIGHT TO HOLIDAY PAY OF SEASONAL WORKERS.
2. RIGHT TO HOLIDAY PAY OF PIECE-WORKERS, TAKAY AND Seasonal workers are entitled to holiday pay while working during the
OTHERS PAID BY RESULTS. season. They may not be paid the required regular holiday pay during off-season
where they are not at work. 2
a. Holiday pay of piece workers, takay or employees paid by
results. 4. RIGHT TO HOLIDAY PAY OF SEAFARERS.
Where a covered employee is paid by results or output such as payment Any hours of work or duty including hours of watchkeeping performed
on piece-work, his holiday pay should not be less than his average daily by the seafarer on designated rest days and holidays shall be paid rest day or
earnings for the last seven (7) actual working days preceding the regular holiday pay. 3
holiday. In no case, however, should the holiday pay be less than the applicable The following shall be considered as holidays at sea and in port:
• • 2
statutory mmmmm wage rate.
b. Workers paid by results classified into supervised and New Year's Day January 1
unsupervised. tviaundy Thursday Movable date
Good Friday Movable date
The principal test tO determine entitlement to holiday pay is whether Araw ng Kagitingan
the employees' time and performance of the work are "supervised" or (Bataan & Corregidor Day) - April9
"unsupervised" by their employer. If supeiVised, the employee is entitled to Labor Day Mayl
holiday pay. IfunsupeiVised, he is not? Independence Day June 12
The distinctions between supervised and unsupervised workers paid by National Heroes Day Last Sunday of August
results are as follows: All Saints Day November I
Bonifacio Day November30
(1) Those whose time and performance are supervised by the Christmas Day December25
employer. Here, there is an element of control and supervision RizalDay December 304
over the manner as to how the work is to be performed.· A piece-
rate worker belongs to this category especially if he performs his It must be noted that the foregoing listing and enumeration of the
work in the company premises; and holidays are different from that prescribed for local workers. (See above listing
thereof).
(2) Those whose time and performance are unsupervised. Here, the
employer's control is over the result of the work. Workers on 5. SOME IMPORTANT PRINCIPLES ON HOLIDAYS.
pakyao and takay basis belong to this group. Both classes of • Non-Muslims are entitled to Muslim holiday pay during Muslim
workers are paid per unit accomplished. Piece~te payment is holidays5 considering that all private corporations, offices, agencies, and
generally practiced in garment factories where work is done in the entities or establishments operating within the designated Muslim provinces
company premises, while payment on pakyao and takay basis is and cities are required to observe Muslim holidays, hence, both Muslims
commonly observed in the agricultural industry, such as in sugar

1 larrbov. NLRC, GR fob.111042, 0c100er26, 1999,317 SCRA420.


2 SecOOn 8 (c], Rlre PI, Boct Ill, Rilles Ill in1Jiement lhe labor Code; No. II G], DOLE HMdiJod( on WOI1<ecs Statutoly
1 Jose Rizal College v. NLRC, GR No. 65482, December 1, 1987. t.'ooelay lleneft;,

..
2 Section 8 [b], Rule IV, Book Ill, Rules to lfr4llement l1e t.m COOe; No. II G], OOI.E HinJxd oo Wtrtem StaWy 3 SecOOn 11 (Overline ood Ho&tays), Merrxxandum Citular fob. 10, Series d 2010, OctOOer 26, 2010 [Amended Sla1d.W
Mxletaly Beoefi1s. Terms and Conditions Govenilg the Ovefseas ~ d Filipino Seafarers OtHloMI Ocean-Goi'q Sh~].
J lm' Coogress d the ~Hippiles v. NLRC, G.R. No. 123938, May 21, 1998, 290 SCRA 509; Tan v.la;jrama, GR fob. 4 ld.

L
151228, August 15, 2002. 5 San MiJuel Cotporalion v. The Hon. CA, G.R No. 146n5, Jan. 30, 2002.

~
BAR REVIEWER ON lABOR lAW
134 CHAPTERlll 135
lABOR STANDARDS
and Christians working within the Muslim areas may not report for work on
the days designated by law as Muslim holidays.
1 2.
• The day designated by law for holding a general election is deemed a 13THMONTHPAY2
2
regular holiday.
• In case of two (2) regular holidays falling on the same day, the worker 1. COVERAGE.
should be compensated as follows: All employers are required to pay all their rank-and-file employees, a
o If unworked - 200% for the two regular holidays; 13th month pay not later than December 24 of every year.
o If worked- 200% for the two regular holidays~ premium of 100% Only rank-and-file employees, regardless of their designation or
3
for work on that day. employment s1atus and irrespective of the method by which their wages are
• "Monthly-paid" employees are not excluded from the coverage of holiday paid, are entitled to the 13th month pay benefit.3 Managerial employees are not
pay. 4 (Note: A "monthly-paid employee" refers to one who is paid his entitled to 13th month pay. 4
wage or salary for every day of the month, including rest days, Sundays,
2. EXCLUSIONS/EXEMPTIONS FROM COVERAGE.
regular or special days, although he does not regularly work on these days.
A "daily-paid employee" refers to one who is paid his wage or salary only The following employers are not covered by the 13th month pay law: 5
on the days he actually worked, except in cases of regular holidays whereir. l) The government and any of its political subdivisions, including
he is paid his wage or salary even if he does not work during those days, government-owned and controlled corporations, except those
provided that he is present or on leave of absence with pay or. the working corporations operating essentially as private subsidiaries of the
day immediately preceding the regular holidays. As distinguished from government. 6
monthly-paid employees who are assured of being paid tor every day of the 2) Employers already paying their employees 13th month pay or more
month, the provision of the Labor Code on holiday pay is principally in a calendar year or its equivalent at the time of the issuance of the
intended to benefit daily-paid employees who are normally bowtd by the Revised Guidelines. 7
principle of "no work, no pay. " Before the advent of the Labor Code, they
3) Employers of those who are paid on purely commission, boundary,
are not paid for unworked regular holidays).
or task basis, and those who are paid a flxed amount for
• Regular or special holidal pay benefit cannot be withdrawn after being
performing a specific work, irrespective of the time conswned in
practiced for quite a time as when it has been practiced continuously for
' 6 the performance thereof, except where the workers are paid on
eight (8) months. piece-rate basis, in which case, the employer shall be covered by
• Offsetting of holiday work with work on regular days is not allowed.'
the Revised Guidelines insofar as such workers are concerned.
Workers paid on piece-rate basis shall refer to those who are
paid a standard amount for every piece or unit of work produced
' The 1999 Hadlodl oo WJm' SllmJllxy ~. appriMld by 11en DOLE Sooelily Bie1weni:1o t. Laguesma oo
that is more or less regularly replicated without regard to the time
llecenter 14, 1999.
2 Article 94{c), labor Code; See Associated labor UnionS (AL.U)-TUCP v. Lefrondo.M:Inl!jo, G.R No. 111988, Oct 14, spent in producing the same. 8
1994, 237 seRA 621 v.t1ich i"r.dles l1e elecOOn d SaroolftoJ Kal!EM (SK). The lem1 "genenll eloctions' meMS, illle
od!Xldfle Sa1ggldrg ~ (SK) eledions, lhe -eledb1s b" l11l!rOOeiS dlleSK,.as disquished fum lie
special eledb1s b" such oflicers.MlreoYer,lhe factllaloo~llose beMeen 15ald21 tldt p!tillhe electic:n ilrmerrbefs
d the SK does rd mr:l\e such eleclkx1 ~ less a reglD' kX3 eledloo. Coosequentf, I was -held flat v.tletler illle
ali"IIIMd toe CBAalle t.m'Ctde. Decerber 4, 1992 wasaholda,tb"v.tth horiday P1Jf sh!U:Ibepaid by resp!X1dl!ll ' lagatic v. NLRC, G.R No. 121004, .lat. 28,1998.
2 PD. No. 851 J)ecerrbel' 16, 1975; Memorandum Order No. 28 ~ 13, 1986; ReWled Gtroernes on 1he
~-
3 See "Explana\Oiy Bli\letin on Wolke!S' Entitlement to Holiday Pay on 9 Ap!l1993, • ng Kagitingan and Good ~ d lie 13111 lv'ooth Pay l.aN [No'lentler 16, 1987'
Fooay' issued on March 11, 1993 by DOLE Underseelelaly Cresendano B. Trajano; Labor NJ.vioory issued on 3 Ibid.; SeciJn 1, l.'anoov1dum Order No. 28.
March 22, 2004 b'f DOLE Secretary Pabicia A. Santo Tomas; Asioo Transmission Caporation v. CA, G.R. No. HousedScraleev.Rey,GR No. 149013,Aug. 31,2006.
144664, March 15, 2004. P.O. No. 851, as amended.
~ San Mguet Corp. v. Del Rosano, G.R. Nos. 168194 &168603, Dec. 13, 2005; Oda~o v. NLRC, G.R. No. 147420, 6 No. 2 {a], Revised Guideines on lhe Implementation a the 13~ Mlnlh Pay l.all, fonnel1y Section 3 lbL Rules and

June 10, 2004; Insular Bank of Asia and America ~Joyees Union tiBMEUJ v. lnciong, G.R. No. L-52415, Oct. Regutam ~P.O. No. 851; AlfiOOCe ofGovemmentWO!kersv. t.tmdlaborand Empkl)1nenl, G.R No. L-
23, 1984, 132 SCRA 663; The Chartered Bank Employees Associatioo v. Ople, G.R No. L44717, Aug. 28, 1985. 60403, Aug. 3, 1983.
5 FEU Employees Labor Union v. Far Eastern University, G.R Nos. 69224-5, Dec. 18,1987,156 SCRA629, 677. 1 Section 2, PD. No. 851; No.2 [b], Revised Gtideines oo the hr~J~ementatialdthe 13~ Woo1h Pay laN, bmeft/ Section 3

L
s ld.; See also Oceanic Pharmacal Employees Union [FFW] v.lnciong, G.R. ~: L-50568, Nov. 7, 1979. [c), Rules !lld Regulations Implementing PD. No. 851.
a No.2 !dJ, lbid.,loonel1y Section 3[e], Rules em Regulations lmplementi1g P.O. No. 851.

~
CHAPTER Ill
136 BAR REvlEWERON lABOR lAW
lABOR STANDARDS
137

2.1. DOMESTIC WORKERS OR KASAMBAHAYS, NOW COVERED. !


! .
I
generally tied to the productivity or capacity for revenue production of a
company, it should not be considered as part ofbasic salary. 1
Previously, not covered by the 13th month pay law are employers of t
I
household helpers and persons in the personal service of another in relation to ! But if the commission paid in addition to the basic salary has a clear
such workers. However, R.A. No. 10361 is now explicit in its commandment direct or necessary relation to the amount of work actually done by the
that a domestic worker or Kasambahay is entitled to 13th month pay as provided employee, it should be considered as part of basic salary. 2
forbylaw. 2 If the employee is paid on commission basis only, he is excluded from
3. NATURE OF 13m MONTH PAY. receiving the 13th month pay benefit. 3
13th month pay is in the nature of additional income granted to 7. CBA VIS-A-VIS 13m MONTH PAY.
employees who are not receiving the same.3 P.D. No. 851 is undoubtedly a labor For purposes of computing the 13th month pay, "basic salary" includes
standards law whose purpose is to increase the real wages of the workers. 4 It is all remunerations or earnings paid by the employer for services rendered but
based on wage but not part ofwage. 5 does not include allowances and monetary benefits which are not considered or
4. MINIMUM AMOUNT OF 13m MONTH PAY. integrated as part of the regular or basic salary, such as the cash equivalent of
unused vacation and sick leave credits, maternity leave, overtime, premium,
The minimum 13th month pay required by law should not be less than
night differential and holiday pay, premiums for work done on rest days and
one-twelfth (1/12) of the total basic salary earned by an employee within a
special holidays and cost-of-living aHowances. However, these salary-related
calendar year. 6
benefits should be included as part of the basic salary in the computation of the
5. MINIMUM PERIOD OF SERVICE REQUIRED. l3rn month pay if by individual or collective bargaining agreement, company
To be entitled to the 13lh month pay benefit, it is imposed as a practice or policy, the same are treated as part of the basic saiarj of the
minimum service requirement that the employee should have worked for at employees. 4
least one (1) month during a calendar year. 7 8. SOME PRINCIPLES ON 13TH MONTH PAY.
6. COMMISSION VIS-A-VIS 13TH MONTH PAY. l. "Basic salary" or "basic wage" contemplates work within the normal eight
In order to be considered part of 13th month pay, the commission (8) working hours in a day. This means that the basic salary of an
should be part of the basic salary of the employee. employee for purposes of computing the 13th month pay should include all
remunerations or earnings paid by the employer for services rendered
However, whether or not a commission forms part of the basic salary
during nonnal working hours. 5
depends upon the circumstances or conditions for its payment which indubitably
are factual in nature for they will require a re-examination and calibration of the 2. For purposes of computing the 13th month pay, "basic salary" should be
evidence on record. 8 interpreted to mean not the amount actually received by an employee, but
1/12 of their standard monthly wage multiplied by their length of service
If the commission paid in addition to the basic salary is in the nature of
within a given calendar year. 6
a productivity bonus or profit-sharing benefit which is dependent on and
3. Extras, casuals and seasonal employees are entitled to 131h month pay.7

1 No. 2 [c1 Revised Gilerrles 00 81e ~ ct the 13fl Mlnlh Pay l.a'l, b:mel1y Secloo 3 [d), PJAes en:! 1
ReglEtioos ~P.O. No.85-1. Philippine Dupli:ators, klc. v. NLRC, G.R No. 110068, Feb. 15, 1995; Boie-Tateda Cllemi<3s, Inc. v. Oela Serna, GR No.
2 Section 25, Article IV, RA No. 10361, otherwise known as the MDomestic WO!kers Acf [January 18, 2013~ 92174]Md Phftippine Fuji XeroxCapoodionv. Trajano, G.R. No.102552, M:rth 24,1994.
2 ld.
3 ~ v. NLRC, G.R No. 158693, Nov. 17,2004.
4 A1iance <i GoYemment Workels v. t.tlis!er of Lalor, G.R No. L-60403, Al.g. 3, 1983; Nationa Federatioo <i Sug<rWakels
3
King of K'BJ5 Troosport, Inc. v. Mml:, GR. No. 166208, June 29, 2007.
v. Ovejela, G.R No. 59743, May 31, 1982; Martqlper ~ Ccxpoortioo v. Ope, G.R No. 51254, June 11, 1981, 105 • No. 4 [a], Revised GOOel'lllE!S on l1e inllfemenlation of the 1Jfllloolh Pay taw, lixme!lt Section 2 PIJ of the RUes ald
SCRA75. Regulations lrqllemenlilg P.O. No. 851; No. X(C], DOLE Haldbook on Wo:kers Sta1utory M:x1elay !lerlelis.
5 CeotaiAzllceade Tmv. Centra!Azucarera deTm laborUnio!J.NLU, G.R No. 188949, July 26,2010.
5
See No.1, OOLE ~lanatoiY Bullelinoo the lndlsiono!Teache!s' OieOOad Pay il the 13fl Mln1h PayDeemilatioo (Dec.
6 SecOOn 2[a], Rules en:! RegulaOOils ~P.O. No. 851. 03,1993.
7 No. 1, Revised Guileines on the Implementation of the 13fl fv'ooth Pay law; No. X[A], DOLE~ on WaKe!S 6
Hooda Phis., Inc. v. SarnahM ng Malay~ Manggagawa sa HoOOa, GR No. 145561, June 15, 2005; San Mguel
StabJtcy MJlelary Benelit. Corporation (Cagayan Coc&Cola PlanQ v. b:lcklng, G.R No. L49n4, Feb. 24, 1981, 103 SCRA 139.
7
s Reyesv. NL.RC, G.R No.160233, Al.g. 8, 2007. BWC Opinkln dated Dec. 19, 1987, Bagong Pilipino WOOd's Fashion Wake!S Union, WOOd's Fashion, Inc.
I
138 BAR REviEWER ON lABOR lAW CHAPTER Ill 139
lABOR STANDARDS

.. i. 5. INTEGRATION.
1
SERVICE CHARGE
! In case the service charge is abolished, the share of covered employees
should be considered integrated in their wages, in accordance with Article 96 of
1. ESTABLISHMENTS COVERED.
The rules on service charge apply only to establishments collecting
service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail
I
I
!i
the Labor Code. The basis of the amount to be integrated is the average monthly
share of each employee for the past twelve (12) months immediately preceding
the abolition or withdrawal of such charges. 1
lounges, massage clinics, bars, casinos and gambling houses, and similar
6. SOME PRINCIPLES ON SERVICE CHARGE.
enterprises, including those entities operating primarily as private subsidiaries of
the government. 2
I • Tips and services charges are two different things. Tips are given by
customers voluntarily to waiters and other people who serve them out of
2. EMPLOYEES COVERED. recognition of satisfactory or excellent service. There is no compulsion to
The same rules on service charges apply to all employees of covered give tips under the law. The same may not be said of service charges which
employers, regardless of their positions, designations or employment status, and are considered integral part of the cost of the food, goods or services
irrespective of the method by which their wages are paid except those receiving ordered by the customers. As a general rule, tips do not form part of the
more than n,ooo.oo a month. 3 service charges which should be distributed in accordance with the sharing
ratio prescribed under Article 96 of the Labor Code. However, where a
3. EXCLUSION. restaurant or similar establish...'D.ent does not collect service charges but has a
Specifically excluded from coverage are employees who are receiving practice or policy of monitoring and pooling tips given voluntarily by its
wages of more than P2,000.0C a month. 4 However, it must be pointed out that customers to its employees, the pooled tips should be monitored, accounted
the P2,000.00 ceiling is no longer realistic considering the applicable minimum for and distributed in the same manner as the service charges? Hence, the
wages prevailing in the country. Hence, it must be disregarded. 5 85% : 15% sharing ratio should be observed.
• Service charges are not in the nature of profit share and, therefore,
4. DISTRIBUTION.
cannot be deducted from wage. 3
a. Percentage of sharing.
All service charges collected by covered employers are required to be
B.
distributed at the following rates: WAGES
I) 85% to be distributed equally among the covered employees; and 1.
2) 15% to .management to answer for losses and breakages and WAGE VERSUS SALARY
distribution to employees receiving more than P2,000.00 a month, at 1. BASIC DISTINCTION.
the discretion of the management. 6
The term "wage" is used to characterize the compensation paid for
b. Frequency of distribution.
manual skilled or unskilled labor. "Salary," on the other hand, is used to
The share of the employees referred to above should be distributed describe the compensation for higher or superior level of employment.4
and paid to them not less often than once every two (2) weeks or twice a month
at intervals not exceeding sixteen (16) days. 7

• Article 96, Labor Code. i


2 ld.; Section 1, Rule VI [Service Charges], BoollllloflheRules lo lmpieme!lttel.abaCode. ' Section 5, Rule VI, Book Ill, bid.; No. VII [B), Ibid.
3 Section 2, Rule VI, Book ill, Rules to Implement lhe labor Code. No. Vlllq, 001.£ 1-mdbook on WorkeiS Slal!.rto!y !looefaly Benefils.
4 ld.
3 Mayan 1W &Reslaunrtv. Adala, GR No. 157634, Mtj 16, 2005.
No. VII [AI, DOLE Handblxt on Workas Slalutccy M:lnelaJy Benefils. 4 100 terms 'wage' (e\yiTK)bJk:al~ from lhe WWie ElY;Jiish IIIJill 'waJen), 's;J.arf (from !he R001a1\\Ud ·sar and Latin
Section 3, Rule VI, Book ill, Ibid.; No. VII [A], lbk!. v.ord 'saimni are synonymous i1 meaning and usage. They al refer to Ole same lhir¥J, i.e., a canpensalion pakl on
Sedion4, Rule VI, Book ill, Ibid.; No. VII [B), Ibid. account ct work or sef'lices re11dered.
'i'

L
140 BAR REviEWER ON lABOR lAW
CHAPTER III 141
lABOR STANDARDS
2. DISTINCTION IN TERMS OF EXECUTION, ATTACHMENT OR
2. It is capable of being expressed in tenus of money, whether fixed or
GARNISHMENT.
ascertained on a time, task, piece or commission basis, or other
In cases of execution, attachment or garnishment of the method of calculating the same;
compensation of an employee received from work issued by the court to satisfY 3. It is payable by an employer to an employee under a written or
a judicially-determined obligation, a distinction should be made whether such unwritten contract of employment for work done or to be done or for
compensation is considered "wage" or "salary. " Under Article 1708 of the services rendered or to be rendered; and .
Civil Code, if considered a "wage," the employee's compensation shall not be 4. It includes the fair and reasonable value, as determined by the DOLE
subject to execution or attachment or garnishment, except for debts incurred for Secretary, of board, lodging, or other facilities customarily furnished
food, shelter, clothing and medical attendance. If deemed a "salary," such by the employer to the employee. "Fair and reasonable value" shall
compensation is not exempt from execution or attachment or garnishment. not include any profit to the employer or to any person affiliated with
Thus, the salary, commission and other remuneration received by a managerial the employer.'
employee (as distinguished from an ordinary worker or laborer) cannot be
3. MINIMUM WAGE.
considered wages. Salary is understood to relate to a position or office, or the
compensation given for official or other service; while wage is the compensation The minimum wage rates prescribed by law shall be the basic casb
for labor.' wages without deduction therefrom of whatever benefits, supplements or
allowances which the employees enjoy free of charge aside from the basic pay. 2
2.
PAYMENT OF WAGES 4. STATUTORY MINIMUM WAGE.

1. BASIC WAGE. [ The term "statutory minimum wage" refers simply to the lowest basic
wage rate fa:ed by law that an employer can pay his workers.J
The term "basic wage" means all the remuneration or earnings paid by i
I 5. REGIONAL MINIMUM WAGE RATES.
an employer to a worker for services rendered on normal working days and
hours but does not include cost-of-living allowances, profit-sharing payments, l The term "regional minimum wage rates" refers to the lowest basic
premium payments. 13th month pay or other monetary benefits which are not
considered as part of or integrated into the regular salary of the workers. 2 I wage rates that an employer can pay his workers, as fixed by the Regional
Tripartite Wages and Productivity Boards (RTWPBs), and which shall not
4
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang be lower than the applicable statutory minimum wage rates.
Manggagawa sa Honda/ the following should be excluded from the The minimum wage rates for agricultural and non-agricultural
computation of "basic salary," to wit: payments for sick, vacation and employees and workers in each and every region of the country shall be those
maternity leaves, night differentials, regular holiday pay and premiums for prescribed by the "RTWPBs". 5 These wage rates may include wages by
work done on rest days and special holidays.4 industry, province or locality as may be deemed necessary by the RTWPBs.
6

2. ATTRIBUTES OF WAGE. 6. WAGE RATES.


"Wage" paid to any employee has the following attnbutes: The term "wage rates" includes cost-of-living allowances as fixed by
1. It is the remuneration or earnings, however designated, for work done the RTWPB, but excludes other wage-related benefits such as overtime pay,
or to be done or for services rendered or to be rendered;
, Based on the defrlition of 'wiJ;le' it Altide 97 [1), labor Code.
2 Section 1, 1M! VIl-A, Boci I~ Rules kl ~tile l.lilorCcde, as ameOOed by Mem:xandumCiaJiar No.3, Nov.4,
1992
3 ~ [o], Definition ofTenns, RUes ~ng RA No.6727; Section 4 ~.Rule I, N'M'C Guidelines No. 01, Series of
2007, June 19, 2007 (Arnel1ded RUes of Procedure on tMitun Wage FIXing.
Gaa v. CA, ilfra; See also ~itable BarUg Colp. v. Sadac, 1J.R No.164n2,June 8, 2006.
4 Section 4 [k1 Rule I, N'IWC Guideliles No. 01, Series d 'lf!J7, June 19, 2007 [.Arne!1ded Rules of Procedure on Mnill1JI11
IIEm [n1 Defllitkln ofTenns, Rilles lmplementi1g Republic Act No. 6727.
GR No.145561,June 15,2005,460SCRA 187. Wage FIXilg.
5 See Article 99 (Regional Minimum Wages),.as amended by Section 3, RA. No. 6727, June9, 1989.
See also Soo t.i;)uel Co!poralioo Gagaym Coca-Cola Plant v.inciooJ, G.R No. L-49774, Feb. 24, 1981, 103 SCRA 139. 6 Micle99, Labor Code; Section 1, Chapter Ill, Rules lf1'4llementing RA. No. 6727.

L.
I CHArTER Ill 143

I
142 liAR REVIEwER ON lABOR lAW lABOR STANDARDS

included in an accepted standard level of consumption." 1 Based on this premise,


bonuses. night shift differential pay, holiday pay, premium pay, 13 111 month pay, COLA is a benefit intended to cover increases in the cost ofliving. 2 ·
premium pay, leave benefits, among others. 1
7. RATIONALE.
The principal reason why a legislated wage increase is considered valid
~I b. Validity of integration.
The integration of monetary benefits into the basic pay of workers is
! not a new method of increasing the minimum wage.
is that it prevents the exploitation of defenseless workers who are situated.in an By way of latest illustration, under Section 1 of Wage Order No. NCR-
unequal position vis-a-vis their employers in terms of bargaining power. By 20 which was issued on May 17, 2016, the COLA ofP15.00 per day under the
setting the minimum below which the law considers illegal, the workers are previous Wage Order No. NCR-19 was ordered integrated into the basic pay of
assured of decent living subsistence without need for them to bargain for the P466.00 upon its effectivity thereby making P481.00 as the new basic wage.
same. Further, a new COLA of P10.00 per day was added resulting in the new
The employer cannot hope to validate his non-compliance with the minimum wage rate ofP491.00.
legislated minimum wage by contending that he has liquidity problem or is 9. "NO WORK, NO PAY" PRINCIPLE.
suffering from financial reverses or business losses. Whatever problem he may It must be emphasized that the age-old rule governing the relation
have in the operation of his business cannot certainly affect his obligation to pay between labor and capital, or management and employee of "no work, no pay"
the minimum wage rate fixed by law. or "fair day's wage for fair day's labor" remains to be adhered to in our
Thus, in Mayon Hotel & Restaurant v. Adana/ the Supreme Court jurisdiction as the basic factor in determining the wages of employees. If the
ruled that petitioner's repeated invocation of serious business losses is not a worker does not work, he is generally not entitled to any wage or pay. The
defense to payment of labor sLJtdard benefits. The employer cannot exempt exception is when it was the employer who unduly prevented him from working
himself from liability to pay minimum wages because of poor fmancial despite his ableness, willingness and readiness to work; or in cases where he is
condition of the C(lmpany. The payment of minimum wages is not dependent on iUegally locke.d out or illegally suspended or illegally dismissed, or otherwise
the employer's ability to pay. 3 illegally prevented from working, in which event, he should be entitled to his
wage. 3
It must be noted that acceptance by the employee of wage below tbe
minimum set by law does not preclude bim from suing for tbe deficiency. 3.
The principle of estoppel or laches does not apply in this situation. FACILITIES VERSUS SUPPLEMENTS
8. INTEGRATION OF COLA AND OTHER MONETARY BENEFITS l. FACILITiES, DEFINED.
INTO THE BASIC PAY. The term "facilities" includes articles or services for the benefit i>f the
a. Meaning of cost-of-living allowance (COLA). employee or his family but does not include tools of the trade or articles or
services primarily for the benefit of the employer or necessary to the conduct of
Clearly, COLA is not in the nature of an allowance intended to the employer's business. 4 They are items of expense necessary for the laborer's
reimburse expenses incurred by employees in the performance of their official and his family's existence and subsistence which form part of the wage and
functions. It is not payment in consideration of the fulfillment of official duty. 4
As defmed, "cost of living" refers to "the level of prices relating to a range of
everyday items"5 or "the cost of purchasing the goods and services which are

1 ld., cmg Websb's Tti'd New kllelna1D1ai!X1ionay, MerticmWebs8hc., 1993 Edibt


2 MlyniadWater~Assodationv.l.4ayrHIWalerSeMces, klc.,-G.R. No.198935, Nov.27, 2013.
3 Aldan 13ed!tCoope!;ANev. Nt.RC, G.R No.121439,J<r1. 25, 2000; PlliippileAi111esv.NLRC, GF. No. 55159, June 22,
1989; C*x Relilely ~ AssociaOOn v. Bdlcrlles, G.R No. 123782, Sept 16, 1997, 279 SCRA 218; Ourabilt
1 Sedb12 G], DepOOrnent O!der No.10, Seres of 1998 [May 04, 1998. ~ Plirt~ v. NLRC, G.R No. L-76746, Jt1t 27, 1987, 152 SCRA 328; SSS v. SSS s...,eMsors lrol,
2 GRNo.157634,May16,2005. GR No. L-31832, Oct. 23,1982.

L.
3 See also Vda.de Rachov. M.inqlaiyofl\ag<rl, G.R No.L-23542, Jan. 2,1968,22 SCRA 1. 4 SecOOn 2, Rli! IJII.A, Book Ill, Rules tl ~lle Lalor Code, as emended by M!romim Citulir No.3, NoJ. 4,
4 Qmerrezv.DBM, G.R No.153266,March 18,2010,616SCRA 1, 18. 1992.
s ld. at 19, cili1g Tt,e New Oxford AmeOCallli:tionay, Oxford UlMllsity Press, 2005 Editioo.
CHAPTER Ill
144 BAR REVIEWER ON lABOR lAW
lABOR STANDARDS
45

when furnished by the employer, are deductible therefrom; since if they are not provided that such deduction is with · the written authorization of the
so furnished, the laborer would spend and pay for them just the same. 1 employees concerned. 1
• The free board and lodging petitioner SIP furnished its employees cannot
2. SUPPLEMENTS, DEFINED.
operate as a set-off for the underpayment of their wages. 2
The term "supplements" means extra remuneration or special
privileges or benefits given to or received by the laborers over and above their 4.
ordinary earnings or wages. 2 NON-DIMINUTION OF BENEFITS
3. FACILITIES VS. SUPPLEMENTS. 1. APPLICABILITY OF ARTICLE 100 OF THE LABOR CODE.
The benefit or privilege given to the employee which constitutes an a. Applicability even to benefits granted after the
extra remuneration over and above his basic or ordinary earning or wage is promulgation/effectivity of the Labor Code.
supplement; and when said benefit or privilege is made part of the laborer's
basic wage, it is a facility. The criterion is not so much with the kind of the Albeit Article 100 is clear that the principle of non-elimination and
benefit or item (food, lodging, bonus or sick leave) given but its purpose. Thus, non-diminution of benefits apply only to the benefits being enjoyed "at the time
free meals supplied by the ship operator to crew members, out of necessity, of the promulgation" of the Labor Code, the Supreme Court has consistently
cannot be considered as facilities but supplements which could not be rtduced cited Article 100 as being applicable even to benefits granted after said
having been given not as part of wages but as a necessary matter in the . promulgation. It has, in fac~ been treated as the legal anchor for the declaration
maintenance of the health and efficiency of the crew during the voyage. 3 of the invalidity of so many acts of employers deemed to have eliminated 01
diminished the benefits of employees.
4. SOME PRINCIPLES ON FACILITIES AND SUPPLEMENTS.
b. Proper basis is not Article 100.
• Facilities are deductible from wage but not supplements. 4
. • Legal requirements must be complied with before facilities may be The language of Article 100 is clear as to its applicability. Therefore,
subsequent to the date of promulgation of the Labor Code, the non-elimination
deducted from wages. The employer simply cannot deduct the value from
the employee's wages without satisfying the following: and non-diminution principle enunciated therein can no longer be invoked as the
same was explicitly and clearly made applicable only to "supplements or other
(1) Proof that such facilities are customarily furnished by the trade;
employee benefits being enjoyed at the time of promulgation" of the Labor
(2) The provision of deductible facilities is voluntarily accepted in writing
Code.3
by the employee; and
(3) The facilities are charged at fair and reasonable value. 5 This view that Article 100 is not the proper basis for the invocation of
• An employer may provide subsidized meals and snacks to his employees the non-diminution and non-elimination of benefits principle was underscored in
provided that the subsidy shall not be less than thirty percent (30%) of the the separate concurring opinion of Mr. Justice Arturo D. Brion4 in the case of
fair and reasonable value of such facilities. In such a case, the employer Arco Metal Products, Inc. v. Samahang ng mga Manggagawa sa Arco
may deduct from the wages of the employees not more than seventy percent Metal-NAFLU {SAMARM-NAFLU),5 where he clarified that the basis for the
(70%) of the value of the meals and snacks enjoyed by the employees, prohibition against diminution of established benefits is not really Article 100 of
the Labor Code as the respondents claimed and as the cases cited in the
ponencia mentioned. He emphasized therein that Article lOO·refers solely to the

1 State MCKine Coqlelalioo illd Rojalline, n:. v. Cebu Sea'nen's Associatkln, Inc., G.R No. L·12444, Feb. 28, 1963; A1Dk
1 Sedioo 1, RIJe VIl-A, Book Ill, Rilles b ~the Labor Code, as emended by Memorandum Cialla' No.3, Nov. 4,
BiJ Wedge lvililg Co., Inc. v. Alii BiJ Wedge MJ1ual BeneftAssocmln, G.R No. L-5276, Marth 3, 1953,97 Phi. 294. 1992.
2 Stale Mline Cooperation and Royal Lile, Inc. v. Cebu Seamen's Association, Inc., supra; Amk eg Wedge Moing Co., he. 2 See Article 124, t.aJortode.
v. NDk Bg Wedge Mltual BenefitAssociatioo, G.R No. L-5276, Mirth 3, 1953, 97 f'llH. 294 Apex Mni'lg Company, Inc. v. NLRC, G.R No. 86200, Feb. 25, 1992,206 SCRA497; See also Octavia v. Philippine
l State Mline CoJporaOOn and Royal line, Inc. v. Cebu Smell's AssociaOOn, klc., supra; Mayon Hotel &Restaurant v. Long DislaJce Telephone Company, G.R No.175492, Feb. 27, 2013; Insular Hotel Employees Union-NFL v.
Adooa, GR No. 157634, May 16, 2005; Mima v. NLRC, G.R No. 118506, Apn1 18, 1997, 271 SCRA 670. Wateffront Insular Hotel Davao, G.R Nos. 174040-i1, Sept 22, 2010.
State Mali1e Coqxra!ion illd Royal Lile, Inc. v. Cebu Seamen's Association, Inc., supra. 4 Fonner Secretay cllhe OepMment oll.aba md Employment pOOr lo his~ kllhe High Court.

L
4
5 Mabeza v. NLRC, supra. GR No. 170734, Mly 14, 2008.

f
·--
146 BAR REVIEWER ON lABOR lAW CHAPTER Ill
147
lABOR STANDARDS

non-diminution of benefits enjoyed at the time of the promulgation of the Labor that the Non-Diminution Rule found in Article 100 of the Labor Code
Code. explicitly prohibits employers from eliminating or reducing the benefits received
by their employees. This rule, however, applies only if the benefit is based on
Indeed, the view is advanc.ed that even without Article I00, the any of the following:
protection-to-labor clause 1 in the Constitution and the grounds of justice and
equity will not allow such diminution and/or elimination of employee benefits. (I) An express policy;
(2) A written contract; or
Based on the ponencia and concurring opinion afore-cited in the Arco (3) A company practice. 1
Metal case, it may be safely concluded that the proper legal bases for the
invocation of the principle that any benefit or supplement being enjoyed by. 2. ELIMINATION OR DIMINUTION OF BENEFITS MAY
employees cannot be reduced, discontinued or eliminated by the employer are CONSTITUTE DEMOTION OR CONSTRUCTIVE DISMISSAL.
the following: a. When it constitutes demotion.
(1) Express terms of an employment agreement; The illegal and unjustified elin1ination or diminution of certain benefits
(2) Company practice which refers to the implied terms of an may result in illegal demotion if it results in the lowering in position or rank or
employment agreement which the employer has freely, voluntarily reduction in salary of the employee.Z
and consistently extended to its employees and thus cannot be b. When it constitutes constructive dismissal.
withdrawn except by mutw=1l consent or agreement of the
Elimination or diminution of ce1taL'l benefits may result in the
contracting parties;
constructive dismissal of an employee when it amounts to an involuntary
(3) The Constitution (Section 18 of Article II and Section 3 of Articie
resignation resorted to because continued employment is rendered impossible,
XIII thereof); and
unreasonable or unlL~ely; when t1ere is a demotion in rank and/or a diminution
(4) Article 4 of the Labor Code.
in pay; or when a clear discrimination, insensibility or disdain by an employer
Indeed, the express terms of an employment agreement which are not becomes unbearable to ihe employee that it could foreclose any choice by him
contrary to law, public policy or public order are the touchstone of the except to forego his continued employment. 3
employment relationship. Said terms constitute the law between the employer 3. COMPANY PRACTICE.
and the employee which cannot be breached. The implied terms thereof, once
granted by the employer, may ripen into a company practice or even into a a. No hard and fast rule to establish company practice.
policy which generally can no longer be withdrawn unilaterally by the employer Company practice is a custom or habit shown by an employer's
except when the affected employee agrees to such withdrawal. repeated, habitual customary or succession of acts of similar kind by reason of
which, it gains the status of a company policy that can no longer be disturbed or
And the protection-to-labor mandate enunciated in Section 18 of
withdrawn.
Article II and Section 3 of Article XIII of the Constitution as well as the rule on
the proper interpretation and construction of the provisions of the Labor Code b. The grant of benefit should not be by reason of legal or
and its implementing rules enshrined in Article 4 thereof are the main bedrock contractual obligation but by reason of liberality.
and shield against any attempt at reducing, diminishing or eliminating benefits To ripen into a company practice that is demandable as a matter of
that employers have granted and which the employees have been enjoying. right, the giving of the benefit should not be by reason of a strict legal or
c. Latest pronouncement on the application of the non-diminution
rule in Article 100.
The 2014 case of Wesleyan University-Philippines v. Wesleyan
Universitv-Philippines FacultY and Staff Association/ succinctly pointed out 1 Citing Cenlral Azuc<rera De Tal1acv. Cenlral Amcare!a De Tarlac lalxri.Jrm.NLU, G.R No.188949, Ju~ 26,2010, 625
SCRA 622, sm31.
2 PhUippi1e Wreless, Inc. [F'ockeftlelfl v. NLRC, G.R. No. 112963, Ju¥ 20, 1999; Blillmles v. GuMra, G.R No. L-22586,
Feb.27, 1969,27 SCRA 138;Femandov. Sio. Tomas,G.R No.112309,.lutj28, 1994,234SCRA546.
1 Refen11g Ill Section 18, M:le II a'ld Section 3, Article XII~ 1987 Cooslitution.
3 Unmn Safely~. Inc. v. Bascrte, G.R No. 154689, lb. 25, 2004; See also ~Mide Sales Wiiehouse CUJ v. NLRC,
2 G.R No. 181806, Martfl12, 2014. G.R. No. 154503, Feb. 29, 2008; Chiang Kai Shek College v. Hon. CA, G.R No. 152988, Aug. 24,2004.
148 BAR REVIEWER ON LABOR LAW CHAPTER III 149
LABOR STANDARDS

contractual obligation but by reason of an act of liberality on the part of the out within less than a year would certainly not qualify as such. Hence, the
• 1
emptoyer. withdrawal of the COLA Wage Order No. RBIII-10 from the salaries of non-
minimum wage earners did not amount to a "diminution of benefits" under the
c. Criteria that may be used to determine existence of company
practice. law.
In the following cases, the act of the employer was declared company
There is no hard and fast rule which may be used and applied in
practice because of the considerable period of time it has been practiced:
determining whether a certain act of the employer may be considered as having
ripened into a practice which, having been elevated to such status, may thus be (a) Davao Fruits Corporation v. Associated Labor Unions.'- The
accorded the same enforceability and binding effect equivalent to a demandable act of the company of freely and continuously including in the
policy or agreement. computation of the 13th month pay, items that were expressly
excluded by law has lasted for six (6) years, hence, was considered
According to the case of National Sugar Refineries Corporation v.
NLRC/ the test or rationale of this rule on long practice requires an indicative of company practice.
indubitable showing that the employer agreed to continue giving the benefits (b) Sevilla Trading Compa!!y v. A. V. A. Semana/ - The act of
knawing fully well that said employees are not covered by the law requiring including non-basic benefits such as paid leaves for unused sick
the payment thereof. leave and vacation leave in the computation of the employees' 13th
month pay for at leasi two (2) years was c~_msidered a company
The following criteria may, however, be used to determine whether an
act has ripened into a company practice: practice.
(c) The 2010 case of Central Azucarera de Tarlac v. Central
(1) The act of the employer has been done for a considerable period of 3
Azucarera de Tarlac Labor Union-NLU, also ruled as company
time;
practice the act of petitioner of granting for thi.rty (30) years, its
(2) The act should be done consistently and intentionally; and
workers the mandatory l31h month pay computed in accordance
(3) The act should not be a product of erroneous interpretation or
with the following formula: Total Basic Annual Salary divided
construction of a doubtful or difficult question of law or provision
by twelve (12) and Including in the computation of the Total
in the CBA.
Basic Annual Salary the foliowing: basic monthly salary; frrst
1. THE ACT OF THE; EMPLOYER HAS BEEN DONE FOR A eight (8) holll'S overtime pay on Sunday and legaVspecial holiday;
CONS,IDE'RABLE PERIOD OF TIME. night premium pay; and vacation and sick leaves for each year.
4
If done only once as in the case of Philippine Appliance Corporation (d) Manila Electric Company v. Secretary of Labor, where the act
@ilacor) v. ~~where the CBA signing bonus was granted only once during of the employer in granting, in addition to the regular 13th month
fue 1997 CBA negotiation, the same cannot be considered as having ripened into bonus, an additional Christmas bonus at the tail-end of the year
a company practice. Similarly, in the 2011 case of Supreme Steel Corporation since 1988 was considered company practice. The conside :rable
v. Narkakaisang Man22agawa ng Supreme Independent Union <NMS.UID- length of time MERALCO has been giving these special grru 1ts to
APL),4 it was held that the impiementation of the COLA under Wag~ Order No. its employees indicates a unilateral and voluntary act on its p art to
RBili-1 0 on an across-the-board basis, which only lasted for less than a year, continue giving said benefits knowing that such act wa1 ; not
cannot be considered as having been practiced "over a long period of time." required by law. · 5
While it is true that jurisprudence has not laid down any rule requiring a specific (e) Davao Integrated Port Stevedoring Services v. Abargue. 7;: -
minimum number of years in order for a practice to be considered as a voluntary The employer, for three (3) years and nine (9) months, appr( 1ved
act of the employer, under existing jurisprudence on this matter, an act carried
1 G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
1 Pag-Asa Steel Wol1ts, Inc. v. CA, G.R No. 166647, Malth 31,2006. 2 G.R. No. 152456, Ap!i128, 2004, 438 SCRA 239.
2 G.R.t«<.101761,Ma!t:h24, 1993,220SCRA452. 3 G.R. ttl. 188949, July 26, 2010.
3 GRNo.149434,June3,2004. 4 G.R. No. 127598, Jan. 27, 1999.

4 G.R. No.185556, Man:h 28,2011. s G.R.t«1.102132, Math 19,1993,220 SCRA 197.


150 BAR REVIEWER ON lABOR lAW CHAPTERlll 151
lABOR STANDARDS

the commutation to cash of the unenjoyed portion of the sick leave contravened Article 100 of the Labor Code which prohibits the
with pay benefit of its intermittent workers. It was held that this act diminution of existing benefits.
of the employer has already ripened into a company practice which (b) Republic Planters Bank, [now known as PNB-Republic Bank)
can no longer be withdrawn. v. NLRC,i where the Supreme Court ruled, thus: "A punctilious
(f) Tiangco v. Leogardo, Jr .. 1 where the employer carried on the perusal of the records leads us to the same conclusion, i.e., that
practice of giving a fixed monthly emergency allowance from PNB-RB has adopted the policy of granting gratuity benefits to its
November 1976 to February 1980, or for a period of three (3) years retiring officers based on the salary rate of the next higher rank. It
and four (4) months. It was ruled that this has already ripened into continued to adopt this practice even after the expiration of the
a company practice which cannot be peremptorily and unilaterally 1971-1973 CBA. The grant was consistent and deliberate although
withdrawn by the employer. petitioner knew fully well that it was not required to give the
(g) Me