Beruflich Dokumente
Kultur Dokumente
Exceptions:
(1) In cases where the worker is insured
with his consent by the employer, and the
deduction is to recompense the employer Rest Periods
for the amount paid by him as premium on
Right to a Weekly rest day
the insurance;
(2) For union dues, in cases where the It is the duty of the
right of the worker or his union to check- duty of every employer,
off has been recognized by the employer whether operating for profit
or authorized in writing by the individual or not, to provide each of
worker concerned; and his employees a rest period
(3) In cases where the employer is of not less than 24
authorized by law or regulations issued by
consecutive hours after evry
the Secretary of Labor and Employment
six consecutive normal work
(Art. 113, LC), such as:
days (art. 91-a LC)
(a) Employee debt to employer is
due and demandable (Art. 1706, CC);
(b) Attachment or execution in
cases of debts incurred for EMERGENCY REST DAY WORK
necessities: food, shelter, clothing, The employer may require his employees to
medical attendance work on any day:
(Art. 1708, CC); (1) In case of actual or impending
(c) Withholding tax; emergencies caused by serious accident,
(d) Deductions of a legally fire, flood, typhoon, earthquake,
established cooperative; epidemic or other disaster or calamity to
prevent loss of life and property, or
(e) Payment to 3rd parties upon
imminent danger to public safety;
written authority by employee;
(2) In cases of urgent work to be
(f) Deductions for loss or damage;
performed on the machinery,
equipment, or installation, to avoid obstruction to the operations and
serious loss which the employer would the employer cannot normally be
otherwise suffer; expected to resort to other
(3) In the event of abnormal measures, the employer may so
pressure of work due to special schedule the weekly rest day of his
circumstances, where the employer choice for at least two days in a
cannot ordinarily be expected to resort month.
to other measures; [IRR, Book Three, Rule III, Sec. 4]
(4) To prevent loss or damage to
perishable goods; E. HOLIDAY PAY/PREMIUM PAY
(5) Where the nature of the work
Kinds of holidays
requires continuous operations and the
*Regular holidays
stoppage of work may result in
irreparable injury or loss to the *Special days
employer; and Regular holidays are designated by law, and
(6) Under other circumstances need no further proclamation for their
analogous or similar to the foregoing as observance. Special days need a specific
determined by the Secretary of Labor proclamation by the President to be observed
as holidays.
and Employment.
[Art. 92, LC]
Holiday pay is a one-day pay given
by law to an employee even if he
Synthesis of the Rules
does not work on a regular
(1) Rest day of not less than holiday. This gift of a day’s pay is
24 consecutive hours after 6 limited to each of the 12 regular
consecutive days of work. holidays.
(2) No work, no pay
principle applies
COVERAGE
(3) If an employee works on
General Rule: All employees Exceptions:
his designated rest day, he is
entitled to a premium pay. (1) Those of the government and
any of the political subdivision, including
(4) Premium pay is
government-owned and controlled
additional 30% of the basic pay.
corporation;
(5) Employer selects the
rest day of his employees (2) Those of retail and service
establishments regularly employing less
(6) However, employer
than 10 workers;
must consider the religious
reasons for the choice of a rest (3) Domestic helpers and persons
day. in the personal service of another;
(7) When the choice of the (4) Managerial employees as
employee as to his rest day based defined in
on religious grounds will inevitably Book III
result in serious prejudice or
(5) Field personnel and other
employees whose time and performance Special (Non-Working Days)
is unsupervised by the employer (1) Chinese New Year – Feb. 19
including those who are engaged on task (2) Black Saturday – Apr. 4
or contract basis, purely commission
(3) Ninoy Aquino Day – Aug. 21
basis, or those who are paid a fixed
(4) All Saints Day – Nov. 1
amount for performing work irrespective
of the time consumed in the (5) Additional special (Non-
performance thereof. working) days
[Sec. 1, Rule IV of the IRR] (a) Jan. 2
(b) Dec. 24
Retail Establishment is one principally (6) Last Day of the Year – Dec. 31
engaged in the sale of goods to end-users for
personal or household use; Special Holiday (for all schools)
EDSA Revolution Anniv – Feb. 25
Service Establishment is one principally
engaged in the sale of service to individuals for P.D. 1083 (Code of Muslim Personal Laws)
their own or household use and is generally SEE: Arts. 169-173
recognized as such. [RA 6727/The Wage
Rationalization Act, IRR] Specifically for the Muslim Areas,
P.D. 1083, in its Book V, Title,
Regular holidays recognizes five (5) Muslim
Proclamation No. 831 signed by President Holidays, namely:
Aquino on 17 July 2014, provides for the (1) Amun Jadid (New Year) which
observance of the regular holidays and special falls on the first (1st) day of the
(non-working) days for the year 2015 on the lunar month of Muharram;
following dates: (2) Mauli-un-Nabi (Birthday of the
(1) New year’s Day – Jan. 1 Prophet Muhammad) which
(2) Maundy Thursday – Apr. 2 falls on the twelfth (12th) day
(3) Good Friday – Apr. 3 of the third (3rd) lunar month
(4) Araw ng Kagitingan – Apr. 9 of Rabi-ul-Awwal;
(5) Labor Day – May 1 (3) Lailatul Isra Wal Mi Rai
(Nocturnal Journey and
(6) Independence Day – June 12
Ascencion of the Prophet
(7) National Heroes Day – Aug. 31
Muhammand) which falls on
(8) Bonifacio Day – Nov. 30 the twentyseventh (27th) day
(9) Christmas Day – Dec. 25 of the seventh (7th) lunar
(10) Rizal Day – Dec. 30 month of Rajab;
(11) Id-ul-Fitr – 1st day of 10th lunar (4) Id-ul-Fitr (Hari Raja Pausa)
month of Shawwal which falls on the first (1st)
(12) Id-ul Adha – 10th day of the 12th day of the tenth (10th) lunar
lunar month of Dhu’l-Hijja month of Shawwal
commemorating the end of (1) Those of the government and any of
the fasting season; and its political subdivisions, including
(5) Id-ul-Adha (Hari Raha Haji) GOCCs;
which falls on the tenth (10th) (2) Domestic helpers and persons in the
day of the twelfth (12th) lunar personal service of another;
month of Dhu’l-Hijja. (3) Managerial employees as defined in
Book 3 of this Code;
Leaves
Service incentive leaves (4) Field personnel and other
employees whose performance is
This benefit means unsupervised by the employer
that every worker who has including those who are engaged on
rendered at least one year task or contract basis, purely
of service shall be entitled to commission basis, or those who are
a yearly service incentive paid a fixed amount for performing
leave of five days with pay. work irrespective of the time
Its purpose is to encourage a consumed in the performance
worker’s loyalty and thereof;
dedication to his work. (5) Those who are already enjoying the
benefit herein provided;
(6) Those enjoying vacation leave with
pay of at least 5 days;
‘at least once a year” means
(7) Those employed in establishments
service for twelve months,
regularly employing less than 10
wheteher continuous or
employees. [Book 3, Rule 5, Sec. 1, IRR]
broken, reckoned from the
date the worker started
Maternity Leave
working, including
authorized absences and
paid regular holidays, unless MATERNITY LEAVE
the employer by practice, [Sec. 14-A of RA 1161 (Social Security Law) as
policy or contract considers amended by RA 7322 and RA 8282]
a year as less than twelve
months, in which case such Coverage
period shall be considered Every pregnant woman in the
as one year. private sector, whether married
or unmarried, is entitled to the
Service Incentive Leave DOES NOT apply to maternity leave benefits.
the following employees:
Exempted Employers:
1/12 of the total basic salary earned by an Separation pay is defined as the amount that an
employee within a calendar year for the year employee receives at the time of his severance
1987 from the service and is designed to provide the
employee with the wherewithal during the
Base Amount, which is the basic salary shall
period that he is looking for another
include:
employment. [A’ Prime Security Services v.
(1) cost of living allowances (COLA) integrated NLRC, et al., 1993]
into the basic salary of a covered employee
GENERAL RULE
pursuant to EO 178.
The rule embodied in the Labor Code is that a
(2) all remunerations or earnings paid by this
person dismissed for cause as defined therein
employer for services rendered.
[see Art, 282] is not entitled to separation pay.
(3) But not the allowances and monetary [PLDT v. NLRC, 1988]
benefits which are not considered or integrated
EXCEPTION
as part of the regular or basic salary, such as the
cash equivalent of: Considerations of equity as in the cases of Filipro,
Inc. v. NLRC, Metro Drug Corp. v. NLRC,
(a) unused vacation and sick leave credits,
Engineering Equipment, Inc. v. NLRC, San Miguel
(b) overtime, Corp v. NLRC.
Exception: ER may give to his employees half (½) One-Half (1/2) Month Pay per Year of Service
of the required 13th Month Pay before the An EE is entitled to receive separation pay
opening of the regular school year and the other equivalent to ½ month pay for every year of
half on or before the 24th of December every service, a fraction of at least six (6) months being
year. considered as one whole year, if his/her
separation from the service is due to any of the
(a) The frequency of payment of this monetary following authorized causes:
benefit may be the subject of agreement
between the employer and the recognized CBA (1) Retrenchment to prevent losses [i.e.
of the employees. reduction of personnel effected by management
to prevent losses];
H. SEPARATION PAY
(2) Closure or cessation of operation of an
DEFINITION establishment not due to serious losses or
financial reverses; and,
(3) When the EE is suffering from a disease not The computation of separation pay of an EE shall
curable within a period of six (6) months and be based on his/her latest salary rate.
his/her continued employment is prejudicial to
INCLUSION OF REGULAR ALLOWANCE IN THE
his/her health or to the health of his/her co-
COMPUTATION
employees
In the computation of separation pay, it would
In no case will an EE get less than one (1) month
be error not to integrate the allowance with the
separation pay if the separation is due to the
basic salary. The salary base properly used in
above stated causes and he/she has served for
computing the separation pay should include not
at least six (6) months.
just the basic salary but also the regular
One-Month Pay per Year of Service allowances that an EE has been receiving.
[Planters’ Products, Inc. v. NLRC, 1989]
An EE is entitled to separation pay equivalent to
his/her one-month pay for every year of service, I. RETIREMENT PAY
a fraction of at least 6 months being considered
RATIONALE RA 7641 is undoubtedly a social
as one whole year, if his/her separation from
legislation. The law has been enacted as a labor
service is due to any of the following:
protection measure and as a curative statute
(1) Installation by ER of labor-saving devices; that absent a retirement plan devised by, an
agreement with, or a voluntary grant from, an
(2) Redundancy, as when the position of the EE
employer can respond, in part at least, to the
has been found to be excessive or unnecessary
financial well-being of workers during their
in the operation of the enterprise;
twilight years soon following their life of labor.
(3) Impossible reinstatement of the EE to his/her There should be little doubt about the fact that
former position or to a substantially equivalent the law can apply to labor contracts still existing
position for reasons not attributable to the fault at the time the statute has taken effect, and that
of the ER, as when the reinstatement ordered by its benefits can be reckoned not only from the
a competent authority cannot be implemented date of the law's enactment but retroactively to
due to closure of cessation of operations of the the time said employment contracts have
establishment/ER, or the position to which started. [Enriquez Security Services, Inc. v.
he/she is to be reinstated no longer exists and Cabotaje, 2006]
there is no substantially equivalent position in
Pursuant thereto, this Court imposed two (2)
the establishment to which he/she can be
essential requisites in order that R.A. 7641 may
assigned. [Gaco v. NLRC, 1994]
be given retroactive effect:
NOTICE OF TERMINATION
(1) the claimant for retirement benefits was still
The ER may terminate the employment of any in the employ of the employer at the time the
EE due to the above-mentioned authorized statute took effect; and
causes by serving a written notice on the EE and
(2) the claimant had complied with the
the DOLE through its regional office having
requirements for eligibility for such retirement
jurisdiction over the place of business at least 1
benefits under the statute. [Universal Robina
month before the intended date thereof.
Sugar Milling Corp. v. Cabanella, 2008]
BASIS OF SEPARATION PAY
a. ELIGIBILITY
All employees in the private sector, regardless of (2) Cash equivalent of five (5) days of service
their position, designation, or status, and incentive leave;
irrespective of the method by which their wages
(3) One-twelfth (1/12) of the 13th month pay.
are paid [Sec 1, RA 7641]
(1/12 x 365/12 = .083 x 30.41 = 2.52)
The only exceptions are:
Thus, “one-half month salary” is equivalent to
(1) employees covered by the Civil Service Law; 22.5 days. [Capitol Wireless, Inc. v. Sec.
Confesor, 1996]
(2) domestic helpers and persons in the
personal service of another, Other benefits may be included in the
computation of the retirement pay upon
(3) employees in retail, service and agricultural
agreement of the ER and the EE or if provided in
establishments or operations regularly
the CBA.
employing not more than ten employees
Retirement pay under RA 7641 vis-à-vis
Age of retirement
retirement benefits under SSS and GSIS laws
EEs shall be retired upon reaching the age of 60
RA 7641 mandates payment of retirement
years or more but not beyond 65 years old (and
benefits. All private sector employees regardless
have served the establishment for at least 5
of their position, designation or status and
years).
irrespective of the method by which their wages
Optional retirement – in the absence of a are paid are entitled to retirement benefits upon
retirement plan or other applicable agreement compulsory retirement at the age of sixtyfive
providing for retirement benefits of EEs in an (65) or upon optional retirement at sixty (60) or
establishment, an EE may retire upon reaching more but not 65. The minimum retirement pay
the age of 60 or more if he has served for at least due covered employees shall be equivalent to
5 years in said establishment. one-half month salary for every year of service,
a fraction of at least six (6) months being
Compulsory retirement – in the absence of a considered as one whole year. The benefits
retirement plan or other applicable agreement under this law are other than those granted by
providing for retirement benefits of EEs in an the SSS or the GSIS.
establishment, an EE shall be retired at the age
of 65 years. Retirement Benefits under a CBA or Applicable
Contract
b. Amount of retirement pay
Any EE may retire or be retired by his/her ER
The minimum retirement pay shall be upon reaching the age established in the CBA or
equivalent to onehalf (1/2) month salary for other applicable agreement/contract and shall
every year of service, a fraction of at least six (6) receive the retirement benefits granted therein;
months being considered as one whole year. provided, however, that such retirement
For the purpose of computing retirement pay, benefits shall not be less than the retirement pay
“one-half month salary” shall include all of the required under RA 7641, and provided further
following: that if such retirement benefits under the
agreement are less, the ER shall pay the
(1) Fifteen (15) days salary based on the latest difference. Where both the ER and the EE
salary rate; contribute to a retirement fund pursuant to the
applicable agreement, the ER’s total private firms, whether individual or corporate, in
contributions and the accrued interest thereof accordance with a reasonable private benefit
should not be less than the total retirement plan maintained by the employer
benefits to which the EE would have been
(1) shall be exempt from all taxes and
entitled had there been no such retirement
benefits’ fund. If such total portion from the ER (2) shall not be liable to attachment,
is less, the ER shall pay the deficiency. garnishment, levy or seizure by or under any
legal or equitable process whatsoever.
c. Retirement benefits of workers paid by
results Exception
For covered workers who are paid by result and Except to pay a debt of the official or employee
do not have a fixed monthly salary rate, the basis concerned to the private benefit plan or that
for the determination of the salary for 15 days arising from liability imposed in a criminal action.
shall be their average daily salary (ADS). The ADS
is derived by dividing the total salary or earning J. WOMEN WORKERS
for the last 12 months reckoned from the date of a. Provisions against discrimination
retirement by the number of actual working days
in that particular period, provided that the It shall be unlawful for any employer to
determination of rates of payment by results are discriminate against any woman employee with
in accordance with established regulations respect to terms and conditions of employment
solely on account of her sex.
d. Retirement benefits of part- time workers
The following are acts of discrimination:
Part-time workers are also entitled to
retirement pay of “one-month salary” for every (1) Payment of a lesser compensation, including
year of service under RA 7641 after satisfying the wage, salary or other form of remuneration and
following conditions precedent for optional fringe benefits, to a female employees as against
retirement: a male employee, for work of equal value; and
(a) There’s no retirement plan between the ER (2) Favoring a male employee over a female
and the EE; and, employee with respect to promotion, training
opportunities, study and scholarship grants
(b) The EE should have reached the age of 60 solely on account of their sexes. [Art. 135 LC].
years, and should have rendered at least 5 years
of service with the ER. b. Stipulation against marriage
Applying the foregoing principle, the It shall be unlawful for an employer to require as
components of retirement benefit of part-time a condition of employment or continuation of
workers may likewise be computed at least in employment that a woman employee shall not
proportion to the salary and related benefits due get married, or to stipulate expressly or tacitly
them. that upon getting married a woman employee
shall be deemed resigned or separated or to
e. Taxability actually dismiss, discharge, discriminate or
[SEC.1, RA 4917] Any provision of law to the otherwise prejudice a woman employee merely
contrary notwithstanding, the retirement by reason of her marriage. [Art. 136, LC]
benefits received by officials and employees of Bona fide occupational qualification exception
When the employer can prove that the Expulsion of Women faculty/ female student
reasonable demands of the business require a due to pregnancy outside of marriage
distinction based on marital status and there is
[Sec 13c RA 9710 Magna Carta of Women]
no better available or acceptable policy which
would better accomplish the business purpose, (c) Expulsion and non-readmission of women
an ER may discriminate against an EE based in faculty due to pregnancy outside of marriage
the identity of the EE’s spouse. [Star Paper Corp. shall be outlawed. No school shall turn out or
vs. Simbol, 2006] The Court sustained the validity refuse admission to a female student solely on
of employer policy prohibiting an employee from the account of her having contracted pregnancy
having a personal or marital relationship with an outside of marriage during her term in school.
employee of a competitor. The prohibition was
reasonable under the circumstances because d. Anti Sexual Harassment Act[RA 7877]
relationships of such nature might compromise Unlawful Forms of Sexual Harassment
the interests of the company. [Duncan Employment or Work Related
Association of Detailmen vs. Glaxo Wellcome,
2004] (1) The sexual favor is made as a condition (HFR)
c. Prohibited Acts [ART.137, LC] (a) in the hiring or in the employment, re-
employment or continued employment of said
Note: Nightwork/ Exception [Art 130-131] – No individual or
more nightwork prohibition under R.A. 10151.
(b) in granting said individual favorable
Discrimination [Art 135, RA 9710] compensation, terms, conditions, promotions,
Stipulation against marriage [Art 136] or privileges, or
Discharge to prevent enjoyment of benefits [Art (c) in the refusal to grant the sexual favor results
137(a)(1)] To deny any woman employee the in limiting, segregating or classifying the EE
benefits provided for in this Chapter or to which in any way would discriminate, deprive or
discharge any woman employed by him for the diminish employment opportunities or
purpose of preventing her from enjoying any of otherwise adversely affect said employee;
the benefits provided under this Code. (2) The above acts would either:
Discharge on account of pregnancy [Art (a) impair the employee’s rights or privileges
137(a)(2)] To discharge such woman on account under existing labor laws; or
of her pregnancy, while on leave or in
confinement due to her pregnancy. (b) result in an intimidating, hostile, or offensive
environment for the employee.
Discharge on account of testimony [Art
137(a)(3)] To discharge or refuse the admission Education or Training environment
of such woman upon returning to her work for In an education or training environment, sexual
fear that she may again be pregnant. [Book III, harassment is committed: (CECI)
Rule XII, Sec 13(d)] It shall be unlawful for any
employer: …to discharge any woman or child or (a) Against one who is under the care, custody
any other employee for having filed a complaint or supervision of the offender
or having testified or being about to testify under
the Code.
(b) Against one whose education, training, (1) if he is informed of such acts by the offended
apprenticeship or tutorship is entrusted to the party and
offender;
(2) no immediate action is taken thereon.
(c) When the sexual favor is made a condition to
Independent Action for Damages
the giving of a passing grade, or the granting of
honors and scholarships, or the payment of a The victim of work, education or training-related
stipend, allowance or other benefits, privileges, sexual harassment can institute a separate and
or considerations; or independent action for damages and other
affirmative relief.
(d) When the sexual advances result in an
intimidating, hostile or offensive environment Sanctions
for the result, trainee or apprentice.
(1) Criminal: imprisonment of 1 month to mos.
Persons who may be liable Or fine of P10k to P20k or both Prescription of
such action is in 3 years.
(1) Any employer, employee, manager,
supervisor, agent of the employer, teacher, (2) Termination
instructor, professor, coach, trainer or any other
person, regardless of whether the demand, As a managerial employee, petitioner is bound
request for requirement for submission is by more exacting work ethics. When such moral
accepted by the object of said act having perversity is perpetuated against his
authority, influence or moral ascendancy over subordinate, he provides a justifiable ground for
another in a work or training or education his dismissal for lack of trust and confidence. It is
environment, who demands, requests or the right, nay the duty of every employer to
otherwise requires any sexual favor from protect its employees from oversexed superiors.
another, [Libres v. NLRC, 1999]
(2) Any person who directs or induces another Cortez’s plant manager manifested a special
to commit any act of sexual harassment as liking for her, so much so that she was receiving
herein defined. OR special treatment from him who would
oftentimes invite her "for a date," which she
(3) Any person who cooperates in the would as often refuse.
commission by another without which it would
NOT have been committed, shall also be held On many occasions, he would make sexual
liable under this Act advances - touching her hands, putting his arms
around her shoulders, running his fingers on her
Role of the employer or Head of Office arms and telling her she looked beautiful. The
special treatment and sexual advances
The Employer or Head of Office shall have the
continued during her employment for four (4)
duty:
years but eventually, he made her understand
(1) to prevent the commission of such acts and that if she would not give in to his sexual
advances he would cause her termination from
(2) to lay down the procedure for the resolution,
the service; and he made good his threat when
settlement or prosecution of committed acts.
he started harassing her.
He shall be solidarily liable for damages:
Public respondent appears baffled why it took
private respondent more than four years to
expose William Chua's alleged sexual Exceptions
harassment. The gravamen of the offense in
(1) Child works directly under the sole
sexual harassment is not the violation of the
responsibility of his parents or legal guardian and
employee's sexuality but the abuse of power by
where only members of the ER’s family are
the employer. Any employee, male or female,
employed, provided:
may rightfully cry "foul" provided the claim is
well substantiated. Strictly speaking, there is no (2) his employment does NOT endanger his life,
time period within which he or she is expected safety, health and morals,
to complain through the proper channels. The
time to do so may vary depending upon the (3) nor impairs his normal development, and
needs, circumstances, and more importantly, (a) the parent or legal guardian shall provide the
the emotional threshold of the employee. said minor child with the prescribed primary
Not many women are made of the stuff that can and/or secondary education; [Sec. 12 of RA 7610
endure the agony and trauma of a public, even as amended by RA 7658] (4) child’s employment
corporate, scandal. If petitioner corporation had or participation in public entertainment or
not issued the third memorandum that information through cinema, theater, radio or
terminated the services of private respondent, television is essential, provided that: [Sec. 12 of
we could only speculate how much longer she RA 7610 as amended by RA 7658]
would keep her silence. Perhaps, to private (a) employment does NOT involve ads or
respondent's mind, for as long as she could commercials promoting alcohol, tobacco and its
outwit her employer's ploys she would continue by-products or violence [Sec. 14 of RA 7610]
on her job and consider them as mere
occupational hazards. [Phil. Aelous Automotive (b) the employment contract is concluded by
United Corp. v. NLRC, 2000] the child’s parents or guardian, and approved by
DOLE
K. EMPLOYMENT OF MINORS (Labor Code and
RA No.7610, RA No. 9231) (c) The ER shall ensure the protection, health,
safety and morals of the child
CONSTITUTIONAL BASIS Art II, Sec. 13 of the
1987 Constitution (d) The ER shall institute measures to prevent
the child’s exploitation or discrimination taking
(1) The State recognizes the vital role of the into account the system and level of
youth in nation-building and shall promote and remuneration, and the duration and
protect their physical, moral, spiritual, arrangement of working time
intellectual, and social wellbeing.
(e) The ER shall formulate and implement,
(2) It shall inculcate in the youth patriotism and subject to the approval and supervision of
nationalism, and encourage their involvement in competent authorities, a continuing program for
public and civic affairs. training and skills acquisition of the child. [Sec.
General Rule: Children below 15 shall NOT be 12 of RA 7610 as amended by RA 7658]
employed EMPLOYMENT OF CHILDREN FROM 15 TO 18 -
Legal Basis: Art. 139(a) of the Labor Code and allowed but restricted to non-hazardous
Sec. 12 to 16 of RA 7610 as amended by RA 7658 undertakings.
and RA 9231 The following are HAZARDOUS workplaces:
(1) Nature of the work exposes the workers to Compensation
dangerous environmental elements,
Minimum wage rates shall be equivalent to the
contaminants or working conditions;
basic cash wages plus lodging, food and medical
(2) construction work, logging, fire-fighting, attendance. [Art. 143-144; Civil Code Art. 1689]
mining, quarrying, blasting, stevedoring, dock
Minimum wage [Art. 143, as amended by RA
work, deep sea fishing, and mechanized farming;
7655] Househelpers shall be paid the following
(3) manufacture or handling of explosives and minimum wage rates:
other pyrotechnic products;
(1) Eight hundred pesos (P800.00) a month for
(4) exposure to or use of heavy power-driven househelpers in Manila, Quezon, Pasay, and
machinery or equipment; Caloocan cities and municipalities of Makati, San
Juan, Mandaluyong, Muntinlupa, Navotas,
(5) exposure to or use of power-driven tools [IRR
Malabon, Parañaque, Las Piñas, Pasig, Marikina,
Book III Rule XII Sec. 3]
Valenzuela, Taguig and Pateros in Metro Manila
L. EMPLOYMENT OF HOUSEHELPERS and in highly urbanized cities;
(2) Sells any goods, articles, or materials to be (a) explosives, fireworks and articles of like
processed or fabricated in or about a home and character;
then rebuys them after. [Art. 155, LC]
(b) drugs and poisons; and
Note: Sec 2(d), Rule XIV, Book III is substantially
(c) other articles, the processing of which
similar to the above.
requires exposure to toxic substances. [Sec 13,
RIGHTS AND BENEFITS ACCORDED Rule XIV, Book III]
HOMEWORKERS
Regional Office shall provide technical
(1) Right to form, join or assist organizations [Sec assistance to registered homeworkers’
3, Rule XIV, Book III]. organizations [Sec 14, Rule XIV, Book III]
(2) Right to acquire legal personality and the CONDITIONS FOR DEDUCTION FROM
rights and privileges granted by law to legitimate HOMEWORKER’S EARNINGS
labor organizations upon issuance of the
Sec. 8, Rule XIV, Book III: Deduction –
No deduction from the homeworker’s earnings The act of filing the proposed apprenticeship
for the value of materials lost, destroyed or program with the DOLE is a preliminary step
damaged unless: towards its final approval, and does not
instantaneously give rise to an employer
(1) Homeworker is clearly shown to be
apprentice relationship. It must be duly
responsible for loss or damage
approved by the Minister of Labor and
(2) Reasonable opportunity to be heard Employment. Hence, since the apprenticeship
agreement between petitioner and respondent
(3) Amount of deduction is fair and reasonable, has no force and effect, respondent's assertion
and does not exceed actual loss or damage that he was hired not as an apprentice but as a
(4) Deduction does not exceed 20% of delivery boy deserves credence. [Nitto
homeworker’s weekly earnings Enterprises vs. NLRC, 1995]
“Apprenticeable Occupation” is an occupation (a) The employer shall ensure the protection,
officially endorsed by a tripartite body and health, safety, morals and normal development
approved to be apprenticeable by the authority. of the child;
[RA 7796, Sec. 4 (m)]
(b) The employer institute measures to prevent
the child's exploitation or discrimination taking
into account the system and level of Employment of Apprentices: When applicable:
remuneration and the duration and (1) Only employers in highly technical industries
arrangement of working time; and may employ apprentices; and
(c) The employer shall formulate and (2) Only in apprenticeable occupations approved
implement, subject to the approval and by the Secretary of Labor. [Art. 60]
supervision of competent authorities, a
Terms and conditions
continuing program for training and skills
acquisition of the child. Apprenticeship agreements, including the wage
rates of apprentices, shall conform to the rules
In the above exceptional cases where any such
issued by the Secretary of Labor and
child may be employed, the employer shall first
Employment. The period of apprenticeship shall
secure, before engaging child, a work permit
not exceed six months. Apprenticeship
from the Department of Labor and Employment
agreements providing for wage rates below the
which shall ensure observance of the above
legal minimum wage, which in no case shall start
requirements.
below 75 percent of the applicable minimum
The Department of Labor and Employment shall wage, may be entered into only in accordance
promulgate rules and regulations necessary for with apprenticeship programs duly approved by
the effective implementation of this Section. [RA the Secretary of Labor and Employment. [LC, Art.
7160, Sec. 12 as amended by RA 7658, Sec. 1] 61] The Secretary of Labor and Employment may
authorize the hiring of apprentices without
Qualifications of apprentice
compensation whose training on the job is
(b) Possess vocational aptitude and capacity for required by the school or training program
appropriate tests; and curriculum or as requisite for graduation or
board examination. [Art. 72, LC] Note: Wage
(c) Possess the ability to comprehend and follow Order No. NCR-17, May 17, 2012 also provides
oral and written instructions. [Art. 59, LC] that the wages of apprentices and learners shall
Integrating both the abovementioned in no case be less than seventy-five percent
provisions then the qualifications of an (75%) of the applicable minimum wage rates.
apprentice are as follows: Enforcement
(1) At least 15 years of age [as amended by R.A. No person shall institute any action for the
7610], provided that if he is below 18 years, he enforcement of any apprenticeship agreement
shall not be eligible for hazardous occupation; or damages for breach of any such agreement,
(2) Possess vocational aptitude and capacity for unless he has exhausted all available
appropriate tests; administrative remedies. [Art. 67, LC]
(3) Possess the ability to comprehend and follow Incentives for employers
oral and written instructions. [Art. 59 of the LC, An additional deduction from taxable income of
as amended by R.A. 7610]. one-half (1/2) of the value of labor training
(4) Physically fit for occupation expenses incurred for developing the
productivity and efficiency of apprentices shall
Allowed employment be granted to the person or enterprise
See: RA 7769, Sec. 4 (m) above organizing an apprenticeship program: Provided,
That such program is duly recognized by the Working scholars – there is no employer-
Department of Labor and Employment: employee relationship between students on one
Provided, further, That such deduction shall not hand, and schools, colleges or universities on the
exceed ten (10%) percent of direct labor wage: other, where there is written agreement
and Provided, finally, That the person or between them under which the former agree to
enterprise who wishes to avail himself or itself of work for the latter in exchange for the privilege
this incentive should pay his apprentices the to study free of charge, provided, the students
minimum wage. [LC Art. 71] are given real opportunities, including such
facilities as may be reasonable and necessary to
Summary of Rules:
finish their chosen courses under such
(1) The apprentice must be paid not less than agreement. [Sec. 14, Rule X, IRR]
75% of the prescribed minimum salary [Art. 61];
LEARNERS
Exception: The employer MAY NOT pay any wage
Definition
if the apprenticeship training is:
"Learners" refers to persons hired as trainees in
(a) part of the school curriculum,
semiskilled and other industrial occupations
(b) a requirement for graduation, or which are nonapprenticeable. Learnership
programs must be approved by the authority.
(c) a requirement for board examination [Art. 72] [RA 7796, Sec. 4] (Occupations) which may be
(2) The apprenticeship agreement must be learned through practical training on the job in a
approved by the DOLE Secretary (without such relatively short period of time which shall not
one shall be deemed a regular employee) [Nitto exceed three (3) months. [Art. 73, sentence 2,
Enterprises v. NLRC, G.R. No. 114337, Sept. 29, LC]
1995]; Allowed employment
(3) The employer is not compelled to continue Learners may be employed when no
one’s employment upon termination of experienced workers are available, the
apprenticeship; employment of learners is necessary to prevent
(4) One-half (1/2) of the value of labor training curtailment of employment opportunities, and
expenses incurred for developing the the employment does not create unfair
productivity and efficiency of apprentices of the competition in terms of labor costs or impair or
training cost is deducted from the employer’s lower working standards. [Art. 74, LC]
income tax but it shall not exceed 10% of direct When learners may be hired
labor wage [Art. 71]
(1) No experienced workers are available;
Requisites of the deduction:
(2) The employment of learners being necessary
(a) Apprenticeship program must be duly to prevent the curtailment of employment
approved by the DOLE; opportunities; and
(b) Deduction shall NOT exceed 10% of direct (3) The employment will neither create unfair
labor wage; competition in terms of labor costs nor impair
(c) Employer must pay his apprentices the working standards.
minimum wage. Terms and conditions of employment
Any employer desiring to employ learners shall process after 2 months of service, he will be
enter into a learnership agreement with them, deemed as regular employee; and
which agreement shall include:
(5) The wages or salary rates of the learners
(1) The names and addresses of the learners; which shall begin at not less than 75% of the
applicable minimum wage.
(2) The duration of the learnership period, which
shall not exceed three (3) months; PERSONS WITH DISABILITY [RA 7277, as
amended by RA No. 9442] – DIFFERENTLY
(3) The wages or salary rates of the learners
ABLED WORKERS
which shall begin at not less than seventy-five
percent (75%) of the applicable minimum wage; a. DEFINITION
and
“Disabled Persons” are those suffering from
(4) A commitment to employ the learners if they restriction or different abilities, as a result of a
so desire, as regular employees upon completion mental, physical or sensory impairment, to
of the learnership. All learners who have been perform an activity in the manner or within the
allowed or suffered to work during the first two range considered normal for a human being
(2) months shall be deemed regular employees if
“Impairment” is any loss, diminution or
training is terminated by the employer before
aberration of psychological, physiological, or
the end of the stipulated period through no fault
anatomical structure or function
of the learners.
“Disability” shall mean:
(5) The learnership agreement shall be subject to
inspection by the Secretary of Labor and (1) Physical or mental impairment that
Employment or his duly authorized substantially limits one or more psychological,
representative. [Art. 75, LC] physiological or anatomical function of an
individual or activities of such individual;
Note: Learners employed in piece or incentive-
rate jobs during the training period shall be paid (2) a record of such an impairment;
in full for the work done. [Art. 76, LC]
(3) or being regarded as having such an
Summary of Rules impairment
(1) The duration of learnership shall not exceed “Handicap” refers to a disadvantage for a given
3 months [Art. 73]; individual, resulting from an impairment or a
disability that limits or prevents the function or
(2) If the learnership of 3 months is completed,
activity that is considered normal given the age
the employer may be compelled to continue
and sex of the individual.
with the services of the learner as a regular
employee [Art. 75(d)]; b. RIGHTS OF DISABLED WORKERS
(3) There is a commitment from the employer to Equal opportunity for employment
employ the learners if they so desire, as regular
employees upon completion of the learnership No disabled person shall be denied access to
[Art. 75(d)]; opportunities for suitable employment. A
qualified disabled EE shall be subject to the same
(4) If the learner is dismissed from service terms and conditions of employment and the
without just and valid cause and without due same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified Code. In the present case, the handicap of
ablebodied person. [Sec. 5 [par. 1], RA 7277] petitioners [deaf-mutes] is NOT a hindrance to
their work. The eloquent proof of this statement
Reserved contractual positions
is the repeated renewal of their employment
5% of all casual, emergency and contractual contracts. [Bernardo v. NLRC, 1999]
positions in the DSWD; DOH, DepEd; and other
Discounts and other privileges
government agencies, offices or corporations
engaged in social development shall be reserved (a) Persons with disability shall be entitled to the
for disabled persons. [Sec 5 [par. 2], RA 72777] following:
Full minimum wage (f) At least 20% discount on medical and dental
services including diagnostic and laboratory fees
All qualified handicapped workers shall receive
and professional fees of attending doctors in all
the full amount of the minimum wage rate
private hospitals and medical facilities, in
prescribed herein. [Sec 7, Wage Order No. NCR-
accordance with the rules and regulations to be
17, May 17, 2012] In this light, the Magna Carta
issued by the DOH, in coordination with
for Disabled Persons mandates that a qualified
PHILHEALTH;
disabled EE should be given the same terms and
conditions of employment as a qualified able- (g) At least 20% discount on fare for domestic air
bodied person. Since the Magna Carta accords and sea travel for the exclusive use or enjoyment
them the rights of qualified able-bodied persons, of persons with disability;
they are thus covered by Article 280 of the Labor
(h) At least 20% discount in public railways, (c) Transportation discount fare ID issued by the
skyways, and bus fare for the exclusive use and National Council for the Welfare of Disabled
enjoyment of persons with disability. Persons (NCWDP).
(i) Educational assistance to persons with The privileges may not be claimed if the persons
disability, for them to pursue primary, with disability claim a higher discount as may be
secondary, tertiary, post tertiary, as well as granted by the commercial establishment
vocational or technical education, in both public and/or under other existing laws or in
and private schools, through the provision of combination with other discount program/s.
scholarships, grants, financial aids, subsidies and
c. Prohibitions on discrimination against
other incentives to qualified persons with
persons with disability
disability, including support for books, learning
materials and uniform allowance to the extent Discrimination of Employment
feasible; Provided, That persons with disability
shall meet minimum admission requirements; No entity, whether public or private shall
discriminate against a qualified disabled person
(j) To the extent practicable and feasible, the by reason of disability in regard to job
continuance of the same benefits and privileges application procedures, the hiring, promotion, or
given by the GSIS, SSS, and PAG-IBIG, as the case discharge of employees compensation, job
may be, as are enjoyed by those in actual service; training and other terms, conditions and
privileges of employment. The following
(k) To the extent possible, the government may
constitute acts of discrimination:
grant special discounts in special programs for
persons with disability on purchase of basic (1) Limiting, segregating or classifying a disabled
commodities, subject to guidelines to be issued job applicant in such a manner that adversely
for the purpose by the DTI and the DA; and affects his work opportunities
(l) Provision of express lanes for persons with (2) Using qualification standards, employment
disability in all commercial and government tests or other selection criteria that screen out or
establishments; in the absence thereof, priority tend to screen out a disabled person unless such
shall be given to them. [Sec 32, RA 7277, as standards, tests or other selection criteria are
amended by RA 9442] shown to be related for the position in question
and are consistent with business necessity;
Conditions for entitlement
(3) Utilizing standards, criteria, or methods of
The privileges in Sec 32 are available only to
administration that:
persons with disability who are Filipino citizens
upon submission of any of the following as proof (a) have the effect of discrimination on the basis
of his/her entitlement thereto: of disability; or
(a) An identification card issued by the city or (b) perpetuate the discrimination of others who
municipal mayor or the barangay captain of the are the subject to common administrative
place where the persons with disability reside; control.
(b) The passport of the persons with disability (4) Providing less compensation, such as salary,
concerned; or, wage or other forms of remuneration and fringe
benefits, to qualified disabled employee, by
reason of his disability, than the amount to
which a non-disabled person performing the (1) supervisors and managers may be informed
same work is entitled; regarding necessary restrictions on the work or
duties of the employees and necessary
(5) Favoring a non-disabled employee over a
accommodations:
qualified disabled employee with respect to
promotion, training opportunities, study and (2) first aid and safety personnel may be
scholarship grants, solely on account of the informed, when appropriate, if the disability
latter's disability; might require emergency treatment;
(7) Dismissing or terminating the services of a (4) the results of such examination are used only
disabled employee by reason of his disability in accordance with this Act. [Sec. 32, RA 7277]
unless the employer can prove that he impairs
Prohibition on Verbal, Non-Verbal Ridicule and
the satisfactory performance of the work
Vilification Against Persons with Disability
involved to the prejudice of the business entity;
Provided, however, That the employer first Public Ridicule
sought to provide reasonable accommodations
for the disabled persons; The act of making fun of or contemptuous
imitating or making mockery of persons with
(8) Failing to select or administer in the most disability whether in writing, or in words, or in
effective manner employment tests which action due to their impairments. [Sec. 39, RA
accurately reflect the skills, aptitude or other 7277, as amended]
factor of the disabled applicant or employee that
such test purports to measure, rather than the Prohibition
impaired sensory, manual or speaking skills of No individual, group or community shall execute
such applicant or employee, if any; and any of these acts of ridicule against persons with
(9) Excluding disabled persons from membership disability in any time and place which could
in labor unions or similar organizations. intimidate or result in loss of self-esteem of the
latter.
Employment Entrance Examination
Vilification includes:
Upon an offer of employment, a disabled
applicant may be subjected to medical (a) The utterance of slanderous and abusive
examinations, on the following occasions: statements against a person with disability;
and/or,
(a) all entering employees are subjected to such
an examination regardless of disability; (b) An activity in public which incites hatred
towards, serious contempt for, or severe ridicule
(b) Information obtained during the medical of persons with disability. [Sec. 41, RA 7277, as
condition or history of the applicant is collected amended]
and maintained on separate forms and in
separate medical files and is treated as a Prohibition Any individual, group or community
confidential medical record; Provided, however, is hereby prohibited from vilifying any person
That: with disability which could result into loss of self-
esteem of the latter.
d. Incentives for Employers
(1) First Tier: Control Test (refer to the Four-Fold A probationary employee is one who is on trial
Test) by an employer during which the employer
determines whether or not he is qualified for
(2) Second Tier: The underlying economic permanent employment [International Catholic
realities of the activity or relationship. [Sevilla v. Migration Comm. vs. NLRC, 1989]
Court of Appeals].
Termination - Can only be terminated for:
The benchmark of economic reality in analyzing
possible employment purposes ought to be the (1) Just causes; or
economic dependence of the worker on his
(2) Failure to qualify as a regular employee in
employer.
accordance with reasonable standards made
The standard of “economic dependence” is known by the employer to the employee at the
whether the worker is dependent on the alleged time of engagement.
employer for his continued employment in that
Note: The probationary employee is entitled to
line of business. [Orozco v. CA, GR No. 155207,
substantial and procedural due process before
13 August 2008].
termination.
2. KINDS OF EMPLOYMENT
Limitations to termination
a. Probationary
(1) It must be exercised in accordance with the
Legal basis specific requirements of the contract
Probationary employment shall not exceed 6 (2) If a particular time is prescribed, the
months from the date the employee started termination must be within such time and if
working, unless it is covered by an formal notice is required, then that form must be
apprenticeship agreement stipulating a longer used;
(3) The employer’s dissatisfaction must be real (18) months, i.e. from May, 1980 to October,
and in good faith, not feigned so as to circumvent 1981 inclusive, especially where the employee
the contract or the law; must learn a particular kind of work such as
selling, or when the job requires certain
(4) There must be no unlawful discrimination in
qualifications, skills, experience or training.
the dismissal. [Manila Hotel Corporation v. NLRC,
[Busier vs. Leogardo, 1984]
G.R. No. 53453, January 22, 1986].
Honasan was certainly under observation during
Purposes
her threeweek on-the-job training. If her services
(1) Observance Period – for employer to proved unsatisfactory then, she could have been
determine if employee is qualified and for dropped as early as during that period. But she
employee to demonstrate to the ER his skills was not. On the contrary, her services were
continued, presumably because they were
(2) Restrictive- As long as the termination was acceptable, although she was formally placed
made before the expiration of the six-month this time on probation.
probationary period, the employer has a right to
sever the employer-employee relationship Even if it be supposed that the probation did not
Indeed, the employer has the right or is at liberty end with the three-week period of on-the-job
to choose as to who will be hired and who will be training, there is still no reason why that period
declined. It is within the exercise of this right to should not be included in the stipulated six-
select his employees that the employer may set month period of probation. Honasan was
or fix a probationary period within which the accepted for on-the-job training on April 15,
latter may test and observe the conduct of the 1991. Assuming that her probation could be
former before hiring him permanently. The right extended beyond that date, it nevertheless
of a laborer to sell his labor to such persons as he could continue only up to October 15, 1991,
may choose is, in its essence, the same as the after the end of six months from the earlier date.
right of an employer to purchase labor from any Under this more lenient approach, she had
person whom it chooses. The employer and the become a regular employee of Holiday Inn and
employee have thus an equality of right acquired full security of tenure as of October 15,
guaranteed by the Constitution. [Grand Motors 1991. [Holiday Inn Manila vs. NLRC, 1993]
Corp. vs. MOLE, 1984]
Paras started reporting for work on May 27,
Duration 1996. The employers unanimously agreed that
his performance was unsatisfactory. On
Generally, the probationary period of November 26, 1996, he received a Notice of
employment is limited to six (6) months. The Termination dated November 25, 1996, Applying
exception to this general rule is when the parties Article 13 of the Civil Code, the probationary
to an employment contract may agree period of six (6) months consists of one hundred
otherwise, such as when the same is established eighty [180] days. As clearly provided for in the
by company policy or when the same is required last paragraph of Article 13, in computing a
by the nature of work to be performed by the period, the first day shall be excluded and the
employee. In the latter case, there is recognition last day included. Thus, the one hundred eighty
of the exercise of managerial prerogatives in [180] days commenced on May 27, 1996, and
requiring a longer period of probationary ended on November 23, 1996. By the time Paras
employment, such as in the present case where received the letter he was already a regular
the probationary period was set for eighteen employee of the petitioner under Article 281 of
the Labor Code. [Mitsubishi Motors vs. Chrysler performance evaluation on a particular date
Union, 2004] after his hiring. [Alcira vs. NLRC, 2004]
(1) if the particular activity performed by the (1) it has been fixed for a specific undertaking,
employee is necessary or desirable in the usual the completion of or termination of which has
business or trade of the employer; and, been determined at the time of the engagement
of the employee or
(2) if the employee has been performing the job
for at least a year. [Pangilinan vs. Gen. Milling (2) where the work or services to be performed
Corp., 2004] is seasonal in nature and the employment is for
the duration of the season.
Standard of determination [Reasonable
connection rule] Quite to the contrary, the private respondent's
work, that of "typist-clerk" is far from being
The primary standard in determining regular "specific" or "seasonal", but rather, one "where
employment is the reasonable connection the employee has been engaged to perform
between the particular activity performed by the activities which are usually necessary or
employee in relation to the usual business or
desirable in the usual business." And under the defined, project employees are those workers
Code, where one performs such activities, he is a hired:
regular employee, "(t)he provisions of written
(1) for a specific project or undertaking, and
agreement to the contrary notwithstanding …”
(2) the completion or termination of such project
It is true that in Biboso vs Victorias Milling
or undertaking has been determined at the time
Company, Inc. we recognized the validity of
of the engagement of the employee. [PNOC
contractual stipulations as to the duration of
Energy Dev’t Corp vs. NLRC, 2007]
employment. But we cannot apply it here
because clearly, the contract-to-contract Indicators of project employment
arrangement given to the private respondent
was but an artifice to prevent her from acquiring (1) The duration of the specific/identified
security of tenure and to frustrate constitutional undertaking for which the worker is engaged is
decrees. [Beta Electric Corp. vs. NLRC, 1990] reasonably determinable;
(1) There is a continuous rehiring of project Private respondents, as well as the other 30
employees even after cessation of a project; and workers, were needed as additional hands for
the renovation work and not for ordinary upkeep
(2) The tasks performed by the alleged “project
and maintenance. The erection of the fire escape
employee” are vital, necessary, and
and other small jobs after the renovation cannot
indispensable to the usual business or trade of
be deemed maintenance but more of casual
the employer. However, the length of time
work. [Phil. Jai-Alai and Amusement Corp. vs.
during which the EE was continuously rehired is
Clave, 1983]
not controlling, but merely serves as a badge of
regular employment. The corporation does not construct vessels for
sale or otherwise which will demand continuous
A work pool may exist although the workers in
production of ships and will need regular
the pool do not receive salaries and are free to
workers. It merely accepts contracts for ship-
seek other employment during temporary
building or for repair of vessels from third
breaks in the business, provided, that the worker
parties. It is only on occasion when it has work
shall be available when called to report for a
contract of this nature that it hires workers to do
project. Although primarily applicable to regular
the job which, needless to say, lasts only for less
seasonal workers, this set-up can likewise be
than a year or longer. Completion of their work
applied to project workers insofar as the effect
or project automatically terminates their
of temporary cessation of work is concerned.
employment. [Sandoval Shipyards, Inc. vs. NLRC,
[Maraguinot vs. NLRC, 1998]
1985]
Members of a work pool from which a
Petitioner was engaged to perform data
construction company draws its project
encoding and keypunching, and her employment
employees, if considered employees of the
was fixed for a specific project or undertaking
construction company while in the work pool,
the completion or termination of which had
been determined at the time of her engagement. public policy and morals. [Purefoods Corp. vs.
This may be observed from the series of NLRC, 1987]
employment contracts between petitioner and
Continuous rehiring
private respondent, all of which contained a
designation of the specific job contract and a Despite the insistence of petitioner that they
specific period of employment. [Imbuido vs. were project employees, the facts show that as
NLRC, 2000] masons, carpenters and fine graders in
petitioner’s various construction projects, they
Employer obligation to make standards known
performed work which was usually necessary
The law is clear that in all cases involving and desirable to petitioner’s business which
employees engaged on probationary' basis, the involves construction of roads and bridges. It is
employer shall make known to the employee at not enough that an employee is hired for a
the time he is hired, the standards by which he specific project or phase of work. There must
will qualify as a regular employee. also be a determination of, or a clear agreement
on, the completion or termination of the project
Nowhere in the employment contract executed
at the time the employee was engaged. This
between petitioner and respondent Grulla is
second requirement was not met in this case.
there a stipulation that the latter shall undergo a
[Chua vs. Court of Appeals, 2004] The fact that
probationary period for three months before he
the workers have been employed with the
can quality as a regular employee.
company for several years on various projects,
There is also no evidence on record showing that the longest being nine (9) years, did not
the respondent Grulla had been apprised of his automatically make them regular employees
probationary status and the requirements which considering that the definition of regular
he should comply in order to be a regular employment in Article 280 of the Labor Code,
employee. In the absence of these requisites, makes specific exception with respect to project
there is justification in concluding that employment. The re-hiring of petitioners on a
respondent Grulla was a regular employee at the project-toproject basis did not confer upon them
time he was dismissed by petitioner, and as such regular employment status. The practice was
cannot be done without just and authorized dictated by the practical consideration that
cause. [A. M. Oreta and Co., Inc. vs. NLRC, 1989] experienced construction workers are more
preferred. It did not change their status as
Specified period project employees. [C.E. Construction Corp vs.
The Court has upheld the legality of fixed-term Cioco, 2004]
employment. It ruled that the decisive d. Seasonal employment
determinant in term employment should not be
the activities that the employee is called upon to Work or services to be performed are seasonal
perform but the day certain agreed upon by the in nature, employment is for the duration of the
parties for the commencement and termination season.
of their employment relationship. But, this Court
No continuing need for the worker.
went on to say that where from the
circumstances it is apparent that the periods “Regular Seasonal” Employees after One
have been imposed to preclude acquisition of Season
tenurial security by the employee, they should
be struck down or disregarded as contrary to
Regular seasonal employees are those called to When not regular, project or seasonal
work from time to time. The nature of their employee. Requirements to become Regular
relationship with the employer is such that employee:
during off season they are temporarily laid off
(1) one (1) year service, continuous or broken
but during summer season they are reemployed,
or when their services may be needed. They are (2) with respect to activity employed
not, strictly speaking, separated from the service
but are merely considered as on leave of absence (3) employment shall continue while such
without pay until they are reemployed. Their activity exists
employment relationship is never severed but Nature of work
only suspended. As such those employees can be
considered as in the regular employment of the What determines regularity or casualness is not
employer. [Manila Hotel Co. v. CIR, G.R. No. L- the employment contract, written or otherwise,
18875, Sept. 30, 1963]. but the nature of the job. If the job is usually
necessary or desirable to the main business of
For respondents to be excluded from those the employer, then employment is regular. [A.
classified as regular employees, it is not enough M. Oreta and Co., Inc. vs. NLRC, 1989]
that they perform work or services that are
seasonal in nature. They must have been One-year service
employed only for the duration of one season. The fact that the petitioners have been hired on
While the records sufficiently show that the a "temporary or seasonal" basis merely is no
respondents’ work in the hacienda was seasonal argument either.
in nature, there was, however, no proof that
they were hired for the duration of one season As held in Philippine Bank of Communications v.
only. In fact, the payrolls, submitted in evidence NLRC, a temporary or casual employee, under
by the petitioners, show that they availed the Article 281 of the Labor Code, becomes regular
services of the respondents since 1991. Absent after service of one year, unless he has been
any proof to the contrary, the general rule of contracted for a specific project.
regular employment should, therefore, stand.
And we cannot say that merchandising is a
The disparity in facts between the Mercado Sr., specific project for the obvious reason that it is
vs. NLRC case and the instant case is best an activity related to the day-to-day operations
exemplified by the fact that the farm laborers, of California. The records show that the
work only for a definite period for a farm worker, petitioners had been given an initial six month
after which they offer their services to other contract, renewed for another six months.
farm owners. In Mercado, although respondent Accordingly, under Article 281 of the Code, they
constantly availed herself of the petitioners’ had become regular employees — of California
services from year to year, it was clear from the — and had acquired a secure tenure. Hence,
facts therein that they were not in her regular they cannot be separated without due process of
employ. In other words, they worked for law. [Tabas vs. California Marketing Co., Inc.,
respondent, but were nevertheless free to 1989]
contract their services with other farm owners.
f. Fixed term employment
[Hacienda Bino vs. Cuenca, 2005]
Article 280 of the Labor Code does not proscribe
e. Casual employment
or prohibit an employment contract with a fixed
period provided the same is entered into by the 1990; Romares v. NLRC, 1998; Medenilla v. Phil.
parties, without any force, duress or improper Veterans Bank, 2000]
pressure being brought to bear upon the
(3) If a contract is for a fixed term and the
employee and absent any other circumstance
Employee is dismissed without just cause, he is
vitiating consent.
entitled to the payment of his salaries
(1) It does not necessarily follow that where the corresponding to the unexpired portion of the
duties of the employee consist of activities employment contract. [Medenilla v. Phil.
usually necessary or desirable in the usual Veterans Bank, 2000]
business of the employer, the parties are
3. JOB CONTRACTING
forbidden from agreeing on a period of time for
the performance of such activities. There is thus a. Article 106 to 109 of the Labor Code
nothing essentially contradictory between a
definite period of employment and the nature of Article 106. Contractor or subcontractor.
the employee's duties. Whenever an employer enters into a contract
with another person for the performance of the
(2) It goes without saying that contracts or former’s work, the employees of the contractor
employment govern the relationship of the and of the latter’s subcontractor, if any, shall be
parties. In this case, private respondent's paid in accordance with the provisions of this
contract provided for a fixed term of nine (9) Code. In the event that the contractor or
months, from June 1, 1991 to March 31, 1992. subcontractor fails to pay the wages of his
Such stipulation, not being contrary to law, employees in accordance with this Code, the
morals, good customs, public order and public employer shall be jointly and severally liable with
policy, is valid, binding and must be respected. his contractor or subcontractor to such
[St. Theresa’s School vs. NLRC 1998] employees to the extent of the work performed
under the contract, in the same manner and
However, the Court upholds the principle that
extent that he is liable to employees directly
where from the circumstances it is apparent that
employed by him. The Secretary of Labor and
periods have been imposed to preclude
Employment may, by appropriate regulations,
acquisition of tenurial security by the employee,
restrict or prohibit the contracting-out of labor
they should be disregarded for being contrary to
to protect the rights of workers established
public policy. [Servidad vs. NLRC, 1999]
under this Code. In so prohibiting or restricting,
Requisites for validity he may make appropriate distinctions between
labor-only contracting and job contracting as
This arrangement does NOT circumvent Security
well as differentiations within these types of
of Tenure when:
contracting and determine who among the
(1) Knowingly and voluntarily agreed upon by the parties involved shall be considered the
parties without any force, duress, or improper employer for purposes of this Code, to prevent
pressure or any other circumstances vitiating his any violation or circumvention of any provision
consent; OR of this Code. There is "labor-only" contracting
where the person supplying workers to an
(2) The employer and the employee dealt with employer does not have substantial capital or
each other on more or less equal terms with no investment in the form of tools, equipment,
moral dominance exercised by the former or the machineries, work premises, among others, and
latter. Brent Doctrine [Brent School v. Zamora, the workers recruited and placed by such person
are performing activities which are directly The work activities, shifts, and schedules of the
related to the principal business of such respondents, including time allowed for "recess"
employer. In such cases, the person or were set under the Written Contract of Services.
intermediary shall be considered merely as an This clearly indicates that these matters, which
agent of the employer who shall be responsible consist of the means and methods by which the
to the workers in the same manner and extent as work is to be accomplished, were not within the
if the latter were directly employed by him. absolute control of Grigio.
Article 107. Indirect employer. The provisions of Petitioner’s allegation that Grigio retained
the immediately preceding article shall likewise control by providing supervisors to monitor the
apply to any person, partnership, association or performance of the respondents cannot be given
corporation which, not being an employer, much weight. Instead of exercising their own
contracts with an independent contractor for the discretion or referring the matter to the officers
performance of any work, task, job or project. of Grigio, its supervisors were obligated to refer
to petitioner’s supervisors any discrepancy in the
Article 108. Posting of bond. An employer or
performance of the respondents.
indirect employer may require the contractor or
subcontractor to furnish a bond equal to the cost Lastly, the law casts the burden on the
of labor under contract, on condition that the contractor to prove that it has substantial
bond will answer for the wages due the capital, investment, tools etc. In this case,
employees should the contractor or neither Grigio nor the petitioner was able to
subcontractor, as the case may be, fail to pay the present any proof that Grigio had substantial
same. capital.
Article 109. Solidary liability. The provisions of Lakas vs. Burlingame (2007): No proof was
existing laws to the contrary notwithstanding, adduced to show F. Garil’s capitalization. The
every employer or indirect employer shall be work of the promo-girls was marketing and
held responsible with his contractor or selling, and thus directly related to the principal
subcontractor for any violation of any provision business or operation of Burlingame.
of this Code. For purposes of determining the
Finally, F. Garil did not undertake the
extent of their civil liability under this Chapter,
performance of its service contract according to
they shall be considered as direct employers.
its own manner and method, free from the
Examples control and supervision of Burlingame. Based on
the contract, F. Garil was responsible in the
Aboitiz Haulers vs. Dimapatoi (2006): The
hiring process only with respect to the screening,
allegation of petitioner that Grigio is an
testing and preselection of the personnel it
independent job contractor is without basis. The
provided to Burlingame. Actual hiring itself was
respondents, as checkers, were employed to
done through the deployment of personnel to
check and inspect cargo, a task which is clearly
establishments by Burlingame.
necessary for the petitioner’s business of
forwarding and distributing cargo. Grigio did not The contract also stipulated that Burlingame
undertake the performance of its service shall pay F. Garil a certain sum per worker. F.
contract according to its own manner and Garil merely served as conduit in the payment of
method, free from the control and supervision of wages to the personnel. The interpretation
its principal. would have been different if the payment was
for the job, project, or services rendered during Contracting or subcontracting – an arrangement
the month and not on a per worker basis. whereby a principal agrees to put out or farm out
with a contractor the performance or
The Court has taken judicial notice of the
completion of a specific job, work or service
practice of employers who do not issue payslips
within a definite or predetermined period,
directly to employees. Under current practice, a
regardless of whether such job, work or service
third person, usually the purported contractor
is to be performed or completed within or
[service or manpower placement agency],
outside the premises of the principal.
assumes the act of paying the wage.
Contractor – any person or entity, including a
The contract also provides that “any personnel
cooperative, engaged in a legitimate contracting
found to be inefficient, troublesome,
or subcontracting arrangement providing either
uncooperative and not observing the rules and
services, skilled worker, temporary workers or a
regulations set forth by Burlingame shall be
combination of services to a principal under a
reported to F. Garil and may be replaced upon
Service Agreement.
request.” Corollary to this circumstance would
be the exercise of control and supervision by Contractor’s employee – includes one employed
Burlingame over workers supplied by F. Garil in by a contractor to perform or complete a job,
order to establish the nature of undesirable work, or service pursuant to a Service
personnel. Agreement with a principal. It shall also refer to
regular EEs of the contractor whose functions
b. Department Order No. 18-A, Series of 2011:
are not dependent on the performance or
Rules Implementing Articles 106 to 109 of the
completion of a specific job, work or service
LC, as amended (14 November 2011) Coverage
within a definite period of time i.e.
This shall apply to:
administrative staff.
(1) all parties of contracting and subcontracting
In-house agency – a contractor which is owned,,
arrangements where ER-EE relationships exist
managed, or controlled directly or indirectly by
(2) cooperatives engaging in contracting or
the principal or one where the principal
subcontracting arrangements Contractors and
owns/represents any share of stock, and which
subcontractors referred to in these rules are
operates solely or mainly for the principal.
prohibited from engaging in recruitment and
placement activities as defined in Art. 13(b) of Net Financial Contracting Capacity (NFCC) –
the LC whether for local or overseas refers to the formula to determine the financial
employment. capacity of the contractor to carry out the job,
work or services sought to be undertaken under
DEFINITION OF TERMS
a Service Agreement.
Cabo – a persons or group of persons or a labor
Formula: NFCC = (current assets - current
groups which, in the guise of a labor
liabilities) x (K – value of all outstanding or
organization, cooperative or any entity, supplies
ongoing projects including contracts to be
workers to an employer, with or without any
started)
monetary or other consideration, whether in the
capacity of an agent of the employer or as an K stands for contract duration equivalent to:
ostensible independent contractor.
(a) 10 for one year or less
(b) The contractor has substantial capital and/or (4) The skill required.
investment; and,
(5) The terms and duration of the relationship.
(c) The Service Agreement ensures compliance
(6) The right to assign the performance of the
with all the rights and benefits under Labor laws.
work to another.
Job contracting is permissible only if the
following conditions are met:
(7) The control and supervision of the work and provisions of regular employment in any of the
the employer’s powers with respect to the following instances:
hiring, firing and payment of salaries.
(a) Requiring them to perform functions which
(8) The duty to supply premises, tools, and are currently being performed by the regular EEs
appliances. of the principal; and,
(B) Contracting out of jobs, works, or services Security of tenure of contractor’s EEs
analogous to the above when not done in good
It is understood that all contractor’s EEs enjoy
faith and not justified by the exigencies of the
security of tenure regardless of whether the
business.
contract of employment is co-terminus with the
Mafinco vs. Ople (1976): When an independent service agreement, or for a specific job, work, or
contractor and not an employee: We recognize service, or phase thereof.
that contracting out is not unlimited; rather, it is
Effect of termination of employment
a prerogative that management enjoys subject
to well-defined legal limitations. As we have The termination of the contractor EE prior to the
previously held, the company can determine in expiration of the Service Agreement shall be
its best business judgment whether it should governed by Arts. 282- 284 of the LC. In case the
contract out the performance of some of its termination is caused by the pre-termination of
work for as long as the employer is motivated by the Service Agreement not due to authorized
good faith, and causes under Art. 283, the right of the contractor
EE to unpaid wages and other unpaid benefits
(1) the contracting out must not have been
including unremitted legal mandatory
resorted to to circumvent the law or
contributions, e.g., SSS, Philhealth, Pag-ibig, ECC,
(2) must not have been the result of malicious or shall be borne by the party at fault, without
arbitrary action. [Manila Electric Co. v. prejudice to the solidary liability of the parties to
Quisumbing, 1999] the Service Agreement. Where the termination
result from the expiration of the Service
We perceive at the outset the disposition of the
Agreement, or from the completion of the phase
NLRC that janitorial services are necessary and
of the job, work or service for which the EE is
desirable to the trade or business of petitioner
engaged, the latter may opt for payment of
Coca-Cola. But this is inconsistent with our
separation benefits as may be provided by law or
pronouncement in Kimberly Independent Labor
the Service Agreement, without prejudice to
Union v. Drilon where the Court took judicial
his/her entitlement to the completion bonuses
notice of the practice adopted in several
or other emoluments, including retirement
government and private institutions and
benefits whenever applicable.
industries of hiring janitorial services on an
“independent contractor basis.” In this respect, Mandatory registration
although janitorial services may be considered
It shall be mandatory for all persons or entities,
directly related to the principal business of an
including cooperative, acting as contractors, to
employer, as with every business, we deem
register with the Regional Office of the DOLE
them unnecessary in the conduct of the
where it principally operates. Failure to register
employer’s principal business. [Coca-Cola
Bottlers Phil. Inc. vs. NLRC, 1999]
shall give rise to the presumption that the animation services, back office
contractor is engaged in labor-only contracting. operations/support). These companies engaged
in BPOs may hire employees in accordance with
Contracting or subcontracting arrangements in
applicable laws, and maintain these EEs based on
the Construction and other industries
business requirements, which may or may not be
Contracting or subcontracting arrangements in for different clients of the BPOs at different
the Construction Industry, under the licensing periods of the EE’s employment.
coverage of the Philippine Construction
Applicability to the Construction Industry
Accreditation Board (PCAB), shall be covered by
the applicable provisions of these Rules and shall Licensing and the exercise of regulatory powers
continue to be governed by Dept Order No. 19, over the construction industry is lodged with
Series of 1993 [Guidelines Governing the PCAB which is under the Construction Industry
Employment of Workers in the Construction Authority of the Philippines and not with the
Industry] Dept. Order No 13, Series of 1998 DOLE or any of its regional offices.
[Guidelines Governing the Occupational Safety
Thus, the DOLE, through its regional offices shall
and Health in the Construction Industry]; DOLE-
not require contractors licensed by PCAB in the
DPWH-DILG-DTI and PCAB Memorandum of
Construction Industry to register under DO 18-A.
Agreement-Joint Administrative Order No. 1,
Moreover, findings of violation/s on labor
Series of 2011 on coordination and
standards and occupational health and safety
harmonization of policies and programs on
standards shall be coordinated with PCAB for its
occupational safety and health in the
appropriate action, including the possible
construction industry.
cancellation/suspension of the contractor’s
c. Department Circular No. 01, Series of 2012: license.
Clarifying the Applicability of DO No. 18-A, 2011
d. Effects of finding that there is labor-only
to Business Processing Outsourcing
contracting
(BPO)/Knowledge Process Outsourcing (KPO)
and the Construction Industry Applicability to A finding by a competent authority of labor-only
BPO contracting shall render the principal jointly and
severally liable with the contractor to the latter’s
DO 18-A speaks of a trilateral relationship that
EEs, in the same manner and extent that the
characterizes the covered contracting/sub-
principal is liable to EEs directly hired by him/her.
contracting arrangement. Thus, vendor-vendee
relationship for entire business processes A finding of commission of any of the prohibited
covered by the applicable provisions of the Civil activities in Sec. 7 or violation of either Secs. 8 or
Code on Contracts is excluded. 9 hereof, shall render the principal the direct ER
of the EEs of the contractor or subcontractor.
DO 18-A contemplates generic or focused
[Sec. 27, DO 18-A, 2011]
singular activity in one contract between the
principal and the contractor (for example, If found to be labor-only contractor, it is
janitorial, security, merchandising, specific equivalent to finding that there exists an
production work) and does not contemplate employer-employee relationship between the
information technology-enabled services owner of the project and the employees of the
involving an entire process (for example, BPO, ‘labor-only’ contractor since that relationship is
KPO, legal process outsourcing, hardware and/or
software support, medical transcription,
defined and prescribed by the law itself. (1) Principal – who decides to farm out a job,
[Industrial Timber Corporation vs. NLRC, 1997] work or service to a contractor;
In legitimate job contracting, no employer- (2) Contractor – who has the capacity to
employee relation exists between the principal independently undertake the performance of
and the job contractor's employees. The the job, work, or service; and
principal is responsible to the job contractor's
(3) Contractual workers – engaged by the
employees only for the proper payment of
contractor to accomplish the job, work or
wages. But in labor-only contracting, an
service. [Sec. 3 D.O. 18-A-11]
employeremployee relation is created by law
between the principal and the labor-only In legitimate contracting there exists:
contractor's employees, such that the former is
responsible to such employees, as if he or she (1) An ER-EE relationship between the
had directly employed them. [PAL vs. NLRC, contractor and the employees it engaged to
1998] perform the specific job, work or service being
contracted
The only time the indirect employer may be
made solidarily liable with the contractor is (2) A contractual relationship between the
when the contractor fails to pay his employees principal and the contractor as governed by the
their wages and other benefits claimed. provisions of the CC.
[Landazares vs. Amethyst Security, 2003] Note: In the event of any violation of any
Eparwa Security, Inc. vs Liceo de Cagayan provisions of the LC (including failure to pay
University (2006): Citing Eagle Security Agency wages) there exists a solidary liability on the part
vs. NLRC--In the case at bar, it is beyond dispute of the principal and the contractor for purposes
that the security guards are the employees of of enforcing the provisions of the LC and other
EAGLE (contractor). That they were assigned to social legislation, to the extent of the worked
guard the premises of PTSI (principal) pursuant performed under the employment contract.
to the latter’s contract with EAGLE and that [Sec. 5, D.O. 18-A-11
neither of these two entities paid their wage and B. DISMISSAL FROM EMPLOYMENT
allowance increases under the subject wage
orders are also admitted. Thus, the application Art. 279: in case of regular employment, the
of the aforecited provisions of the Labor Code on employer shall not terminate the services of an
joint and several liability of the principal and employee except for (a) just cause [Art. 282] (b)
contractor is appropriate. authorized cause [Art. 283-284]
(2) Labor Code: regular employees [Art. 279] in (c) If a contract is for a fixed term and the
all establishments or undertakings, whether for Employee is dismissed without just cause, he is
profit or not [Art. 278], except government and entitled to the payment of his salaries
its political subdivisions including government corresponding to the unexpired portion of the
owned or controlled corporations or GOCCs employment contract.
(3) Security of tenure extends to non regular CONFLICT WITH MANAGEMENT PREROGATIVES
Employees
(1) Discipline
(4) Contract Employees – limited extent; secured
(2) Right to dismiss or otherwise impose
during the period their respective contracts of
disciplinary sanctions upon an employee for just
employment remain in effect.
and valid cause, pertains in the first place to the
(5) Probationary Employees – limited extent; employer, as well as the authority to determine
additional limitations on power of Employer to the existence of said cause in accordance with
terminate: the norms of due process.
(1) The employee’s assailed conduct has been (1) It is sufficient that there is some basis for
willful or intentional, the willfulness being such loss of confidence such as when the
characterized by a “wrongful and perverse employer has reasonable ground to believe that
attitude”; and the employee concerned is responsible for the
purported misconduct;
(2) The order violated must have been:
(2) And the nature of his participation therein
(a) Reasonable and lawful;
renders him unworthy of the trust and
(b) Made known to the employee; and confidence demanded of his position
(c) In connection to the duties which he has been Abandonment of employment; elements that
engaged to discharge. must concur
Gross and habitual neglect of duties Abandonment is the deliberate and unjustified
refusal of an Employee to resume his
Gross negligence is want of even slight care, employment. [Nueva Ecija Electric Cooperative
acting or omitting to act in a situation where v. NLRC, 2005]
there is a duty to act, not inadvertently but
willfully and intentionally with a conscious Requisites:
indifference to consequences insofar as other
(1) Failure to report to work or absence w/o valid
persons may be affected.
reason;
Habitual neglect implies repeated failure to
(2) Clear intent to sever the employer-employee
perform one's duties for a period of time,
relationship via overt acts [Floren Hotel v. NLRC,
depending upon the circumstances.
2005]
Requisites
(a) Cannot be lightly inferred, much less legally The law recognizes the right of every business
presumed from certain equivocal acts such as entity to reduce its workforce if the same is
interim employment [Hacienda Dapdap v. NLRC, made necessary by compelling economic factors
1998] which would endanger its existence or stability.
(b) disease incurable in 6 mos, Art. 283 and 284 are not exhaustive; other
authorized causes are:
(c) valid application of union security clause,
(a) total and permanent disability,
(d) expiry of term employment period,
(b) disease incurable in 6 mos,
(e) completion of project,
(c) valid application of union security clause,
(f) failure in probation, etc
(d) expiry of term employment period,
Totality of infractions doctrine
(e) completion of project,
The totality of infractions or the number of
violations committed during the period of (f) failure in probation, etc
employment shall be considered in determining
Redundancy, retrenchment and closure
the penalty to be imposed upon an erring
employee. The offenses committed by petitioner Redundancy Dusit School Nikko v. NUWHRAIN
should not be taken singly and separately. (2005):
Fitness for continued employment cannot be
(1) [redundancy] exists where the service
compartmentalized into tight little cubicles of
capability of the workforce is in excess of what is
aspects of character, conduct and ability
reasonably needed to meet the demands of the
separate and independent of each other. While
business enterprise;
it may be true that petitioner was penalized for
his previous infractions, this does not and should (2) a reasonably redundant position is one
not mean that his employment record would be rendered superfluous by any number of factors,
wiped clean of his infractions. After all, the such as overhiring of workers, decreased volume
record of an employee is a relevant of business, dropping of a particular product line
consideration in determining the penalty that previously manufactured by the company, or
should be meted out since an employee's past phasing out of service activity previously
misconduct and present behavior must be taken undertaken by the business
together in determining the proper imposable
penalty. [Merin v. NLRC, 2008] Redundancy does not refer to duplication of
work. That no other person was holding the
2. AUTHORIZED CAUSES same position which the dismissed employee
held prior to the termination of his services does
Recognized right
not show that his position had not become Temporary retrenchment or temporary
redundant. [Escareal v. NLRC, 1992] cessation or suspension of operations [Art. 286]
Financial loss is not a requisite. [Escareal v. NLRC, A specific period that employees may remain
1992] temporarily laid-off or in floating status. The
temporary lay-off or bona fide suspension of
Creation of positions with functions related or
operations of a business or undertaking wherein
similar to those of the abolished functions does
the employees likewise cease to work should not
not necessarily invalidate the declaration of
last longer than 6 months. After 6 months, the
redundancy—the old and new positions were
employees should either be recalled to work or
different and the declaration was not maliciously
permanently entrenched following the
motivated. [Santos v. CA, 2001] Employer’s good
requirements of the law, and that failing to
faith in implementing a redundancy program is
comply with this would be tantamount to
not necessarily put in doubt by the availment of
dismissing the employees and the employer
services of an independent contractor. [Asian
would thus be liable for such dismissal.
Alcohol Corp. v. NLRC, 1999]
[International Hardware v. NLRC, 1989]
Separation pay entitlement. — Employee is
Separation pay entitlement. — Employee is
entitled to separation pay of 1 month pay or 1
entitled to separation pay of 1 month pay or 1/2
month pay per year of service, whichever is
month pay per year of service, whichever is
higher
higher
Retrenchment
Closure
Retrenchment is the termination of employment
Employer may close or cease his business
effected by management during periods of
operations or undertaking even if he is not
business recession, industrial depressions,
suffering from serious business losses or
seasonal fluctuations, lack of work or
financial reverses, as long as he pays his
considerable reduction in the volume of the
employees their termination pay in the amount
employer’s business. [AMA Computer College v.
corresponding to their length of service.
Ely Garcia, 2008]
[Catatista v. NLRC, 1995] It includes both the
General standards for when retrenchment is complete cessation of all business operations
preventive rather than curative (SINS). — (a) and the cessation of only part of a company’s
Losses expected are (s)ubstantial and not merely business [Coca-Cola Bottlers, Inc. v. NLRC, 1991
de minimis in extent; (b) Apprehended losses are
Requirements. — Must de bona fide or in good
reasonably (i)mminent, can be perceived
faith
objectively and in good faith; (c) Retrenchment
must be reasonably (n)ecessary to prevent the Procedural steps required
expected losses—measure of last resort; and (d)
At least 1 month before the intended date of
Expected or actual losses must be proved by
termination, Employer is to serve written notice
(s)ufficient and convincing evidence. [Lopez
to:
Sugar Corp. v. Federation of Free Workers, 1990]
(1) Affected employees; and
Reduction of work days may be considered
constructive retrenchment [International (2) DOLE [Art. 283]
Hardware v. NLRC, 1989]
Requirements for valid (4) age,
retrenchment/redundancy.—
(5) financial hardship, or
Requisites: Redundancy
(6) seniority. [Asian Alcohol Corp. v. NLRC, 1999]
(1) Written notice served on both the Employees
Disease or illness
and the DOLE at least 1 month prior to the
intended date; Separation pay entitlement
(2) Payment of separation pay equivalent to one Employee is entitled to separation pay of 1
month pay or one month pay for every year of month pay or ½ month pay per year of service,
service, whichever is higher; whichever is higher
(3) Good faith in abolishing the redundant Requisites
positions; and
(1) Employee has been found to be suffering
(4) Fair and reasonable criteria in ascertaining from any disease;
what positions are to be declared redundant and
accordingly abolished. The following are usually (2) His continued employment is prohibited by
considered in redundancy: position itself, nature law or is prejudicial to his health as well as to the
of the services performed by the employee, and health of his co-employees;
necessity of such position. [Edge Apparel v. (3) Payment of separation pay;
NLRC, 1998]
(4) A medical certification by a competent public
Requisites: Retrenchment health authority that the disease cannot be
(a) Necessary to prevent or minimize losses and cured w/in 6 months even with proper medical
such losses are proven; treatment [IRR Book VI. Rule I. Sec. 8]
(b) There must be 1 month written notice to the (a) Medical certification cannot be dispensed
DOLE and the employee; with [Manlyl Express, Inc. v. Payong, 2005]
(1) preferred status [e.g. temporary, casual or A very basic requirement of substantive due
regular Employees], process; it has to be observed. Indeed, the rights
to counsel and to due process of law are two of
(2) efficiency the fundamental rights guaranteed by the 1987
(3) physical fitness, Constitution to any person under investigation,
be the proceeding administrative, civil, or Coming now to the period of time within which
criminal. [Salaw v. NLRC, 1991] the employee should submit his reply to the
show-cause memo, King of Kings Transport v.
Procedural Due Process
Mamac, 526 SCRA 116 (2007), tells us that an
Employee must be given notice with adequate employee under investigation for a violation of
opportunity to be heard before he/she is notified company rules is entitled to a “reasonable time”
of his/her actual dismissal for Cause. [Fujitsu v. so that he can “prepare adequately for his
CA, 2005] ER may NOT substitute the required defense.” Under King of Kings, “reasonable
prior notice & opportunity to be heard with the opportunity” has been construed to mean “at
mere payment of 30 days' salary. [PNB v. least five (5) calendar days from receipt of the
Cabanag, 2005] notice to give the (employee) an opportunity to
study the accusation against him, consult a union
a. Twin-notice requirement official or lawyer, gather data and evidence, and
First notice – notice specifying the grounds for decide on the defenses he will raise against the
which dismissal is sought complainant.”
Second notice – notice of the decision to dismiss What the law requires, as held in De Leon v.
NLRC, cited by petitioners, is for the employer to
b. Hearing; meaning of opportunity to be heard inform the employee of the specific charges
A formal or trial type hearing is not at all times against him and to hear his side or defenses. This
and in all instances essential to due process; it is does not however mean a full adversarial
enough to that the parties are afforded fair and proceeding. Litigants may be heard thru: (1)
reasonable opportunity to explain their side of pleadings, written explanations, position papers,
the controversy. [Mendoza vs. NLRC, 1991] memorandum; (2) oral argument. In both
instances, the employer plays an active role —
Summary proceeding may be conducted; written he must provide the employee the opportunity
explanations, affidavits, position papers or other to present his side and answer the charges, in
pleadings may be used as well; what is essential substantial compliance with due process. Actual
is the ample opportunity to be heard. adversarial proceeding becomes necessary only
[Homeowners Savings and Loan Assoc. Inc. vs. for clarification or when there is a need to
NLRC, 1996] propound searching questions to unclear
witnesses. This is a procedural right which the
No formal hearing necessary when the Employee
employee must, however, ask for it is not an
already admitted his responsibility for the act he
inherent right, and summary proceedings may
was accused of. [Magos v. NLRC, 1998]
be conducted. This is to correct the common but
In the leading case of Perez v. Philippine mistaken perception that procedural due
Telegraph and Telephone Co., G.R. No. 152048, process entails lengthy oral arguments. Hearing
April 7, 2009, the Supreme Court, in an en banc in administrative proceedings and before quasi-
decision, held that relative to the hearing judicial agencies are neither oratorical contests
requirement in termination cases, a formal nor debating skirmishes where cross
hearing or conference becomes mandatory only examination skills are displayed. Non-verbal
in the following instances: (1) when requested by devices such as written explanations, affidavits,
the employee in writing; (2) when substantial position papers or other pleadings can establish
evidentiary disputes exist; or (3) when a just as clearly and concisely aggrieved parties'
company rule or practice requires it. predicament or defense. What is essential is
ample opportunity to be heard, meaning, every It is the restoration of an employee who was
kind of assistance that management must accord unjustly dismissed to the position from which he
the employee to prepare adequately for his was removed, that is, to his status quo ante
defense. [as cited in Manggagawa ng dismissal [Santos vs. NLRC, 1987]
Komunikasyon sa Pilipinas v. NLRC, 1992]
Note: An offer by Employer to re-employ the
Article 277(b) of the Labor Code provides that, in Employee did not cure the vice of earlier
cases of termination for a just cause, an arbitrary dismissal. [Ranara v. NLRC, 1992]
employee must be given "ample opportunity to
An order for reinstatement must be specifically
be heard and to defend himself." Thus, the
declared and cannot be presumed; like back
opportunity to be heard afforded by law to the
wages, it is a separate and distinct relief given to
employee is qualified by the word "ample" which
an illegally dismissed employee. [Gold City
ordinarily means "considerably more than
Integrated Port Service, Inc. v. NLRC, 1995]
adequate or sufficient."21 In this regard, the
phrase "ample opportunity to be heard" can be Alternative
reasonably interpreted as extensive enough to
cover actual hearing or conference. [Perez v. In lieu of reinstatement, Employee is entitled to
Philippine Telegraph and telephone Company, separation pay of 1 month pay per year of
2009] service. [Gaco vs. NLRC, 1994] General Rule:
reinstatement is a matter of right to an illegally
Burden of Proof. — Upon the employer. dismissed Employee.
Employer must comply with due process
requirements before any termination is done. Exceptions:
[Gothong Lines, Inc. v. NLRC, 1999] (a) (a) Closure of business [Retuya vs. Dumarpa,
Unsubstantiated suspicions and baseless 2003]
conclusions by employers are not legal
justification for dismissing employees. (b) Economic business conditions: The
[Maranaw Hotel and Resort Corp. v. NLRC, 1999] reinstatement remedy must always be adapted
to economic-business conditions. [Union of
Degree of Proof. — Substantial evidence; proof Supervisors, etc. v. Sec. of Labor, 1984]
beyond reasonable doubt not required. [Manila
Electric Co., Inc. v. NLRC, 1991] (c) EE’s unsuitability [Divine World High School
vs. NLRC, 1986]
C. RELIEFS FOR ILLEGAL DISMISSAL
(d) EE’s Retirement/Coverage [Espejo vs. NLRC,
A finding of illegal dismissal entitles the 1996]
Employee to:
Prescription Period
(1) reinstatement without loss of seniority rights
and privileges, and An action for reinstatement by reason of illegal
dismissal is one based on an injury which may be
(2) full backwages inclusive of allowances and to brought within 4 years from the time of
benefits or their monetary equivalent from the dismissal. [Art. 1146 of the Civil Code]
time withheld up to actual reinstatement [Art.
279] a. Reinstatement pending appeal
(b) As where reinstatement would only (1) According to St. Theresa’s School of
exacerbate the tension and strained relations Novaliches Foundation v. NLRC (1998): earnings
between the parties lost by a worker due to his illegal dismissal; a
form of relief that restores the income lost by
(c) Or where the relationship between the
reason of such unlawful dismissal;
employer and employee has been unduly
strained by reason of their irreconcilable (2) it is not private compensation or damages;
differences, particularly where the illegally nor is it a redress of a private right;
dismissed employee held a managerial or key
(3) but, rather, in the nature of a command to
position in the company
the employer to make a public reparation for
(d) It would be more prudent to order payment illegally dismissing an employee.
of separation pay instead of reinstatement
Effect of failure to order backwages
Kinds
A “plain error” which may be rectified, even if
(1) SP as a statutory requirement for authorized employee did not bring an appeal regarding the
causes matter [Aurora Land v. NLRC, 1997]
(2) Delay of the EE in filing the case for illegal E. CONSTRUCTIVE DISMISSAL
dismissal. The following constitute constructive dismissal:
D. PREVENTIVE SUSPENSION (1) Bona fide suspension of the operation of a
DEFINITION business or undertaking exceeding 6 months
[Valdez v. NLRC, 1998]
It is a disciplinary measure for the protection of
the company's property pending investigation of (2) Floating status of more than 6 months [Agro
any alleged malfeasance or misfeasance Commercial Security Services v. NLRC, 1989]
committed by the employee. The employer may An involuntary resignation is resorted to
place the worker concerned under preventive
suspension if his continued employment poses a 1) when continued employment is rendered
serious and imminent threat to the life or impossible, unreasonable, or unlikely;
property of the employer or of his co-workers. 2) when there is a demotion in rank and/or a
[PAL v. NLRC, 1998] diminution in pay;
As held in PNB v. Velasco, 564 SCRA 512 (2008), 3) or when a clear discrimination, insensibility or
the employer has the right to preventively disdain by an employer becomes unbearable to
the employee. [Phil. Wireless, Inc. v. NLRC, 1998] agreements the Supreme Court will uphold
If an employee was forced to remain without them.
work or assignment for a period exceeding 6
months, then he is in effect constructively
dismissed [Valdez v. NLRC, 1998] Management Prerogatives cover the following
aspects of business:
Bonus is an amount granted and paid to Management has the inherent prerogative to
an employee for his industry and loyalty which change working hours, schedule hours of work
contributed to the success of the employers and to change the same as demanded by the
business and made possible the realization of needs of the business.
profits.
Compulsory upon all Employees Compulsory for all permanent Compulsory upon all Employers
not over 60 years of age and Employees below 60 years of age and their Employees not over 60
their Employers upon appointment to years of age; Provided, that an
permanent status, and for all Employee who is not over 60
elective officials for the duration years of age and paying
1. Filipinos recruited in the of their tenure. contributions to qualify for the
Philippines by foreign- retirement of life insurance
based Employers for benefit administered by the
employment abroad
may be covered by the 1. Any person, whether system shall be subject to
SSS on the voluntary elected or appointed, in compulsory coverage.
basis. the service of an
employer is a covered if
2. Compulsory upon all
employee receives
self-employed persons
compensation for such
earning P1,800 or more
service.
per annum.
court or administrative agency or official shall
have the power to set or fix wages, rates of pay,
LABOR RELATIONS
hours of work or other terms and conditions of
BOOK FIVE employment, except as otherwise provided
under this Code. (As amended by Section 3,
Republic Act No. 6715, March 21, 1989)
Art. 217. Declaration of Policy.
f. To ensure a stable but dynamic and just f. "Employee" includes any person in the employ
industrial peace; and of an employer. The term shall not be limited to
the employees of a particular employer, unless
g. To ensure the participation of workers in
the Code so explicitly states. It shall include any
decision and policy-making processes
individual whose work has ceased as a result of
affecting their rights, duties and welfare.
or in connection with any current labor dispute
or because of any unfair labor practice if he has
not obtained any other substantially equivalent
B. To encourage a truly democratic method of and regular employment.
regulating the relations between the employers
and employees by means of agreements freely g. "Labor organization" means any union or
entered into through collective bargaining, no
association of employees which exists in whole accredited by the Board as such or any person
or in part for the purpose of collective bargaining named or designated in the Collective Bargaining
or of dealing with employers concerning terms Agreement by the parties to act as their
and conditions of employment. Voluntary Arbitrator, or one chosen with or
without the assistance of the National
h. "Legitimate labor organization" means any
Conciliation and Mediation Board, pursuant to a
labor organization duly registered with the
selection procedure agreed upon in the
Department of Labor and Employment, and
Collective Bargaining Agreement, or any official
includes any branch or local thereof.
that may be authorized by the Secretary of Labor
i. "Company union" means any labor and Employment to act as Voluntary Arbitrator
organization whose formation, function or upon the written request and agreement of the
administration has been assisted by any act parties to a labor dispute.
defined as unfair labor practice by this Code.
o. "Strike" means any temporary stoppage of
j. "Bargaining representative" means a work by the concerted action of employees as a
legitimate labor organization whether or not result of an industrial or labor dispute.
employed by the employer.
p. "Lockout" means any temporary refusal of an
k. "Unfair labor practice" means any unfair labor employer to furnish work as a result of an
practice as expressly defined by the Code. industrial or labor dispute.
l. "Labor dispute" includes any controversy or q. "Internal union dispute" includes all disputes
matter concerning terms and conditions of or grievances arising from any violation of or
employment or the association or disagreement over any provision of the
representation of persons in negotiating, fixing, constitution and by-laws of a union, including
maintaining, changing or arranging the terms any violation of the rights and conditions of
and conditions of employment, regardless of union membership provided for in this Code.
whether the disputants stand in the proximate
r. "Strike-breaker" means any person who
relation of employer and employee.
obstructs, impedes, or interferes with by force,
m. "Managerial employee" is one who is vested violence, coercion, threats, or intimidation any
with the powers or prerogatives to lay down and peaceful picketing affecting wages, hours or
execute management policies and/or to hire, conditions of work or in the exercise of the right
transfer, suspend, lay-off, recall, discharge, of self organization or collective bargaining.
assign or discipline employees. Supervisory
s. "Strike area" means the establishment,
employees are those who, in the interest of the
employer, effectively recommend such warehouses, depots, plants or offices, including
managerial actions if the exercise of such the sites or premises used as runaway shops, of
authority is not merely routinary or clerical in the employer struck against, as well as the
nature but requires the use of independent immediate vicinity actually used by picketing
judgment. All employees not falling within any of strikers in moving
the above definitions are considered rank-and-
to and fro before all points of entrance to and
file employees for purposes of this Book.
exit from said establishment. (As amended by
n. "Voluntary Arbitrator" means any person Section 4, Republic Act No. 6715, March 21,
1989)
ELEMENTS OF EMPLOYER-EMPLOYEE
RELATIONSHIP
LABOR DISPUTE
EMPLOYEE
(1) includes any person acting in the NLRC: NATURE AND ORGANIZATION
interest of an employer, directly or
indirectly. Creation and Autonomy
(2) The term shall not include any labor Before the advent of the Labor Code the labor
organization or any of its officers or court was the Court of Industrial Relations.
agents except when acting as employer. When martial law was declared in September
(A labor organization may be deemed an 1972, PD No. 21 (October 14, 1972) abolished
“employer” when it is acting as such in the CIR and replaced it with an ad hoc National
relation to persons rendering services Labor Relations Commission. This NLRC was
under hire, particularly in connection short-lived as it gave way to the NLRC which the
with its activities for profit or gain.) Labor Code created in 1974.
the eight divisions, not on the individual
commissioners not on the whole commission.
Administrative Supervision Delegated to the
4. Contempt Power
The Commission has the power to promulgate
rules and regulations:
Contempt is defined as a disobedience to the
Court by setting up an opposition to its authority,
a) governing the hearing and disposition of justice and dignity. It signifies not only a willful
cases before it and its regional branches; disregard or disobedience of the court's orders
but such conduct as tends to bring the authority
b) pertaining to its internal functions; and of the court and the administration of law into
c) those that may be necessary to carry out disrepute or in some manner to impede the due
the purposes of this Code. administration of justice.
The NLRC has no appellate jurisdiction over As a rule, restraining orders or injunctions do not
decisions rendered by issue ex parte and only after compliance with the
following requisites, to wit:
(1) a voluntary arbitrator, or
a) a hearing held "after due and personal notice
(2) the secretary of labor, or
thereof has been served, in such manner as the
(3) the bureau of labor relations Commission shall direct, to all known persons
director on cases appealed from the against whom relief is sought, and also to the
DOLE regional offices. Chief Executive and other public officials of the
province or city within which the unlawful acts
have been threatened or committed charged
The decisions of these three offices are with the duty to protect complainant's
appealable rather to the Court of Appeals. property;"
(4) That complainant has no adequate d) the "temporary restraining order shall
remedy at law; and (5) That the public be effective for no longer than twenty
officers charged with the duty to protect (20) days and shall become void at the
complainant's property are unable or expiration of said twenty (20) days.
unwilling to furnish adequate
protection.”
An injury is considered irreparable if it is of such
constant and frequent recurrence that no fair
3. Conditions for Issuance Ex Parte of a and reasonable redress can be had therefor in a
Temporary Restraining Order (TRO) court of law, or where there is no standard by
which their amount can be measured with Under the NLRC Rules of 2005, no temporary
reasonable accuracy, that is, it is not susceptible restraining order or writ of preliminary
of mathematical computation. It is considered injunction shall be issued except on the
irreparable injury when it cannot be adequately condition that petitioner shall first file an
compensated in damages due to the nature of undertaking to answer for the damages and post
the injury itself or the nature of the right or a cash bond in the amount of Fifty Thousand
property injured or when there exists no certain Pesos (P50,000.00), or such higher amount as
pecuniary standard for the measurement of may be determined by the Commission.
damages.
The purpose of the bond is to recompense those
enjoined for any loss, expense or damage caused
by the improvident or erroneous issuance of
“Property” includes not only tangible property
such order or injunction, including all reasonable
but also the right to use such property.
costs, together with a reasonable attorney’s fee,
and expense of defense against the order or
against the granting of any injunctive relief
“Public officers” means local law enforcing sought in the same proceeding and subsequently
officers. denied by the Commission.
An adequate remedy at law has been defined as The reception of evidence “for the application of
one “that affords relief with reference to the a writ of injunction may be delegated by the
matter in controversy, and which is appropriate Commission to any of its Labor Arbiters who shall
to the particular circumstances of the case. conduct such hearings in such places as he may
determine to be accessible to the parties and
their witnesses and shall submit thereafter his
5. Cash Bond recommendation to the Commission.”
APPEAL
2) verified by the appellant himself in d) Subject to the provisions of the Labor Code,
accordance with Section 4, Rule 7 of the once the appeal is perfected in accordance with
Rules of Court, as amended; these Rules, the Commission shall limit itself to
3) in the form of a memorandum of appeal reviewing and deciding only the specific issues
which shall state the grounds relied that were elevated on appeal.
upon and the arguments in support
thereof, the relief prayed for, and with a
statement of the date the appellant 6. FRIVOLOUS APPEAL
received the appealed decision,
resolution or order;
Section 11, Rule VI of the NLRC Rules of
4) in three (3) legibly typewritten or
Procedure empowers not only the Commission
printed copies; and
but also the Labor Arbiter to impose reasonable
5) accompanied by penalties, including fines and censures, upon a
party for filing a frivolous appeal. This implies
i) proof of payment of the that even when the appeal is still with the Labor-
required appeal fee; Arbiter, and not yet transmitted to the
ii) posting of a cash or surety Commission, the former may already find it
bond as provided in frivolous and, there and then, terminate that
Section 6 of this Rule; iii) appeal.
a certificate of non-forum
shopping; and iv) proof of
service upon the other Unverified Letter Not Proper Appeal
parties.
Section 6. Bond. - In case the decision of the A cash or surety bond shall be valid and effective
Labor Arbiter or the Regional Director involves a from the date of deposit or posting, until the
monetary award, an appeal by the employer may case is finally decided, resolved or terminated, or
be perfected only upon the posting of a bond, the award satisfied. This condition shall be
which shall either be in the form of cash deposit deemed incorporated in the terms and
or surety bond equivalent in amount to the conditions of the surety bond, and shall be
monetary award, exclusive of damages and binding on the appellants and the bonding
attorney's fees. company.
In case of surety bond, the same shall be issued The appellant shall furnish the appellee with a
by a reputable bonding company duly accredited certified true copy of the said surety bond with
by the Commission or the Supreme Court, and all the abovementioned supporting documents.
shall be accompanied by original or certified true The appellee shall verify the regularity and
copies of the genuineness thereof and immediately report any
irregularity to the Commission. Upon verification
following:
by the Commission that the bond is irregular or
a) a joint declaration under oath by the not genuine, the Commission shall cause the
employer, his counsel, and the bonding immediate dismissal of the appeal, and censure
company, attesting that the bond posted is or cite in contempt the responsible parties and
genuine, and shall be in effect until final their counsels, or subject them to reasonable
disposition of the case. fine or penalty.
Title III
The bond is sine qua non to the perfection of
BUREAU OF LABOR RELATIONS
appeal from the labor arbiter’s monetary award.
1. BLR JURISDICTION
Motion to Reduce Bond under NLRC Rules
The Bureau of Labor Relations (BLR) no longer
A motion to reduce the amount of the bond may
handles “all” labor-management disputes;
be entertained, but, meantime, a bond in
rather, its functions and jurisdiction are largely
reasonable amount must be filed anyway.
confined to union matters, collective bargaining
registry, and labor education.
The law looks with disfavor upon quitclaims and WHEN TO EFFECT COMPROMISE: FINAL
releases by employees who are inveigled or
DECISION, NEGOTIABLE?
pressured into signing them by unscrupulous
employers seeking to evade their legal A compromise agreement may be effected at
responsibilities. On the other hand, there are any stage of the proceedings and even when
legitimate waivers that represent a voluntary there is already a final and executory judgment.
settlement of laborer's claims that should be
respected by the courts as the law between the
parties. OPTIONS WHEN COMPROMISE AGREEMENTS IS
VIOLATED
Within thirty (30) days from the execution of a The Bureau shall also maintain a file of all
Collective Bargaining Agreement, the parties Collective Bargaining Agreements (CBAs) and
shall submit copies of the same directly to the other related agreements.
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration, accompanied with verified proofs of Art. 238. Prohibition on certification election.
its posting in two conspicuous places in the place The Bureau shall not entertain any petition for
of work and ratification by the majority of all the certification election or any other action which
may disturb the administration of duly LABOR ORGANIZATION: TWO BROAD
registered existing collective bargaining PURPOSES
agreements affecting the parties except under
A “labor organization” is not always a union; it
Articles 253, 253-A and 256 of this Code. (As
may be an “association of employees.” And, the
amended by Section 15, Republic Act No. 6715,
purpose is not only or necessarily “collective
March 21, 1989)
bargaining” but also dealing with employers
concerning terms and conditions of
employment.
THE CONTRACT-BAR RULE
Art. 239. Privileged communication. Information "Union" refers to any labor organization in the
and statements made at conciliation private sector organized for collective bargaining
proceedings shall be treated as privileged and for other legitimate purposes.
communication and shall not be used as
evidence in the Commission.
Conciliators and similar officials shall not testify Not every union is “legitimate;” only those
in any court or body regarding any matters taken properly registered are considered LLO.
up at conciliation proceedings conducted by
them.
But non-registration does not mean it is
“illegitimate;” it simply is unregistered and has
Title IV no legal personality.
LABOR ORGANIZATIONS
It exists legally but does not possess the rights of
an LLO.
Chapter I
"Exclusive Bargaining Representative" refers to a chapters each of which must be a duly
legitimate labor union duly recognized or recognized collective bargaining agent.
certified as the sole and exclusive bargaining
representative or agent of all the employees in a
bargaining unit. “Industry Union” means any group of legitimate
labor organizations operating within an
identified industry, organized for collective
"Workers' Association" refers to an association bargaining or for dealing with employers
of workers organized for the mutual aid and concerning terms and conditions of employment
protection of its members or for any legitimate within an industry, or for participating in the
purpose other than collective bargaining. formulation of social and employment policies,
standards and programs in such industry, which
is duly registered with the Department. D.O. No.
"Legitimate Workers' Association" refers to an 40-03, however, does not carry this term and this
association of workers organized for mutual aid definition, although under Rule III, Section 2-B,
and protection of its members or for any “labor organizations operating within an
legitimate purpose other than collective identified industry may also apply for
bargaining registered with the Department. registration as a federation or national union
within the specified industry by submitting to the
Bureau the same set of documents (as required
Distinction Between “Collective Bargaining” and of federations and national unions.)”
“Dealing with Employer”
To bargain collectively is a right that may be “Trade Union Center” means any group of
acquired by a labor organization after registering registered national unions or federations
itself with the Department of Labor and organized for the mutual aid and protection of its
Employment and after being recognized or members, for assisting such members in
certified by DOLE as the exclusive bargaining collective bargaining, or for participating in the
representative (EBR) of the employees. formulation of social and employment policies,
Dealing with employer, on the other hand, is a standards and programs, which is duly registered
generic description of interaction between with the Department.
employer and employees concerning grievances,
wages, work hours and other terms and
conditions of employment, even if the An “alliance” is an aggregation of unions existing
employee’s group is not registered with the in one line of industry, or in a conglomerate, a
Department of Labor and Employment. group of franchises, a geographical area, or an
industrial center.
and leave no doubt as to the intentions of the Requirements of affiliation. - The report of
parties, the literal meaning of the stipulation affiliation of independently registered labor
shall control. unions with a federation or national union shall
be accompanied by the following documents:
Yet the local unions remain the basic units of But even before the onset of the freedom period
association, free to serve their own interests (and despite the closed-shop provision in the
subject to the restraints imposed by the CBA between the mother union and
constitution and bylaws of the national management) disaffiliation may still be carried
federation, and free also to renounce the out, but such disaffiliation must be effected by a
affiliation upon the terms laid down in the majority of the members in the bargaining unit.
agreement which brought such affiliation into
This ruling is true ONLY if the contract of
existence. affiliation does not specify the period for
possible disaffiliation.
A contract between an employer and the parent Effect of merger or consolidation. – Where there
organization as bargaining agent for the is a merger of labor organizations, the legal
employees is terminated by the disaffiliation of existence of the absorbed labor organization(s)
the local of which the employees are members. ceases, while the legal existence of the absorbing
labor organization subsists. All the rights,
interests and obligations of the absorbed labor
Disaffiliation: Effect on Existing CBA; the organizations are transferred to the absorbing
“Substitutionary” Doctrine organization.
REVOCATION OF CHARTER
While registration is the act that converts a labor (c) updated list of newly-elected officers,
organization to a legitimate labor organization, together with the appointive officers or agents
cancellation is the government act that [divests] who are entrusted with the handling of funds,
it of that status. It thereby reverts to its character within thirty (30) days after each regular or
prior to the registration. Although it does not special election of officers, or from the
cease to exist or become an unlawful occurrence of any change in the officers of
organization, its juridical personality as well as its agents of the labor organization or workers
statutory rights and privileges [are] suspended. association;
It loses entitlement to the rights enumerated in
(d) updated list of individual members of
Article 248 of the Labor Code.
chartered locals, independent unions and
workers' associations within thirty (30) days
after the close of each fiscal year; and
It cannot demand recognition by or bargaining
with the employer, cannot file a petition for (e) updated list of its chartered locals and
certification election, and cannot strike. affiliates or member organizations, collective
bargaining agreements executed and their
effectivity period, in the case of federations or
1 "Cabo" refers to a person or group or persons national unions, within thirty (30) days after the
or to a labor group which, in the guise of a labor close of each fiscal year, as well as the updated
organization, supplies workers to an employer, list of their authorized representatives, agents or
with or without any monetary or other signatories in the different regions of the
consideration whether in the capacity of an country.
agent of the employer or as an ostensible
independent contractor.
As understood in these Rules, the fiscal year of a
labor organization shall coincide with the
2 Administrative Cancellation; the “reportorial calendar year, unless a different period is
requirements” prescribed in the constitution and bylaws.
Section 1. Reporting requirements. - It shall be Failure of the labor organization to submit the
the duty of every legitimate labor unions and reports mentioned above for five (5) consecutive
workers associations to submit to the Regional years authorizes the Bureau to institute
Office or the Bureau which issued its certificate
cancellation proceedings upon its own initiative policy affecting the entire membership of the
or upon complaint by any party-in-interest. organization, unless the nature of the
organization or force majeure renders such
secret ballot impractical, in which case, the
Chapter II board of directors of the organization may make
the decision in behalf of the general
RIGHTS AND CONDITIONS OF MEMBERSHIP membership;
Art. 241. Rights and conditions of membership in e. No labor organization shall knowingly admit as
a labor organization. The following are the rights members or continue in membership any
and conditions of membership in a labor individual who belongs to a subversive
organization: organization or who is engaged directly or
a. No arbitrary or excessive initiation fees shall indirectly in any subversive activity;
be required of the members of a legitimate labor f. No person who has been convicted of a crime
organization nor shall arbitrary, excessive or involving moral turpitude shall be eligible for
oppressive fine and forfeiture be imposed; election as a union officer or for appointment to
b. The members shall be entitled to full and any position in the union;
detailed reports from their officers and g. No officer, agent or member of a labor
representatives of all financial transactions as organization shall collect any fees, dues, or other
provided for in the constitution and by-laws of contributions in its behalf or make any
the organization; disbursement of its money or funds unless he is
c. The members shall directly elect their officers, duly authorized pursuant to its constitution and
including those of the national union or by-laws;
federation, to which they or their union is h. Every payment of fees, dues or other
affiliated, by secret ballot at intervals of five (5) contributions by a member shall be evidenced by
years. No qualification requirements for a receipt signed by the officer or agent making
candidacy to any position shall be imposed other the collection and entered into the record of the
than membership in good standing in subject organization to be kept and maintained for the
labor organization. The secretary or any other purpose;
responsible union officer shall furnish the
Secretary of Labor and Employment with a list of i. The funds of the organization shall not be
the newly-elected officers, together with the applied for any purpose or object other than
appointive officers or agents who are entrusted those expressly provided by its constitution and
with the handling of funds, within thirty (30) by-laws or those expressly authorized by written
calendar days after the election of officers or resolution adopted by the majority of the
from the occurrence of any change in the list of members at a general meeting duly called for the
officers of the labor organization; (As amended purpose;
by Section 16, Republic Act No. 6715, March 21,
j. Every income or revenue of the organization
1989)
shall be evidenced by a record showing its
source, and every expenditure of its funds shall
be evidenced by a receipt from the person to
d. The members shall determine by secret ballot, whom the payment is made, which shall state
after due deliberation, any question of major the date, place and purpose of such payment.
Such record or receipt shall form part of the correct account of all moneys received and paid
financial records of the organization. by him since he assumed office or since the last
day on which he rendered such account, and of
Any action involving the funds of the
all bonds, securities and other properties of the
organization shall prescribe after three (3) years
organization entrusted to his custody or under
from the date of submission of the annual
his control. The rendering of such account shall
financial report to the Department of Labor and
be made:
Employment or from the date the same should
have been submitted as required by law, 1. At least once a year within thirty (30) days
whichever comes earlier: Provided, That this after the close of its fiscal year;
provision shall apply only to a legitimate labor
2. At such other times as may be required by a
organization which has submitted the financial
resolution of the majority of the members of the
report requirements under this Code: Provided,
organization; and
further, that failure of any labor organization to
comply with the periodic financial reports 3. Upon vacating his office. The account shall be
required by law and such rules and regulations duly audited and verified by affidavit and a copy
promulgated thereunder six (6) months after the thereof shall be furnished the Secretary of Labor.
effectivity of this Act shall automatically result in
the cancellation of union registration of such m. The books of accounts and other records of
labor organization; (As amended by Section 16, the financial activities of any labor organization
Republic Act No. 6715, March 21, 1989) shall be open to inspection by any officer or
member thereof during office hours;
k. The officers of any labor organization shall not
be paid any compensation other than the n. No special assessment or other extraordinary
salaries and expenses due to their positions as fees may be levied upon the members of a labor
specifically provided for in its constitution and organization unless authorized by a written
by-laws, or in a written resolution duly resolution of a majority of all the members in a
authorized by a majority of all general membership meeting duly called for the
purpose. The secretary of the organization shall
the members at a general membership meeting record the minutes of the meeting including the
duly called for the purpose. The minutes of the list of all members present, the votes cast, the
meeting and the list of participants and ballots purpose of the special assessment or fees and
cast shall be subject to inspection by the the recipient of such assessment or fees. The
Secretary of Labor or his duly authorized record shall be attested to by the president.
representatives. Any irregularities in the
approval of the resolutions shall be a ground for o. Other than for mandatory activities under the
impeachment or expulsion from the Code, no special assessments, attorney’s fees,
organization; negotiation fees or any other extraordinary fees
may be checked off from any amount due to an
l. The treasurer of any labor organization and employee without an individual written
every officer thereof who is responsible for the authorization duly signed by the employee. The
account of such organization or for the authorization should specifically state the
collection, management, disbursement, custody amount, purpose and beneficiary of the
or control of the funds, moneys and other deduction; and
properties of the organization, shall render to
the organization and to its members atrue and
p. It shall be the duty of any labor organization
and its officers to inform its members on the
provisions of its constitution and by-laws,
collective bargaining agreement, the prevailing
labor relations system and all their rights and
obligations under existing labor laws. RIGHTS OF UNION MEMBERS
For this purpose, registered labor organizations The rights and conditions of membership laid
may assess reasonable dues to finance labor down in Art. 247 may be summarized as follows:
relations seminars and other labor education (1) Political right – the member’s right to vote
activities. and be voted for, subject to lawful provisions on
Any violation of the above rights and conditions qualifications and disqualifications.
of membership shall be a ground for cancellation (2) Deliberative and decision-making right – the
of union registration or expulsion of officers member’s right to participate in deliberations on
from office, whichever is appropriate. At least major policy questions and decide them by
thirty percent (30%) of the members of a union secret ballot.
or any member or
(3) Rights over money matters – the member’s
members specially concerned may report such right against excessive fees; the right against
violation to the Bureau. The Bureau shall have unauthorized collection of contributions or
the power to hear and decide any reported unauthorized disbursements; the right to
violation to mete the appropriate penalty. require adequate records of income and
Criminal and civil liabilities arising from expenses and the right of access to financial
violations of above rights and conditions of records; the right to vote on officers’
membership shall continue to be under the compensation; the right to vote on proposed
jurisdiction of ordinary courts. special assessments and be deducted a special
assessment only with the member’s written
authorization.
DEMOCRATIZATION OF UNIONS (4) Right to Information – the member’s right to
be informed about the organization’s
As unionism’s aim is to install industrial
constitution and by-laws and the collective
democracy, the unions themselves must be
bargaining agreement and about labor laws.
democratic. This is a rationale behind Article
247. Although not so denominated, Article 247 of the
Labor Code carries the character of a bill of rights
To democratize the unions, Article 247 requires
of union members.
that the union officers be elected directly by the
members through secret ballot and that the
major policy decisions, as a rule, be made by the
union members, again, by secret ballot. As in a ELECTION OF UNION OFFICERS
republic where sovereignty resides in the The officers of the union are elected by the
people, the members of the union are the members in secret ballot voting. The election
keepers and dispensers of authority. The takes place at intervals of five years which is the
governing power is the members, not the term of office of the union officers including
officers. those of a national union,
federation, or trade union center. independently registered union, affiliate, local or
chapter of a labor federation or national union
operates shall henceforth be elected or
Eligibility of Voters appointed as an officer of such union, affiliate,
local or chapter.
Only members of the union can take part in the
election of union officers. In short, one should be employed in the
company to qualify as officer of a union in that
company.
Member in good standing is any person who has
fulfilled the requirements for membership in the
union and who has neither voluntarily Disqualification of Union Officers
withdrawn from membership nor been expelled
"Moral turpitude" has been defines as an act of
or suspended from membership after
baseness, vileness, or depravity in the private
appropriate proceedings consistent with the
and social duties which a man owes his fellow
lawful provisions of the union’s constitution and
men, or to society in general, contrary to the
by-laws.
accepted and customary rule of right and duty
between man and man or conduct contrary to
justice, honesty, modesty, or good morals.
A labor organization may prescribe reasonable
rules and regulations with respect to voting
eligibility.
ACTION AGAINST UNION OFFICERS
(b) Its list of officers, minutes of the The entities covered are all persons employed in:
election of officers, and list of voters
within thirty (30) days from election; 1. Commercial industrial, and agricultural
enterprises;
(c) Its annual financial report within thirty
(30) days after the close of every fiscal
year; and
2. In religious, charitable or medical or
(d) Its list of members at least once a year educational institutions whether operating for
or whenever required by the Bureau. profit or not.
Persons/Ee’s eligible to join a labor
organization for mutual aid and protection
Art. 250. Right of employees in the public
service. – Employees of government
corporations established under the Corporation
The following enjoy the right to self organization
Code shall have the right to organize and to
for mutual aid and protection:
bargain collectively with their respective
1. Ambulant workers employers. All other employees in the civil
service shall have the right to form associations
2. Intermittent workers for purposes not contrary to law.
3. Itinerant workers
6. Those without and definite Er’s. 1. Schedule of vacation and other leaves
Persons/Ee’s not granted the right to self 3. Personnel growth and development
organization: 4. Communication system
1. High level or Managerial Government 5. Provision for protection and safety
2. Ee’s of International organizations with 6. Provision for facilities for handicapped
immunities. personnel
3. Managerial Employees 7. Provision for first aid medical services
4. Members of the AFP including the police and supplies
officers, policemen, firemen, and jail 8. Physical fitness program
guards
9. Annual physical/medical examination
5. Confidential Employees
10. Recreational. Social, athletic and cultural
6. Employees of cooperatives who are its activities and facilities
members (However they may form
worker’s Association)
Workers may renegotiate other With the execution of the CBA, Bad Faith
provisions of the CBA not later than can no longer be imputed upon any of
three (3) years. the parties thereto. All provisions in the
CBA are supposed to have been jointly
Representation aspect refers to the and voluntarily incorporated therein by
identity and majority status of the union the parties.
that negotiated the CBA as the exclusive
bargaining agent of the appropriate Limitations to bargain collectively:
bargaining unit.
Such duty does not compel any party to agree to
Where there is a legitimate a proposal or to make any concession.
representation issue, there is no duty to Parties cannot stipulate terms and conditions of
bargain collectively on the part of the employment which are below the minimum
Employer. requirements prescribed by law.
Zipper clause - is a stipulation in a CBA Economic provisions of CBA:
indicating that issues that could have
been negotiated upon but not contained Wages
in the CBA cannot be raised for
Family planning
negotiation when the CBA is already in
Effectivity of the agreement Injunction is an order or a writ that
commands a person to do or not to do a
Other terms and conditions of employment
particular act. It may be a positive
Non-economic provisions of CBA: (mandatory) or a negative (prohibitory)
command.
Coverage of the bargaining unit
GR: No court or entity shall
Union security clauses enjoin any picketing, strike or
Management prerogatives and/or lockout, or any labor dispute.
rights/responsibilities of employees XPN:
Grievance machinery and voluntary arbitration
1. When prohibited or
No strike – no lock out provision unlawful acts are being
or about to be
Mandatory provisions of CBA committed that will
Grievance machinery cause grave or
irreparable damage to
Voluntary arbitration the complaining party.
Wages 2. On the ground of
national interest
Hours of work
The “no strike‐no lockout” clause in the CBA Requisites for injunction to issue:
applies only to economic strikes. It does not
a. actual or threatened
apply to ULP strikes. Hence, if the strike is
commission of a
founded on an unfair labor practice of the
prohibited or unlawful
employer, a strike declared by the union cannot
act OR requirement of
be considered a violation of the no strike clause.
performance of a
Art. 254 – Injunction prohibited. No temporary particular act in a labor
or permanent injunction or restraining order in dispute
any case involving or growing out of labor
b. (b) if unrestrained or
disputes shall be issued by any court or other
unperformed, the act
entity, except as otherwise provided in Articles
will cause grave or
218 and 264 of this Code.
irreparable damage to
any party OR render should be included in
ineffectual any decision the CBA”. Strictly
in favor of such party speaking, the parties
may choose a voluntary
An "innocent bystander," who seeks to
arbitrator to decide on
enjoin a labor strike, must satisfy the
the terms and
court that aside from the grounds
conditions of
specified in Rule 58 of the Rules of Court,
employment, but this is
it is entirely different from, without any
impracticable because it
connection whatsoever to, either party
will be a value judgment
to the dispute and, its interests are
of the arbitrators and
totally foreign to the context thereof.
not of the parties.
Types of labor dispute: d. Rights disputes - They
a. Organizational or intra- are claims for violations
union disputes - Any of a specific right arising
conflict between and from a contract, i.e. CBA
among union members, or company policies.
grievances arising from
Entities or Persons authorized to issue
any violation of the
injunction or restraining order:
rights and conditions of
membership, violation a. Labor Arbiters
of or disagreement over
b. NLRC or any division
any provision of the
union’s constitution and c. BLR
by‐laws, or disputes
from chartering or d. President
affiliation of union. e. Secretary
b. Representation or inter-
union disputes - Any
conflict between and Art 254 – Exclusive Bargaining Representation
among legitimate labor and Worker’s Participation in Policy and
unions involving Decision-Making. The labor organization
representation designated or selected by the majority of the
questions for the employees in an appropriate collective
purposes of Collective bargaining unit shall be the exclusive
Bargaining or to any representative of the employees in such unit for
other conflict or dispute the purpose of collective bargaining. However,
between legitimate an individual employee or group of employees
labor union shall have the right at any time to present
grievances to their employer.
c. Interest or economic
disputes - they involve Any Provision of law to the
questions on “what contrary notwithstanding, workers shall have
the right, subject to such rules and regulations
as the Secretary of Labor and Employment may collective bargaining agreements or are
promulgate, to participate in policy and traditional areas of bargaining.
decision-making processes of the
In organized establishments, the
establishment where they are employed
workers’ representatives to the council
insofar as said processes will directly affect
shall be nominated by the exclusive
their rights, benefits and welfare. For the
bargaining representative. In
purpose, workers and employers may form
establishments where no legitimate
labor-management councils: Provided, That the
labor organization exists, the workers
representatives of the workers in such labor-
representative shall be elected directly
management councils shall be elected by at
by the employees at large.
least the majority of all employees in said
establishment. The extent of the worker’s right to
participate in policy and decision‐
Doctrine of Union Monopoly. Once a
making processes in a company refers
Union is chosen as exclusive bargaining
not only to formulation of corporate
agent through voluntary recognition,
programs and policies but also to
consent election, certification election,
participation in grievance procedures
or run-off election, can collectively
and voluntary modes of settling
bargain with the management excluding
disputes.
other competing unions.
The Commission, its Regional Offices Cases arising from any violation of Art. 264,
and the Regional Directors of the Department including questions involving the legality of
of Labor and Employment shall not entertain strikes and lockouts;
disputes, grievances or matters under the
Except claims for Employment Compensation,
exclusive and original jurisdiction of the
Social Security, Philhealth and maternity
Voluntary Arbitrator or panel of Voluntary
benefits, all other claims arising from Employer‐
Arbitrators and shall immediately dispose and
Employee relations, including those of persons in
refer the same to the Grievance Machinery or
domestic or household service, involving an
Voluntary Arbitration provided in the Collective
amount exceeding P5000 regardless of whether
Bargaining Agreement.
accompanied with a claim for reinstatement
Powers of the voluntary arbitrators: Monetary claims of overseas contract workers
1. hold hearings arising from Employer‐Employee relations under
the Migrant Worker’s Act of 1995 as amended by
2. receive evidence RA 10022
3. take whatever action is necessary to Wage distortion disputes in unorganized
resolve the issue or issues subject of establishments not voluntarily settled by the
dispute, including efforts to effect a parties pursuant to RA 6727
Enforcement of compromise agreements when of the dispute, including efforts to effect a
there is non‐compliance by any of the parties voluntary settlement between parties.
pursuant to Art. 227 of the Labor Code (LC), as
All parties to the dispute shall be
amended; and
entitled to attend the arbitration proceedings.
Other cases as may be provided by law The attendance of any third party or the
exclusion of any witness from the proceedings
The cases enumerated may instead be
shall be determined by the Voluntary Arbitrator
submitted to a voluntary arbitrator by
or panel of Voluntary Arbitrators. Hearing may
agreement of the parties. The law prefers
be adjourned for cause or upon agreement by
voluntary over compulsory arbitration.
the parties.
Filing and service of notice of strike, filed with Give the NCMB ample time to decide on whether
the NCMB taking into consideration the cooling‐ or not there is a need to supervise the conduct
off period of the strike vote to prevent any acts of violence
and or irregularities;
Observance of cooling-off period, 30 days before
the intended strike for bargaining deadlocks and Give ample time to prepare for the deployment
15 days before the intended strike for ULP of the requisite personnel .
Union officers who knowingly participate in the General rule: A worker who participates in a
illegal strike lawful strike is not ground for termination of his
employment.
Any striker or union who knowingly participates
in the commission of illegal acts during the strike Exception: When the worker participated in
illegal acts during the strike.
Those union members who have joined an illegal
strike but have not committed any illegal act When the strike is or becomes illegal, only the
shall be reinstated but without back wages. The union officers are deemed to have lost their
responsibility for the illegal acts committed employment status.
during the strike must be on an individual and
Liability of employer:
not on a collective basis.
Any worker whose employment has been
GR: Strikers entitled to their backwages or strike
terminated as a consequence of any unlawful
duration pay even if such strike was legal.
lockout shall be entitled to reinstatement with
XPN: full backwages
(b) Upon the recommendation of the Minister The relevance of labor laws and labor relations
of Labor and Employment and the Minister of to national development.
National Defense, foreigners who violate the The Secretary of Labor shall also inquire into the
provisions of the Title shall be subject to causes of industrial unrest and take all the
immediate and summary deportation by the necessary steps within his power as may be
Commission on Immigration and Deportation prescribed by law to alleviate the same, and
and shall be permanently barred from re- shall from time to time recommend the
entering the country without the special enactment of such remedial legislation as in is
permission of the President of the Philippines. judgment may be desirable for the
Title IX – SPECIAL PROVISIONS maintenance and promotion of industrial
peace.
Art. 273 – Study of Labor-Management
Relations. The Secretary of Labor shall have the
power and it shall be his duty to inquire into:
(PD.442)
www.chanroblesbar.com