LABOR LAW REVIEW | Atty. Jefferson M.
Marquez | By Tanya Ibanez
PD 442, AS AMENDED
Labor Code of the Philippines (Nov. 1, 1974)
LABOR, CONCEPT
 Job, work or service
 It may also refer to the exertion of physical and/or mental effort or
both towards the production of goods and/or services
Relation between capital and labor
 Labor is also mentioned in the Civil Code
 “Labor” – refers to the working class in the society
FIELDS OF LABOR LAW
A. Labor Standards Law
Minimum terms and conditions prescribed by law regarding hours
of work, wages, occupational health and safety and other social
welfare legislations.
Examples:
1. Overtime pay – at least 25% if overtime work is rendered in
an ordinary working day; 30% if special or rest day.
2. Minimum wage – employees should be paid any amount as
long as it does not fall below the prescribed minimum wage.
3. Normal working hours – Not more than 8 hours a day. If work
beyond 8 hours – entitled to overtime pay.
4. Night shift pay (10pm-6am) – night shift differential pay for
every hour of work, at least 10%.
5. Holiday pay during regular holiday – 100% if the worker did
not work on the day; 200% if worker worked on the day.
6. Premium pay – work during his scheduled rest day or special
holiday – Premium pay.
JMM: The employer can improve these working standards.
However, this is rarely done by the employer because so long as
the minimum standards are met, there is no violation. Thus, this
can be done through Collective Bargaining and Negotiation –
exercised by the employees through the exercise of self-
organization (constitutional right of workers)
Employees can:
- Form a union
- Join a union
- Assist in the formation of a labor organization
Labor Union
Certification Election – democratic means of ascertaining the will of
the employees. Certified as the sole and exclusive bargaining agent
– can now exercise the right to collective bargaining and
negotiation including the right to engage in peaceful concerted
activities, including strike.
Certification election is only one mode of getting certified as the
sole and exclusive bargaining amendment)
SEBA (Sole Exclusive and Bargaining Agent)
File application with Regional Office at the DOLE (Petition for SEBA)
- Found in the Implementing Rules
- Another mode to be the sole and exclusive bargaining agent
- Support of the majority of the bargaining unit before the
Regional Director will issue a certification
- This will dispense of the long and tedious process of a
certification election
DO 40, as amended
B. Labor Relations Law
C. Social and Welfare Legislation – apply when the employee is
unable to work due to disability, sickness, etc.
Example: Social Security Act.
If the employee gets sick or is unable to work, the principle of no
work no pay in labor standards law applies. Under the labor
standards law. But, there is another field of labor law – Social and
Welfare Legislation.
JMM: These three fields of labor law do not contradict each other.
Rather, they complement each other.
SYSTEMS OF LABOR
1. Slavery
2. Serfdom – debt bondage.
TN: The two (slavery, serfdom) are both illegal. Only the wage
system and free artisanship are recognized in the Philippines.
3. Wage System – one incorporated in the Civil Code. Employers
control not just the results but also the means and manner of
performing the service.
4. Free Artisanship
- Known as “independent contractorship” in the modern society
- Bilateral contractorship (principal – independent contractor),
unlike a contracting arrangement where the relationship is
trilateral. Do not mix the two. (the requirement that
substantially capitalized only applies to trilateral relationship
under Art 106-109)
- Principal hires an independent professional to do the work for
him without an employer-employee relationship.
Example: Companies who hire consultants – not solely dependent
on the principal for his income; not subject to control as regards
the means and manner of performing his service, except as to the
results.
ENACTMENT OF LABOR LAW
Bases in the enactment of Labor Law
1. Protection to labor
“The State shall afford full protection to law, local or overseas.”
(Constitution)
Ex: Migrant Workers and Overseas Filipinos Act
2. Social justice – “those who have less in life shall have more in law”
Ex: Retirement Pay Law (65-compulsory age of retirement, entitled
to retirement pay equivalent to ½ month pay for every year of
service or 22.5 days per year of service); SSS Law; Law exempting
minimum wage earners from income tax under the NIRC;
3. Police power
Inherent power of the State to regulate life, liberty and property.
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
Ex: Labor Code.
Job is a property right, you cannot be terminated from employment
without due process of law. The provision on just and authorized
cause – restricts the exercise of management prerogative. There is
no firing at will in the Philippines.
Due process of law, two components
a) Substantive due process
b) Procedural due process
Assumption of jurisdiction by the Secretary of Labor over a labor
dispute that is likely to affect public interest.
- Employer has to readmit the striking workers to their former
position without loss of seniority rights. Employees have to
return to work, otherwise, they are deemed to have violated the
return to work order and is a valid ground for termination. (also
an exercise of police power)
4. Doctrine of incorporation
The State renounces war as an instrument of foreign policy and
adopts the generally accepted principles of international law as part
of the laws of the land.
Examples:
Philippines is a signatory to various international conventions
a) Convention on the elimination of worst forms of discrimination
against women (Magna Carta for Women; RA 9262 VAWC–
Local legislations enacted based on the doctrine of
incorporation)
b) Convention on the Rights of the Child
TN: Familiarize yourself with the constitutional provisions on Labor.
Limitations in the enactment of Labor Law
1. Observance of due process
- Termination with cause must be respected
2. Equal protection of the laws (“equality among equals”)
All persons and things similarly situated shall be treated alike, both
with respect to rights given and responsibilities imposed.
3. Prohibition against involuntary servitude
Ex. of violations: Law requiring workers to work 24/7; law removing
the normal hours of work
RELATIONS BETWEEN CAPITAL AND LABOR
Not merely contractual, impressed with public interest and
must yield to common good (Article 1700, Civil Code)
- Employment contract should not be compared with other contracts,
like contracts of lease
- Employment contract is a special contract
Asufrin, 2004
Labor is neither chattel nor commodity, but human and must be dealt
with from the standpoint of human interest.
Parties to an employment contract
Principal parties
1. Employer
2. Employee
Other parties
3. Government
4. Public
Ex: Pharmaceutical company which distributes Viagra.
Important: Principles like social justice are deemed written in every
employment contract.
Principle of Non-Oppression (Art 1701, Civil Code)
Employers and workers should not be acting oppressively against each
other. They must work together harmoniously.
RULE OF INTERPRETATION AND IMPLEMENTATION
Protection to law, what rule of construction to apply
All doubts in the interpretation and enforcement of labor laws shall be
resolved in favor of labor. (Labor Code; Basis: Protection to labor clause)
See also:
In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer. (Article
1702, NCC)
Why?
Because labor is economically dependent upon capital.
Bar Q: Does the rule on liberality in favor of labor in case of doubt in
interpretation of laws applies only to rules and regulations? Can it extend
to other areas of labor law?
ANS:
Extends to:
1. Evidence presented by the employer and the employee (2010,
Penaflor)
The employee only has to allege non-payment of wage, and the
burden shifts to the employer to prove that there was.
2. Interpretation of agreements and writings (2011, EGI
Construction)
Ex. venue, grant of bonuses in agreements and writings – in case
of doubt, resolve in favor of labor.
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez

LABOR CODE V. IRR, RULE IN CASE OF CONFLICT 6. Board will deliberate whether to grant or deny
7. If it grants – it will issue a wage order
DOCTRINE; PRINCIPLE OF LAW; IRR & LABOR ADVISORY 8. Publication of wage order
9. Wage order takes effect 15 days after publication
XXXXX 10. Wage order cannot be disturbed within one year except in
exceptional circumstances.
STATE’S POLICY ON TRIPARTISM
Important: The fixing of the minimum wage may be done by
Tripartite Industrial Peace Council (TIPC) at the Regional or the Board motu proprio WHEN the conditions in the region so
Industrial level warrant.
- Representatives from (1) government, (2) workers, and (3)
employers Failure or Refusal to comply with wage order:
Liability – civil, administrative or criminal
xxx
RIGHT TO HIRE Can you appeal the wage order?
Yes. Within 10 days FROM THE PUBLICATION of such wage
EQUITABLE PRINCIPLES IN LABOR LAW order with the NWPC on the grounds provided by law:
1. Non-conformity with the guidelines
1. Fair day’s wage for a fair day’s labor 2. Grave abuse of discretion
2. No work, no pay (1997 Caltex Refinery Employees Association; 3. Pure questions of law
2004 Odango)
3. Equal pay for equal work (2000 International School Alliance of B. NWPC – National Wages Productivity Commission
Educators; 2015 SSS/Ubana)
Powers:
Latest case: SSS 1. Promulgate rules and regulations
Contractual in SSS are made to perform exactly the kind of work as 2. Exercises appellate jurisdiction over decisions of the RTWPB
that of regular workers (hours of work, nature – all same) but are
denied the same rate of compensation and benefits. SSS denied the Fixing the Minimum Wage; Policies
claim. Workers filed civil case alleging “equal pay for equal work”. RTC 1. Rationalize the fixing of minimum wage
level still. 2. Promote collective bargaining as primary mode of settling wages
(wage disputes)
FIXING OF WAGES
RIGHTS OF EMPLOYERS
Fixing of minimum wage; Agencies
1. Right to reasonable returns on investment
Wage Rationalization Act 2. Right to expansion and growth (2004 Duncan Association of
Detailman-PTGWO)
Two primary agencies of the government: (1) RTWPB (2) NWPC – - Prohibition to marry someone from a rival company
responsible for the fixing of wages and grant of exemption from the
minimum wage WAGE DISTORTION

A. RTWPB – Regional Tripartite Wage and Productivity
Boards
Headed by the Regional Director of the DOLE
Two major powers:
1. Fix the minimum wage (through the issuance of a wage
order pursuant to its wage-fixing authority)
2. Grant exemption from the minimum wage
Before issuance of wage order, it has to go through a procedure:
1. Petition is filed with the Board for the adjustment of the daily
minimum wage
Four requisites: (1999 Prubankers)
1. Existing hierarchy of positions with corresponding salary rates
2. Increase in the salary of the lower class without a concomitant
increase in the salary of the higher class
3. Elimination of distinctions based on skills, qualification or other
substantial basis of differentiation
4. Same region
In order for there to be a wage distortion within the meaning of the law,
there should be a wage order.
How to resolve wage distortion
A. Unorganized Establishment

2. Proper parties: Negotiate >

a) Employer
b) Union
TN: A mere employee is not authorized to file a petition.
3. Board will publish a copy of the petition in a newspaper of
general circulation and set the date of hearing.
4. The Board will set the case for public hearing (usually in the
Capitol)
5. During the public hearing, any party may file an opposition
or join the petition.
NCMB – has no power to adjudicate; no power to resolve disputes;
only to mediate; no power to determine employer-employee
relationship; endorse to the arbitration branch of the NLRC (Labor
Arbiter) for compulsory arbitration. >
Labor Arbiter >
Appeal to NLRC (10 days) >
Rule 65 to CA > Rule 45 SC
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
B. Organized Establishment
Grievance Machinery in the CBA (grievance machinery is
incorporated in the CBA; mandatory; Grievance Committee with
equal participation; if there is impasse, refer it to VA) >
Voluntary Arbitrator (must also be embodied in the VA; if no free
designation, go to NCMB and get list of accredited VAs) >
Labor Code provides that decision of VA is final and executory after
10 calendar days. >
Appeal to CA under Rule 43 (quasi-judicial bodies) >
Rule 45 Supreme Court
Method of determining wages
1. Floor wage method
2. Salary-ceiling method
2004 Bankard Employees Union
If increase in hiring rate is brought about by the employer voluntarily
and unilaterally even without increasing the salary rates of old
employees, there is no wage distortion.
TN: The wage distortion was brought about not by a wage order but by
the unilateral act of the employer. Thus, the law cannot address the
same. Only wage distortions caused by a wage order issued by the
RTWPB are addressed by the law.
2006 Pag-Asa Steel Worker
No right to wage increase under a wage order if employee is receiving
above minimum wage.
*Wage order cannot be applied across the board.
Important: Only those receiving BELOW the prescribed minimum wage
may benefit from the wage order.
VIOLATION OF WAGE ORDERS; PENALTY
Civil liability
Wage difference x 2 = liability of employer (DOUBLE INDEMNITY)
Regional Director has jurisdiction – Art 128 (even if beyond P5,000)
Easiest way for the employee when he claims underpayment of wages
– report to the RD to exercise visitorial and enforcement power (no
jurisdictional amount limit)
If more complicated – Art. 129 (but only P5,000 or below)
Criminal liability
RD or SOLE has no jurisdiction.
EXEMPTION FROM WAGE ORDER
Could either be by application or by operation of law.
Automatically exempted:
Those under the labor code (domestic workers, needle work in their
respective homes, cottage industry, etc.)
Can apply for exemption with RTWPB:
1. Distressed establishments (1997 Joy Brothers)
2. Retail establishments
3. BMBEs (Barangay Micro xxx; not more than P3M capitalization)
4. Newly organized establishments
---END OF PART 1-----
WAGE ENFORCEMENT AND RECOVERY TOOLS
Mechanisms under the Labor Code to ensure recovery of wages
(Enforcement tools in the recovery of wages; to those establishment
who refuse to comply with wage orders, labor standards law)
A. Visitorial and Enforcement Power (Art. 128)
 Inquisitorial in nature because the DOLE does not need a
compliant to visit the establishment and enforce compliance
with labor laws; it can visit an establishment on its own.
 To whom given: Secretary of Labor (Silvestre H. Bello III)
 SOLE can deputize labor federations as labor law compliance
officers; other authorized representatives – Regional Director
 Search warrant NOT needed; it is by the nature of the office
that SOLE can visit establishments, interview workers,
examine employment records, make finding if there is
violation of labor law
 Labor Code is being enforced and other labor-related statutes
(wages, benefits, hours of work – everything)
 Revised Rules on Labor Law Compliance system; Modes of
implementation (1) Joint Assessment, (2) Compliance Visit (3)
Occupation Safety and Health Standards Investigation (4)
Special Assessment Visit Establishment
 Joint Assessment and Compliance visit – customarily used by
DOLE
 RD must have a “LETER OF AUTHORITY TO ASSESS” –
present to employer
 If joint assessment – require the employer to be represented
by his representative and the employees must likewise be
represented by their chosen representative
 Labor Law Compliance Officer – confront the employer of the
results of the investigation
 NOTICE OF RESULTS – post in the company premises; copy
be given to the employer/representative
 Remedy of employer: Contest the findings of the LLCO by
raising issues supported by documentary proof not considered
during the course of the investigation (i.e. payroll)
 Effect if there is a proper contest: Exception clause – RD is
divested of jurisdiction – Labor Arbiter
 If no proper contest – RD will issue a Compliance Order
(commanding employers to pay the employees, etc.)
 TN: Don’t confuse Notice of Results with Compliance Order.
 Remedy from Compliance Order: Appeal to SOLE first
(exhaustion of administrative remedies – memorandum of
appeal)
 If SOLE issued the Compliance Order: MR (10 calendar days)
> Rule 65 CA > Rule 45 SC
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
 Art 128 presupposes that er-ee relationship exists
 Other visitorial powers [Article 289, (274)] – examine books
of account
B. Simple money claims (Art. 129) See 1993 Rajah Humabon
Hotel
- Adversarial
- Memorize the requisites
1. Claimant is house helper or employee
2. Claim arose from employer-employee relationship
3. Does not seek reinstatement
4. Claim does not exceed P5,000
DOLE/RD – fully empowered to determine the existence of employer-
employee relationship, subject to JUDICIAL REVIEW, not review by the
NLRC. No limitation is imposed by law. The DOLE does not need to seek
the NLRC’s determination. (2012 People’s Broadcasting Services)
- No need to defer to the NLRC; DOLE can determine existence of er-
ee relationship
- Relevance: er-ee relationship is a requisite in Art 128
STOPPAGE OF OPERATION
Stoppage of operation under Art 128 will not apply if the stoppage is
ordered by the DENR and not the DOLE. Thus, the principle of no work
no pay during the period of stoppage of operation applies. (2008
National Mines and Allied Workers0
*If DOLE was the one which issued the stoppage order, and the
stoppage was not due to the fault of the employee – employees must
still be paid.
GUIDELINES ON THE PROCEDURE FOR CLOSURE OF BUSINESS
UNDER RA 9231
- DOLE Dept. Cir. No. 3, S. 2009
- Allows closure after notice and hearing
- Also allows immediate closure (close now, hear later process)
NO JURISDICTION, ART 128, REQUISITES
1. Employer-employee relationship has ceased
2. Where no such relationship has ever existed (2009 People’s
Broadcasting – Bombo Radyo Phils)
TN: Not within the coverage of the Visitorial and Enforcement Power. If
no er-ee relationship exists, the RD will be divested of jurisdiction under
the Exception clause > Jurisdiction is with Labor Arbitration for
compulsory arbitration.
ART. 128; NO JURISDICTIONAL AMOUNT
Applies even if the amount involved exceeds P5,000. (there is no more
ceiling)
*If DOLE conducts a compliance visit – can issue a compliance order
awarding to the employees more than P5,000.
2009, Balladares
The worker need not litigate to get what legally belongs to him. The
whole enforcement machinery of the DOLE exists to insure its
expeditious delivery to him free of charge.
*no need for lawyer under Art 128; no complainant except DOLE; no
individual complainant from the establishment;
Revised Rules on
Xxx
SAVE (Special Assessment or Visit of Establishment)
1. Establishment profile
2. Organizational structure and total number of employees
XXXXXXX
8/16/27
Nursing Employees; Expanded Breastfeeding Promotion Act of
2009
 Infant (0-12 months); Young child (12 months and 1 day – 3
years)
 Employer cannot prohibit the employee to bring her infant or
young child
 Duration and frequency of breaks may be agreed upon by the
employees and employer with the minimum being 40 minutes
 Applies to all establishments, whether private or government
 Penalty: Revocation of license of the establishment depending on
the frequency of violation; Assessed by the DOH (Works jointly
with DOLE)
Drivers and Conductors in Public Utility Transport System (DO
No. 118-12, S. 2012, January 13, 2012
 Public buses
 Benefits apply to driver and conductors (considered employees
applying the four fold test (not merely lessees)
 Not applicable to taxis or jeepneys
 Hours of work should not exceed 8 hours a day
 If required to work overtime (not more than 4 hours); Thus,
maximum hours of work shall not exceed 12 hours in any 24 hour
period, subject to safety and operational conditions of the bus
 At least 1 hour excluding of meal breaks within a 12 hour shift
 If work shift is 12 hours – entitled to rest period (1 hour)
 They should be paid PARTLY fixed and PARTLY performance
based. (Before, they are paid on commission or on boundary
basis – this encouraged them to drive fast and recklessly resulting
to numerous accidents; to minimize accidents, they should be
paid partly fixed and partly performance-based compensation)
 8 hours – prescribed daily minimum wage (fixed component –
which must be agreed by the parties but in no case shall be less
than the minimum wage)
 Partly-performance based:
1. Safety performance – no accidents, higher pay
2. Revenue performance – ridership; the more passengers, the
higher the pay
 There must be a contract of employment IN WRITING –
NOTARIZED (This is also true in employment of domestic
workers)
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
Night Workers (RA 10151; DOLE D.O. 119-12, S 2012)
 Hours of work is between 10pm-6am, provided he has rendered
at least 7 continuous hours of work
 Could be a male or female worker
 Benefits:
1. Right to a health assessment or the right to an advice of
one’s health, free of charge (to be done by a qualified nurse
or physician)
2. Right to mandatory facilities
 Right to a Health Assessment is free of charge, when requested
by the employee
- Before taking up an assignment as night worker
- At regular intervals during such assignment
- If he/she experiences health problems during such
assignments
 Right to Mandatory Facilities
- Suitable first-aid and emergency facilities
- Lactation station
- Separate toilet facilities for men and women
- Facility for eating with potable drinking water
- Transportation facility and/or properly ventilated temporary
sleeping or resting quarters, separate for male and female
workers (subject to exceptions)
Domestic Workers (RA 10361, Arts 139-150)
 There must be a written employment agreement between the
employer and the domestic worker
 Hours of work – 16 hours a day
 Rest period – aggregate of 8 hours
 Service Incentive Leave – entitled if served for at least 1 year; Art
82 of the Labor is deemed repealed insofar as entitled to service
incentive leave is concerned (with respect to domestic workers);
if unused = NOT CONVERTIBLE
 13th Month Pay – entitled if served for at least a year (same
computation as regular workers)
 Retirement Benefits – entitled (65; 60 – same computation, 22.5
days per year of service)
 Not entitled to DAILY minimum wage, but MONTHLY minimum
wage (Cebu – P3,000/month)
 SSS, PhilHealth, Pag-ibig membership – if served for at least 1
month; whether they are required to share in their contribution
would depend on their compensation (if receiving 5,000 and
above – have to share with their employer; if less, contribution
will have to be paid solely by the employer)
[END OF PART II]
SECURITY OF TENURE
 One of the constitutional rights of workers in relation to Labor
Relations (Art XII, Section 3)
 To continue in his employment until he is terminated for a just or
authorized cause
 Causes of termination: (1) Just causes, (2) Authorized causes
 Right to security of tenure covers all kinds of establishments –
whether industrial, commercial or agricultural
 Available to regular employees; also available to probationary
employee only during the period of probation; also available to
project and seasonable employee, but only during the duration of
the project and season, respectively
Classification of employees
1. Regular employee
i. By nature of the work – Performs a job which is
necessary and desirable to the trade and business of
the employer
ii. By length of service (casual employees becoming
regular after 1 year of service)
2. Casual employee – engaged to perform a job, work or
service which is merely incidental to the trade or business of
the employer and for a definite period made known to him
at the time of his engagement. (ex. carpenter in a school
3. Probationary employee – is a regular employee but has no
permanent employment because he is placed on probation
or trial period; during which, performance is assessed by the
employer.
Maximum ceiling of probation
GR: Article 296 – not to exceed 6 months from the date the employee
started WORKING. (1994 Central Negros Electric Cooperative)
XPN: Contract stipulates the date when probation period starts.
If probationary employee is allowed to work beyond the period of
probation = he becomes a regular and permanent employee.
Period
Not more than 6 months. (it may be lessened)
Other period of probation
Manual of Regulations for Private Higher Education of 2008 (Teachers
for tertiary level)
Revised xxx (Teachers for elementary and secondary teachers)
Counting of period of probation
The computation of the 6 month period of probation is reckoned from
the date of appointment up to the same calendar date of the 6th month
following.
Ex. January 1 – July 1
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
When probation may exceed 6 months
When the parties agree otherwise, such as when the same is established
by company policy or when the same is required by the nature of work
as where one must learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills, experience or
training. (1989 Mariwasa, citing Buiser)
TN: This doctrine is NOT extension. From the start, it already exceeds 6
months.
Q. Can the period of probation be extended?
GR: No. 6 months is more than adequate for the employee to learn the
job.
XPN: Where the extension of employee’s probation was ex gratia, an act
of liberality on the part of his employer to afford the employee a second
chance to make good after having initially failed to prove his worth as
an employee. (1989 Mariwasa)
Illegal; Re-hiring of probationer
 Hiring for 5 months, and then later re-hiring on probation – CLEAR
CIRCUMVENTION OF THE LAW (1987 Cebu Royal Plant)
 Employment on “day-to-day” basis for a temporary period
terminable anytime – violates the right of the employee to security
of tenure; prejudicial to worker (1992 Baguio Country Club)
Illegal Arrangement
 Placing of employee under a 6 month probation for 3 times –
unending probationary employment.
 Making an employee undergo on the job training for 3 weeks, after
which placing him under 6 month probation – exceeds the
maximum period of probation (1993 Holiday Inn Manila)
Sir: Do not confuse this with student trainees where no er-ee
relationship exists, i.e. jobstart act; dual xxx
Informing the Probationer of Reasonable Standards at the time
of engagement (performance standards)
GR: Where no standards are made known to the probationary employee
at the time of his engagement, he shall be deemed a regular employee
from day one.
Sir: The performance standards must be incorporated in the contract of
employment or at least subsequent to that – orientation
When probationer considered regular and permanent
1. If probationary employee is not informed of the standards
2. Employee did not undergo any performance evaluation
3. Allowed to work after the probationary period.
Failure to qualify; Termination of Probationary Employee
XPN: If a probationary employee had been fully apprised of his duties
and responsibilities, then basic knowledge and common sense dictate
that you must adequately perform the same, else he fails to pass the
probationary trial and may therefore be subject to termination.
The adequate performance of such duties and responsibilities
constitute the inherent and implied standard for regularization
(2014 Abbott Laboratories Phils. EN BANC DECISION)
2015 Enchanted Kingdom v. Verzo
Ideally, employers should immediately inform a probationary employee
of the standards for his regularization from day one. However, strict
compliance is not required. The true test of compliance is one of
reasonableness. As long as he is given a reasonable time and
opportunity to be made fully aware of what is expected of him during
the early phases of the period, the law is met.
Special laws on Probation
1. JobStart Trainee Act – a jobstart trainee cannot be placed under
probation if he has successfully completed his internship including
the technical training periods. (RA 10869)
Sir: A jobstart trainee is not an employee. However if later on he
is hired, employee is prohibited to put him under probation (if
trainee has successfully completed his internship)
2. SPES Law (Special Program for Employment Law) – Period of
employment of poor but deserving students, out of school youth
or displaced workers = considered part of student’s probationary
period should they apply in the same company.
Sir: Period of employment = part of the probationary period
EXCEPTIONS TO REGULAR EMPLOYMENT
Non-regular employment:
1. Project
2. Seasonal
*They will never become permanent if they are truly hired as project or
seasonal workers.
Two types of activities in a project
1. One that is within the usual trade or business of the employer but
separate, distinct and identifiable as such from the other
undertaking
2. One that is outside the usual trade or business of the employer
but separate, distinct and identifiable as such from the other
undertaking
Important: Repeated and continuous re-hiring of project employee will
make a project employee a regular employee or a member of a work
pool.
Jurisprudence:
While there was repeated re-hiring, the hiring was not however
continuous, as in fact there was lapse of 33 months after the next
project, the employee is a project and not regular. (2009 Acatel Phils)
Jurisprudence:
The successive re-engagement to perform same kind of work not
intermittently, but continuous, contract after contract, month after
month involving the same task indicates necessity and desirability xxx
Seasonal employee
1. Establishment belongs to a seasonal industry (i.e. agriculture)
where work is available only in part or parts of the year (not
year in year out)
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
XXXXX
8/29/2017
Employee’s Right to Ample Opportunity to be Heard
TN: Employee has no right to be head. Just ample opportunity to be
heard.
A. Right to explain and offer evidence in support thereof
 Prepare his explanation personally or with the assistance of
a representative or counsel (representative need not be a
lawyer)
 Ask the employer to copy the records material to his defense
 May request for a formal hearing or conference
B. Evidence consisting of relevant company records (201 file, daily
time cards), and sworn statements of witness/es
Formal conference
GR: Not mandatory.
XPNs:
1. When requested by employee in writing, or
2. When substantial evidentiary disputes exist, or (when employee
denies the charges)
3. When a company rule or practice requires it, or
4. When similar circumstances require it (2009 Perez, en banc)
While dismissal may be valid because there exists substantive due
process, there is violation of procedural due process = nominal
damages
Right to ample opportunity
1. Right to adduce evidence in his/her defense
2. Opportunity to confront witness against him if invoked
3. May be represented by any person even if not a lawyer
Enforcing Disciplinary action (3rd step)
1. Terminating or ending the investigation
2. Notify the employee; deliberate on the evidence and determine
the imposable penalty and the penalty to be imposed
THE NOTICE OF DISMISSAL OF THE EMPLOYER IS NOT WITHOUT
PREJUDICE TO THE RIGHT OF THE EMPLOYEE TO QUESTION THE
VALIDITY OF THE DISMISSAL.
IMPOSABLE PENALTY
A. Double jeopardy rule
An employee cannot be penalized twice for the same offense. To
do so would make the employee suffer again for the same
offense (1990 Continental Arrastre and Stevedoring, 1999
Dimabayao)
B. Past or previous infraction rule
Previous infractions which may be used as justification for an
employee’s dismissal from work must be in connection with a
subsequent similar offense.
Previous infraction cannot be used if the offense recently
committed is different from the previous offense.
C. Totality of infraction rule
The number of violations committed during the period of
employment shall be considered in determining the penalty to be
imposed upon an erring employee
The offenses xxx
D. Doctrine of discretionary justice
Where a penalty less punitive would suffice, whatever missteps
may be committed by labor ought not to be visited with a
consequence so severe.
TN: Not the same with discerning compassion.
It must be commensurate with the act, conduct or omission
imputed to the employee, and must consider the employee’s
length of service in the company, and his previous infractions.
Penalty of dismissal, too harsh
A. An employee who incurred tardiness in one occasion, and who
left his post twice without permission.
B. Marine engineer who has been employed for 8 years. He incurred
absences on 4 different occasion over a period of 4 years from
1980 to 1984. Penalty of dismissal is too harsh.
Service of Notice to Explain
Service of Notice of Decision
NOTICE OF DECISION
 Mode of service: Persona, mail, private courier (as long as there is
proof of actual receipt)
 Reportorial requirement to DOLE on dismissal cases
Defective Notice of Decision
“Since you did not submit the written letter of explanation as
requested in your preventive suspension, you are hereby dismissed
from service effective immediately.”
It did not discuss the reason for the dismissal, and the facts used as
basis in arriving said decision.
TN: This violates the employee’s right to due process.
There must be proof of receipt of Notice of Decision
Mere copy of the notice sent without proof of receipt, or in the very
least actual service thereof, does not constitute substantial evidence.
(2012 Mansion Printing Center)
Completeness of Service
A. Personal service/private courier – deemed served from date of
actual receipt
B. By registered mail – deemed served either (1) from actual receipt
of the mail, or (2) after 5 days from date addressee received the
first notice (registry notice) from the postmaster (2013 University
of the East)
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez

XXXXX DISMISSAL DUE TO ENFORCEMENT OF A UNION SECURITY

CLAUSE
TN: The first part was actual dismissal. We move to constructive
dismissal. Requisites:
1. Union security clause is applicable
CONSTRUCTIVE DISMISSAL 2. The union requests for he enforcement of the union security
provision in the CBA
It is an involuntary resignation resorted to when continued 3. Sufficient evidence to support the decision of the Union to expel
employment is rendered impossible xxx the employees from the union (compliance with prior notice and
hearing)
TN: “forced resignation”
The employer cannot dispense with prior notice and hearing xxx
Reliefs of one constructively dismissed
Same reliefs as when one is actually dismissed DISMISSAL OF PROBATIONARY EMPLOYEE
1. Reinstatement
2. Payment of backwages The dismissal after only about 4 weeks while under probationary
employment was valid due to his refusal to attend company’s seminar,
Different from voluntary resignation lack of interest in familiarizing himself with company’s objectives and
policies, prolonged lunch break, going out of the office without leave,,
Important: There can be constructive dismissal even if the etc. exhibiting negative working habits. (2012 Canadian Opportunities
employee quit his employment. Unlimited, Inc.)

1. Employee does not quit his employment Grounds:

1. Just cause/authorized cause
Ex. Illegal transfer, illegal demotion, illegal suspension 2. Failure to qualify

If there is transfer, it must be lateral. There must be no Limitations on power to terminate probationary employee
diminution of xxx (jurisprudence)

2. Employee quits his employment 1. Must be exercised in accordance with specific requirements of the
contract
Ex. Clear act of discrimination, insensibility or disdain, making it 2. Dissatisfaction must be real and in good faith
unbearable so as to forego one’s employment (2013 Celdran; 3. No unlawful discrimination
Extended Resolution)
ABANDONMENT
DISMISSAL FOR A FALSE CAUSE
Two requisites:
Dismissal for a false or non-existent cause. 1. Unjustified absences
2. Intention to sever employment relations
Termination of employee who failed to report because he was under
detention for criminal charges which were later dismissed (2007 Asian 2009 Baron Republic Theatrical
Terminal, citing 2005 Standard Electric) Filing of complaint is inconsistent with employer’s defense of
abandonment. In difficult times, it is unlikely for employee to abandon
Important: Backwages shall be counted only from the date the his job especially after long years of service.
employee demanded for reinstatement and the employer denied it.
(Different cut-off period as compared to illegal dismissal – from the RELIES AND AWARD
date one was illegally dismissed)
1. Reinstatement
No intent to sever employment relationship; No dismissal 2. Backwages
3. Award of damages (moral, exemplary, attorney’s fees)
A security agency may place security guard on floating status or
temporary off detail until he is transferred or assigned to a new post or Component of backwages
client. - From the date compensation was withheld up to date of actual
reinstatement
If you are placed on a temporary lay-off (for a period not exceeding 6 - Latest salary at the time you were illegally dismissed
months), there is no severance of employment relation; it is highly - Inclusive of allowances and benefits (e.g. fringe benefits)
premature for the employee to accuse the employer of illegal
dismissal.

Important: The mere lapse of the 6 month period of floating status XXXXX
does not immediately constitute constructive dismissal. The
circumstances must be looked into and the reason of the security
guard’s failure to assume another post or assignment. If such failure is
due to the employee’s own refusal (he insisted on his former assignment
as VIP security), the security agency should not be held liable. 92014
Exocet Security & Allied Services Corp.)
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez
8/30/17
No Alien Employment Permit, No Legal Reliefs
An alien employee who worked in the Philippines without a proper
work permit cannot sue and claim employee’s benefits under Philippine
Labor Laws.
To grant her prayer is to sanction the violation of Philippine labor laws
requiring aliens to secure work permits before their employment. The
status quo must prevail and the parties should be left where the xxx
Other awards based on equity
2009 Eastern Shipping Lines, Inc
A seaman is not entitled to separation pay upon expiration of fixed
contract; however, pay him financial assistance of P100,000 for his 11
years of service.
Important: Don’t immediately conclude that the separation pay has no
basis. It may be granted based on equitable grounds even if statutorily
you are not entitled.
2011 Villaruel
When a machine operator decide to stop working due to his failing
health, it is he who initiated the severance of his employment especially
since he rejected his employer’s offer for him to return to work.
However, as a measure of social and compassionate justice, having been
employed for 30 years, an award of financial assistance of P50,000 is
equitable.
Migrant workers
Reliefs: In case of unjust termination or unauthorized
deductions from the migrant worker’s salary
A. Full reimbursement of his placement fee and deductions made plus
interest at 12% per annum. (not 6%; BSP Circular; cannot repeal
RA 8042)
Important: It should be 12% because it is the law which
provides!!!!
B. Payment of his salaries for the unexpired portion of his contract
(2014 Sameer Overseas Placement Agency)
AUTHORIZED CASES
1. Redundancy
2. Retrenchment
3. Closure xxx
30 day prior notice rule
[Art. 283 and 277 (b)]
Analogous causes (closure)
1. Non-renewal of a lease contract resulting to closure
2. Closure of operations by DENR
TN: Here, separation pay is still warranted.
BONA FIDE SUSPENSION OF OPERATIONS
Suspension of operation
 Not more than 6 months
 No work no pay applies
Analogous cases
1. Temporary lay-off of employee (1995 Sebuguero)
2. Off detail
TN: In both, must not exceed 6 months.
1 month notice rule is still mandatory
In both permanent and temporary lay-off, jurisprudence dictates that
the 1 month notice rule to the DOLE and the employee under Art. 283
of the Labor Code is mandatory. (2014 Lopez; 2015 Pasig Agricultural
Development and Industrial Supply)
Labor Code and DOLE 147-15 – there is no need for the notice because
there is mere suspension and not termination. (BUT FOLLOW THE
CASES)
COST-CUTTING MEASURES
1. Compressed workweek
2. Reduction of workdays (amounts to constructive dismissal if
without proof of economic loss, 2009 Rosa)
3. Rotation of workers
4. Forced leave
5. Broken-time schedule
6. Flexi-holidays (DOLE Advisory No. 2, S.2009)
REDUNDANCY
There must be a redundancy program – produce an organizational chart.
SELLING COMPANY TO ANOTHER
Requisites:
 There must be valuable consideration
 Sale is in good faith
If sale is in bad faith, the successor employer shall be deemed to have
absorbed the employee and is held liable for the wages xxx
Theory of automatic assumption
BPI is deemed to have assumed the employment contracts of FEBTC
employees upon effectivity of the merger without break in the continuity
of their employment even without express stipulation in the Articles of
Merger. *Bank of the Phils. Islands, Oct 2011, Res. En Banc)
Purchase of Assets and Assumption of Debts
As a rule, a corporation that purchases xx
XPNS:
1. Purchases expressly or implied agrees to assume the debts
2. Where purchasing corporation is merely a continuation of the
selling corporation
3. Where selling corporation fraudulently enters into the
transaction to escape liability for those debts
4. xxx
Retrenchment, when valid
Losses must be substantial, xxx
All elements under Art. 283 must concur
Jurisprudence; Retrenchment NOT closure
The closure of a department or division of a company constitutes
retrenchment by, and not closure of, the company itself. Verily,
retrenchment and not closure was effected to warrant the valid dismissal
of the workers. The hotel has not totally ceased its operations xxx
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez

CLOSURE  Must not cause unnecessary inconvenience or prejudice on the

employee
Closure under Art. 283 is not limited to those resulting from business  Transfer may also involve transfer from one location to another
losses or reverse.  Illegal transfer may also constitute constructive dismissal

It need not also be closure of the entire establishment. It may be closure
of just a division, etc.
EFFECTS OR CONSEQUENCES OF DISMISSAL
Just cause + valid notice and hearing = VALID (no reliefs)
Just cause (no prior notice and hearing) = VALID but should pay
indemnity P30,000 Agabong case
Authorized cause + 30 day notice rule = VALIE + separation pay
Just cause (no prior notice and hearing) = VALID but should pay
indemnity P50,000
Valid exercise of management prerogative
1. Reshuffling of bank personnel (2004 Mendoza)
2. Company re-organization (1197 Arrieta)
3. Adoption of job evaluation program and salary scaling program
4. Granting of bonus
5. Change of work schedule
Suspension of work; jurisprudence
An employer’s policy of suspending and not allowing its drivers to drive
pending payment of arrears in their boundary obligations is fair and
reasonable. Such suspension is not dismissal as there was no intent to
sever the employer-employee relationship.

CORPORATE OFFICERS AND LIABILITIES CONTRACTING ARRANGEMENT (ALSO AN EXERCISE OF

Corporate officers
Not liable for illegal dismissal, except if there is bad faith or fraud on
their part.
XPN: Migrant workers (always jointly liable with the placement and
recruitment agency even without bad faith)
MANAGEMENT PREROGATIVE – ARTS. 106-109)
Businessmen with the aid of lawyers, have tried to avoid the bringing an
employer-employee relationship in some of their enterprises because
that juridical relation spawns obligations connected with workmen’s
compensation, social security, medicare, minimum wage, termination
pay and unionism.

WORKER’S PREFERENCE ART. 110 Two types of employer:

1. Direct employer
Only an ordinary preferred credit; not a lien; always applies where there 2. Indirect employer (statutory employer – made liable like a direct
is bankruptcy or liquidation proceedings. employer in case there is non-payment of wages)

Remedy: employee to initiate liquidation proceedings thru FRIA Applicable laws and rules
1. Arts. 106-109, Labor Code
If company is placed under receivership 2. Implementing Rules
All claims are suspended, including labor claims including civil cases  DOLE DO No. 174, S. 2017
Purpose is to normalize operations.  DOLE DO No. 150-16, S. 2016 (Revised Guidelines governing
the employment of Security Guards)
XXXXX
Article 106. Contractor or Subcontractor – whenever an employer enters
8/31/2017 into a contract with another person for the performance of the former’s
work, the employees of the contractor and of the latter’s subcontractor,
PART III-A if any, shall be paid in accordance with the provisions of the Labor Code.

MANAGEMENT PREROGATIVES In case there is legitimate job contracting

Termination is an inherent management prerogative, subject to the
requirements under the law
Promotion – scalar ascent from a lower position to a higher position,
accompanied with increase in duties, rank or status, and MAY OR MAY
NOT involve increase in salary.
In the event that the contractor or subcontractor fails to pay the wages
of his employees in accordance with this Code, the employer shall be
jointly and severally liable with his contractor or subcontractor to such
employees to the extent of the work performed under the contract, in
the same manner and extent that he is liable to employees directly
employed by him.

It is in the nature of a gift. Employee may refuse a promotion. Such Job contracting v. labor-only contracting
refusal does not constitute insubordination.
Labor-only contracting (Two requisites MUST concur)
Demotion XXX
- There must be valid cause
- There is compliance with due process (there must be opportunity Important: The subject of contracting is the PERFORMANCE OF
to be heard) LABOR. It is not sale (vendor-vendee relationship). If it does not involve
- It cannot be resorted to as a form of discrimination otherwise, the performance of job, work or service – it is outside the coverage of
constructive dismissal Arts. 106-109. (example: BPO – Civil Code applies)

Transfer Article 107. Indirect employer

 Lateral movement
 No diminution of duties and responsibility; no reduction in rank or
salary
 Employer must act in good faith
 Must be for the benefit of the employee
LABOR LAW REVIEW | Atty. Jefferson M. Marquez | By Tanya Ibanez

ENDO “END OF CONTRACT” Examples of Illegal “ENDO” jurisprudence

 Intertwined with the issue of labor contracting 1. 1987 Purefoods Corp

 Applies to a bilateral relationship
 Employment of contractor’s workers is made co-terminus with the
duration of the service agreement
 No repeated or continuous hiring or re-hiring of workers
(otherwise – regular or permanent)
 See DO 174, S. 2017
 The repeated, continuous, hiring, firing and re-hiring which
circumvents the worker’s right to security of tenure
Are there legitimate ENDO (end of contract) type of
employment under the Labor Code?
Yes. Project employment, seasonable employment, fixed term
employment.
Two types of relationship when we speak of contracting or
subcontracting:
1. Bilateral relationship (contractor-worker)
2. Trilateral relationship (principal-contractor-worker)
2. 1993 Mehitabel Furniture (hiring by a manufacturer of furniture
for export of additional workers occasionally to handle special
orders from customers abroad. Such special xx
Sir: No season in the type of business because it operates year in
year out.
3. 2004 Fadriquela (hiring on contract basis, ranging from 2-3
months, totaling almost 13 months of uninterrupted service, to
augment the company’s regular workforce xxx
4. 2003 Magsalin (employment of sales route helpers by a softdrinks
manufacturer for the same limited period of 5 months when it was
shown that after such period, the same workers were still retained
on a day-to-day basis)
See Labor Advisory No. 10, S. 2016

Labor contracting per se is not illegal. Labor-only contract is

what is illegal

Important: Labor contracting is a management prerogative.

Labor contracting is justified when it is undertaken in order to effectuate

more economic and efficient methods of production (1999 Asian Alcohol
Corp.) or as part of the company’s cost-saving program. (1992 De
Ocampo et. al.)

Sir: Labor contracting is usually resorted to for purposes of economy,

efficiency and the contractor’s expertise.

Labor-only contracting is prohibited, elements:

Two kinds of labor-only contracting

Labor Code

1. The agency or contractor lacks substantial capital or investment

AND

2. The activities performed by the agency or contractor’s workers are

directly related xxx

Control test

1. Agency or contractor merely supplies human bodies (acting merely

as an agent)

AND

2. Does not exercise the right of control over the performance of the
work of the employee

Important: YOU CANNOT SUPPLY LABOR ALONE. IT IS THE

EXPERTISE OF THE CONTRACTOR AND THE PERFORMANCE OF THE
JOB OR SERVICE THAT IS BEING PAID FOR, AND NOT THE NUMBER
OF PEOPLE. IT SHOULD NOT BE “MANPOWER SERVICE”, BUT “SERVICE
PROVIDER’.

Sir: Contracting is different from recruitment and placement.