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UP LAW BOC LABOR LAW LABOR RELATIONS
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TABLE OF CONTENTS
WHO CANNOT FORM, JOIN, OR ASSIST LABOR NATURE OF PROCEEDINGS ............................. 147
ORGANIZATIONS .......................................... 106 CONCILIATION VS. MEDIATION ........................ 148
BARGAINING UNIT ........................................ 107
VOLUNTARY RECOGNITION ..............................110 DOLE REGIONAL DIRECTORS ....... 148
CERTIFICATION ELECTION ...............................110 JURISDICTION .............................................. 148
Article II, Section 10. The State shall promote Article II, Section 13. The State recognizes the
social justice in all phases of national vital role of the youth in nation-building and
development. shall promote and protect their physical,
moral, spiritual, intellectual, and social well-
General definition of Social Justice being. It shall inculcate in the youth
Social Justice is neither communism, nor patriotism and nationalism, and encourage
despotism, nor atomism, nor anarchy, but the their involvement in public and civic affairs.
humanization of laws and the equalization of
social and economic forces by the State so that Article II, Section 14. The State recognizes the
justice in its rational and objectively secular role of women in nation-building, and shall
conception may at least be approximated. ensure the fundamental equality before the
[Calalang vs. Williams (1940)] law of women and men.
Welfare State Article II, Section 18. The State affirms labor as
The welfare state concept is found in the a primary social economic force. It shall
constitutional clause on the promotion of social protect the rights of workers and promote
justice to ensure the well-being and economic their welfare.
security of all the people, and in the pledge of
protection to labor with specific authority to Article II, Section 20. The State recognizes the
regulate the relations between landowners and indispensable role of the private sector,
tenants and between labor and capital. encourages private enterprise, and provides
[Alalayan vs. National Power Corporation (1968)] incentives to needed investments.
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full protection to labor, local and overseas, the inherent economic inequality between labor
organized and unorganized, and promote full and management. Never should the scale be so
employment and equality of employment tilted if the result is an injustice to the employer.
opportunities for all. [Phil. Geothermal Inc. vs. NLRC (1994)]
It shall guarantee the rights of all workers to This Court held that the employers right to
self-organization, collective bargaining and conduct the affairs of his business according to
negotiations, and peaceful concerted its own discretion and judgment, is well-
activities, including the right to strike in recognized. An employer has a free reign and
accordance with law. They shall be entitled to enjoys wide latitude of discretion to regulate all
security of tenure, humane conditions of work, aspects of employment. This is a management
and a living wage. They shall also participate prerogative, where the free will of management
in policy and decision-making processes to conduct its own affairs to achieve its purpose
affecting their rights and benefits as may be takes form. [Torreda vs. Toshiba (2007)]
provided by law.
Limits to Management Prerogative
The State shall promote the principle of
shared responsibility between workers and (1) Good faith
employers and the preferential use of So long as a companys management
voluntary modes in settling disputes, prerogatives are exercised in good faith for the
including conciliation, and shall enforce their advancement of the employers interest and not
mutual compliance therewith to foster for the purpose of defeating or circumventing the
industrial peace. rights of the employees under special laws or
under valid agreements, this Court will uphold
The State shall regulate the relations between themEven as the law is solicitous of the
workers and employers, recognizing the right welfare of the employees, it must also protect
of labor to its just share in the fruits of the right of an employer to exercise what are
production and the right of enterprises to clearly management prerogatives. The free will
reasonable returns to investments, and to of management to conduct its own business
expansion and growth. affairs to achieve its purpose cannot be denied.
[Ernesto G. Ymbong vs. ABS-CBN Broadcasting
Participation in Decision-Making Process Corp. (2012)]
Verily, a line must be drawn between
management prerogatives regarding business (2) Without grave abuse of discretion
operations per se and those which affect the But, like other rights, there are limits thereto.
rights of the employees. In treating the latter, The managerial prerogative to transfer
management should see to it that its employees personnel must be exercised without grave
are at least properly informed of its decisions or abuse of discretion, bearing in mind the basic
modes action. Indeed, industrial peace cannot elements of justice and fair play. Having the
be achieved if the employees are denied their right should not be confused with the manner in
just participation in the discussion of matters which the right is exercised. [Tinio vs. CA (2007)]
affecting their rights. [Phil. Airlines Inc. vs. NLRC
(1993); also cited in Manila Electric Co. vs. Sec. of (3) Assumption of jurisdiction by the Secretary of
Labor Quisumbing (2000)] Labor
This Court declared that it recognizes the
Management and the Constitution: Management exercise of management prerogatives and it
Function/Prerogative often declines to interfere with the legitimate
The law in protecting the rights of the business decisions of the employerHowever,
employees authorizes neither oppression nor as expressed in PAL vs. NLRC, the privilege is
self-destruction of the employer. It should be not absolute, but subject to exceptions. One of
made clear that when the law tilts the scale of these exceptions is when the Secretary of Labor
justice in favor of labor, it is but a recognition of assumes jurisdiction over labor disputes involving
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industries indispensable to the national interest pertinent labor laws, the provisions of said laws
under Article 263(g) of the Labor Code. would prevail over the terms of the contract,
[University of Immaculate Concepcion Inc. vs. and private respondent would still be entitled to
Sec. of Labor (2005)] overtime pay. [PAL Employees Savings and Loan
Assn., Inc. vs. NLRC (1996)]
Article XIII, Section 14. The State shall protect
working women by providing safe and Indeed, a contract of employment is impressed
healthful working conditions, taking into with public interest. For this reason, provisions
account their maternal functions, and such of applicable statutes are deemed written into
facilities and opportunities that will enhance the contract. Hence, the parties are not at
their welfare and enable them to realize their liberty to insulate themselves and their
full potential in the service of the nation. relationships from the impact of labor laws and
regulations by simply contracting with each
Article XIII, Section 13. The State recognizes other. Moreover, in case of doubt, the terms of a
the vital role of the youth in nation-building contract should be construed in favor of labor.
and shall promote and protect their physical, [Innodata Philippines, Inc. vs. Quejada-Lopez
moral, spiritual, intellectual, and social well- (2006)]
being. It shall inculcate in the youth
patriotism and nationalism, and encourage Liberal Construction
their involvement in public and civic affairs. While the terms and conditions of a CBA
constitute the law between the parties, it is not
however, an ordinary contract to which is
CIVIL CODE applied the principles of law governing ordinary
contracts. A CBA, as a labor contract within the
Article 19, Civil Code, Articles 19, 1700, 1702 contemplation of Article 1700 of the Civil Code
Art. 19. Every person must, in the exercise of of the Philippines which governs the relations
his rights and in the performance of his duties, between labor and capital, is not merely
act with justice, give everyone his due, and contractual in nature but impressed with public
observe honesty and good faith. interest, thus, it must yield to the common
good. As such, it must be construed liberally
Art. 1700. The relations between capital and rather than narrowly and technically, and the
labor are not merely contractual. They are so courts must place a practical and realistic
impressed with public interest that labor construction upon it, giving due consideration to
contracts must yield to the common good. the context in which it is negotiated and
Therefore, such contracts are subject to the purpose which it is intended to serve. (Cirtek
special laws on labor unions, collective Employees Labor Union-FFW v Cirtek Electronics,
bargaining, strikes and lockouts, closed shop, 2010)
wages, working conditions, hours of labor and
similar subjects. When there is doubt between the evidence
submitted by the employer and that submitted
Art. 1702. In case of doubt, all labor legislation by the employee, the scales of justice must be
and all labor contracts shall be construed in tilted in favor of the employee. This is consistent
favor of the safety and decent living for the with the rule that an employers cause could
laborer. only succeed on the strength of its own evidence
and not on the weakness of the employees
Contracts evidence. [Misamis Oriental II Electric Service
Under the Civil Code, contracts of labor are Cooperative (Moresco II) vs. Virgilio Cagalawan
explicitly subject to the police power of the state (2012)]
because they are not ordinary contracts but are
impressed with public interest. Inasmuch as in Fair treatment
this particular instance the contract in question The right of an employer to dismiss an
employee differs from and should not be 7
would have been deemed in violation of
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confused with the manner in which such right is Art. 4. Construction in favor of labor. All doubts
exercised. It must not be oppressive and abusive in the implementation and interpretation of
since it affects one's person and property. the provisions of this Code, including its
[General Bank and Trust Co. vs. CA (1985)] implementing rules and regulations, shall be
resolved in favor of labor
Mutual obligation
The employer's obligation to give his workers Liberality in Application of Rules
just compensation and treatment carries with it We stress at this point that it is the spirit and
the corollary right to expect from the workers intention of labor legislation that the NLRC and
adequate work, diligence and good conduct. the labor arbiters shall use every reasonable
[Firestone Tire and Rubber Co. vs. Lariosa (1987)] means to ascertain the facts in each case
speedily and objectively, without regard to
Compliance with law technicalities of law or procedure, provided due
It is also important to emphasize that the process is duly observed. xxx The application of
return-to-work order not so much confers a technical rules of procedure in labor cases may
right as it imposes a duty; and while as a right it be relaxed to serve the demands of substantial
may be waived, it must be discharged as a duty justice. [Manila Electric Co. vs. Jan Carlo Gala
even against the worker's will. [Sarmiento vs. (2012)]
Tuico (1988)]
It is settled that subsequent and substantial
Employee's compliance and obedience to compliance may call for the relaxation of the
employer's orders rules of procedureThe Court has time and
The lack of a written or formal designation again relaxed the rigid application of the rules
should not be an excuse to disclaim any to offer full opportunity for parties to ventilate
responsibility for any damage suffered by the their causes and defenses in order to promote
employer due to his negligence. The measure of rather than frustrate the ends of justice. [Ma.
the responsibility of an employee is that if he Ligaya Santos vs. Litton Mills (2011)]
performed his assigned task efficiently and
according to the usual standards, then he may Article 172, Labor Code
not be held personally liable for any damage
arising therefrom. Failing in this, the employee Art. 172. Policy. The State shall promote and
must suffer the consequences of his negligence develop a tax-exempt employees
if not lack of due care in the performance of his compensation program whereby employees
duties. [PCIB vs. Jacinto (1991)] and their dependents, in the event of work-
connected disability or death, may promptly
secure adequate income benefit and medical
LABOR CODE related benefits.
Article 3, Labor Code Article 217, Labor Code
Art. 3. Declaration of basic policy. The State 1. Art. 217, Declaration of Policy.
shall afford protection to labor, promote full 2. A. It is the policy of the State:
employment, ensure equal work opportunities
regardless of sex, race or creed and regulate 1. (a) To promote and emphasize the
the relations between workers and employers. primacy of free collective bargaining and
The State shall assure the rights of workers to negotiations, including voluntary
self-organization, collective bargaining, arbitration, mediation and conciliation, as
security of tenure, and just and humane modes of settling labor or industrial
conditions of work. disputes;
Article 4, Labor Code 2. (b) To promote free trade unionism as an
instrument for the enhancement of
democracy and the promotion of social
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policies and/or to hire, transfer, suspend, runaway shops, of the employer struck
lay-off, recall, discharge, assign or against, as well as the immediate vicinity
discipline employees. Supervisory actually used by picketing strikers in
employees are those who, in the interest moving to and fro before all points of
of the employer, effectively recommend entrance to and exit from said
such managerial actions if the exercise of establishment.
such authority is not merely routinary or
clerical in nature but requires the use of Article 261, Labor Code
independent judgment. All employees not Art. 261. Exclusive bargaining representation
falling within any of the above definitions and workers participation in policy and
are considered rank-and-file employees decision-making. The labor organization
for purposes of this Book. designated or selected by the majority of the
(n) "Voluntary Arbitrator" means any person employees in an appropriate collective
accredited by the Board as such or any bargaining unit shall be the exclusive
person named or designated in the representative of the employees in such unit
Collective Bargaining Agreement by the for the purpose of collective bargaining.
parties to act as their Voluntary Arbitrator, However, an individual employee or group of
or one chosen with or without the employees shall have the right at any time to
assistance of the National Conciliation present grievances to their employer.
and Mediation Board, pursuant to a
selection procedure agreed upon in the Any provision of law to the contrary
Collective Bargaining Agreement, or any notwithstanding, workers shall have the right,
official that may be authorized by the subject to such rules and regulations as the
Secretary of Labor and Employment to Secretary of Labor and Employment may
act as Voluntary Arbitrator upon the promulgate, to participate in policy and
written request and agreement of the decision-making processes of the
parties to a labor dispute. establishment where they are employed
(o) "Strike" means any temporary stoppage of insofar as said processes will directly affect
work by the concerted action of their rights, benefits and welfare. For this
employees as a result of an industrial or purpose, workers and employers may form
labor dispute. labor-management councils: Provided, that
(p) "Lockout" means any temporary refusal of the representatives of the workers in such
an employer to furnish work as a result of labor-management councils shall be elected
an industrial or labor dispute. by at least the majority of all employees in
(q) "Internal union dispute" includes all said establishment. [As amended by Section
disputes or grievances arising from any 22, Republic Act No. 6715, March 21, 1989]
violation of or disagreement over any
provision of the constitution and by-laws Article 283, Labor Code
of a union, including any violation of the
rights and conditions of union
membership provided for in this Code.
(r) "Strike-breaker" means any person who
obstructs, impedes, or interferes with by
force, violence, coercion, threats, or
intimidation any peaceful picketing
affecting wages, hours or conditions of
work or in the exercise of the right of self-
organization or collective bargaining.
(s) "Strike area" means the establishment,
warehouses, depots, plants or offices,
including the sites or premises used as
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Voluntary Arbitration Program. (As amended mandatory period, the aforesaid officials shall,
by Section 33, Republic Act No. 6715, March without prejudice to any liability which may
21, 1989) have been incurred as a consequence thereof,
see to it that the case or matter shall be
The Ministry shall help promote and gradually decided or resolved without any further delay.
develop, with the agreement of labor [Incorporated by Section 33, Republic Act No.
organizations and employers, labor- 6715, March 21, 1989]
management cooperation programs at
appropriate levels of the enterprise based on
the shared responsibility and mutual respect Recruitment and
in order to ensure industrial peace and
improvement in productivity, working
Placement
conditions and the quality of working life.
(Incorporated by Batas Pambansa Bilang 130,
August 21, 1981) RECRUITMENT OF LOCAL AND
In establishments where no legitimate labor MIGRANT WORKERS
organization exists, labor-management
committees may be formed voluntarily by LICENSE AND AUTHORITY
workers and employers for the purpose of A license is a document issued by the
promoting industrial peace. The Department Department of Labor and Employment (DOLE)
of Labor and Employment shall endeavor to authorizing a person or entity to operate a
enlighten and educate the workers and private employment agency, while an authority
employers on their rights and responsibilities is a document issued by the DOLE authorizing a
through labor education with emphasis on the person or association to engage in recruitment
policy thrusts of this Code. [As amended by and placement activities as a private
Section 33, Republic Act No. 6715, March 21, recruitment agency. [Art. 13(d) and (f), LC]
1989]
License Authority
To ensure speedy labor justice, the periods Authorize an entity to Authorize an entity to
provided in this Code within which decisions operate as a private operate as a private
or resolutions of labor relations cases or employment agency recruitment entity
matters should be rendered shall be When a license is Does not entitle a
mandatory. For this purpose, a case or matter given, one is also private recruitment
shall be deemed submitted for decision or authorized to collect entity to collect fees.
resolution upon the filing of the last pleading fees
or memorandum required by the rules of the
Commission or by the Commission itself, or Private employment agency (PEA) v. Private
the Labor Arbiter, or the Director of the recruitment entity (PRE)
Bureau of Labor Relations or Med-Arbiter, or Type Definition Requires
the Regional Director. Private Any person or entity License
Upon expiration of the corresponding period, employment engaged in
a certification stating why a decision or agency recruitment and
resolution has not been rendered within the placement of
said period shall be issued forthwith by the workers for a fee
Chairman of the Commission, the Executive
Private Any person or Authority
Labor Arbiter, or the Director of the Bureau of
recruitment association
Labor Relations or Med-Arbiter, or the
entity engaged in the
Regional Director, as the case may be, and a
recruitment and
copy thereof served upon the parties.
placement of
workers, locally or
Despite the expiration of the applicable
overseas, without
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The proviso provides for a presumption that a (a) The person charged with the crime must
person or entity so described engages in have undertaken recruitment activities
recruitment and placement [People v. Panis defined under Art. 13(b) or prohibited
(1988)] activities defined under Art. 34; and
(b)The said person does not have a license or
What constitutes recruitment authority to do so. [Art. 38, LC]
The number of persons dealt with is not an
essential ingredient of the act of recruitment Profit or lack thereof is immaterial
and placement of workers. Any of the acts The act of recruitment may be "for profit or not."
mentioned in Article 13(b) will constitute Notably, it is the lack of the necessary license or
recruitment and placement even if only one authority, not the fact of payment that renders
prospective worker is involved. The proviso the recruitment activity of LCL unlawful. [C.F.
merely lays down a rule of evidence that where Sharp vs. Espanol (2007)]
a fee is collected in consideration of a promise
or offer of employment to two or more Accused must give the impression of ability to
prospective workers, the individual or entity send complainant abroad
dealing with them shall be presumed to be It is well-settled that to prove illegal
engaged in the act of recruitment and recruitment, it must be shown that appellant
placement. [People v. Panis, 1988] gave complainants the distinct impression that
she had the power or ability to send
Acts of referral complainants abroad for work such that the
The act of referral, which is included in latter were convinced to part with their money in
recruitment, is "the act of passing along or order to be employed. [People v. Ochoa (2011)]
forwarding of an applicant for employment after
an initial interview of a selected applicant for Contract Substitution amounts to Illegal
employment to a selected employer, placement Recruitment
officer or bureau." [Rodolfo vs. People (2006)] The reduced salaries and employment period in
the new employment contract contradicted the
Promising employment POEA-approved employment contract. By this
Promising employment as factory workers and act of contract substitution, respondents
receiving money allegedly for processing papers committed a prohibited practice and engaged in
without authorization or license is engaging into illegal recruitment as defined in Art. 34(i), LC.
unlawful recruitment and placement activities. [PERT/CPM Manpower Exponent Co. v. Vinuya
The absence of the necessary license or (2012)]
authority renders all of accused-appellants
recruitment activities criminal. [People vs. Saulo Prohibited practices
(2000)] It shall be unlawful for any individual, entity,
licensee, or holder of authority:
Note: To determine which law applies, the place (a) To charge or accept, directly or indirectly, any
of work is the determining factor: amount greater than that specified in the
(1) If in the Philippines: Labor Code (LC) applies schedule of allowable fees prescribed by the
(2) If abroad: Migrant Workers Act [R.A. 8042, Secretary of Labor, or to make a worker pay
as amended by R.A. 10022]. any amount greater than that actually
received by him as a loan or advance;
ILLEGAL RECRUITMENT FOR LOCAL (b) To furnish or publish any false notice or
WORKERS (GOVERNED BY THE information or document in relation to
recruitment or employment;
LABOR CODE) (c) To give any false notice, testimony,
information or document or commit any act
SIMPLE ILLEGAL RECRUITMENT of misrepresentation for the purpose of
Elements: securing a license or authority under this
Code.
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1st type:
Illegal recruitment vs. Estafa (1) Person charged undertakes any recruitment
Illegal recruitment and estafa are entirely activity as defined in Art.13 (b) of the Labor
different offenses and neither one necessarily Code; and
includes or is necessarily included in the other. (2) Said person does not have a license or
A person who is convicted of illegal recruitment authority to do so.
may, in addition, be convicted of estafa by false
pretenses or fraudulent acts under Article 315, 2nd type:
paragraph 2(a) of the Revised Penal Code. In (1) Person charged commits any of the
the same manner, a person acquitted of illegal enumerated acts under Sec. 6 of R.A. 8042, as
recruitment may be held liable for estafa. amended by, R.A. 10022.
Double jeopardy will not set in because illegal (2) It is immaterial whether he is a holder or not
recruitment is malum prohibitum, in which there of any license or authority
is no necessity to prove criminal intent,
whereas estafa is malum in se, in the Illegal recruitment - shall mean any act of
prosecution of which, proof of criminal intent is canvassing, enlisting, contracting, transporting,
necessary. [Rosita Sy vs. People of the Philippines utilizing, hiring, or procuring workers
(2010)]
and includes
One convicted for illegal recruitment may still be referring, contract services, promising or
convicted of estafa advertising for employment abroad,
In People v. Cortez the Court explained that: In
this jurisdiction, it is settled that a person who whether for profit or not,
commits illegal recruitment may be charged
and convicted separately of illegal recruitment when undertaken by non-licensee or non-holder
under the Labor Code and estafa under par. 2(a) of authority contemplated under Article 13(f) of
of Art. 315 of the Revised Penal Code. The Presidential Decree No. 442, as amended,
offense of illegal recruitment is malum otherwise known as the Labor Code of the
prohibitum where the criminal intent of the Philippines
accused is not necessary for conviction, while
estafa is malum in se where the criminal intent Provided,
of the accused is crucial for conviction. That any such non-licensee or non-holder who,
Conviction for offenses under the Labor Code in any manner, offers or promises for a fee
does not bar conviction for offenses punishable employment abroad to two or more persons
by other laws. Conversely, conviction for estafa shall be deemed so engaged. [Sec. 6, RA 8042
under par. 2(a) of Art. 315 of the Revised Penal as amended]
Code does not bar a conviction for illegal
recruitment under the Labor Code. It follows Other prohibited acts
that one's acquittal of the crime of estafa will It shall likewise include the following acts,
not necessarily result in his acquittal of the whether committed by any person, whether a
crime of illegal recruitment in large scale, and non-licensee, non-holder, licensee or holder of
vice versa. [People v. Ochoa (2011); People v. authority:
Ocden (2011)] (1) To charge or accept directly or indirectly any
amount greater than that specified in the
ILLEGAL RECRUITMENT FOR schedule of allowable fees prescribed by the
MIGRANT WORKERS (GOVERNED BY Secretary of Labor and Employment, or to
make a worker pay or acknowledge any
R.A. 8042, AS AMENDED BY R.A. amount greater than that actually received
10022) by him as a loan or advance;
(2) To furnish or publish any false notice or
SIMPLE ILLEGAL RECRUITMENT information or document in relation to
recruitment or employment;
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(3) To give any false notice, testimony, monetary or financial considerations, or for
information or document or commit any act any other reasons, other than those
of misrepresentation for the purpose of authorized under the Labor Code and its
securing a license or authority under the implementing rules and regulations;
Labor Code, or for the purpose of (11) Failure to actually deploy a contracted
documenting hired workers with the POEA, worker without valid reason as determined
which include the act of reprocessing by the Department of Labor and
workers through a job order that pertains to Employment;
nonexistent work, work different from the (12) Failure to reimburse expenses incurred by
actual overseas work, or work with a the worker in connection with his
different employer whether registered or documentation and processing for purposes
not with the POEA; of deployment, in cases where the
(4) To include or attempt to induce a worker deployment does not actually take place
already employed to quit his employment in without the worker's fault. Illegal
order to offer him another unless the recruitment when committed by a syndicate
transfer is designed to liberate a worker or in large scale shall be considered an
from oppressive terms and conditions of offense involving economic sabotage; and
employment; (13) To allow a non-Filipino citizen to head or
(5) To influence or attempt to influence any manage a licensed recruitment/manning
person or entity not to employ any worker agency.
who has not applied for employment
through his agency or who has formed, In addition to the acts enumerated above, it
joined or supported, or has contacted or is shall also be unlawful for any person or entity to
supported by any union or workers' commit the following prohibited acts:
organization; (1) Grant a loan to an overseas Filipino worker
(6) To engage in the recruitment or placement with interest exceeding eight percent (8%)
of workers in jobs harmful to public health per annum, which will be used for payment
or morality or to the dignity of the Republic of legal and allowable placement fees and
of the Philippines; make the migrant worker issue, either
(7) To fail to submit reports on the status of personally or through a guarantor or
employment, placement vacancies, accommodation party, postdated checks in
remittance of foreign exchange earnings, relation to the said loan;
separation from jobs, departures and such (2) Impose a compulsory and exclusive
other matters or information as may be arrangement whereby an overseas Filipino
required by the Secretary of Labor and worker is required to avail of a loan only
Employment; from specifically designated institutions,
(8) To substitute or alter to the prejudice of the entities or persons;
worker, employment contracts approved (3) Refuse to condone or renegotiate a loan
and verified by the Department of Labor incurred by an overseas Filipino worker after
and Employment from the time of actual the latter's employment contract has been
signing thereof by the parties up to and prematurely terminated through no fault of
including the period of the expiration of the his or her own;
same without the approval of the (4) Impose a compulsory and exclusive
Department of Labor and Employment; arrangement whereby an overseas Filipino
(9) For an officer or agent of a recruitment or worker is required to undergo health
placement agency to become an officer or examinations only from specifically
member of the Board of any corporation designated medical clinics, institutions,
engaged in travel agency or to be engaged entities or persons, except in the case of a
directly or indirectly in the management of seafarer whose medical examination cost is
travel agency; shouldered by the principal/shipowner;
(10) To withhold or deny travel documents from (6) Impose a compulsory and exclusive
applicant workers before departure for arrangement whereby an overseas Filipino
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worker is required to undergo training, scale if committed against three (3) or more
seminar, instruction or schooling of any kind persons individually or as a group.
only from specifically designated
institutions, entities or persons, except for LIABILITIES AND PENALTIES FOR
recommendatory trainings mandated by ILLEGAL RECRUITMENT
principals/shipowners where the latter
shoulder the cost of such trainings; Illegal Recruitment Involving Local Workers [Art.
(7) For a suspended recruitment/manning 39, LC]
agency to engage in any kind of recruitment Act Penalty
activity including the processing of pending Illegal recruitment Life imprisonment
workers' applications; and constituting economic AND
(8) For a recruitment/manning agency or a sabotage Fine: P100,000.00
foreign principal/employer to pass on the Licensee or holder or 2 years
overseas Filipino worker or deduct from his authority violating or
or her salary the payment of the cost of Imprisonment 5
causing another to years OR
insurance fees, premium or other insurance violate Title I, Book I,
related charges, as provided under the P10,000 Fine
LC
compulsory worker's insurance coverage. P50,000 OR both
[Sec. 6, RA 8042 as amended] Violating or causing 4 years
another to violate Title Imprisonment 8
Migrant Workers Act (MWA) expands the I, Book I, LC years OR
definition of illegal recruitment
P20,000 Fine
The amendments to the Labor Code introduced
P100,000 OR both
by Republic Act No. 8042, otherwise known as
the Migrant Workers and Overseas Filipinos Act
If the offender is a corporation, partnership,
of 1995, broadened the concept of illegal
association or entity, the penalty shall be
recruitment and provided stiffer penalties,
imposed upon the officer or officers of the
especially for those that constitute economic
corporation, partnership, association or entity
sabotage. [People v. Ocden (2011)]
responsible for violation.
Law Applicabil Acts Who can be
If such officer is an alien, he shall, in addition to
ity Punishabl punished
the penalties herein prescribed, be deported
e
without further proceedings.
Labor Local Art. 13(b) Non-
Code Workers licensee
In every case, conviction shall cause and carry
Art. 34 Non- the automatic revocation of the license or
licensee authority and all the permits and privileges
RA Migrant Art. 13(b) Non- granted to such person or entity under this Title,
8042 Workers Labor licensee and the forfeiture of the cash and surety bonds
as Code in favor of the Overseas Employment
amend Enumerat Licensee/N Development Board or the National Seamen
ed by ed on-licensee Board, as the case may be, both of which are
RA prohibite authorized to use the same exclusively to
10022 d acts in promote their objectives.
Section 6
Illegal Recruitment Involving Migrant Workers
OFFENSE INVOLVING ECONOMIC SABOTAGE [Sec. 7, RA 8042 as amended by RA 10022]
(LARGE-SCALE OR BY A SYNDICATE) Act Penalty
Illegal recruitment is deemed committed by a Illegal 12 years and 1 day
syndicate if carried out by a group of three (3) or recruitment
more persons conspiring or confederating with Imprisonment 20 years AND
one another. It is deemed committed in large P1M Fine P2M
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(2) Shall assume joint and solidary liability with Pre-Termination of Contract of Migrant Worker
the employer for all claims and liabilities which [Sec. 10, R.A. 8042, as amended by R.A. 10022]
may arise in connection with the
implementation of the contract, including but In case of termination of overseas employment
not limited to payment of wages, death and (1) without just, valid or authorized cause as
disability compensation and repatriation; defined by law or contract, or
(2) any unauthorized deductions from the
(3) Shall guarantee compliance with the existing migrant workers salary
labor and social legislations of the Philippines
and of the country of employment of recruited The worker shall be entitled to the full
workers [POEA Rules, Book II, Rule II, Sec. 1 (f) (2- reimbursement of:
5)] (1) his placement fee and the deductions made
with interest at twelve percent (12%) per annum
Joint and solidary liability is meant to assure (2) plus his salaries for the unexpired portion of
aggrieved workers of immediate and sufficient his employment contract OR for three (3)
payment of what is due them months for every year of the unexpired term,
The fact that the manning agency and its whichever is less.
principal have already terminated their agency
agreement does not relieve the former of its Rule before Serrano: 3-month salary rule applies
liability. The agency agreement with the The employment contract involved in the
principal even if ended as between them, still instant case covers a two-year period but the
extends up to and until the expiration of, the overseas contract worker actually worked for
employment contracts of the employees only 26 days prior to his illegal dismissal. Thus,
recruited and employed pursuant to the said the three months salary rule applies [Flourish
recruitment agreement. Otherwise, this will Maritime Shipping v. Almanzor, G.R. No. 177948,
render nugatory the very purpose for which the March 14, 2008]
law governing the employment of workers for
foreign jobs abroad was enacted, that is, to Serrano ruling: invalidated the 3-month salary
assure aggrieved workers of immediate and cap
sufficient payment of what is due them. [OSM The issue in this case is the constitutionality of
Shipping Phil, Inc. v. NLRC (2003)] the last clause of Sec.10 of RA 8042:
Sec. 10. Money Claims. - x x x In case of
Common Rules on Illegal Recruitment (Local or termination of overseas employment without
Overseas) just, valid or authorized cause as defined by law
or contract, the workers shall be entitled to the
Venue full reimbursement of his placement fee with
A criminal action arising from illegal interest of twelve percent (12%) per annum, plus
recruitment shall be filed with the RTC of the his salaries for the unexpired portion of his
province or city: employment contract or for three (3) months for
(1) where the offense was committed or every year of the unexpired term, whichever is less.
(2) where the offended party actually resides at
the time of the commission of the offense. [Sec. The Court held that said clause is
9, R.A. 8042 (this part was not amended by R.A. unconstitutional for being an invalid
10022)]. classification, in violation of the equal protection
clause. [Serrano v. Gallant Maritime Services, Inc.,
Prescriptive Periods G.R. No. 167614, March 24, 2009]
(1) Simple Illegal Recruitment 5 years
(2) Illegal Recruitment involving Economic DIRECT HIRING
Sabotage 20 years. [Sec. 12, R.A. 8042 [this General Rule: No employer may hire a Filipino
part was not amended by R.A, 10022]. worker for overseas employment except through
the Boards and entities authorized by the
Secretary of Labor. [Art. 18, LC]
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Even if by the standard contract employment (3) Immigrants and Filipino professionals
commences only upon actual departure of the working with the United Nations and its
seafarer, this does not mean that the seafarer agencies or other specialized bodies.
has no remedy in case of non-deployment
without any valid reason. Even before the start
of any employer-employee relationship, Labor Standards
contemporaneous with the perfection of the
employment contract was the birth of certain
rights and obligations, the breach of which may COVERAGE
give rise to a cause of action for damages under General rule: Shall apply to employees in all
the Civil Code against the erring party. [Stolt- establishments and undertakings whether for
Nielsen v. Medequillo (2012)] profit or not. [Art. 82, LC]
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Workers who are family members of the official. [Cadiz v. Philippine Sinter Corp,
employer, and who are dependent on him for NLRC Case No. 7-1729, cited by Azucena]
their support, are outside the coverage of this (2) A family cook, who is later assigned to work
Title on working conditions and rest periods. as a watcher and cleaner of the employers
business establishment, becomes an
(5) Domestic helpers industrial worker entitled to receive the
"Domestic or household service" shall mean wages and benefits flowing from such
service in the employers home which is usually status. [Villa v. Zaragosa and Associates, OP
necessary or desirable for the maintenance and Decision No. 0183, cited by Azucena]
enjoyment thereof and includes ministering to
the personal comfort and convenience of the (b) Workers Paid by Result
members of the employers household, Workers who are paid by results, including those
including services of family drivers. [Art. 141, LC] who are paid on piece-work, takay, pakiao or
task basis, and other non-time work if their
Note: The Kasambahay Law (RA 10361) has output rates are in accordance with the
redefined domestic worker or kasambahay: standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such
Domestic worker or Kasambahay refers to any rates have been fixed by the Secretary of Labor
person engaged in domestic work within an and Employment in accordance with the
employment relationship such as, but not aforesaid Section. [Book 3, Rule 1, Sec. 2 (e), IRR]
limited to, the following: general househelp,
nursemaid or yaya, cook, gardener, or laundry Workers under piece-rate employment have no
person, but shall exclude any person who fixed salaries and their compensation is
performs domestic work only occasionally or computed on the basis of accomplished tasks.
sporadically and not on an occupational basis. That their work output might have been
[RA 10361 Art. 1, Sec. 4 (d)] affected by the change in their specific work
assignments does not necessarily imply that any
(a) Persons in personal service of another resulting reduction in pay is tantamount to
The provisions of this Rule shall not apply to the constructive dismissal. It is the prerogative of
following persons if they qualify for exemption the management to change their assignments
under the conditions set forth herein: or to transfer them. [Best Wear Garments v. De
Lemos and Ocubillo (2012)]
Domestic servants and persons in the personal
service of another if they perform such services HOURS OF WORK
in the employers home which are usually
necessary or desirable for the maintenance and
COVERAGE/EXCLUSIONS
enjoyment thereof, or minister to the personal
Please see previous section (Coverage) which
comfort, convenience, or safety of the employer
deals with the general rules of coverage and
as well as the members of his employers
exclusions for the applicability of the Conditions
household. [Book 3, Rule 1, Sec. 2 (d), IRR]
of Employment provisions in Book III of the
Labor Code.
Exclusivity of function required
Note that the definition contemplates a
domestic servant who is employed in the NORMAL HOURS OF WORK
employers home to minister exclusively to the
personal comfort and enjoyment of the General Rule: 8-Hour Labor Law
employers family. [Azucena] The normal hours of work of any employee shall
Thus, it has been held that the following not exceed eight (8) hours a day. [Art. 83, LC]
personnel are NOT domestic employees:
(1) House personnel hired by a ranking company Article 83 of the Labor Code only set a
official but paid by the company itself to maximum of number of hours as "normal hours
maintain a staff house provided for the of work" but did not prohibit work of less than
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eight hours [Legend Hotel v. Realuyo (2012)] (3) If the work performed was necessary, or it
benefited the employer, or the employee
Exception to the 8-Hour Law: Work Hours of could not abandon his work at the end of his
Health Personnel normal working hours because he had no
Health personnel in replacement, all time spent for such work
(1) cities and municipalities with a population of shall be considered as hours worked, if the
at least one million (1,000,000) OR work was with the knowledge of his
(2) hospitals and clinics with a bed capacity of at employer or immediate supervisor.
least one hundred (100) (4) The time during which an employee is
shall hold regular office hours for eight (8) inactive by reason of interruptions in his
hours a day, for five (5) days a week, exclusive of work beyond his control shall be considered
time for meals, except where the exigencies of working time either:
the service require that such personnel work for (i) if the imminence of the resumption of work
six (6) days or forty-eight (48) hours, in which requires the employees presence at the place of
case, they shall be entitled to an additional work, or
compensation of at least thirty percent (30%) of (ii) if the interval is too brief to be utilized
their regular wage for work on the sixth day. effectively and gainfully in the employees own
interest.
For purposes of this Article, "health personnel"
shall include resident physicians, nurses, Rest period short duration or coffee break
nutritionists, dietitians, pharmacists, social Rest periods of short duration during working
workers, laboratory technicians, paramedical hours shall be counted as hours worked. [Art.
technicians, psychologists, midwives, 84, par. 2, LC]
attendants and all other hospital or clinic
personnel. [Art. 38, LC] Rest periods or coffee breaks running from five
(5) to twenty (20) minutes shall be considered as
Medical secretaries are also considered clinic compensable working time. [Bk III, Rule 1, Sec. 7,
personnel. [Azucena] par. 2, IRR]
Compensable Hours of Work [Art. 84, LC] An employee need not leave the premises of the
Hours worked shall include work place in order that his rest period shall not
(1) All time during which an employee is be counted, it being enough that he stops
required to be on duty or to be at a prescribed working, may rest completely and may leave his
workplace; AND work place, to go elsewhere, whether within or
(2) All time during which an employee is outside the premises of his work place. [Book 3,
suffered or permitted to work. Rule 1, Sec. 4 (b) of the IRR]
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(2) Travel that is all in the days work Time Hours worked: Burden of Evidence
spent by an employee in travel from jobsite to When an employer alleges that his employee
jobsite during the workday, must be counted as works less than the normal hours of
hours worked. Where an employee is required to employment as provided for in the law, he bears
report at a meeting place to receive instructions the burden of proving his allegation with clear
or to perform other work there, the travel from and satisfactory evidence. [Prangan v. NLRC, et.
the designated place to the workplace is part of al., G.R. No. 126529, April 15 (1998)]
the days work.
COMPRESSED WORK WEEK (CWW) [DOLE
(3) Travel away from home - Travel that keeps ADVISORY NO. 02, SERIES OF 2004]
an employee away from home overnight is Under the CWW scheme, the normal workday
travel away from home. Travel away from home goes beyond eight hours without the
is worktime when it cuts across the employees corresponding overtime premium.
workday. The time is hours worked not only on
regular working hours but also during the The total hours of work, however, shall not
corresponding hours on non-working days. exceed 12 hours a day or 48 hours a week, or the
employer is obliged to pay the worker the
Semestral Break of Private School Teachers overtime premium in excess of said work hours.
Regular full-time teachers are entitled to salary
during semestral breaks. These semestral Conditions for CWW
breaks are in the nature of work interruptions (1) The CWW scheme is undertaken as a result
beyond the employees control. As such, these of an express and voluntary agreement of
breaks cannot be considered as absences within majority of the covered employees or their duly
the meaning of the law for which deductions authorized representatives. This agreement may
may be made from monthly allowances. be expressed through collective bargaining or
[University of the Pangasinan Faculty Union v. other legitimate workplace mechanisms of
University of Pangasinan (1984)] participation such as labor management
councils, employee assemblies or referenda.
Work Hours of Seamen (2) In firms using substances, chemicals and
Seamen are required to stay on board of their processes or operating under conditions where
vessels by the very nature of their duties, and it there are airborne contaminants, human
is for this reason that, in addition to their regular carcinogens or noise prolonged exposure to
compensation, they are given free living which may pose hazards to employees health
quarters to be on board. It could not have been and safety, there must be a certification from an
the purpose of the law to require their accredited health and safety organization or
employers to pay them overtime pay even when practitioner from the firms safety committee
they are not actually working. The correct that work beyond eight hours is within threshold
criterion in determining whether or not sailors limits or tolerable levels of exposure, as set in
are entitled to overtime pay is not, therefore, the OSHS.
whether they are on board and cannot leave (3) The employer shall notify DOLE, through the
ship beyond the regular eight working number Regional Office having jurisdiction over the
of hours, but whether they actually rendered workplace, of the adoption of the CWW scheme.
service in excess of said number of hours. The notice shall be in DOLE CWW Report Form
[Cagampan, et. al. v. NLR (1991)] attached to this Advisory. [DOLE Advisory No.
02-04]
Hours worked: Proof of work
Entitlement to overtime pay must first be Effects of CWW
established by proof that said overtime work (1) Unless there is a more favorable practice
was actually performed, before an employee existing in the firm, work beyond eight hours
may avail of said benefit. [Lagatic v. NLRC will not be compensable by overtime
(1998)] premium provided the total number of
hours worked per day shall not exceed
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Conditions for shortened meal breaks upon OVERTIME WORK, OVERTIME PAY
employees request. Overtime compensation is additional pay for
(1) The employees voluntarily agree in writing to service or work rendered or performed in excess
a shortened meal period of 30 minutes and of eight hours a day by employees or laborers
are willing to waive the overtime pay for covered by the Eight-hour Labor Law. [National
such shortened meal period; Shipyard and Steel Corp. v. CIR (1961)]
(2) There will be no diminution whatsoever in
the salary and other fringe benefits of the Rationale
employees existing before the effectivity of There can be no other reason than that he is
the shortened meal period; made to work longer than what is
(3) The work of the employees does not involve commensurate with his agreed compensation
strenuous physical exertion and they are for the statutorily fixed or voluntary agreed
provided with adequate coffee breaks in hours of labor he is supposed to do. [PNB v.
the morning and afternoon. PEMA (1982)]
(4) The value of the benefits derived by the
employees from the proposed work Overtime on ordinary working day
arrangement is equal to or commensurate Work may be performed beyond eight (8) hours
with the compensation due them for the a day provided that the employee is paid for the
shortened meal period as well as the overtime work, an additional compensation
overtime pay for 30 minutes as determined equivalent to his regular wage plus at least
by the employees concerned; twenty-five percent (25%) thereof. [Art. 87, LC]
(5) The overtime pay of the employees will
become due and demandable if ever they Overtime work on holiday or rest day
are permitted or made beyond 4:30pm; anD Work performed beyond eight hours on a
(6) The effectivity of the proposed working time holiday or rest day shall be paid an additional
arrangement shall be of temporary duration compensation equivalent to the rate of the first
as determined by the Secretary of Labor. eight hours on a holiday or rest day plus at least
thirty percent (30%) thereof. [Art. 87, LC]
WAITING TIME
Waiting time spent by an employee shall be Computation of additional compensation
considered as working time if waiting is an For purposes of computing overtime and other
integral part of his work or the employee is additional remuneration as required by this
required or engaged by the employer to wait. Chapter, the "regular wage" of an employee
[Book III, Rule I Sec. 5(a), IRR] shall include the cash wage only, without
deduction on account of facilities provided by
An employee who is required to remain on call the employer. [Art. 90, LC]
in the employers premises or so close thereto
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BUT when the overtime work was performed on (2) Additional compensation is demandable
the employees rest day or on special days or only if the employer had knowledge and
regular holidays (Art. 93 and 94), the premium consented to the overtime work rendered by the
pay, must be included in the computation of the employee.
overtime pay. [See p. 19 of Handbook on Workers
Statutory Monetary Benefits, issued by the Bureau Exception: Express approval by a superior
of Working Conditions, 2006] NOT a requisite to make overtime
compensable:
Emergency overtime [Art. 89, LC] (a) If the work performed is necessary, or
Any employee may be required by the employer that it benefited the company; or
to perform overtime work in any of the following (b) That the employee could not abandon
cases: his work at the end of his eight-hour work
(1) When the country is at war or when any other because there was no substitute ready to
national or local emergency has been take his place. [Manila Railroad Co. v. CIR
declared by the National Assembly or the (1952)]
Chief Executive;
(2) When it is necessary to prevent loss of life or Note: However, the Court has also ruled
property or in case of imminent danger to that a claim for overtime pay is NOT
public safety due to an actual or impending justified in the absence of a written
emergency in the locality caused by serious authority to render overtime after office
accidents, fire, flood, typhoon, earthquake, hours during Sundays and holidays.
epidemic, or other disaster or calamity; [Global Incorporated v. Atienza (1986)]
(3) When there is urgent work to be performed
on machines, installations, or equipment, in (3) Compensation for work rendered in excess of
order to avoid serious loss or damage to the the eight (8) normal working hours in a day.
employer or some other cause of similar (a) For ordinary days, additional 25% of the
nature; basic hourly rate.
(4) When the work is necessary to prevent loss (b) For rest day/special day/holiday,
or damage to perishable goods; and additional 30% of the basic hourly rate.
(5) Where the completion or continuation of the
work started before the eighth hour is (4) Not unless a day is a rest day, the given day
necessary to prevent serious obstruction or is considered an ordinary day.
prejudice to the business or operations of
the employer. (5) Undertime does NOT offset overtime
Overtime pay does not preclude night differential Undertime work on any particular day shall not
pay be offset by overtime work on any other day.
When the tour of duty of a laborer falls at Permission given to the employee to go on leave
nighttime [between 10:00pm and 6:00am], the on some other day of the week shall not exempt
receipt of overtime pay will not preclude the the employer from paying the additional
right to night differential pay. The latter is compensation required in this Chapter. [Art. 88,
payment for work done during the night while LC]
the other is payment for the excess of the
regular eight-hour work. [Naric v. Naric Workers No Waiver of Overtime Pay
Union (1959)] The right to overtime pay cannot be waived. The
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BUT if the goods are to be manufactured Coverage/Exclusions [Art. 98 and Bk 3, Rule VII,
specially for the customer and upon his special Sec 3, IRR]
order, and not for the general market, it is a The Labor Code Title on wages shall not apply
contract for a piece of work. [Article 1467, CC] to the following:
(1) Farm tenancy or leasehold;
WAGES (2) Household or domestic helpers, including
family drivers and other persons in the
Definition
personal service of another;
(1) It is the remuneration or earnings, however
(3) Homeworkers engaged in needlework;
designated, capable of being expressed in
(4) Workers in registered cottage industries who
terms of money,
actually work at home;
(2) whether fixed or ascertained on a time, task,
(5) Workers in registered cooperatives when so
piece, or commission basis, or other method
recommended by the Bureau of Cooperative
of calculating the same,
Development upon approval of the
(3) which is payable by an employer to an
Secretary of Labor;
employee
(6) Workers in registered barangay micro
(4) under a written or unwritten contract of
business enterprise [RA 9178].
employment for work done or to be done, or
for services rendered or to be rendered and
(5) includes the fair and reasonable value, as WAGE VS. SALARY
determined by the Secretary of Labor and Wages and salary are in essence synonymous.
Employment, of board, lodging, or other [Songco v. NLRC (1990)]
facilities customarily furnished by the
employer to the employee There are slight differences:
Wage Salary
Fair and reasonable value - shall not include Paid for skilled or Paid to white collar
any profit to the employer, or to any person unskilled manual workers and denote a
affiliated with the employer. [Art. 97(f)] labor higher grade of
employment
No work no pay principle Not subject to Not exempt from
General Rule: the age old rule governing the execution, execution,
relation between labor and capital or garnishment or garnishment or
management and employee is that a "fair day's attachment except for attachment [Gaa vs.
wage for a fair day's labor." [Sugue v. Triumph debts related to CA, 1985]
International (2009)] necessities [Art. 1708]
Exception: When the laborer was able, willing and MINIMUM WAGE
ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally See also: DOLE Bureau of Working Conditions
prevented from working. [Sugue v Triumph Handbook on Workers Statutory Monetary
International, supra] Benefits and Wage Order No. NCR-18 (Effective:
4 October 2013).
Equal Work for Equal Pay Principle
Employees working in the Philippines, if they are Definition
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Statutory minimum wage is the lowest wage Note: Daily minimum wage in NCR applicable
rate fixed by law that an ER can pay his workers. from Oct. 2013 is now P466 [Wage Order
[IRR, RA 6727, (o)] No. NCR-18]
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Where the output rates established by the ER Likewise, there is no law mandating that
do not conform to the standards set under the commissions be paid only after the minimum
foregoing methods for establishing output wage has been paid to the employee. Verily, the
rates, the EE shall be entitled to the difference establishment of a minimum wage only sets a
between the amount he/she is entitled to floor below which an employees remuneration
receive and the amount paid by the ER. cannot fall, not that commissions are excluded
from wages in determining compliance with the
Minimum wage of apprentices and learners minimum wage law. [Iran v. NLRC (1998)]
Wages of apprentices and learners shall in
no case be less than 75% of the applicable DEDUCTIONS FROM WAGES
minimum wage rates. [Art. 61 & 75, LC] General Rule: No employer, in his own behalf or
Note: Learners employed in piece or in behalf of any person, shall make any
incentive-rate jobs during the training deduction from the wages of his employees.
period shall be paid in full for the work [Art. 113]
done. [Art. 76, LC]
The Secretary of Labor and Employment Exceptions:
may authorize the hiring of apprentices (1) In cases where the worker is insured with his
without compensation whose training on the consent by the employer, and the deduction
job is required by the school or training is to recompense the employer for the
program curriculum or as requisite for amount paid by him as premium on the
insurance;
(2) For union dues, in cases where the right of
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the worker or his union to check-off has Communication of the Phil., Inc. v. Sec. of
been recognized by the employer or Labor (1989)]
authorized in writing by the individual
worker concerned; and Note: Persons earning minimum wage are
(3) In cases where the employer is authorized by excepted from income tax
law or regulations issued by the Secretary of That minimum wage earners as defined in
Labor and Employment (Art. 113), such as: Section 22(HH) of this Code shall be
(i) Employee debt to employer is due and exempt from the payment of income tax on
demandable [CC 1706]; their taxable income: Provided, further,
(ii) Attachment or execution in cases of That the holiday pay, overtime pay, night
debts incurred for necessities: food, shift differential pay and hazard pay
shelter, clothing, medical attendance received by such minimum wage earners
[CC 1708]; shall likewise be exempt from income tax.
(iii) Withholding tax; [RA 9504, Sec. 2 redefining sec. 24(A) of RA
(iv) Deductions of a legally established 8424]
cooperative;
(v) Payment to 3rd parties upon written NON-DIMINUTION OF BENEFITS
authority by employee; General Rule: There is a prohibition against
(vi) Deductions for loss or damage; elimination or diminution of benefits [Art. 100]
(vii) SSS, Medicare, Pag-IBIG premiums;
(viii) Deduction for value meals and other No wage order issued by any regional board
facilities. shall provide for wage rates lower than the
statutory minimum wage rates prescribed by
It shall be unlawful to make any deduction from Congress. [Art. 127, as amended by Republic Act
the wages of any employee for the benefit of the No. 6727, June 9, 1989]
employer as consideration of a promise of
employment or retention in employment. [Art. 117] Requisites
or to retaliate against the employee who filed a If the following are met, then the employer
complaint. [Art. 118] cannot remove or reduce benefits:
(a) Ripened company policy: Benefit is founded
With Employees Without Employees on a policy which has ripened into a practice
consent in Writing consent over a long period [Prubankers Assn. vs.
(1) SSS Payments (1) Workers insurance Prudential Bank and Co., 1999]
(2) PHILHEALTH acquired by the (b) Practice is consistent and deliberate and
payments employer (c) Not due to error in the construction or
(3) Contributions to (2) Union dues, where application of a doubtful or difficult
PAG-IBIG Fund the right to check-off question of law. [Globe Mackay Cable vs.
(4) Value of meals and is recognized by the NLRC, 1988]
other facilities employer (provided in (d) The diminution or discontinuance is done
(5) Payments to third the CBA) unilaterally by the employer.
persons with (3) Debts of the
employees consent employee to the When not applicable: When at least one of the
(6) Deduction of employer that have requisites is absent.
absences become due and (1) Mistake in the application of the law [Globe
(7) Union dues, where demandable Mackay Cable v. NLRC, June 29, 1988]
check-off is not (2) Negotiated benefits [Azucena]
provided in the CBA. (3) Reclassification of Positions e.g. loss of
some benefits by promotion.
Prohibition seeks to protect the employee (4) Contingent or Conditional Benefits the rule
against unwarranted practices that would does not apply to a benefit whose grant
diminish his compensation without his depends on the existence of certain
knowledge and consent. [Radio conditions, so that the benefit is not
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(3) If still unresolved after 10 calendar days of proportionate amount corresponding to the
conciliation, it shall be referred to the days when no work was done. The monthly
appropriate branch of the NLRC compensation is evidently intended precisely to
compulsory arbitration avoid computations and adjustments resulting
Both the employer and employee from the contingencies just mentioned which
cannot use economic weapons. are routinely made in the case of workers paid
(4) Employer cannot declare a lock-out; on daily basis. [Wellington Investment Inc. v.
Employee cannot declare a strike because Trajano, 1995]
the law has provided for a procedure for
settling For daily-paid EEs
(5) The salary or wage differential does not need Daily-paid employees are those who are paid on
to be maintained. [National Federation of the days actually worked and on unworked
Labor v. NLRC, 1994] regular holidays.
National Conciliation and Mediation Board if (a) For those who are required to work every day
unresolved, COMPULSORY arbitration by the including Sundays or rest days, special days and
NLRC regular holidays:
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irrespective of the time consumed in the (2) Mauli-un-Nabi (Birthday of the Prophet
performance thereof. [Sec. 1, Rule IV of the Muhammad) which falls on the twelfth
IRR] (12th) day of the third (3rd) lunar month of
Rabi-ul-Awwal;
Retail Establishment is one principally engaged (3) Lailatul Isra Wal Mi Rai (Nocturnal Journey
in the sale of goods to end-users for personal or and Ascencion of the Prophet
household use; Muhammand) which falls on the twenty-
seventh (27th) day of the seventh (7th) lunar
Service Establishment is one principally month of Rajab;
engaged in the sale of service to individuals for (4) Id-ul-Fitr (Hari Raja Pausa) which falls on
their own or household use and is generally the first (1st) day of the tenth (10th) lunar
recognized as such. [IRR of RA 6727/the Wage month of Shawwal commemorating the end
Rationalization Act] of the fasting season; and
(6) Id-ul-Adha (Hari Raha Haji) which falls on
Regular holidays the tenth (10th) of the twelfth (12th) lunar
Proclamation No. 655 signed by President month of Dhul-Hijja.
Aquino on 25 September 2013, provides for the
observance of the regular holidays and special Note:
(non-working) days for the year 2014 on the Id-ul-Fitr (Eidl Fitr) and Id-ul-Adha (Eidl
following dates: Adha) have been added to the list of
(1) New years Day - January 1 national legal holidays.
(2) Maundy Thursday March 28 Note: There should be no distinction
(3) Good Friday March 29 between Muslims & non-Muslims as
(4) Araw ng Kagitingan April 9 regards to the payment of benefits for
(5) Labor Day May 1 Muslim holidays. Wages & other
(6) Independence Day June 12
emoluments granted by law to the working
(7) National Heroes Day August 26
manare determined on the basis of the
(8) Bonifacio Day November 30
(9) Christmas Day - December 25 criteria laid down by laws ¬ on workers
(10) Rizal Day - December 30 faith. Art. 3(3), PD 1083 states that nothing
(11) Eidl Fitr date to be determined later herein shall be construed to operateto the
(12) Eidl Adha date to be determined later prejudice of a non-Muslim. [San Miguel Corp
vs. CA, 2002]
Special (Non-Working Days)
(1) Chinese New Year January 31 Holiday pay computation (Art. 94 Labor Code, Book
III, Rule IV of IRR, RA 9424 and DOLE Memorandum
(2) Black Saturday March 30
Circular 1 Series of 2004)
(3) Ninoy Aquino Day - August 21
(4) All Saints Day - November 1
General Rule: An employer may require an
(5) Additional special (Non-working) days
employee to work on any holiday but such
(a) December 24
employee shall be paid a compensation
(b) December 26
equivalent to twice his regular rate. [Art. 94(b)]
(6) Last Day of the Year - December 31
According to the LC, IRR and Memo:
Special Holiday (for all schools)
Work on any regular holiday,
EDSA Revolution Anniversary February 25 Computation
not exceeding 8 hours
P.D. 1083 (Code of Muslim Personal Laws) SEE: Work on any regular 200% of regular
Arts. 169-173 holiday, if it exceeds 8 daily wage (for the
Specifically for the Muslim Areas, P.D. 1083, in hours/overtime 1st 8 hours)
its Book V, Title, recognizes five (5) Muslim + 30% of hourly
Holidays, namely: rate on said day
(1) Amun Jadid (New Year) which falls on the
first (1st) day of the lunar month of
Muharram;
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Work on any regular holiday 200% of regular (2) He works on first holiday, which entitles
which falls on the daily wage + 30% him to pay on second holiday.
scheduled rest day, not of such amount
exceeding 8 hours Divisors
Work on any regular holiday Regular holiday- The divisor assumes an important role in
which falls on scheduled on-rest day rate determining whether or not holiday pay is
rest day, if it exceeds 8 (200% of regular already computed.
hours/overtime daily wage plus (1) Monthly paid employees are not entitled to
30% of such the holiday pay if their total annual income
amount) + 30% of is divided by 365 days resulting in a wage
hourly rate on said which is beyond the minimum wage per day
day. because they are considered paid everyday
Work on special holiday not Regular daily wage of the year including holidays, rest days, and
exceeding 8 hours + 30% thereof other non-working days. The 365 days are
Work on special holiday Regular daily wage as follows:
+ 50% thereof 365 days = 296 days ordinary days
52 days rest days
According to DOLE Memo Circular 1-04, a 12 days regular holidays
special holiday/special day includes the 5 days special holidays
National Special Days, and declared special (2) As a general rule, for a company with a 6-
days such as Special Non-working Holiday, day working schedule, the divisor 313
Special Public Holiday and Special National already means that the legal holidays are
Holiday. Such days are entitled to the rates included in the monthly pay of the
prescribed above. These days are not the same employee. The divisor is arrived at by
as a special working holiday. subtracting all Sundays from the total
number of calendar days in a year.
A special working holiday is considered an (3) As a general rule for a company with a 5-day
ordinary working day, so there is no premium working schedule, the divisor 287 means
pay. that the holiday pay is already included in
the monthly salary of the employee.
Double holiday pay
According to DOLE Explanatory Bulletin on Where the employer had a standing practice of
Workers Entitlement to Holiday Pay on 9 April using 286 days as a divisor and following the
1993, if two holidays fall on the same day: correct computation and taking into account
that one of the holidays always falls on a
(1) If unworked, 200% of basic wage.
Sunday, therefore increasing the divisor to
(2) If worked, 300% of basic wage. [Azucena]
287, but increase would in some instances
prejudice the employees, in violation of the
Double Holiday Rule for Monthly-paid
proscription against non-diminution of benefits
employees
under Sec. 100 of the labor code, the 287
For covered employees whose monthly salaries
divisor should only be used for computations
are computed based on 365 days and for those
which would be advantageous to the employer
other employees who are paid using factor 314,
(i.e. deduction for absences) and not for
or 262, or any other factor which already
computations which would diminish the existing
considers the payment for the 11 regular
benefits of the employees (i.e., overtime pay,
holidays, NO additional payment is due them.
holiday pay and leave conversions). [Trans Asia
[BWC-WHSD Opinion No. 053, s. 1998]
Phils. v. NLRC, 1999]
Successive holiday pay
Sundays
According to IRR, Rule IV, Sec. 10, an employee
(1) When a holiday falls on a Sunday, the
is entitled to holiday pay for both days, IF: following Monday will not be considered a
(1) He is present on day immediately holiday unless a proclamation says so.
preceding first holiday; or
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(2) Furthermore as stated in the Wellington regular holiday, he is not entitled to holiday
case (see below), a legal holiday falling on a pay unless he works on such regular
Sunday does not create a legal obligation to holiday.
pay extra, aside from the usual holiday pay,
to monthly-paid employees. [Azucena citing In case of temporary cessation of work
Letter of Instruction No. 1087] (a) In cases of temporary or periodic shutdown
and temporary cessation of work of an
No provision of law requires any employer to establishment, as when a yearly inventory or
make adjustments in the monthly salary rate set when the repair or cleaning of machineries
by him to take account of legal holidays falling and equipment is undertaken, the regular
on Sundays in a given year, otherwise to reckon holidays falling within the periods shall be
a year at more than 365 days. [Wellington compensated in accordance with this Rule.
Investment and Manufacturing Corporation vs. (b) The regular holiday during the cessation of
Trajano (1995)] operation of an enterprise due to business
reverses as authorized by the Secretary of
Non-working/scheduled rest day Labor may not be paid by the employer.
Where the day immediately preceding the [IRR, Book III, Rule IV, Sec 7]
holiday is a non-working day in the
establishment or the scheduled rest day of the An employee is entitled to holiday pay for the
employee, he shall not be deemed to be on regular holidays falling within the period in
leave of absence on that day, in which case he cases of temporary shutdowns or cessation of
shall be entitled to the holiday pay if he worked work, when:
on the day immediately preceding the non- (1) an annual inventory; or
working day or rest day. [IRR, Book III, Rule V, (2) repair or cleaning of machineries and
Sec 6 (c)] equipment is undertaken.
Example: If a holiday falls on Monday, and The employer may not pay his employees for the
Sunday is a non-working day in the regular holidays during the suspension of work
establishment or is the scheduled rest day of if: the cessation of operation is due to business
the employee, the employee shall be entitled to reverses, and is authorized by the Secretary of
holiday pay if he worked on Saturday (which is Labor.
the day immediately preceding Sunday, the
non-working day or rest day). TEACHERS, PIECE WORKERS,
SEAFARERS, SEASONAL
Right to holiday pay WORKERS ETC.
(a) Private school teachers, including faculty
In case of absences members of colleges and universities, may
All covered employees shall be entitled to the not be paid for the regular holidays during
benefit provided herein when they are on leave semestral vacations. They shall, however, be
of absence with pay. paid for the regular holidays during
Christmas vacation;
Employees who are on leave of absence without (b) Where a covered employee, is paid by results
pay on the day immediately preceding a regular or output, such as payment on piece work,
holiday may not be paid the required holiday his holiday pay shall not be less than his
pay if he has not worked on such regular average daily earnings for the last seven (7)
holiday. [IRR, Book III, Rule IV, Sec 6(a)] actual working days preceding the regular
holiday; Provided, However, that in no case
Note: shall the holiday pay be less than the
(1) If an employee is on leave of absence with applicable statutory minimum wage rate.
pay on the day immediately preceding a (c) Seasonal workers may not be paid the
regular holiday, he is entitled to holiday pay. required holiday pay during off-season
(2) If an employee is on leave of absence without when they are not at work
pay on the day immediately preceding a (d) Workers who have no regular working days
shall be entitled to the benefits provided in
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this Rule. [Book III, Rule IV, Sec. 8 of IRR] hours on non-work days, such as rest days and
special days.
Holiday Pay of Hourly-Paid Faculty Members
(1) They are not entitled to payment of holiday Coverage (Book 3, Rule 3, Sec. 7 of the IRR)
pay because they are paid only for work
actually done. Since regular holidays are General Rule: All employees
known to both the school and faculty
members as no class day; certainly the Exceptions:
latter do not expect payment for said (1) Those of the government and any of the
unworked holidays. political subdivision, including government-
(2) They are entitled to their hourly rate on days owned and controlled corporations;
declared as special holidays. Be it noted (2) Managerial employees as defined in Book III;
that when a special public holiday is (3) Househelpers and persons in the personal
declared, the faculty member paid by the service of another;
hour is deprived of expected income, and it (4) Workers who are paid by results, including
does not matter that the school calendar is those who are paid on piece rate, takay,
extended in view of the days or hours lost, pakyaw, or task basis, and other noontime
for their income that could be earned from work, if their output rates are in accordance
other sources is lost during the extended with the standards prescribed in the
days. regulations, or where such rates have been
(3) Similarly, when classes are called off or fixed by the Secretary of Labor and
shortened on account of typhoons, floods, Employment;
rallies, and the like, these faculty members (5) Field personnel, if they regularly perform
must likewise be paid, whether or not their duties away from the principal or
extensions are ordered. [Jose Rizal College v. branch office or place of business of the ER
NLRC, 1987] and whose actual hours of work in the filed
cannot be determined with reasonable
Piece workers certainty.
Philosophy underlying the exclusion of piece
workers from the 8-hour law is that said workers Premium pay rates (DOLE Memorandum
are paid depending upon the work they do Circular 1, Series of 2004)
irrespective of the amount of time employed in
doing said work. [Red v. Coconut Products Ltd., WHEN WORK
PREMIUM PAY
v. CIR, 196] PERFORMED
On scheduled rest day 30% of regular wage
Seafarers On Sunday ONLY IF 30% of regular wage
Any hours of work or duty including hours of ESTABLISHED rest day
watch-keeping performed by the seafarer on No regular work and 30% of regular wage
designated rest days and holidays shall be paid rest days for work performed
rest day or holiday pay. [Section 11.C, Standard on Sundays and
Terms and Conditions Governing the holidays
Employment of Filipino Seafarers on Board On any special 30% of regular wage
Ocean-Going Vessels] holiday/special day
On any special holiday 50% of regular wage
Seasonal workers /special day falling on
Seasonal workers who do not work during off- scheduled rest day
season are not entitled to pay for the regular On any regular holiday 230% of regular
holidays occurring during their off-season. falling on scheduled rest wage
Workers assigned to skeleton crews that work day
during the off-season have the right to be paid
on regular holidays falling in that duration. Where the collective bargaining agreement
or other applicable employment contract
Premium pay refers to the additional stipulates the payment of a higher premium
compensation for work performed within 8
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pay than that prescribed under this Article, Employer may require employee to work
the employer shall pay such higher rate. The employer may require an employee to work
[Art. 93 (d)] on any holiday but such employee shall be paid
Nothing in this Rule shall justify an a compensation equivalent to twice his regular
employer in reducing the compensation of rate (Art. 95(b))
his employees for the unworked Sundays,
holidays, or other rest days which are Jurisprudence:
considered paid-off days or holidays by Teachers of private school on contract basis
agreement or practice subsisting upon the are entitled to service incentive leave. [Cebu
effectivity of the Code. [Book III, Rule III, Sec. Institute of Technology v. Ople, 1987]
8 of the IRR] In the case of Makati Haberdashery v. NLRC
Nothing herein shall prevent the employer the Court ruled that piece-rate employees
and his employees or their representatives are not entitled to service incentive leave.
in entering into any agreement with terms [Makati Haberdashery v. NLRC, 1989]
more favorable to the employees than those However, in the case of Labor Congress of
provided herein, or be used to diminish any the Philippines v. NLRC the Court held that
benefit granted to the employees under petitioners are entitled to service incentive
existing laws, agreements, and voluntary leave. The Court looked at several factors
employer practices. [Book III, Rule II, Sec. 9 which led them to conclude that petitioners,
of the IRR] although compensated on a per piece basis,
were regular employees of private
LEAVES respondents. [Labor Congress of the
Philippines v. NLRC, 1998]
SERVICE INCENTIVE LEAVE PAY
Every employee who has rendered at least one Meaning of 1 year of service
year of service shall be entitled to a yearly The term "at least one-year service" shall mean
service incentive leave of five days with pay. (Art. service for not less than 12 months, whether
95(a)) continuous or broken, reckoned from the date
the employee started working, including
Service Incentive Leave DOES NOT apply to the authorized absences and paid regular holidays
following employees: unless the working days in the establishment as
(1) Those of the government and any of its a matter of practice or policy, or that provided in
political subdivisions, including GOCCs; the employment contract is less than 12
(2) Domestic helpers and persons in the months, in which case said period shall be
personal service of another; considered as one year. [Book III, Rule V, Sec. 3 of
(3) Managerial employees as defined in Book 3 the IRR]
of this Code;
(4) Field personnel and other employees whose Entitlement
performance is unsupervised by the The grant of benefit in excess of that
employer including those who are engaged provided herein shall not be made a subject
on task or contract basis, purely commission of arbitration or any court or administrative
basis, or those who are paid a fixed amount action. [Art. 95 (c)]
for performing work irrespective of the time The cause of action of an entitled employee
consumed in the performance thereof; to claim his service incentive leave pay
(5) Those who are already enjoying the benefit accrues from the moment the employer
herein provided; refuses to remunerate its monetary
(6) Those enjoying vacation leave with pay of at equivalent if the employee did not make use
least 5 days; of said leave credits but instead chose to
(7) Those employed in establishments regularly avail of its commutation (into money).
employing less than 10 employees. [Book 3, Accordingly, if the employee wishes to
Rule 5, Sec. 1 of the IRR] accumulate his leave credits and opts for its
commutation upon his resignation or
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separation from employment, his cause of The maternity benefits provided under the
action to claim the whole amount of his Social Security Law shall be paid only for the
accumulated service incentive leave shall first four (4) deliveries or miscarriages
arise when the employer fails to pay such
amount at the time of his resignation or SSS pays for the maternity leave
separation from employment. (Auto Bus The employer advances the benefit to the
Transport vs. NLRC, 2005) employee but the SSS shall immediately
reimburse the employer of one hundred
Commutable nature of benefit percent (100%) of the amount upon receipt
The service incentive leave shall be commutable of satisfactory proof of such payment and
to its money equivalent if not used or exhausted legality thereof
at the end of the year.
Other conditions
MATERNITY LEAVE [Sec. 14-A of RA (1) Employer shall advance the payment subject
to reimbursement by the SSS within 30 days
1161 (SOCIAL SECURITY LAW) AS from filing of leave application.
AMENDED BY RA 7322 AND RA 8282] (2) Availment shall be a bar to the recovery of
sickness benefits provided by this Act for the
Coverage same period for which daily maternity benefits
Every pregnant woman in the private sector, have been received.
whether married or unmarried, is entitled to the (3) Employee may only avail of benefit for the
maternity leave benefits. first four (4) deliveries or miscarriages.
(4) Sanction:
This is applicable to both childbirth and That if an employee should give birth or
miscarriage. suffer miscarriage
(a) without the required contributions
Requisites having been remitted for her by her ER
(a) Employment: A female employee employed to the SSS, or
at the time of delivery, miscarriage or (b) without the latter having been previously
abortion notified by the ER of time of the
(b) Contribution: who has paid at least 3 pregnancy, then the employer shall pay
monthly contributions in the 12-month to the SSS damages equivalent to the
period immediately preceding the semester benefits which said employee member
of her childbirth, or miscarriage. would otherwise have been entitled to.
(c) Notice: employee notified employer of her
pregnancy and the probable date of her PATERNITY LEAVE [RA 8187
childbirth, which notice shall be transmitted (PATERNITY LEAVE ACT OF 1996)]
to the SSS in accordance with the rules and
regulations it may provide. Coverage and purpose
Paternity leave is granted to all married male
Benefit received employees in the private and public sectors,
A daily maternity benefit equivalent to 100% of regardless of their employment status (e.g.
her average daily salary credit for: probationary, regular, contractual, project
(1) 60 days for normal delivery basis). The purpose of this benefit is to allow the
(2) 78 days for caesarean delivery husband to lend support to his wife during her
period of recovery and/or in nursing her
This benefit shall NOT be included in the newborn child. [Sec. 3, RA 8187]
computation of 13th month pay as it is granted
to an employee in lieu of wages which is the Benefit
basis for computing 13th month. It shall apply to the first 4 deliveries of the
employees lawful wife with whom he is
Only 4 maternity leaves available cohabiting.
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It shall be for 7 calendar days, with full pay, (2) If the existing paternity leave benefit is less
consisting of basic salary and mandatory than that provided in RA 8187, the ER shall
allowances fixed by the Regional Wage Board, if adjust the existing benefit to cover the
any, provided that his pay shall not be less than difference.
the mandated minimum wage. [Sec. 2, RA 8187]
Where a company policy, contract, or CBA
Cohabiting means the obligation of the husband provides for an emergency or contingency leave
and wife to live together. If the spouses are not without specific provisions on paternity leave,
physically living together because of the the ER shall grant to the employee 7 calendar
workstation or occupation, the male employee is days of paternity leave. [Sec. 9, IRR, RA 8187]
still entitled to the paternity leave benefit. [Sec.
1, IRR, RA 8187] PARENTAL LEAVE [RA 8972 (SOLO
PARENTS WELFARE ACT OF 2000)]
Usage of the benefit Leave benefits granted to a solo parent to
Usage of the leave shall be after the delivery, enable him/her to perform parental duties and
without prejudice to an employers policy of responsibilities where physical presence is
allowing the employee to avail of the benefit required. [Sec. 3 (d), RA 8972]
before or during the delivery, provided that the
total number of days shall not be more than 7 Coverage
days for each covered delivery. [Sec. 5, IRR, RA Any solo parent or individual who is left alone
8187] with the responsibility of parenthood due to:
(1) Giving birth as a result of rape or and other
Conditions for entitlement [Sec. 3, IRR, RA 8187] crimes against chastity even without a final
(a) He is married; conviction of the offender: Provided, That
(b) He is an employee at the time of the delivery the mother keeps and raises the child;
of his child; (2) Death of spouse;
(c) He is cohabiting with his spouse at the time (3) Spouse is detained or is serving sentence for
that she gives birth or suffers a miscarriage; a criminal conviction for at least one (1) year;
(d) He has applied for paternity leave with his (4) Physical and/or mental incapacity of spouse
ER within a reasonable period of time from as certified by a public medical practitioner;
the expected date of delivery by his (5) Legal separation or de facto separation from
pregnant spouse, or within such period as spouse for at least one (1) year: Provided,
may be provided by company rules and that he/she is entrusted with the custody of
regulations, or by CBA; and, the children;
(d) His wife has given birth or suffered a (6) Declaration of nullity or annulment of
miscarriage. marriage as decreed by a court or by a
church: Provided, that he/she is entrusted
Application for paternity leave with the custody of the children;
See number 4 under conditions for entitlement. (7) Abandonment of spouse for at least one (1)
year;
In case of miscarriage, prior application for (8) Unmarried father/mother who has preferred
paternity leave shall not be required. [Sec. 4, to keep and rear his/her child/children,
IRR, RA 8187] instead of having others care for them or
give them up to a welfare institution;
Non-conversion to cash (9) Any other person who solely provides
In the event that the paternity leave is not parental care and support to a child or
availed of, it shall not be convertible to cash and children: Provided, that he/she is duly
shall not be cumulative. [Sec. 7, IRR, RA 8187] licensed as a foster parent by the
Department of Social Welfare and
Crediting of existing benefits Development (DSWD) or duly appointed
(1) If the existing paternity leave benefit under legal guardian by the court; and
the CBA, contract, or company policy is (10) Any family member who assumes the
greater than 7 calendar days as provided for responsibility of head of family as a result of
in RA 8187, the greater benefit shall prevail. the death, abandonment, disappearance, or
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prolonged absence of the parents or solo VAWC leave is granted to women employees
parent for at least one (1) year. [Sec. 3 (a), who are victims of violence, as defined in RA
RA 8972] 9262. The leave benefit covers the days that the
women employee has to attend to medical or
Conditions for entitlement legal concerns.
A solo parent employee shall be entitled to the
parental leave under the following Definition of Terms
conditions: Violence against women and their children
(a) He/she has rendered at least one (1) year of refers to any act or a series of acts committed by
service, whether continuous or broken; any person against a woman who is his wife,
(b) He/she has notified his/her employer that former wife, or against a woman with whom the
he/she will avail himself/herself of it, within person has or had a sexual or dating
a reasonable period of time; and relationship, or with whom he has a common
(c) He/she has presented to his/her employer a child, or against her child whether legitimate or
Solo Parent Identification Card, which may illegitimate, within or without the family abode,
be obtained from the DSWD office of the which result in or is likely to result in physical,
city or municipality where he/she resides. sexual, psychological harm or suffering, or
[Sec 19, Art. V, IRR, RA 8972] economic abuse including threats of such acts,
battery, assault, coercion, harassment or
Availment arbitrary deprivation of liberty.
The parental leave is in addition to leave
privileges under existing laws with full pay, VAWC includes, but is not limited to, the following
consisting of basic salary and mandatory acts:
allowances. It shall not be more than seven (7) (1) Physical Violence" refers to acts that include
working days every year. [Sec. 8, RA 8972] bodily or physical harm;
(2) "Sexual violence" refers to an act which is
Grant of flexible work schedule sexual in nature, committed against a
The employer shall provide for a flexible woman or her child. It includes, but is not
working schedule for solo parents: Provided, limited to:
That the same shall not affect individual and (a) rape, sexual harassment, acts of
company productivity: Provided, further, That lasciviousness, treating a woman or her
any employer may request exemption from the child as a sex object, making
above requirements from the DOLE on certain demeaning and sexually suggestive
meritorious grounds. [Sec. 6, RA 8972] remarks, physically attacking the sexual
parts of the victim's body, forcing
Protection against work discrimination her/him to watch obscene publications
No employer shall discriminate against any solo and indecent shows or forcing the
parent employee with respect to terms and woman or her child to do indecent acts
conditions of employment on account of his/her and/or make films thereof, forcing the
status. [Sec. 7, RA 8972] wife and mistress/lover to live in the
Termination of the benefit conjugal home or sleep together in the
A change in the status or circumstance of the same room with the abuser;
parent claiming the benefit under the law, such (b) acts causing or attempting to cause the
that he/she is no longer left alone with the victim to engage in any sexual activity
responsibility of parenthood, shall terminate by force, threat of force, physical or
his/her eligibility for these benefits. [Sec. 3 (a), other harm or threat of physical or other
RA 8972] harm or coercion;
(c) Prostituting the woman or child.
LEAVES FOR VICTIMS AND VIOLENCE (3) "Psychological violence" refers to acts or
AGAINST WOMEN [RA 9262, ANTI- omissions causing or likely to cause mental
VIOLENCE AGAINST WOMEN AND or emotional suffering of the victim such as
THEIR CHILDREN ACT OF 2004]
but not limited to intimidation, harassment,
Coverage and purpose stalking, damage to property, public ridicule
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unnecessary in the operation of the the statute has taken effect, and that its
enterprise; benefits can be reckoned not only from the date
(3) Impossible reinstatement of the EE to of the law's enactment but retroactively to the
his/her former position or to a substantially time said employment contracts have started.
equivalent position for reasons not [Enriquez Security Services, Inc. v. Cabotaje,
attributable to the fault of the ER, as when 2006]
the reinstatement ordered by a competent
authority cannot be implemented due to Pursuant thereto, this Court imposed two (2)
closure of cessation of operations of the essential requisites in order that R.A. 7641 may
establishment/ER, or the position to which be given retroactive effect: (1) the claimant for
he/she is to be reinstated no longer exists retirement benefits was still in the employ of the
and there is no substantially equivalent employer at the time the statute took effect;
position in the establishment to which and (2) the claimant had complied with the
he/she can be assigned. [Gaco vs NLRC, requirements for eligibility for such retirement
1994] benefits under the statute. [Universal Robina
Sugar Milling Corp. vs Caballeda, 2008]
Notice of Termination
The ER may terminate the employment of any ELIGIBILITY
EE due to the above-mentioned authorized All employees in the private sector, regardless
causes by serving a written notice on the EE and of their position, designation, or status, and
the DOLE through its regional office having irrespective of the method by which their wages
jurisdiction over the place of business at least 1 are paid [Sec. 1, IRR, RA 7641]
month before the intended date thereof.
The only exceptions are:
Basis of Separation Pay (1) employees covered by the Civil Service Law;
The computation of separation pay of an EE (2) domestic helpers and persons in the
shall be based on his/her latest salary rate. personal service of another, and
[DOLE Handbook on Workers Statutory (3) employees in retail, service and agricultural
Monetary Benefits, 2014 ed.] establishments or operations regularly
employing not more than ten employees [Sec. 2,
Inclusion of Regular Allowance in the IRR, RA 7641]
Computation
In the computation of separation pay, it would Exclusions from coverage
be error not to integrate the allowance with the R.A. No. 7641, otherwise known as "The
basic salary. The salary base properly used in Retirement Pay Law," only applies in a situation
computing the separation pay should include where
not just the basic salary but also the regular (1) there is no collective bargaining agreement
allowances that an EE has been receiving. or other applicable employment contract
[Planters Products, Inc. vs NLRC, 1989] providing for retirement benefits for an
employee; OR
RETIREMENT PAY (RA 7641 - (2) there is a collective bargaining agreement or
The Retirement Pay Law) other applicable employment contract
providing for retirement benefits for an
Rationale employee, but it is below the requirements
RA 7641 is undoubtedly a social legislation. The set for by law.
law has been enacted as a labor protection
measure and as a curative statute that absent a The reason for the first situation is to prevent
retirement plan devised by, an agreement with, the absurd situation where an employee, who is
or a voluntary grant from, an employer can otherwise deserving, is denied retirement
respond, in part at least, to the financial well- benefits by the nefarious scheme of employers
being of workers during their twilight years soon in not providing for retirement benefits for their
following their life of labor. There should be employees. The reason for the second situation
little doubt about the fact that the law can is expressed in the Latin maxim pacta private juri
apply to labor contracts still existing at the time public derogare non possunt. Private contracts
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cannot derogate from the public law. [Oxales vs Retirement pay under RA 7641 vis--vis
Unilab, 2008] retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
Age of retirement benefits. All private sector employees
In the absence of a retirement plan or regardless of their position, designation or
agreement providing for retirement benefits of status and irrespective of the method by which
employees in the establishment, an employee their wages are paid are entitled to retirement
upon reaching the age of sixty (60) years or benefits upon compulsory retirement at the age
more, but not beyond sixty-five (65) years which of sixty-five (65) or upon optional retirement at
is hereby declared the compulsory retirement sixty (60) or more but not 65. The minimum
age (and have served the establishment for at retirement pay due covered employees shall be
least 5 years). [Sec. 1, IRR, RA 7641] equivalent to one-half month salary for every
year of service, a fraction of at least six (6)
Optional retirement in the absence of a months being considered as one whole year.
retirement plan or other applicable agreement The benefits under this law are other than those
providing for retirement benefits of EEs in an granted by the SSS or the GSIS.
establishment, an EE may retire upon reaching
the age of 60 or more if he has served for at Retirement Benefits under a CBA or Applicable
least 5 years in said establishment. Contract
Any EE may retire or be retired by his/her ER
Compulsory retirement in the absence of a upon reaching the age established in the CBA
retirement plan or other applicable agreement or other applicable agreement/contract and
providing for retirement benefits of EEs in an shall receive the retirement benefits granted
establishment, an EE shall be retired at the age therein; provided, however, that such retirement
of 65 years. [Sec. 4, IRR, RA 7641] benefits shall not be less than the retirement
pay required under RA 7641, and provided
AMOUNT OF RETIREMENT PAY further that if such retirement benefits under
The minimum retirement pay shall be the agreement are less, the ER shall pay the
equivalent to one-half (1/2) month salary for difference.
every year of service, a fraction of at least six (6)
months being considered as one whole year. Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable
For the purpose of computing retirement pay, agreement, the ERs total contributions and the
one-half month salary shall include all of the accrued interest thereof should not be less than
following: the total retirement benefits to which the EE
(1) Fifteen (15) days salary based on the latest would have been entitled had there been no
salary rate; such retirement benefits fund. If such total
(2) Cash equivalent of five (5) days of service portion from the ER is less, the ER shall pay the
incentive leave; deficiency.
(3) One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.52) RETIREMENT BENEFITS OF
WORKERS WHO ARE PAID BY
Thus, one-half month salary is equivalent to RESULTS
22.5 days. [Capitol Wireless, Inc. vs Sec. For covered workers who are paid by result and
Confessor, 1996] do not have a fixed monthly salary rate, the
basis for the determination of the salary for 15
Other benefits may be included in the days shall be their average daily salary (ADS).
computation of the retirement pay upon The ADS is derived by dividing the total salary or
agreement of the ER and the EE or if provided in earning for the last 12 months reckoned from
the CBA. the date of retirement by the number of actual
working days in that particular period, provided
that the determination of rates of payment by
results are in accordance with established
regulations
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When the employer can prove that the Expulsion of Women faculty/ female student due
reasonable demands of the business require a to pregnancy outside of marriage
distinction based on marital status and there is Expulsion and non-readmission of women
no better available or acceptable policy which faculty due to pregnancy outside of marriage
would better accomplish the business purpose, shall be outlawed. No school shall turn out or
an ER may discriminate against an EE based in refuse admission to a female student solely on
the identity of the EEs spouse. [Star Paper Corp. the account of her having contracted pregnancy
vs. Simbol, 2006] outside of marriage during her term in school.
[Sec. 13(c), RA 9710]
The Court sustained the validity of employer
policy prohibiting an employee from having a ANTI-SEXUAL HARRASSMENT (RA
personal or marital relationship with an 7877 ANTI-SEXUAL HARRASSMENT
employee of a competitor. The prohibition was ACTO OF 1995)
reasonable under the circumstances because
relationships of such nature might compromise Forms of Sexual Harassment
the interests of the company. [Duncan (1) Employment or Work Related
Association of Detailmen vs. Glaxo Wellcome, (a) The sexual favor is made as a condition
2004] (i) in the hiring or in the employment,
re-employment or continued
PROHIBITED ACTS (ART. 135) employment of said individual or
(II) in granting said individual favorable
Note: Nightwork/ Exception (Art 130-131) No compensation, terms, conditions,
more nightwork prohibition under R.A. 10151. promotions, or privileges, or
(iii) in the refusal to grant the sexual
Discrimination (Art 133, RA 9710) favor results in limiting, segregating
See previous section or classifying the EE which in any
way would discriminate, deprive or
Stipulation against marriage (Art 134) diminish employment opportunities
See previous section or otherwise adversely affect said
employee;
Discharge to prevent enjoyment of benefits
To deny any woman employee the benefits (b) The above acts would either:
provided for in this Chapter or to discharge any (i) impair the employees rights or
woman employed by him for the purpose of privileges under existing labor laws;
preventing her from enjoying any of the benefits or
provided under this Code. [Art. 135 (1)] (ii) result in an intimidating, hostile, or
offensive environment for the
Discharge on account of pregnancy employee.
To discharge such woman on account of her
pregnancy, while on leave or in confinement due (1) Education or Training environment. In an
to her pregnancy. [Art. 135 (2)] education or training environment, sexual
harassment is committed:
Discharge on account of testimony a. Against one who is under the care,
To discharge or refuse the admission of such custody or supervision of the offender
woman upon returning to her work for fear that b. Against one whose education,
she may again be pregnant. [Art. 137 (3)] training, apprenticeship or tutorship is
entrusted to the offender;
It shall be unlawful for any employer: to c. When the sexual favor is made a
discharge any woman or child or any other condition to the giving of a passing
employee for having filed a complaint or having grade, or the granting of honors and
testified or being about to testify under the scholarships, or the payment of a
Code [Book III, Rule XII, Sec 13(d), IRR] stipend, allowance or other benefits,
privileges, or considerations; or
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nursemaid or yaya, cook, gardener, or laundry The employer shall grant the domestic worker
person.[Sec 4(D). RA 10361] access to outside communication during free
time: Provided, That in case of emergency,
The term domestic worker or kasambahay access to communication shall be granted even
excludes any person who performs domestic during work time. [Sec. 8, RA 10361]
work only occasionally or sporadically and not
on an occupational basis. [Sec.4(D), RA 10361] (f) Education and Training
The employer shall afford the domestic worker
Rights and Privileges the opportunity to finish basic education and
may allow access to alternative learning
(a) Minimum wage systems and, as far as practicable, higher
The minimum wage of domestic workers shall education or technical and vocational training.
not be less than the following: [Sec. 9, RA 10361]
(1) P2,500 a month for those employed in
NCR (g) Social and Other Benefits
(2) P2,000 a month for those employed in A domestic worker who has rendered at least
chartered cities and first class one (1) month of service shall be covered by the
municipalities Social Security System (SSS), the Philippine
(3) P1,500 a month for those employed in Health Insurance Corporation (PhilHealth), and
other municipalities the Home Development Mutual Fund or Pag-
Within one year from the effectivity of the Act, IBIG, and shall be entitled to all the benefits in
and periodically thereafter, the Regional accordance with the pertinent provisions
Tripartite and Productivity Wage Boards shall provided by law.
review, and if proper, determine and adjust the
minimum wage rates of domestic workers. [Sec. (h) Leave Benefits
24, RA 10361] A domestic worker who has rendered at least
one (1) year of service shall be entitled to an
(b) Standard of Treatment annual service incentive leave of five (5) days
The employer or any member of the household with pay [Sec. 29, RA 10361]
shall not subject a domestic worker or
kasambahay to any kind of abuse nor inflict Pre-Employment Requirement
any form of physical violence or harassment or Prior to the execution of the employment
any act tending to degrade the dignity of a contract, the employer may require the
domestic worker. [Sec. 5, RA 10361] following from the domestic worker:
(1) Medical certificate or a health certificate
(c) Board, Lodging and Medical Attendance issued by a local government health officer;
The employer shall provide for the basic (2) Barangay and police clearance;
necessities of the domestic worker to include at (3) National Bureau of Investigation (NBI)
least three (3) adequate meals a day and clearance; and
humane sleeping arrangements that ensure (4) Duly authenticated birth certificate or if not
safety and shall provide appropriate rest and available, any other document showing the age
assistance to the domestic worker in case of of the domestic worker such as voters
illnesses and injuries sustained during service identification card, baptismal record or
without loss of benefits. [Sec. 6, RA 10361] passport.
(d) Privacy However, Section 12(a), (b), (c) and (d) shall be
Respect for the privacy of the domestic worker standard requirements when the employment
shall be guaranteed at all times and shall of the domestic worker is facilitated through the
extend to all forms of communication and PEA.
personal effects [Sec. 7, RA 10361]
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The cost of the foregoing shall be borne by the (e) Any disease prejudicial to the health of the
prospective employer or agency, as the case domestic worker, the employer, or
may be. [Sec. 12, RA 10361] member/s of the household; and
(f) Other causes analogous to the foregoing.
Time and Manner of Payment: Payment of [Sec. 33, RA 10361]
wages shall be made on time directly to the
domestic worker in cash at least once a month (2) Initiated by the employer
and unless allowed by the domestic worker An employer may terminate the services of the
through a written consent, employer shall make domestic worker at any time before the
no deductions from the wages other than that expiration of the contract, for any of the
which is mandated by law. [Sec. 25, RA 10361] following causes:
(a) Misconduct or willful disobedience by the
Right against assignment to non-household domestic worker of the lawful order of the
work at a wage rate lower than that mandated employer in connection with the formers
for agricultural or non-agricultural enterprises work;
depending on the case. [Sec. 22, RA 10361] (b) Gross or habitual neglect or inefficiency by
the domestic worker in the performance of
Employment Age of Domestic Workers: Unlawful duties;
to employ any person below fifteen (15) years of (c) Fraud or willful breach of the trust reposed
age as a domestic worker [Sec. 16, RA 10361] by the employer on the domestic worker;
(d) Commission of a crime or offense by the
Persons between 15-18 years old should only be domestic worker against the person of the
employed in non-hazardous work. [DO 4-99 employer or any immediate member of the
Sec. 4] employers family;
(e) Violation by the domestic worker of the
Daily Rest Period: Aggregate of eight (8) hours terms and conditions of the employment
per day. [Sec. 20, RA 10361] contract and other standards set forth
under this law;
Employment Certification: ER shall give the (f) Any disease prejudicial to the health of the
househelper a written statement of the nature domestic worker, the employer, or
and duration of the service and his or her work member/s of the household; and
performance as househelper upon severance. (g) Other causes analogous to the foregoing.
[Sec. 35, RA 10361] [Sec. 34, RA 10361]
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which shall ensure observance of the above only in accordance with apprenticeship
requirements. programs duly approved by the Secretary of
Labor and Employment. [Art. 61, LC]
The Department of Labor and Employment
shall promulgate rules and regulations The Secretary of Labor and Employment may
necessary for the effective implementation of authorize the hiring of apprentices without
this Section. [RA 7160, Sec. 12 as amended by RA compensation whose training on the job is
7658, Sec. 1] required by the school or training program
curriculum or as requisite for graduation or
Qualifications of apprentice board examination. [Art. 72, LC]
(a) Possess vocational aptitude and capacity for
appropriate tests; and The wages of apprentices and learners shall in
(b) Possess the ability to comprehend and no case be less than seventy-five percent (75%)
follow oral and written instructions. [Art. 59, LC] of the applicable minimum wage rates. [Wage
Order No. NCR-17, May 17, 2012]
Integrating both the abovementioned provisions
then the qualifications of an apprentice are as Enforcement
follows: No person shall institute any action for the
(1) At least 15 years of age (as amended by R.A. enforcement of any apprenticeship agreement
7610), provided that if he is below 18 years, or damages for breach of any such agreement,
he shall not be eligible for hazardous unless he has exhausted all available
occupation; administrative remedies. [Art. 67, LC]
(2) Possess vocational aptitude and capacity for
appropriate tests; Incentives for employers
(3) Possess the ability to comprehend and An additional deduction from taxable income of
follow oral and written instructions. [Art. 59 one-half (1/2) of the value of labor training
of the LC, as amended by R.A. 7610] expenses incurred for developing the
(4) Physically fit for occupation productivity and efficiency of apprentices shall
be granted to the person or enterprise
Allowed employment organizing an apprenticeship program:
SEE: RA 7769, Sec. 4 (m) above Provided, That such program is duly recognized
by the Department of Labor and Employment:
Employment of Apprentices: When applicable: Provided, further, That such deduction shall not
(1) Only employers in highly technical industries exceed ten (10%) percent of direct labor wage:
may employ apprentices; and and Provided, finally, That the person or
(2) Only in apprenticeable occupations enterprise who wishes to avail himself or itself of
approved by the Secretary of Labor. [Art. 60, this incentive should pay his apprentices the
LC] minimum wage. [Art. 71, LC]
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Disabled Persons are those suffering from In the placement of disabled persons in
restriction or different abilities, as a result of a sheltered employment, it shall accord due
mental, physical or sensory impairment, to regard to the individual qualities, vocational
perform an activity in the manner or within the goals and inclinations to ensure a good working
range considered normal for a human being atmosphere and efficient production. [Sec 6, RA
[Sec. 4(a), RA 7277] 7277]
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all services in hotels and similar lodging for persons with disability on purchase of
establishments; restaurants and recreation basic commodities, subject to guidelines to
centers for the exclusive use or enjoyment of be issued for the purpose by the DTI and the
persons with disability; DA; and
(2) A minimum of 20% discount on admission (11) Provision of express lanes for persons with
fees charged by theaters, cinema houses, disability in all commercial and government
concert halls, circuses, carnivals and other establishments; in the absence thereof,
places of culture, leisure and amusement priority shall be given to them. [Sec 32, RA
for the exclusive use or enjoyment of 7277, as amended by RA 9442]
persons with disability;
(3) At least 20% discount for the purchase of Conditions for entitlement
medicines in all drugstores for the exclusive (1) Persons with disability who are Filipino
use or enjoyment of persons with disability; citizens upon submission of any of the following
(4) At least 20% discount on medical and dental as proof of his/her entitlement thereto:
services including diagnostic and laboratory (a) An identification card issued by the city
fees such as, but not limited to, x-rays, or municipal mayor or the barangay
computerized tomography scans and blood captain of the place where the persons
tests, in all government facilities, subject to with disability reside;
guidelines to be issued by the DOH in
coordination with the PHILHEALTH. (b) The passport of the persons with
(5) At least 20% discount on medical and dental disability concerned; or
services including diagnostic and laboratory (c) Transportation discount fare ID issued by
fees and professional fees of attending the National Council for the Welfare of
doctors in all private hospitals and medical Disabled Persons (NCWDP).
facilities, in accordance with the rules and (2) The privileges may not be claimed if the
regulations to be issued by the DOH, in persons with disability claim a higher
coordination with PHILHEALTH; discount as may be granted by the
(6) At least 20% discount on fare for domestic commercial establishment and/or under
air and sea travel for the exclusive use or other existing laws or in combination with
enjoyment of persons with disability; other discount program/s. [Sec 32, RA 7277,
(7) At least 20% discount in public railways, as amended by RA 9442
skyways, and bus fare for the exclusive use
and enjoyment of persons with disability. Other Provisions Against Discrimination
(8) Educational assistance to persons with
disability, for them to pursue primary, (a) Discrimination of Employment
secondary, tertiary, post tertiary, as well as No entity, whether public or private shall
vocational or technical education, in both discriminate against a qualified disabled person
public and private schools, through the by reason of disability in regard to job
provision of scholarships, grants, financial application procedures, the hiring, promotion,
aids, subsidies and other incentives to or discharge of employees compensation, job
qualified persons with disability, including training and other terms, conditions and
support for books, learning materials and privileges of employment. The following
uniform allowance to the extent feasible; constitute acts of discrimination:
Provided, That persons with disability shall (1) Limiting, segregating or classifying a
meet minimum admission requirements; disabled job applicant in such a manner
(9) To the extent practicable and feasible, the that adversely affects his work opportunities
continuance of the same benefits and (2) Using qualification standards, employment
privileges given by the GSIS, SSS, and PAG- tests or other selection criteria that screen
IBIG, as the case may be, as are enjoyed by out or tend to screen out a disabled person
those in actual service; unless such standards, tests or other
(10) To the extent possible, the government may selection criteria are shown to be related for
grant special discounts in special programs
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the position in question and are consistent (b) Information obtained during the medical
with business necessity; condition or history of the applicant is
(3) Utilizing standards, criteria, or methods of collected and maintained on separate forms
administration that: and in separate medical files and is treated
(i) have the effect of discrimination on the as a confidential medical record; Provided,
basis of disability; or however, That:
(ii) perpetuate the discrimination of others (1) supervisors and managers may be
who are the subject to common informed regarding necessary
administrative control. restrictions on the work or duties of the
(4) Providing less compensation, such as salary, employees and necessary
wage or other forms of remuneration and accommodations:
fringe benefits, to qualified disabled (2) first aid and safety personnel may be
employee, by reason of his disability, than informed, when appropriate, if the
the amount to which a non-disabled person disability might require emergency
performing the same work is entitled; treatment;
(5) Favoring a non-disabled employee over a (3) government officials investigating
qualified disabled employee with respect to compliance with this Act shall be
promotion, training opportunities, study and provided relevant information on
scholarship grants, solely on account of the request; and
latter's disability; (4) the results of such examination are
(6) Re-assigning or transferring a disabled used only in accordance with this Act.
employee to a job or position he cannot [Sec. 35, RA 7277 as amended by RA
perform by reason of his disability; 9442]
(7) Dismissing or terminating the services of a (c) Prohibition on Verbal, Non-Verbal Ridicule
disabled employee by reason of his and Vilification Against Persons with Disability
disability unless the employer can prove (i) No individual, group or community shall
that he impairs the satisfactory execute any of these acts of ridicule
performance of the work involved to the against persons with disability in any
prejudice of the business entity; Provided, time and place which could intimidate
however, That the employer first sought to or result in loss of self-esteem of the
provide reasonable accommodations for the latter. [Sec. 40, RA 7277, as amended by
disabled persons; RA 9442]
(8) Failing to select or administer in the most (ii) Any individual, group or community is
effective manner employment tests which hereby prohibited from vilifying any
accurately reflect the skills, aptitude or person with disability which could result
other factor of the disabled applicant or into loss of self-esteem of the latter.
employee that such test purports to [Sec. 42, RA 7277, as amended by RA
measure, rather than the impaired sensory, 9442]
manual or speaking skills of such applicant
or employee, if any; and Public Ridicule - The act of making fun of or
(9) Excluding disabled persons from contemptuous imitating or making mockery of
membership in labor unions or similar persons with disability whether in writing, or in
organizations. [Sec. 34, RA 7277 as amended words, or in action due to their impairments.
by RA 9442] [Sec. 39, RA 7277, as amended by RA 9442]
Vilification includes:
(b) Employment Entrance Examination (1) The utterance of slanderous and abusive
Upon an offer of employment, a disabled statements against a person with disability;
applicant may be subjected to medical and/or,
examinations, on the following occasions: (2) An activity in public which incites hatred
(a) all entering employees are subjected to such towards, serious contempt for, or severe ridicule
an examination regardless of disability;
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use of such means. These address both the IRR, Book VI, Rule 1, Sec. 6(d). In all cases of
result and the means used to achieve it and probationary employment, the employer shall
hence, EE-ER relationship exists. [Insurance make known to the employee the standards
Life v. NLRC, G.R. No. 84484, Nov. 15, 1989] under which he will qualify as regular
employee at the time of his engagement.
Economic Dependence Test Where no standards are made known to the
Two-tiered approach. employee at the time of engagement, he shall
(1) First Tier: Control Test (refer to the Four-Fold be deemed a regular employee.
Test)
(2) Second Tier: The underlying economic Probationary employee is one who is on trial by
realities of the activity or relationship. [Sevilla v. an employer during which the employer
Court of Appeals] determines whether or not he is qualified for
permanent employment [International Catholic
The benchmark of economic reality in analyzing Migration Comm. vs. NLRC, 1989]
possible employment purposes ought to be the
economic dependence of the worker on his Termination
employer. Can only be terminated for:
(1) Just causes; or
The standard of economic dependence is (2) Failure to qualify as a regular employee in
whether the worker is dependent on the alleged accordance with reasonable standards made
employer for his continued employment in that known by the employer to the employee at the
line of business. [Orozco v. CA, GR No. 155207, time of engagement.
13 August 2008].
The probationary employee is entitled to
KINDS OF EMPLOYMENT substantial and procedural due process before
termination.
PROBATIONARY EMPLOYMENT
Legal basis Limitations to termination
Article 281. Probationary employment shall (1) It must be exercised in accordance with the
not exceed 6 months from the date the specific requirements of the contract
employee started working, unless it is covered (2) If a particular time is prescribed, the
by an apprenticeship agreement stipulating a termination must be within such time and if
longer period. The services of an employee formal notice is required, then that form
who has been engaged on a probationary must be used;
basis may be terminated for a just cause or (3) The employers dissatisfaction must be real
when he fails to qualify as a regular employee and in good faith, not feigned so as to
in accordance with reasonable standards circumvent the contract or the law;
made known by the employer to the employee (4) There must be no unlawful discrimination in
at the time of his engagement. An employee the dismissal. [Manila Hotel Corporation v.
who is allowed to work after a probationary NLRC, G.R. No. 53453, January 22, 1986]
period shall be considered a regular
employee. Purposes
(1) Observance Period for employer to
determine if employee is qualified and for
employee to demonstrate to the ER his
skills
(2) Restrictive - As long as the termination was
made before the expiration of the six-month
probationary period, the employer has a
right to sever the employer-employee
relationship
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When the bank renewed the contract after the by the Manual of Regulations for Private
lapse of the six-month probationary period, the Schools and not the Labor Code. [Paragraph
employees thereby became regular employees. 75of the 1970 Manual; Aklan College vs. Guarino,
No employer is allowed to determine 2007]
indefinitely the fitness of its employees.
[Bernardo vs. NLRC, 1999] Employer obligation to make standards known
The law is clear that in all cases involving
Absorbed employees employees engaged on probationary basis, the
The private respondents could not be employer shall make known to the employee at
considered probationary employees because the time he is hired, the standards by which he
they were already well-trained in their will qualify as a regular employee.
respective functions. As stressed by the Solicitor
General, while private respondents were still There is also no evidence on record showing
with the CCAS they were already clerks. that the respondent Grulla had been apprised
Respondent Gelig had been a clerk for CCAS for of his probationary status and the requirements
more than ten (10) years, while respondent which he should comply in order to be a regular
Quijano had slightly less than ten (10) years of employee. In the absence of these requisites,
service. They were, therefore, not novices in their there is justification in concluding that
jobs but experienced workers. [Cebu Stevedoring respondent Grulla was a regular employee at
Co., Inc. vs. Regional Director, 1988] the time he was dismissed by petitioner, and as
such cannot be done without just and
Double probation authorized cause. [A. M. Oreta and Co., Inc. vs.
There is no basis for subjecting an employee to NLRC, 1989]
a new probationary or temporary employment
where he had already become a regular REGULAR EMPLOYMENT
employee when he was absorbed by a sister Regular employment is not synonymous with
company. [A Prime Security Services, Inc. vs. permanent employment, because there is no
NLRC, 2000] such thing as a permanent employment. Any
employee may be terminated for just cause.
Termination and salary
A probationary employee enjoys only a A regular employee is one who is engaged to
temporary employment status. This means that perform activities which are necessary and
he is terminable at any time, permanent desirable in the usual business or trade of the
employment not having been attained in the employer as against those which are
meantime. The employer could well decide he undertaken for a specific project or are seasonal.
no longer needed the probationary employees There are two separate instances whereby it can
services or his performance fell short of be determined that an employment is regular:
expectations, etc. As long as the termination (1) if the particular activity performed by the
was made before the termination of the six- employee is necessary or desirable in the
month probationary period, the employer was usual business or trade of the employer;
well within his rights to sever the employer- (2) if the employee has been performing the job
employee relationship. A contrary interpretation for at least a year. [Pangilinan vs. Gen.
would defect the clear meaning of the term Milling Corp., 2004]
probationary. [De la Cruz, Jr. vs. NLRC, 2004]
Standard of determination (Reasonable
Private school teachers Connection rule)
The provisions of Article 280 of the Labor Code The primary standard in determining regular
are not applicable to the present case especially employment is the reasonable connection
with respect to the issue of respondent's between the particular activity performed by the
acquisition of security of tenure. It is settled that employee in relation to the usual business or
questions respecting a private school teachers trade of the employer. The connection can be
entitlement to security of tenure are governed determined by considering the nature of the
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work performed and its relation to the scheme Length of time is not controlling, merely serves
of the particular business or trade in its entirety. as a badge of regular employment. [Maraguinot
The repeated and continuing need for the vs. NLRC, 1998]
performance of the job has been deemed
sufficient evidence of the necessity, if not PROJECT EMPLOYMENT
indispensability of the activity to the business. Employment fixed on a specific project or
[Lopez vs. MWSS, 2005] undertaking, completion or termination of
which is determined at the time of engagement
Hiring for an extended period of the employee.
Where the employment of project employees is
extended long after the supposed project has Whether or not the project has a direct relation
been finished, the employees are removed from to the business of the ER is not important, BUT:
the scope of project employees and considered (1) EE must be informed of the nature and
regular employees. [Audion Electric Co., Inc. vs. duration of project
NLRC, 1999] (2) project and principal business of ER are two
separate things
Repeated renewal of contract (3) no attempt to deny security of tenure to the
The petitioner cannot rightfully say that since worker 39
the private respondent's employment hinged
from contract to contract, it was "temporary", Test of project employment
depending on the term of each agreement. The principal test for determining whether
Under the Labor Code, an employment may employees are properly characterized as
only be said to be "temporary" "where: "project employees," as distinguished from
(1) [it] has been fixed for a specific undertaking, "regular employees," is whether or not the
the completion of or termination of which project employees were assigned to carry out a
has been determined at the time of the "specific project or undertaking," the duration
engagement of the employee OR and scope of which were specified at the time
(2) where the work or services to be performed is the employees were engaged for that project.
seasonal in nature and the employment is As defined, project employees are those workers
for the duration of the season. hired:
(a) for a specific project or undertaking, and
Quite to the contrary, the private respondent's (b) the completion or termination of such
work, that of "typist-clerk" is far from being project or undertaking has been determined
"specific" or "seasonal", but rather, one "where at the time of the engagement of the
the employee has been engaged to perform employee. [PNOC Energy Devt Corp vs.
activities which are usually necessary or NLRC, 2007]
desirable in the usual business." And under the
Code, where one performs such activities, he is a Indicators of project employment
regular employee, "[t]he provisions of written (1) The duration of the specific/identified
agreement to the contrary notwithstanding undertaking for which the worker is
engaged is reasonably determinable;
It is true that in Biboso vs Victorias Milling (2) Such duration, as well as the specific
Company, Inc. we recognized the validity of work/service to be performed, is defined in
contractual stipulations as to the duration of an employment agreement and is made
employment. But we cannot apply it here clear to the employee at the time of the
because clearly, the contract-to-contract hiring;
arrangement given to the private respondent (3) The work/service to be performed by the
was but an artifice to prevent her from acquiring employee is in connection with the particular
security of tenure and to frustrate constitutional project/undertaking for which he is
decrees. [Beta Electric Corp. vs. NLRC, 1990] engaged;
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(4) The employee, while not employed and A work pool may exist although the workers in
awaiting engagement, is free to offer his the pool do not receive salaries and are free to
services to any other employer; seek other employment during temporary
(5) The termination of his employment in the breaks in the business, provided, that the worker
particular project/undertaking is reported to shall be available when called to report for a
the DOLE Regional Office having jurisdiction project. Although primarily applicable to regular
over the workplace following the date of his seasonal workers, this set-up can likewise be
separation from work, using the prescribed applied to project workers insofar as the effect
form on employees terminations of temporary cessation of work is concerned.
/dismissals/suspensions; [Maraguinot vs. NLRC, 1998]
(6) An undertaking in the employment contract
by the employer to pay completion bonus to Members of a work pool from which a
the project employee as practiced by most construction company draws its project
construction companies. [Samson v. NLRC, employees, if considered employees of the
G.R. No. 11366, Feb. 1, 1996)] construction company while in the work pool,
are non-project employees, or employees for an
See also: Policy No. 2 of 1997 and D.O. 19 of indefinite period. If they are employed in a
1993 particular project, the completion of the project
or any phase thereof will not mean severance of
When the present action for regularization was the employer-employee relationship. [Aguilar
filed on November 5, 1989 and during the entire Corp. vs. NLRC, 1997]
period of petitioner's employment with private
respondent prior to said date, the rule in force Rationale for project employment
then was Policy Instruction No. 20, which If a project has already been completed, it
required the employer company to report to the would be unjust to require the employer to
nearest Public Employment Office the fact of maintain them in the payroll while they are
termination of a project employee as a result of doing absolutely nothing except waiting until
the completion of the project or any phase in another project is begun, if at all. In effect, these
which he is employed. stand-by workers would be enjoying the status
of privileged retainers, collecting payment for
Furthermore, Department Order No. 19, which work not done, to be disbursed by the employer
was issued on April 1, 1993, did not totally from profits not earned. [De Ocampo vs. NLRC,
dispense with the notice requirement. Instead, it 1990]
made provisions and considered it (i.e. the
notice) as one of the "indicators" that a worker is Examples of project employment
a project employee. [Samson vs. NLRC (1996)] The corporation does not construct vessels
for sale or otherwise which will demand
Work pool employee continuous production of ships and will
A project EE or a member of a work pool may need regular workers. It merely accepts
acquire the status of a regular employee when contracts for ship-building or for repair of
the following concur: vessels from third parties. It is only on
(a) There is a continuous rehiring of project occasion when it has work contract of this
employees even after cessation of a project; nature that it hires workers to do the job
and which, needless to say, lasts only for less
(b) The tasks performed by the alleged project than a year or longer. Completion of their
employee are vital, necessary, and work or project automatically terminates
indispensable to the usual business or trade their employment. [Sandoval Shipyards, Inc.
of the employer. However, the length of vs. NLRC, 1985
time during which the EE was continuously Petitioner was engaged to perform data
rehired is not controlling, but merely serves encoding and keypunching, and her
as a badge of regular employment. employment was fixed for a specific project
or undertaking the completion or
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termination of which had been determined a project-to-project basis did not confer
at the time of her engagement. [This] may upon them regular employment status. The
be observed from the series of employment practice was dictated by the practical
contracts between petitioner and private consideration that experienced construction
respondent, all of which contained a workers are more preferred. It did not
designation of the specific job contract and change their status as project employees.
a specific period of employment. [Imbuido [C.E. Construction Corp vs. Cioco, 2004]
vs. NLRC, 2000]
SEASONAL EMPLOYMENT
Fixed-period Work or services to be performed are seasonal
The Court has upheld the legality of fixed- in nature, employment is for the duration of the
term employment. It ruled that the decisive season.
determinant in term employment should
not be the activities that the employee is There is no continuing need for the worker.
called upon to perform but the day certain
agreed upon by the parties for the Regular Seasonal Employees After One
commencement and termination of their Season
employment relationship. But, this Court Regular seasonal employees are those
went on to say that where from the called to work from time to time. The nature
circumstances it is apparent that the of their relationship with the employer is
periods have been imposed to preclude such that during off season they are
acquisition of tenurial security by the temporarily laid off but during summer
employee, they should be struck down or season they are reemployed, or when their
disregarded as contrary to public policy and services may be needed. They are not,
morals. [Purefoods Corp. vs. NLRC, 1987] strictly speaking, separated from the service
but are merely considered as on leave of
absence without pay until they are
Continuous rehiring reemployed. Their employment relationship
Despite the insistence of petitioner that they is never severed but only suspended. As
were project employees, the facts show that such those employees can be considered as
as masons, carpenters and fine graders in in the regular employment of the employer.
petitioners various construction projects, [Manila Hotel Co. v. CIR, G.R. No. L-18875,
they performed work which was usually Sept. 30, 1963].
necessary and desirable to petitioners For respondents to be excluded from those
business which involves construction of classified as regular employees, it is not
roads and bridges. It is not enough that an enough that they perform work or services
employee is hired for a specific project or that are seasonal in nature. They must have
phase of work. There must also be a been employed only for the duration of one
determination of, or a clear agreement on, season. While the records sufficiently show
the completion or termination of the project that the respondents work in the hacienda
at the time the employee was engaged. This was seasonal in nature, there was, however,
second requirement was not met in this case. no proof that they were hired for the
[Chua vs. Court of Appeals, 2004] duration of one season only. In fact, the
The fact that the workers have been payrolls, submitted in evidence by the
employed with the company for several petitioners, show that they availed the
years on various projects, the longest being services of the respondents since 1991.
nine (9) years, did not automatically make Absent any proof to the contrary, the
them regular employees considering that general rule of regular employment should,
the definition of regular employment in therefore, stand.
Article 280 of the Labor Code, makes
specific exception with respect to project The disparity in facts between the Mercado
employment. The re-hiring of petitioners on Sr., vs. NLRC case and the instant case is
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(3) If a contract is for a fixed term and the directly related to the principal business of
Employee is dismissed without just cause, such employer. In such cases, the person or
he is entitled to the payment of his salaries intermediary shall be considered merely as an
corresponding to the unexpired portion of agent of the employer who shall be
the employment contract. [Medenilla v. Phil. responsible to the workers in the same
Veterans Bank, 2000]. manner and extent as if the latter were
directly employed by him.
JOB CONTRACTING 8.
9. Article 107. Indirect employer. The provisions of
ARTICLES 106 TO 109 OF THE LABOR CODE the immediately preceding article shall
likewise apply to any person, partnership,
Articles 106 to 109 of the Labor Code association or corporation which, not being an
1. Article 106. Contractor or subcontractor. employer, contracts with an independent
Whenever an employer enters into a contract contractor for the performance of any work,
with another person for the performance of task, job or project.
the formers work, the employees of the 10.
contractor and of the latters subcontractor, if 11. Article 108. Posting of bond. An employer or
any, shall be paid in accordance with the indirect employer may require the contractor
provisions of this Code. or subcontractor to furnish a bond equal to
2. the cost of labor under contract, on condition
3. In the event that the contractor or that the bond will answer for the wages due
subcontractor fails to pay the wages of his the employees should the contractor or
employees in accordance with this Code, the subcontractor, as the case may be, fail to pay
employer shall be jointly and severally liable the same.
with his contractor or subcontractor to such 12.
employees to the extent of the work Article 109. Solidary liability. The provisions of
performed under the contract, in the same existing laws to the contrary notwithstanding,
manner and extent that he is liable to every employer or indirect employer shall be
employees directly employed by him. held responsible with his contractor or
4. subcontractor for any violation of any
5. The Secretary of Labor and Employment may, provision of this Code. For purposes of
by appropriate regulations, restrict or prohibit determining the extent of their civil liability
the contracting-out of labor to protect the under this Chapter, they shall be considered
rights of workers established under this Code. as direct employers.
In so prohibiting or restricting, he may make
appropriate distinctions between labor-only Examples of Labor-Only Contracting
contracting and job contracting as well as The respondents, as checkers, were employed to
differentiations within these types of check and inspect cargo, a task which is clearly
contracting and determine who among the necessary for the petitioners business of
parties involved shall be considered the forwarding and distributing cargo. Grigio did
employer for purposes of this Code, to prevent not undertake the performance of its service
any violation or circumvention of any provision contract according to its own manner and
of this Code. method, free from the control and supervision of
6. its principal.
7. There is "labor-only" contracting where the
person supplying workers to an employer The work activities, shifts, and schedules of the
does not have substantial capital or respondents, including time allowed for "recess"
investment in the form of tools, equipment, were set under the Written Contract of Services.
machineries, work premises, among others, This clearly indicates that these matters, which
and the workers recruited and placed by such consist of the means and methods by which the
person are performing activities which are
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work is to be accomplished, were not within the The contract also provides that any personnel
absolute control of Grigio. found to be inefficient, troublesome,
uncooperative and not observing the rules and
Petitioners allegation that Grigio retained regulations set forth by Burlingame shall be
control by providing supervisors to monitor the reported to F. Garil and may be replaced upon
performance of the respondents cannot be request. Corollary to this circumstance would
given much weight. Instead of exercising their be the exercise of control and supervision by
own discretion or referring the matter to the Burlingame over workers supplied by F. Garil in
officers of Grigio, its supervisors were obligated order to establish the nature of undesirable
to refer to petitioners supervisors any personnel. [Lakas vs. Burlingame (2007)]
discrepancy in the performance of the
respondents. DEPARTMENT ORDER NO. 18-A, SERIES OF
2011: RULES IMPLEMENTING ARTICLES 106-
Lastly, the law casts the burden on the 109 OF THE LC, AS AMENDED (14
contractor to prove that it has substantial NOVEMEBER 2011)
capital, investment, tools etc. In this case,
neither Grigio nor the petitioner was able to Coverage
present any proof that Grigio had substantial This shall apply to:
capital. [Aboitiz Haulers vs. Dimapatoi (2006)] (1) all parties of contracting and subcontracting
arrangements where ER-EE relationships
No proof was adduced to show F. Garils exist
capitalization. The work of the promo-girls was (2) cooperatives engaging in contracting or
marketing and selling, and thus directly related subcontracting arrangements
to the principal business or operation of
Burlingame. Contractors and subcontractors referred to in
these rules are prohibited from engaging in
Finally, F. Garil did not undertake the recruitment and placement activities as defined
performance of its service contract according to in Art. 13(b) of the LC whether for local or
its own manner and method, free from the overseas employment.
control and supervision of Burlingame. Based
on the contract, F. Garil was responsible in the Cabo a persons or group of persons or a labor
hiring process only with respect to the groups which, in the guise of a labor
screening, testing and pre-selection of the organization, cooperative or any entity, supplies
personnel it provided to Burlingame. Actual workers to an employer, with or without any
hiring itself was done through the deployment monetary or other consideration, whether in the
of personnel to establishments by Burlingame. capacity of an agent of the employer or as an
ostensible independent contractor.
The contract also stipulated that Burlingame
shall pay F. Garil a certain sum per worker. F. Contracting or subcontracting an arrangement
Garil merely served as conduit in the payment of whereby a principal agrees to put out or farm
wages to the personnel. The interpretation out with a contractor the performance or
would have been different if the payment was completion of a specific job, work or service
for the job, project, or services rendered during within a definite or predetermined period,
the month and not on a per worker basis. regardless of whether such job, work or service
is to be performed or completed within or
The Court has taken judicial notice of the outside the premises of the principal.
practice of employers who do not issue payslips
directly to employees. Under current practice, a Contractor any person or entity, including a
third person, usually the purported contractor cooperative, engaged in a legitimate
(service or manpower placement agency), contracting or subcontracting arrangement
assumes the act of paying the wage. providing either services, skilled worker,
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temporary workers or a combination of services net worth of at least P3,000,000. [Sec 3, D.O.
to a principal under a Service Agreement. 18-A-11]
Contractors employee includes one employed Service agreement refers to the contract
by a contractor to perform or complete a job, between the principal and contractor containing
work, or service pursuant to a Service the terms and conditions governing the
Agreement with a principal. performance or completion of a specific job,
work or service being farmed out for a definite or
It shall also refer to regular EEs of the predetermined period.
contractor whose functions are not dependent
on the performance or completion of a specific Legitimate contracting or subcontracting
job, work or service within a definite period of Contracting or subcontracting shall be
time i.e. administrative staff. legitimate if ALL the following circumstances
occur:
In-house agency a contractor which is owned, (1) The contractor must be registered in
managed, or controlled directly or indirectly by accordance with these rules and carries a
the principal or one where the principal distinct and independent business
owns/represents any share of stock, and which (2) The contractor undertakes to perform the
operates solely or mainly for the principal. job, work or service on its own responsibility,
according to its own manner and method,
Net Financial Contracting Capacity (NFCC) and free from control and direction of the
refers to the formula to determine the financial principal in all matters connected with the
capacity of the contractor to carry out the job, performance of the work except as to the
work or services sought to be undertaken under results thereof;
a Service Agreement. (3) The contractor has substantial capital and/or
investment; and
Formula: (4) The Service Agreement ensures compliance
NFCC = (current assets - current liabilities) x (K with all the rights and benefits under Labor
value of all outstanding or ongoing projects laws.
including contracts to be started)
Factors to determine existence of independent
K stands for contract duration equivalent to: contractor relationship
(a) 10 for one year or less (1) Whether the contractor is carrying on an
(b) 15 for more than 1 year up to 2 years independent business
(c) 20 for more than 2 years (2) whether the work is part of the employers
general business.
Principal any ER, whether a person or entity, (3) The nature and extent of the work.
including government agencies and GOCCs, (4) The skill required.
who/which puts out or farms out a job, service (5) The terms and duration of the relationship.
or work to a contractor. (6) The right to assign the performance of the
work to another.
Right to control the right reserved to the (7) The control and supervision of the work and
person for whom the services of the contractual the employers powers with respect to the
workers are performed, to determine not only hiring, firing and payment of salaries.
the end to be achieved, but also the manner (8)The duty to supply premises, tools, and
and means to be used in reaching that end. appliances. [Mafinco vs. Ople, 1976]
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equipment, machineries, work premises, (vi) Contracting out of a job, work or service
among others, and the employees recruited being performed by union members when
and places are performing activities which such will interfere with, restrain or coerce
are usually necessary or desirable to the EEs in the exercise of their rights to self-
operation of the company, or directly organization as provided in Art. 248(c) of
related to the main business of the principal the LC, as amended.
within a definite or predetermined period, (vii) Repeated hiring of EEs under an
regardless of whether such job, work or employment contract of short duration or
service is to be performed or completed under a Service Agreement of short
within or outside the premises of the duration with the same or different
principal; OR contractors, which circumvents the LC
(b) The contractor does not exercise the right to provisions on Security of Tenure.
control the performance of the work of the (viii) Requiring EEs under a subcontracting
employee. arrangement to sign a contract fixing the
period of employment to a term shorter
Other prohibitions than the term of the Service Agreement,
(1) Contracting out of jobs, works or services unless the contract is divisible into phases
when not done in good faith and not justified by for which substantially different skills are
the exigencies of the business such as the required and this is made known to the EE
following: at the time of the engagements.
(i) Contracting out of jobs, works or services (ix) Refusal to provide a copy of the Service
when the same results in the termination or Agreement and the employment contracts
reduction of regular EEs and reduction of between the contractor and the EEs
work hours or reduction or splitting of the deployed to work in the bargaining unit of
bargaining unit. the principals certified bargaining agent to
(ii) Contracting out of work with a Cabo the sole and exclusive bargaining agents.
(iii) Taking undue advantage of the economic (x) Engaging or maintaining by the principal of
situation or lack of bargaining strength of subcontracted EEs in excess of those
the contractors EEs, or undermining their provided in the applicable CBA or as set by
security of tenure or basic rights, or the Industry Tripartite Council.
circumventing the provisions of regular
employment in any of the following (b) Contracting out of jobs, works, or services
instances: analogous to the above when not done in good
(iv) Requiring them to perform functions which faith and not justified by the exigencies of the
are currently being performed by the business.
regular EEs of the principal; and requiring
them to sign, as a precondition to The court recognizes that contracting out is not
employment or continued employment, an unlimited; rather, it is a prerogative that
antedated resignation letter; a blank management enjoys subject to well-defined
payroll; a waiver of labor standards legal limitations. The company can determine in
including minimum wages and social or its best business judgment whether it should
welfare benefits; or a quitclaim releasing contract out the performance of some of its
the principal, contractor or from any liability work for as long as the employer is motivated by
as to payment of future claims. good faith, and
(iv) Contracting out of a job, work or service (a) the contracting out must not have been
through an in-house agency. resorted to to circumvent the law or
(v) Contracting out of a job, work or service that (b) must not have been the result of malicious
is necessary or desirable or directly related or arbitrary action. [Manila Electric Co. v.
to the business or operation of the principal Quisumbing, 1999 citing Mafinco vs. Ople
by reason of a strike or lockout whether (1976)]
actual or imminent.
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We perceive at the outset the disposition of the Agreement, without prejudice to his/her
NLRC that janitorial services are necessary and entitlement to the completion bonuses or other
desirable to the trade or business of petitioner emoluments, including retirement benefits
Coca-Cola. But this is inconsistent with our whenever applicable.
pronouncement in Kimberly Independent Labor
Union v. Drilon where the Court took judicial Mandatory registration
notice of the practice adopted in several It shall be mandatory for all persons or entities,
government and private institutions and including cooperative, acting as contractors, to
industries of hiring janitorial services on an register with the Regional Office of the DOLE
independent contractor basis. In this respect, where it principally operates.
although janitorial services may be considered
directly related to the principal business of an Failure to register shall give rise to the
employer, as with every business, we deem presumption that the contractor is engaged in
them unnecessary in the conduct of the labor-only contracting.
employers principal business. [Coca-Cola
Bottlers Phil. Inc. vs. NLRC, 1999] Contracting or subcontracting arrangements in
the Construction and other industries
Rights of contractors EEs Contracting or subcontracting arrangements in
All contractors EEs, whether deployed or the Construction Industry, under the licensing
assigned ass reliever, seasonal, week-ender, coverage of the Philippine Construction
temporary, or promo jobbers, shall be entitled Accreditation Board (PCAB), shall be covered by
to all the rights and privileges as provided for in the applicable provisions of these Rules and
the LC, as amended. shall continue to be governed by Dept Order
No. 19, Series of 1993 [Guidelines Governing the
Security of tenure of contractors EEs Employment of Workers in the Construction
It is understood that all contractors EEs enjoy Industry) Dept. Order No 13, Series of 1998
security of tenure regardless of whether the (Guidelines Governing the Occupational Safety
contract of employment is co-terminus with the and Health in the Construction Industry]; DOLE-
service agreement, or for a specific job, work, or DPWH-DILG-DTI and PCAB Memorandum of
service, or phase thereof. Agreement-Joint Administrative Order No. 1,
Series of 2011 (on coordination and
Effect of termination of employment harmonization of policies and programs on
The termination of the contractor EE prior to the occupational safety and health in the
expiration of the Service Agreement shall be construction industry.
governed by Arts. 282-284 of the LC.
DEPARTMENT CIRCULAR NO. 01, SERIES OF
In case the termination is caused by the pre- 2012: CLARIFYING THE APPLICABILITY OF
termination of the Service Agreement not due to DO NO.18-A, 2011 TO BUSINESS PROCESS
authorized causes under Art. 283, the right of OUTSOURCING (BPO)/KNOWLEDGE
the contractor EE to unpaid wages and other PROCESS OUTSOURCING AND THE
unpaid benefits including unremitted legal CONSTRUCTION INDUSTRY
mandatory contributions, e.g., SSS, Philhealth,
Pag-ibig, ECC, shall be borne by the party at Applicability to BPO
fault, without prejudice to the solidary liability of DO 18-A speaks of a trilateral relationship that
the parties to the Service Agreement. characterizes the covered contracting/sub-
contracting arrangement. Thus, vendor-vendee
Where the termination result from the relationship for entire business processes
expiration of the Service Agreement, or from the covered by the applicable provisions of the Civil
completion of the phase of the job, work or Code on Contracts is excluded.
service for which the EE is engaged, the latter
may opt for payment of separation benefits as DO 18-A contemplates generic or focused
may be provided by law or the Service singular activity in one contract between the
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principal and the contractor (for example, relationship is defined and prescribed by the
janitorial, security, merchandising, specific law itself. [Industrial Timber Corporation vs.
production work) and does not contemplate NLRC, 1997]
information technology-enabled services In legitimate job contracting, no employer-
involving an entire process (for example, BPO, employee relation exists between the
KPO, legal process outsourcing, hardware principal and the job contractor's
and/or software support, medical transcription, employees. The principal is responsible to
animation services, back office the job contractor's employees only for the
operations/support). These companies engaged proper payment of wages. But in labor-only
in BPOs may hire employees in accordance with contracting, an employer-employee relation
applicable laws, and maintain these EEs based is created by law between the principal and
on business requirements, which may or may the labor-only contractor's employees, such
not be for different clients of the BPOs at that the former is responsible to such
different periods of the EEs employment. employees, as if he or she had directly
employed them. [PAL vs. NLRC, 1998]
Applicability to the Construction Industry The only time the indirect employer may be
Licensing and the exercise of regulatory powers made solidarily liable with the contractor is
over the construction industry is lodged with when the contractor fails to pay his
PCAB which is under the Construction Industry employees their wages and other benefits
Authority of the Philippines and not with the claimed. [Landazares vs. Amethyst Security,
DOLE or any of its regional offices. 2003]
Thus, the DOLE, through its regional offices Solidary liability of principal and labor-only
shall not require contractors licensed by PCAB contractor
in the Construction Industry to register under In the case at bar, it is beyond dispute that the
DO 18-A. Moreover, findings of violation/s on security guards are the employees of EAGLE
labor standards and occupational health and (contractor.) That they were assigned to guard
safety standards shall be coordinated with the premises of PTSI (principal) pursuant to the
PCAB for its appropriate action, including the latters contract with EAGLE and that neither of
possible cancellation/suspension of the these two entities paid their wage and
contractors license. allowance increases under the subject wage
orders are also admitted. Thus, the application
EFFECTS OF FINDING THAT THERE IS of the aforecited provisions of the Labor Code
LABOR-ONLY CONTRACTING on joint and several liability of the principal and
A finding by a competent authority of labor- contractor is appropriate.
only contracting shall render the principal
jointly and severally liable with the The solidary liability of PTSI and EAGLE,
contractor to the latters EEs, in the same however, does not preclude the right of
manner and extent that the principal is reimbursement from his co-debtor by the one
liable to EEs directly hired by him/her. who paid [See Article 1217, Civil Code]. It is with
respect to this right of reimbursement that
A finding of commission of any of the petitioners can find support in the aforecited
prohibited activities in Sec. 7 or violation of contractual stipulation. [Eparwa Security, Inc. vs
either Secs. 8 or 9 hereof, shall render the Liceo de Cagayan University (2006)]
principal the direct ER of the EEs of the
contractor or subcontractor. [Sec. 27, DO 18- TRILATERAL RELATIONSHIP IN
A, 2011] CONTRACTING ARRANGEMENT
If found to be labor-only contractor, it is There are three parties involved:
equivalent to finding that there exists an (1) Principal who decides to farm out a job,
employer-employee relationship between work or service to a contractor;
the owner of the project and the employees
of the labor-only contractor since that
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(2) Contractor who has the capacity to constructive dismissal. [Lanzadares vs. Amethyst
independently undertake the performance of Security, 2003]
the job, work, or service; and
(3) Contractual workers engaged by the Coverage
contractor to accomplish the job, work or 1987 Constitution: all workers (Art. XIII Sec.
service. [Sec. 3 D.O. 18-A-11] 3)
Labor Code: regular employees (Art. 279) in
In legitimate contracting there exists: all establishments or undertakings, whether
(a) An ER-EE relationship between the for profit or not (Art. 278), except
contractor and the employees it engaged to government and its political subdivisions
perform the specific job, work or service being including government owned or controlled
contracted corporations or GOCCs (IRR Book VI Rule I
(b) A contractual relationship between the Sec. 1)
principal and the contractor as governed by the Security of tenure extends to non-regular
provisions of the CC. Employees [Kiamco vs. NLRC, 1999]
In the event of any violation of any provisions of Contract Employees
the LC (including failure to pay wages) there Limited extent; secured during the period their
exists a solidary liability on the part of the respective contracts of employment remain in
principal and the contractor for purposes of effect. [Labajo vs. Alejandro, 1988]
enforcing the provisions of the LC and other
social legislation, to the extent of the worked
performed under the employment contract. Probationary Employees
[Sec. 5, D.O. 18-A-11] Limited extent; additional limitations on power
of employer to terminate: must be exercised in
DISMISSAL FROM accordance with the specific requirements of
the contract; dissatisfaction of the employer
EMPLOYMENT must be real and in good faith, not feigned so as
Art. 279: In case of regular employment, the to circumvent the contract or the law
employer shall not terminate the services of an
employee except for Project/seasonal Employees
(a) just cause (Art. 282) Limited extent; secured for the duration of the
(b) authorized cause (Art. 283-284) limited period of their employment
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(2) Brent Doctrine: the employer and the family or his duly authorized
employee dealt with each other on more or less representatives; and
equal terms with no moral dominance exercised (5) Other causes analogous to the foregoing.
by the former or the latter. [Brent School v. (Art. 282)
Zamora, 1990; Romares v. NLRC, 1998; Medenilla
v. Phil. Veterans Bank, 2000] Serious misconduct or willful disobedience
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Reduction of work days may be considered Must de bona fide or in good faith
constructive retrenchment [International
Hardware v. NLRC, 1989] Procedural steps required
At least 1 month before the intended date of
Temporary retrenchment or temporary termination, Employer is to serve written notice
cessation or suspension of operations (Art. 286) to:
(a) Affected employees; and
A specific period that employees may remain (b) DOLE (Art. 283)
temporarily laid-off or in floating status. The
temporary lay-off or bona fide suspension of Criteria in selecting employees for dismissal
operations of a business or undertaking wherein
the employees likewise cease to work should Fair and reasonable criteria in ascertaining who
not last longer than 6 months. After 6 months, will be affected:
the employees should either be recalled to work (1) preferred status (e.g. temporary, casual or
or permanently entrenched following the regular Employees),
requirements of the law, and that failing to (2) efficiency
comply with this would be tantamount to (3) physical fitness,
dismissing the employees and the employer (4) age,
would thus be liable for such dismissal. (5) financial hardship, or
[International Hardware v. NLRC, 1989] (6) seniority. [Asian Alcohol Corp. v. NLRC, 1999]
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role he must provide the employee the Serrano v. NLRC, 2000 Dismissal is valid.
opportunity to present his side and answer the EE is entitled to the
charges, in substantial compliance with due payment of full
process. Actual adversarial proceeding becomes backwages -
necessary only for clarification or when there is a Computed from the
need to propound searching questions to time of dismissal until
unclear witnesses. This is a procedural right the Court finds the
which the employee must, however, ask for it is dismissal to be for just
not an inherent right, and summary proceedings cause.
may be conducted. This is to correct the
common but mistaken perception that Current rule: Agabon v. Dismissal is valid (NO
procedural due process entails lengthy oral NLRC, 2004 reinstatement and
arguments. Hearing in administrative backwages)
proceedings and before quasi-judicial agencies BUT Employer to
are neither oratorical contests nor debating indemnify Employee in
skirmishes where cross examination skills are the form of nominal
displayed. Non-verbal devices such as written damages
explanations, affidavits, position papers or other
pleadings can establish just as clearly and Indemnity is stiffer than
concisely aggrieved parties' predicament or Wenphil Corp. vs.
defense. What is essential is ample opportunity NLRC to discourage
to be heard, meaning, every kind of assistance the practice of dismiss
that management must accord the employee to now, pay later.
prepare adequately for his defense. [as cited in Prior to 1989 Illegal dismissal
Manggagawa ng Komunikasyon sa Pilipinas v.
NLRC, 1992] RELIEFS FOR ILLEGAL
Burden of Proof DISMISSAL
The burden of proof is upon the employer. A finding of illegal dismissal entitles the
Employer must comply with due process Employee to:
requirements before any termination is (1) reinstatement without loss of seniority rights
done. [Gothong Lines, Inc. v. NLRC, 1999] and privileges, and
Unsubstantiated suspicions and baseless (2) full backwages inclusive of allowances and
conclusions by employers are not legal to benefits or their monetary equivalent
from the time withheld up to actual
justification for dismissing employees.
reinstatement [Art. 279]
[Maranaw Hotel and Resort Corp. v. NLRC,
1999]
REINSTATEMENT
Degree of Proof It is the restoration of an employee who was
Substantial evidence; proof beyond reasonable unjustly dismissed to the position from
doubt not required. [Manila Electric Co., Inc. v. which he was removed, that is, to his status
NLRC, 1991] quo ante dismissal [Santos vs. NLRC, 1987]
Note: An offer by Employer to re-employ the
Agabon doctrine Employee did not cure the vice of earlier
Prior to 1989 Illegal dismissal arbitrary dismissal. [Ranara v. NLRC, 1992]
An order for reinstatement must be
Wenphil Corp. v. NLRC, Dismissal isvalid (NO specifically declared and cannot be
1989 reinstatement and presumed; like back wages, it is a separate
- Belated Due Process backwages) and distinct relief given to an illegally
Rule BUT Employer to dismissed employee. [Gold City Integrated
indemnify Employee Port Service, Inc. v. NLRC, 1995]
for damages
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amount of backwages to their total equivalent (1) Bona fide suspension of the operation of a
for three years (depending on the circumstances) business or undertaking exceeding 6
without deduction or qualification. months [Valdez v. NLRC, 1998]
The rationale for the policy was stated in the (2) Floating status of more than 6 months [Agro
following words: Commercial Security Services v. NLRC, 1989]
As has been noted, this formula of awarding An involuntary resignation is resorted to 1) when
reasonable net backwages without deduction or continued employment is rendered impossible,
qualification relieves the employees from unreasonable, or unlikely; 2) when there is a
proving or disproving their earnings during their demotion in rank and/or a diminution in pay; 3)
lay-off and the employers from submitting or when a clear discrimination, insensibility or
counterproofs, and obviates the twin evils disdain by an employer becomes unbearable to
of Idleness on the part of the employee who the employee. [Phil. Wireless, Inc. v. NLRC, 1998]
would "with folded arms, remain inactive in the
expectation that a windfall would come to him" If an employee was forced to remain without
[Itogon Suyoc Mines, Inc. vs. Sangilo-Itogon work or assignment for a period exceeding 6
Workers Union (1968), as cited in Diwa ng months, then he is in effect constructively
Pagkakaisa vs. Filtex International Corp. (1972)] dismissed [Valdez v. NLRC, 1998]
and attrition and protracted delay in satisfying
such award on the part of unscrupulous
employers who have seized upon the further Management Prerogative
proceedings to determine the actual earnings of
the wrongfully dismissed or laid-off employees This Court held that the employers right to
to hold unduly extended hearings for each and conduct the affairs of his business, according to
every employee awarded backwages and its own discretion and judgment, is well-
thereby render practically nugatory such award recognized. An employer has a free reign and
and compel the employees to agree to enjoys wide latitude of discretion to regulate all
unconscionable settlements of their backwages aspects of employment. This is a management
award in order to satisfy their dire need. [See La prerogative, where the free will of management
Campana Food Products, Inc. vs. CIR, (1969) and to conduct its own affairs to achieve its purpose
Kaisahan ng Mga Manggagawa vs. La Campana takes form. [Torreda vs. Toshiba, 2007]
Food Products, Inc., (1970)].
So long as a companys management
prerogatives are exercised in good faith for the
PREVENTIVE SUSPENSION advancement of the employers interest and not
Preventive Suspension is a disciplinary for the purpose of defeating or circumventing
measure for the protection of the company's the rights of the employees under special laws
property pending investigation of any or under valid agreements, this Court will
alleged malfeasance or misfeasance uphold themEven as the law is solicitous of
committed by the employee. The employer the welfare of the employees, it must also
may place the worker concerned under protect the right of an employer to exercise
preventive suspension if his continued what are clearly management prerogatives. The
employment poses a serious and imminent free will of management to conduct its own
threat to the life or property of the employer business affairs to achieve its purpose cannot be
or of his co-workers. [PAL v. NLRC, 1998] denied. [Ernesto G. Ymbong vs. ABS-CBN
Preventive suspension is limited to 30 days; Broadcasting Corp., 2012]
any more than that amounts to constructive
dismissal. [Pido vs. NLRC, 2007] DISCIPLINE
The employers right to conduct the affairs of his
CONSTRUCTIVE DISMISSAL
business, according to its own discretion and
The following constitute constructive dismissal:
judgment, includes the prerogative to instill
discipline in its employees and to impose
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penalties, including dismissal, upon erring (2) The Employer has the right to transfer or
employees. This is a management prerogative assign Employees from one area of
where the free will of management to conduct operation to another, or one office to
its own affairs to achieve its purpose takes form. another or in pursuit of its legitimate
The only criterion to guide the exercise of its business interest,
management prerogative is that the policies, (3) Provided there is no demotion in rank or
rules and regulations on work-related activities diminution of salary, benefits and other
of the employees must always be fair and privileges and not motivated by
reasonable and the corresponding penalties, discrimination or made in bad faith, or
when prescribed, commensurate to the offense effected as a form of punishment or
involved and to the degree of the infraction. demotion without sufficient cause. [Westin
[Consolidated Food Corporation vs. NRLC, 1999] Phil. Plaza Hotel v. NLRC, 1999]
[St. Michaels Institute vs. Santos, 2001]
This prerogative extends to the managements
Right to dismiss or otherwise impose right to regulate, according to its own discretion
disciplinary sanctions upon an employee for just and judgment, all aspects of employment,
and valid cause, pertains in the first place to the including the freedom to transfer and reassign
employer, as well as the authority to determine employees from one are to another in order to
the existence of said cause in accordance with meet the requirements of the business is,
the norms of due process. [Makati Haberdashery, therefore, not general constitutive of
Inc. v. NLRC, 1989] constructive dismissal. Thus, the consequent
transfer of Trycos personnel, assigned to the
Management has the prerogative to discipline Production Department was well within the
its employees and to impose appropriate scope of its management prerogative.
penalties on erring workers pursuant to
company rules and regulations. [Jose P. Artificio When the transfer is not unreasonable, or
vs. NLRC, 2010] inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or
It is obvious that the company overstepped the diminution of salaries, benefits, and other
bounds of its management prerogative in the privileges, the employee may not complain that
dismissal of Mauricio and Camacho. It lost sight it amounts to a constructive dismissal. [Bisig ng
of the principle that management prerogative Manggagawa sa TRYCO v. NLRC, 2008]
must be exercised in good faith and with due
regard to the rights of the workers in the spirit of It is management prerogative for employers to
fairness and with justice in mind. [Philbag transfer employees on just and valid grounds
Industrial Manufacuring Corp. vs. Philbag such as genuine business necessity. [William
Workers Union-Lakas at Gabay ng Barroga vs. Data Center College of the
Manggagawang Nagkakaisa, 2012] Philippines, 2011]
Although we recognize the right of employers to Even though transfers or reassignments per se
shape their own work force, this management are indeed valid and fall within the ambit of
prerogative must not curtail the basic right of management prerogatives, the exercise of these
employees to security of tenure [Alert Security & rights must remain within the boundaries of
Investigation Agency, Inc. vs. Saidali Pasawilan, justice and fair play. [Michelle T. Tuason vs. Bank
et. al., 2011]. of Commerce, 2012]
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in his assigned work. [Petrophil Corporation vs. give it. [Kimberly-Clark Philippines, Inc. vs.
NLRC, 1986] Dimayuga, 2009]
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(c) P1,000; provided, that the monthly pension difference is that the pension is paid directly to
shall in no case be paid for an aggregate the member.
amount of less than 60 months. In case the permanently disabled member dies,
(d) Notwithstanding the abovementioned, it would be given the same treatment as a
minimum pension is P1,200 for members retiree dying.
with at least 10 years credit service, P2,400
for those with 20 years. For permanent partial disability, the pension is
not lifetime. (e.g. loss of thumb entitles member
(2) Dependents pension [Sec. 12-A] to only 10 months of pension, while loss of arm
(a) Paid when member dies, retires or with 50 months). It shall be paid in lump sum if the
permanent total disability; period is less than 12 months.
(b) Paid to each child conceived on or prior to
contingency, but not exceeding 5, beginning For multiple partial disabilities, they shall be
with the youngest and preferring the additive when related or deteriorating the
legitimate; percentage shall be equal to the number of
(c) Amount is either P250 or 10% of the monthly months the partial disability is entitled to
pension as computed above, whichever is divided by 75 months. (e.g. loss of sight in one
higher. eye 25/75; loss of arm 50/75; if both
occur due to same cause, then 25/75 + 50/75 =
(3) Retirement benefits [Sec. 12-B] 100% so treated as if it were permanent total
disability)
ELIGIBILITY REQUIREMENTS
(a) 120 monthly contributions; (5) Death benefits [Sec. 13]
(b) Age
(i) 65 years old; or ELIGIBILITY REQUIREMENT
(ii) A member who has reached 60 years 36 monthly contributions prior to the semester
may also avail if he is already separated of death.
from employ-ment or has ceased to be self-
employed. BENEFIT
Monthly pension to primary or secondary
BENEFIT beneficiaries.
Entitlement to monthly pension from retirement
until death. TO THOSE INELIGIBLE
Lump sum benefit which shall be the higher
Lump Sum Alternative Member may opt to between the two:
receive his first 18 monthly pensions in lump (1) (monthly pension) x 12; or
sum but such is discounted at a preferential rate (2) (monthly pension) x (# of monthly
of interest. contributions)
Lump Sum Eligible A 60 year old member (Funeral benefits [Sec. 13-B]
with less than 120 monthly contributions who is P12,000 in cash or in kind, upon death of
no longer employed or self-employed, and who member
is not continuing contributions independently,
he is entitled to a lump sum equal to his total (6) Loan
contributions paid.
Social Security Commission Resolution No. 669.
(4) Permanent disability benefits [Sec. 13-A] Moreover, several SSS-issued circulars such as
Circular No. 21-P and No. 52 pertain to the
ELIGIBILITY REQUIREMENT treatment of salary loans, sometimes providing
36 monthly contributions prior to the semester for more flexible payment terms or condonation
of disability; same as death benefit; only for delinquent payers; [Santiago v. CA and SSS,
GR # L-39949 (1984)] resolved an issue
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(2) Member separated from service but still essentially, the total amount of all
entitled to funeral benefit; contributions paid) or P12,000 whichever is
(3) Pensioner; higher.
(4) Retiree who at the time of retirement was of (2) Below 60 years of age and at least 15 years
pensionable age but opted to retire under of service: cash payment equivalent to 18 x
RA 1616. (monthly pension) at the time of resignation
or separation plus an old-age pension
(6) Loan benefit equal to basic monthly pension.
GSIS website provides for this
(9) Unemployment benefits [Sec. 11]
(7) Temporary disability benefits (similar to
sickness) ELIGIBILITY REQUIREMENTS
(a) Employee separated from service due to
ELIGIBILITY REQUIREMENTS AND OTHER abolition of his office or position; and
CONDITIONS (b) Employee has been paying integrated 60
(a) Employee must be contributions for at least 1 year prior to
(i) in service at the time of disability; or separation.
(ii) if separated, he has rendered at least 3
years of service and paid at least 6 BENEFIT
monthly contributions in the 12 month Monthly cash payments of 50% of average
period immediately prior to disability; monthly compensation for a duration which is
(b) All sick leave credits including CBA sick proportional to years rendered, ranging from 2
leaves for the current year has been used months to 6 months.
up; and
(c) Maximum of 120 days per 1 calendar year (10) Survivorship benefits
(so maximum permissible for the same Beneficiaries are entitled to the following:
sickness and confinement is 240 days for 2 (1) Basic survivorship pension which is 50% of
consecutive years). basic monthly pension; and
(2) Dependent childrens pension not
BENEFIT exceeding 50% of the basic monthly
75% of the current daily compensation for every pension.
day or fraction thereof of disability or P70
whichever is higher. (11) Life insurance benefits
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SSS GSIS
Enabling law
RA 1161 as amended by RA 8282: Social Security Act RA 8291 amending PD 1146
of 1997
Definition of Terms
Employer any person, natural or juridical, Employer National government, its political
domestic or foreign, who carries on in the subdivisions, branches, agencies or
Philippines any trade business, industry, instrumentalities, including government-owned or
undertaking, and uses the services of another controlled corporations and financial institutions
person who is under his orders as regards the with original charters (GOCCs); constitutional
employment, except those considered as employer commissions; and judiciary
under the GSIS. A self-employed person shall be
both employer and employee at the same time. Employee any person receiving compensation
while in service of an employer whether by election
Employee any person who performs services for or appointment, irrespective of status of
an employer in which either or both mental and appointment; baranggay officials; and sangguniang
physical efforts are used and who receives officials
compensation for such services, where there is an
employer-employee relationship; also, a self- Note: No counterpart for self-employed.
employed person who is both employee and
employer at the same time
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100%.
(2) Secondary shall only receive when the primary
beneficiaries are absent: Dependent parents
(3) Other any other person designated by the
member as his/her secondary beneficiary.
Compensation all actual remuneration for Compensation basic pay received excluding per
employment, including living allowance, as well as diems, bonuses, overtime, honoraria, allowances
the cash value of any remuneration paid in any and other emoluments not integrated into the basic
medium other than cash except that portion pay under existing laws.
already above the max salary credit under Sec. 18 of
the Act.
Coverage
Compulsory Public sector employees below the compulsory
Employers as defined above; retirement age of 65.
Employees not over 60 years including household
helpers with at least P1,000 monthly pay; and Exceptions:
Self-employed. (1) AFP and PNP;
(2) Members of the Judiciary and Constitutional
Voluntary Commissions who are covered only by life insurance
Spouses who devote full time to managing as they have separate retirement schemes;
household and family affairs; Contractual employees with no employee-employer
relationship with the agency they serve.
OFWs recruited by foreign-based employers;
Employees already separated from employment
or those self-employed with no realized income
for a given month, who chose to continue with
contributions to maintain right to full benefit.
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Dispute Settlement
Social Security Commission CA (Rule 43; GSIS CA [Rule 43] SC [Rule 45]; appeal does
questions of law and fact) SC (Rule 45; questions not stay execution.
of law only)
Prescriptive Period
20 years 4 years
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LIMITED PORTABILITY LAW [RA by both Systems. [Sec. 2, IRR of Title II, Book
IV of LC]
7699] (5) Filipinos working abroad in the service of an
employer as defined in Section 3 hereof
COVERAGE shall be covered by the System, and entitled
(1) Workers who transfer employment from one to the same benefits as are provided for
sector to another; or employees working in the Philippines. [Sec.
(2) Those employed in both sectors (public and 5, IRR of Title II, Book IV of LC]
private).
EFFECTIVITY
PROCESS Coverage of employees shall take effect on the
The covered worker shall have his credible first day of employment. [Sec. 6]
services or contributions in both Systems
credited to his service or contribution record in WHEN COMPENSABLE
each of the Systems and shall be totalized for Grounds:
purposes of old-age, disability, survivorship and (1) For the injury and the resulting disability or
other benefits in case the covered member does death to be compensable, the injury must
not qualify for such benefits in either or both be the result of accident arising out of and in
systems without totalization: Provided, however, the course of the employment.
That overlapping periods of membership shall (2) For the sickness and the resulting disability
be credited only once for purposes of or death to be compensable, the sickness
totalization [Sec. 3] must be the result of an occupational
disease listed under Annex A of these
Totalization shall refer to the process of Rules with the conditions set therein
adding up the periods of creditable services or satisfied, otherwise, proof must be shown
contributions under each of the Systems, for that the risk of contracting the disease is
purposes of eligibility and computation of increased by the working conditions.
benefits [Sec. 2e].
LIMITATION
Overlapping periods of membership in case of No compensation shall be allowed to the
those employed in both sectors at once are to employee or his dependents when the injury,
be counted only ONCE for purposes of sickness, disability, or death was occasioned by
totalization to be able to satisfy eligibility any of the following:
requirements of benefits provided for by either (1) His intoxication;
SSS or GSIS. (2) His willful intention to injure or kill himself
or another; or
EMPLOYEES COMPENSATION (3) His notorious negligence
(4) As otherwise provided by law.
COVERAGE AND WHEN
COMPENSABLE
COVERAGE
(1) Every employer shall be covered.
(2) Every employee not over sixty (60) years of
age shall be covered.
(3) An employee over sixty (60) years of age
shall be covered if he had been paying
contributions to the System prior to age
sixty (60) and has not been compulsorily
retired.
(4) An employee who is coverable by both the
GSIS and SSS shall be compulsorily covered
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Personnel in the Private Security Industry] (b) the supervisor must handle the
In Dec 1986, President Aquino issued EO prescribed responsibilities relating to labor
No. 111 which eliminated the provision on relations. [San Miguel Supervisors and
the disqualification of security guards and Exempt Union v Laguesma, 1997]
with that security guards were thus free to Rationale of Exclusion of Confidential
join a rank and file organization. Under the Employees - By the very nature of their
old rule, security guards were barred from functions, they assist and act in a
joining labor organizations of the rank-and- confidential capacity to, or have access to
file but under RA 6715, they may now freely confidential matters of, persons who
join a labor organization with the rank-and- exercise managerial functions in the field of
file or the supervisory union, depending on labor relations. (Thus there is a fiduciary and
their rank. [Manila Electric Co. v. SOLE, 1991] confidential relationship between manager
and employer.) It is not far-fetched that in
WHO CANNOT FORM, JOIN OR ASSIST the course of CB, they might jeopardize that
LABOR ORGANIZATIONS interest which they are duty bound to
(1) Managerial employees protect. [Metrolab Industries Inc. v. Roldan-
(2) Confidential employees Confessor, 1996]
(3) Non-employees The disqualification of managerial and
(4) Member-employee of a cooperative confidential employees from joining a
(5) Employees of international organizations bargaining unit for rank and file employees
(6) High-level government employees is already well-entrenched in jurisprudence.
(7) Members of the AFP, police officers, While Article 245 of the Labor Code limits
policemen, firemen and jail guards the ineligibility to join, form and assist any
labor organization to managerial
(1) Managerial Employees employees, jurisprudence has extended this
Art. 218 (m). Supervisory employees are those prohibition to confidential employees or
who, in the interest of the employer, those who by reason of their positions or
effectively recommend such managerial nature of work are required to assist or act
actions if the exercise of such authority is not in a fiduciary manner to managerial
merely routinary or clerical in nature but employees and hence, are likewise privy to
requires the use of independent judgment. sensitive and highly confidential records.
[Standard Chartered Bank Employees Union
Art. 251. Supervisory employees shall not be v SCB, 2008]
eligible for membership in a labor Function Test: nomenclature is not
organization of the rank-and-file employees controlling - The mere fact that an employee
but may join, assist or form separate labor is designated manager does not ipso facto
organizations of their own. make him one. Designation should be
reconciled with the actual job description of
(2) Confidential employees the employee. [Paper Indurstries Corp. of the
Those who assist or act in a confidential Philippines. v. Laguesma, 2000]
capacity persons who formulate, determine
and effectuate management policies in the (3) Non-Employees
field of labor relations (Nature of Access Respondents are found not to be employees
Test). of the Company, they are not entitled to the
The two criteria are cumulative, and both constitutional right to join or form a labor
must be met if an employee is to be organization for purposes of collective
considered a confidential employee that bargaining. Citing La Suerte Cigar and
is, Cigarette Factory v. Director of Bureau of
(a) the confidential relationship must exist Labor Relations the court here reiterated,
between the employees and his supervisor, The question of whether employer-
and employee relationship exists is a primordial
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their rights, benefits and welfare. For this conglomeration of companies is a positive
purpose, workers and employers may form proof that a corporation is endowed with a
labor-management councils: Provided, that legal personality DISTINCTLY ITS OWN,
the representatives of the workers in such independent and separate from other
labor-management councils shall be corporations.
elected by at least the majority of all (3) Separate legitimate purposes militate
employees in said establishment. [Art. 261] against treating one corporation as an
adjunct or alter ego of the other.
CBA Coverage (4) The fact that the businesses are related,
When there has been a factual determination by that some of the employees are the same
the Labor Arbiter that the petitioners were persons working in the other company and
regular employees, said employees shall fall the physical plants, offices and facilities are
within the coverage of the bargaining unit and in the same compound are NOT sufficient to
are therefore entitled to CBA benefits as a justify piercing the corporate veil. In Umali
matter of law and contract. [Farley Fulache, et a. vs CA, legal corporate entity is disregarded
v ABS-CBN, 2010] only if it is sought to hold the officers and
stockholders directly liable for a corporate
Effect of Prior Agreement debt or obligation. [Indophil Textile Mills
Prior agreement as to the inclusion or Workers Union v. Calica, 1992; Diatagon
exclusion of workers in a bargaining unit or Labor Federation v. Ople, 1980]
prohibition from forming their own union
agreed upon by the corporation with the Spun-off corporations
previous bargaining representatives can The transformation of companies is a
never bind subsequent federations. [General management prerogative and business
Rubber & Footwear Corp. v BLR, 1987] judgment which the courts cannot look into
Rationale - It is a curtailment of the right to unless it is contrary to law, public policy or
self-organization. During the freedom morals. If, considering the spin-offs, the
period, the parties may not only renew the companies would consequently have their
existing collective bargaining agreement respective and distinctive concerns in terms of
but may also propose and discuss nature of work, wages, hours of work and other
modifications or amendments thereto. conditions of employment. The nature of their
[DLSU v. DLSUEA, 2000] products and scales of business may require
different skills, volumes of work, and working
Corporate Entities conditions which must necessarily be
Two companies having separate juridical commensurate by different compensation
personalities shall NOT be treated as a packages. [San Miguel Union v Confesor, 1996]
single bargaining unit.
Exception: Pervasive Unitary Aspect of TEST TO DETERMINE THE CONSTITUENCY
Management Doctrine - The cross-linking of OF AN APPROPRIATE BARGAINING UNIT
the agencies command, control, and 4 Factors:
communication systems indicate their (1) Will of the Employees (Globe Doctrine)
unitary corporate personality. [Philippine (2). Affinity and unity of employees interest
Scouts Veterans v. Torres] (3) Prior collective bargaining history
Principles in determining whether to establish (4) Employment status [UP v. Ferrer-Calleja,
separate bargaining units 1992]
(1) The existence of a bona fide business
relationship between the 2 companies is not Other factors:
proof of being a single corporate entity, (5) Geography and Location
especially when the services provided by the (6) Policy of avoiding fragmentation of the
other company are merely auxiliary. bargaining unit
(2) The fact that there are as many
bargaining units as there are companies in a (1) Globe Doctrine: Concept
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and to collective bargaining, which could All accompanying documents of the notice
hardly be accomplished if the respondent for voluntary recognition shall be certified
associations membership were to be under oath by the employer representative
broken up into five separate ineffective tiny and president of the recognized labor union.
units. Creating fragmentary units would not The employer may voluntarily recognize the
serve the interest of industrial peace. The representation status of a union in
breaking up of bargaining units into tiny unorganized establishments. In this case,
units will greatly impair their organizational however, the company [SLECC] was not an
value. [Filoil Refinery Corp. v Filoil unorganized establishment when it
Supervisory and Confidential Employees voluntarily recognized SMSLEC as its
Union, 1972] exclusive bargaining representative. Prior
to the voluntary recognition, another union
VOLUNTARY RECOGNITION [CLUP-SLECC] has already filed a petition
Voluntary Recognition refers to the process by for certification election. Thus, the
which a legitimate labor union is recognized by companys voluntary recognition of SMSLEC
the employer as the exclusive bargaining is void. [SLECC v Sec. of Labor, 2009]
representative or agent in a bargaining unit,
reported with the Regional office in accordance CERTIFICATION ELECTION
to Rule VII, Sec 2 of these Rules. [Book V, Rule I,
Certification election is the process of
Sec. 1 (bbb)]
determining, through secret ballot, the sole
and exclusive bargaining agent of the
Requirements
employees in an appropriate bargaining
Substantive Requirements
unit, for purposes of collective bargaining.
(1) Unorganized establishment;
[Book V Rule I Sec. 1 (x)]
(2) Only one union asking for recognition;
(3) The members of the bargaining unit did not The certification election is the best method
object to the projected recognition of the union. of determining the will of the workers on the
[Book V, Rule VII, Sec. 2] crucial question of who shall represent
them in their negotiations with the
Procedural Requirements management for a collective bargaining
agreement that will best protect and
The notice of voluntary recognition shall be
promote their interests. It is essential that
accompanied by the original copy and two
there be no collusion against this objective
(2) duplicate copies of the following
between an unscrupulous management and
documents:
a union covertly supporting it while
(1) A joint statement under oath of voluntary
professing its loyalty to labor, or at least
recognition attesting to the fact of
that the hopes of labor be not frustrated
voluntary recognition
because of its representation by a union
(2) Certificate of posting of the joint
that does not enjoy its approval and
statement of voluntary recognition for
support. It is therefore sound policy that any
fifteen (15) consecutive days in at least
doubt regarding the real representation of
two (2) conspicuous places in the
the workers be resolved in favor of the
establishment or bargaining unit where
holding of the certification election. This is
the union seeks to operate;
preferable to the suppression of the voice of
(3) The approximate number of employees
the workers through the prissy observance
in the bargaining unit, accompanied by
of technical rules that will exalt procedure
the names of those who support the
over substantial justice. [Port Workers Union
voluntary recognition comprising at
of the Philippines v Laguesma, 1992]
least a majority of the members of the
bargaining unit; and Purpose
(4) A statement that the labor union is the The purpose of a certification election is
only legitimate labor organization precisely the ascertainment of the wishes of the
operating within the bargaining unit. majority of the employees in the appropriate
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bargaining unit: to be or not to be represented labor union that has the support and
by a labor organization, and in the affirmative confidence of the majority of the workers
case, by which particular labor organization. and is thus entitled to represent them in
[Reyes v Trajano, 1992] bargaining for the terms and conditions of
their employment. [Port Workers Union v.
Nature of proceeding DOLE, 1992]
It is not litigation, but a mere investigation Thus it should not be circumvented. There
of a non-adversary character. The object of should be no obstacle in conducting the
the proceedings is merely the determination Certification election. [George & Peter Lines,
of proper bargaining units and the Inc. v. Associated Labor Union, 1985]
ascertainment of the will and choice of the
employees in respect of the selection of the Who may vote
bargaining representative. The All employees whether union members or not,
determination of the proceeding does not as long as they belong to the appropriate
entail the entry of remedial orders or bargaining unit can vote.
redress of rights, but culmination solely in
an official designation of bargaining units Who may file a petition for certification election
and an affirmation of the employees (1) Legitimate labor organization (registered w/
expressed choice of bargaining agent. DOLE)
[Young Men Labor Union Stevedores v CIR, (2) Unregistered local chapter with charter
1965] certificate from national union or federation
It is the most democratic and most (3) National union or federation in behalf of its
efficacious/ effective way of determining the local/chapter
will of the bargaining unit. [Samahang (4) Employer (when requested to bargain
Manggagawa sa Permex v Sec. of Labor, collectively and no existing CBA)
1998]
It is a statutory policy. [Belyca Corp. v. Ferrer- Legitimate labor organization
Calleja, 1998] Art. 218 (f). "Legitimate labor organization"
means any labor organization duly registered
Certification Election Union Election with the Department of Labor and
Employment, and includes any branch or local
To determine the To elect union officers thereof.
Exclusive Bargaining
Agent Unregistered local/chapter with charter
All members of the Only union members certificate
appropriate bargaining may vote. Art 240-A, introduced by RA 9481. A duly
unit may vote. registered federation or national union may
directly create a local chapter by issuing a
Certification election is the fairest and most charter certificate indicating the
effective way of determining which labor establishment of the local chapter. The
organization can truly represent the working chapter shall acquire legal personality only for
force. It is a fundamental postulate that the purposes of filing a petition for certification
will of the majority given expression in an election from the date it was issued a charter
honest election with freedom on the part of certificate.
the voters to make their choice, is
controlling. [PLUM Federation of Industrial National union/federation
and Agrarian Workers v Noriel, 1978] Art. 263. In any establishment where there is
Implications no certified bargaining agent, a certification
election shall automatically be conducted by
Technical rules and objections should not
the Med-Arbiter upon filing of a petition by
hamper the correct ascertainment of the
any legitimate labor organization, including a
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certification election. [Port Workers Union v. ground that the rules and regulations or parts
DOLE, 1992] established by the Secretary of Labor for the
conduct of election have been violated.
Validity
Double majority requirement (voters, valid votes) Organized vs. Unorganized Establishment
Art. 262. To have a valid election, at least a Art. 256 Art. 257
majority of all eligible voters in the unit must Organized Unorganized
have cast their votes. The labor union
receiving the majority of the valid votes cast Bargaining Existing, has None
shall be certified as the exclusive bargaining agent one
agent of all the workers in the unit. Petition filed Has to be a No need to be
VERIFIED verified
Discretionary rule petition
If the petition does not comply with the Freedom No petition for Not applicable.
substantial support requirement, the BLR may Period Certification
exercise its discretion in determining whether or election No freedom
not a certification election must be conducted. EXCEPT within period.
(Scout Albano Memorial College v. Noriel, 1978) 60 days before Can file
the expiration petition
Effect of withdrawal of signatures of the collective anytime.
The employees withdrawal from a labor bargaining
union made before the filing of the petition agreement
for certification election is presumed (See Art. 253 &
voluntary, while withdrawal after the filing 253-A)
of such petition is considered to be
involuntary and does not affect the petition. Take note how
[S.S. Ventures International vs. S.S. Ventures SC interpreted
Labor Union, 2008] the term
If performed after the filing of the petition, WITHIN.
the withdrawal is presumed to be
involuntary and that it was procured What is the
through duress, coercion, or for a valuable rationale of
consideration. [Oriental Tin Can Labor Union freedom period
v. Secretary of Labor and Employment, 1998] in Organized
establishments,
Forced Intervenor why is there
The incumbent bargaining agent shall none in
automatically be one of the choices in the unorganized
certification election as forced intervenor. [Book establishments?
V Rule VIII Sec. 7] It has
69 something to
Substantial support not necessary in intervention do with
The requisite written consent representing industrial
substantial support of the workers in the peace
bargaining unit [as required in Art. 256 applies
to petitioners for certification only, and not to Substantial Must be duly NO substantial
motions for intervention. [PAFLU v Calleja, 1989] support rule supported by support rule.
25% of ALL WHY?
Appeal from order of Med-Arbiter holding THE MEMBERS Intention of law 71
certification election OF THE is to bring in
APPROPRIATE the union, to
Art. 265. Appeal to Secretary of Labor on the BARGAINING implement
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outside the so-called freedom period is to that until decided, shall suspend or bar
ensure industrial peace between the proceedings for certification election.
employer and its employees during the If it were a labor organization objecting to
existence of the CBA. [Republic Planters the participation in a certification election of
Bank Union v. Laguesma, 1996] a company-dominated union, as a result of
The premature renewal of a CBA cannot bar which a complaint for an unfair labor
the holding of a certification election by practice case against the employer was
virtue of a bona fide petition filed within the filed, and when the court finds that said
freedom period if the clear intention was to union is employer-dominated in the unfair
frustrate the constitutional right of the labor practice case, the union selected
employees to self-organization. [Associated would be decertified and the whole election
Labor Union v. Calleja, 1989] proceedings would be rendered useless and
What is prohibited is the filing of the nugatory.' There would be an impairment of
petition for certification election outside the the integrity of the collective bargaining
60-day freedom period. The signing of the process if a company-dominated union
authorization to file was merely preparatory were allowed to participate in a certification
to the filing of the PCE, or an exercise of the election. [United CMC Textile Workers Union
right to self-organization. [PICOP Resources v. BLR, 1984]
Inc. v. Ricardo Dequita, 2011]
Certification Election; Other Requirements
Petition for cancellation of union registration Posting of Notice
does not bar certification election Who: Election Officer shall cause the
Certification election can be conducted despite posting
pendency of a petition to cancel the union What: notice of election
registration certificate. For the fact is that at the Where: 2 conspicuous places in company
time the union, whose registration certificate is premises
sought to be cancelled, filed its petition for When: at least 10 days before actual
certification, it still had legal personality to election
perform such act absent an order directing its
cancellation. [Samahan ng mga Manggagawa v Contents of Notice
Laguesma, 1997] (a) Date and Time of election;
(b) Names of all contending unions;
Suspension of Election: Prejudicial Question (c) Description of the bargaining unit
Rule (d) List of eligible and challenged Voters.
Formal charge of ULP against the employer
for establishing a company union triggers The posting of the notice of election, the
suspension. [B.F. Goodrich Phils. Marikina v. information required to be included therein and
B.F. Goodrich Confidential and Salaried the duration of the posting cannot be waived by
Employees Union] the contending unions or the employer. [Book V
Note: The ONLY party who could ask for the Rule IX Sec 6, IRR]
suspension of the CE is the labor union
which filed a complaint for ULP against the Voting List and Voters
employer. The basis of determining voters may be agreed
Rationale - If there is a union dominated by upon by the parties (i.e. the use of payroll).
the company, to which some of the workers [Acoje Workers Union v NAMAWU, 1963]
belong, an election among workers and
employees of the company would not All Employees entitled to vote
reflect the true sentiment and wishes of the All rank-and-file employees in the
said workers and employees because the appropriate bargaining unit. The Code
votes of the members of the dominated makes no distinction as to their
union would not be free. Such charge of employment status. All they need to be
company domination is a prejudicial question
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Art. 247 (h). Every payment of fees, dues or Art. 228 (b). No attorneys fees, negotiation
other contributions by a member shall be fees or similar charges of any kind arising
evidenced by a receipt signed by the officer or from any collective bargaining negotiations or
agent making the collection and entered into conclusion of the collective agreement shall
the record of the organization to be kept and be imposed on individual member of
maintained for the purpose. contracting union. Provided, however, that
attorneys fees may be charged against union
Special assessments payments for a special funds in an amount to be agreed upon by the
purpose, especially if required only for a limited parties. Any contract, agreement or
time. [Azucena] arrangement of any sort to the contrary shall
be null and void.
Art. 247 (n). No special assessment or other
extraordinary fees may be levied upon the General Rule: attorneys fees, negotiation fees,
members of a labor organization unless and similar charges should be charged against
authorized by a written resolution of a the union funds and not as a special
majority of all the members of a general assessment. However, if a special assessment is
membership meeting duly called for the required to pay such fees, then the
purpose. requirements above must be satisfied.
Art. 247 (o). Other than for mandatory Strict compliance for special assessment
activities under the Code, no special There must be strict and full compliance with
assessments, attorneys fees, negotiation fees the requisites. Substantial compliance is not
or any other extraordinary fees may be enough. [Palacol v. Ferrer-Calleja]
checked off from any amount due to an
employee without an individual written Jurisdiction over Check-off disputes
authorization duly signed by the employee. The Bureau of Labor Relations has
The authorization should specifically state the jurisdiction to hear, decide and to mete out
amount, purpose and beneficiary of the punishment any reported violation under
deduction. Article 241
Note: Sec of Labor or his duly authorized
Requirements for validity representative may inquire into financial
(1) Authorization by written resolution of activities of legitimate labor orgs UPON
majority of ALL the members at the general filing of complaint under oath and
membership meeting called for that purpose supported by written consent of at least
(2) Secretarys record of the minutes of the 20% of total membership, Provided, such
meetings attested to by the president. inquiry shall not be conducted during (60)-
(3) Individual written authorization for check-off day freedom period nor within the thirty (30)
duly signed by the employees concerned. days immediately preceding the date of
election of union officials [Art. 274].
Check-off A process or device whereby the
employer, on agreement with the Union, AGENCY FEES
recognized as the proper bargaining Agency fee an amount, equivalent to union
representative, or on prior authorization from dues, which a non-union member pays to the
the employees, deducts union dues or agency union because he benefits from the CBA
fees from the latters wages and remits them negotiated by the union. [Azucena]
directly to the Union. [Marino v Gamilla, 2009]
Rationale for allowing agency fees
Attorneys fees, negotiation fees, and similar Avoiding unjust enrichment on the part of non-
charges union members who benefit from the union's
efforts without paying any fee therefor, unlike
the members of the bargaining agent.
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substandard CBAs as a ground for the A CBA, just like any other contract, is
cancellation of registration of union respected as the law between the
registration. contracting parties and compliance in good
A substandard CBA cannot bar a petition faith is mandated. Similarly, the rules
for certification election under the contract- embodied in the Civil Code [Art. 1700) on
bar rule. the proper interpretation of contracts can
very well govern.
Confidentiality of registered CBA or parts thereof General Rule: If the terms of the contract
are clear, the literal meaning of the
General rule: CBA is not confidential stipulations shall control. 80
Exception: If the words appear to be
Exceptions: contrary to the evident intention of the
(1) confidentiality authorized by Secretary of parties, the latter shall prevail over the
Labor former. [Kimberly Clark Phils. V. Lorredo,
(2) when it is at issue in any judicial litigation 1993]
(3) public interest or national security requires
[Art. 231] Bargaining Procedure: (Book V, Rule XVI)
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(e) Voluntary arbitration. The Board shall exert Art. 233. Information and statements made at
all efforts to settle disputes amicably and conciliation proceedings shall be treated as
encourage the parties to submit their case to a privileged communication and shall not be
voluntary arbitrator. used as evidence in the Commission.
(f) Prohibition against disruptive acts. During the Conciliators and similar officials shall not
conciliation proceedings in the Board, the testify in any court or body regarding any
parties are prohibited from doing any act which matters taken up at conciliation proceedings
may disrupt or impede the early settlement of conducted by them.
the disputes.
Rationale a person is entitled to buy his or
Period to reply; bad faith - The period to her peace without danger of being
reply is merely procedural, and non- prejudiced in case his or her efforts fail
compliance cannot be automatically
offers for compromise are irrelevant
deemed to be an act of ULP. [National
because they are not intended as
Union of Restaurant Workers vs. CIR, 1964]
admissions by the parties making them
The companys refusal to make a counter- [Pentagon Steel v. CA, 2009]
proposal to the unions proposed CBA is an
indication of its bad faith. Where the Mandatory bargainable issues
employer did not even bother to submit an (1) Wages
answer to the bargaining proposals of the (2) Hours of work
union, there is a clear evasion of the duty to (3) All other terms and conditions of
bargain collectively. The employers employment including proposals for adjusting
actuations show a lack of sincere desire to any grievances or questions arising under such
negotiate, rendering it guilty of unfair labor agreement [Art. 252]
practice. [Colegio de San Juan de Letran vs.
Association, 2000] Permissive Issues:
Failure to reply as indicia of bad faith Unilateral benefits extended by the
GMCs failure to make a timely reply to the employer [cf., Union of Filipro Employees-
proposal sent by the union is indicative of its Drug v. Nestle, 2008]
utter lack of interest in bargaining with the A collective bargaining agreement refers to
union. Its excuse that it felt the union no the negotiated contract between a
longer represented the workers was mainly legitimate labor organization and the
dilatory as it turned out to be utterly employer concerning wages, hours of work
baseless. GMCs refusal to make a counter- and all other terms and conditions of
proposal is an indication of its bad faith. employment in a bargaining unit, including
Where the employer did not even bother to mandatory provisions for grievances and
submit an answer to the bargaining arbitration machineries. As in all other
proposals of the union, there is a clear contracts, the parties in a CBA may
evasion of the duty to bargain collectively. establish such stipulations, clauses, terms
It is guilty of ULP. [General Milling Corp. v. and conditions as they may deem
CA, 2004] convenient provided they are not contrary to
law, morals, good customs, public order or
Conciliation / Preventive Mediation Privileged public policy. [Manila Fashions v. NLRC,
communication 1996]
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bargainable issue must have a connection Grievances arising from the interpretation or
between the proposal and the nature of the implementation of the CBA are subjects of
work. the grievance procedure. [Navarro III v.
Importance of determining whether an issue Damasco, 1995]
is a mandatory bargaining issue or only a It should be remembered that a grievance
permissive bargaining issue The question procedure is part of the continuous process
as to what are mandatory and what are of collective bargaining. It is intended to
merely permissive subjects of collective promote a friendly dialogue between labor
bargaining is of significance on the right of a and management as a means of
party to insist on his position to the point of maintaining industrial peace. [Master Iron
stalemate. A party may refuse to enter into Labor Union v. NLRC, 1993]
a collective bargaining contract unless it No particular setup for a grievance
includes a desired provision as to a matter machinery is required by law. Art. 260 of, as
which is a mandatory subject of collective incorporated by R.A. 6715, only mandates
bargaining. But a refusal to contract unless that the parties to the CBA establish a
the agreement covers a matter which is not machinery to settle problems arising from
a mandatory subject is in substance a "interpretation or implementation of their
refusal to bargain about matters which are collective bargaining agreement and those
mandatory subjects of collective bargaining; arising from the interpretation or
and it is no answer to the charge of refusal enforcement of company personnel policies.
to bargain in good faith that the insistence [Caltex Refinery Employees Association v.
on the disputed clause was not the sole Brillantes, 1997]
cause of the failure to agree or that
agreement was not reached with respect to Voluntary arbitration
other disputed clauses.
Such refusal will not be deemed as an Constitutional basis
unfair labor practice. However, if a party The State shall promote the principle of shared
refuses to contract based on an issue which responsibility between workers and employers
is not a mandatory bargainable issue, the and the preferential use of voluntary modes in
party will be guilty of ULP. [Samahang settling disputes, including conciliation, and
Manggagawa sa Top Form v. NLRC, 1998] shall enforce their mutual compliance therewith
to foster industrial peace. [Art. XIII Section 3]
MANDATORY PROVISIONS OF CBA
Automatic referral if grievance machinery fails
Grievance procedure Art. 266. All grievances submitted to the
The parties to a Collective Bargaining
grievance machinery which are not settled
Agreement shall include therein: within 7 calendar days from the date of its
(1) Provisions that will ensure the mutual submission shall automatically be referred to
observance of its terms and conditions. voluntary arbitration prescribed in the CBA.
(2) A machinery for the adjustment and
resolution of grievances arising from:
Voluntary arbitration provision in the CBA
(a) the interpretation or implementation of
(1) Parties to a CBA shall:
their CBA; and
(a) Name and designate in advance a
(b) those arising from the interpretation or
Voluntary Arbitrator or panel of Voluntary
enforcement of company personnel policies.
Arbitrators, OR
(3) All grievances submitted to the grievance
(b) Include in the agreement a procedure for
machinery which are not settled within 7
the selection of such Voluntary Arbitrator or
calendar days from the date of its submission
panel of Voluntary Arbitrators preferably
shall be automatically referred to voluntary
from the listing of qualified Voluntary
arbitration prescribed in the CBA. [Art. 260]
Arbitrators duly accredited by the Board.
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(2) In case the parties fail to select a Voluntary adequate prerogative is aimed at
Arbitrator or panel of Voluntary Arbitrators, the accomplishing the rationale of the law on
Board shall designate the Voluntary Arbitrator voluntary arbitration speedy labor justice.
or panel of Voluntary Arbitrators, as may be [Goya, Inc. vs. Goya, Inc. Employees Union-
necessary, pursuant to the selection Voluntary FFW, 2013]
Arbitrator or panel of Arbitrators procedure
agreed upon in the CBA, which shall act with Powers of the voluntary arbitrators
the same force and effect as if the has been (1) hold hearings
selected by the parties as described above. [Art. (2) receive evidence
260] (3) take whatever action is necessary to resolve
the issue or issues subject of dispute, including
Voluntary arbitration as a condition precedent efforts to effect a voluntary settlement between
The stipulation to refer all future disputes to an parties
arbitrator or to submit an ongoing dispute to (4) determine attendance of any third parties
one is valid. Being part of a contract between (5) determine exclusion of any witness
the parties, it is binding and enforceable in court (6) issue writ of execution for sheriff of NLRC or
in case one of them neglects, fails or refuses to regular courts to execute the final decision,
arbitrate. Going a step further, in the event that order, or award [Art 262-A]
they declare their intention to refer their
differences to arbitration first before taking Finality of the final decision, order, or award
court action, this constitutes a condition Art 268-A. Award or decision of the voluntary
precedent, such that where a suit has been arbitrator shall be final and executory after 10
instituted prematurely, the court shall suspend days from receipt of the copy of the award or
the same and the parties shall be directed decision by the parties.
forthwith to proceed to arbitration. A court
action may likewise be proper where the No motion for reconsideration
arbitrator has not been selected by the parties. The voluntary arbitrator lost jurisdiction over the
[Chung Fu Industries v. CA, 1992] case submitted to him the moment he rendered
his decision. Therefore, he could no longer
Arbitrable issues entertain a motion for reconsideration of the
(1) interpretation or implementation of the CBA decision for its reversal or modification.
[Art. 261) (Solidbank v. BLR)
(2) interpretation or enforcement of company
personnel policies [Art. 261)
(3) gross violations of CBA provision Appeal
(flagrant/malicious refusal to comply with the While there is an express mode of appeal
economic provisions of the CBA [Art. 261) from the decision of a labor arbiter,
(4) all other labor disputes including ULP and Republic Act No. 6715 is silent with respect
bargaining deadlock, if the parties agree [Art. to an appeal from the decision of a
262] voluntary arbitrator.
Assuming arguendo that the voluntary
In general, the arbitrator is expected to arbitrator or the panel of voluntary
decide those questions expressly stated and arbitrators may not strictly be considered as
limited in the submission agreement. a quasi-judicial agency, board or
However, since arbitration is the final resort commission, still both he and the panel are
for the adjudication of disputes, the comprehended within the concept of a
arbitrator can assume that he has the power "quasi-judicial instrumentality." A fortiori,
to make a final settlement. The VA has the decision or award of the voluntary
plenary jurisdiction and authority to arbitrator or panel of arbitrators should
interpret the CBA and to determine the likewise be appealable to the Court of
scope of his or her own authority. Subject to
judicial review, this leeway of authority and
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the expiry date, the new CBA will retroact to provision insofar as the need to await the
the date following the expiry date creation of a new agreement will not apply.
(Illustration: expiry date: December 13; Otherwise, it will create an absurd situation
effectivity date: December 14). where the union members will be forced to
(ii) If the renegotiated CBA is concluded maintain membership by virtue of the union
beyond 6 months from the expiry date, the security clause existing under the CBA and,
matter of retroaction and effectivity is left thereafter, support another union when
with the parties. filing a petition for certification election. If
Art. 253-A serves as the guide in we apply it, there will always be an issue of
determining when the CBA at bar is to take disloyalty whenever the employees exercise
effect. It provides that the representation their right to self-organization. The holding
aspect of the CBA is to be for a term of 5 of a certification election is a statutory policy
years. All other provisions of the CBA shall that should not be circumvented, or
be renegotiated not later than 3 years after compromised. [PICOP Resources, Inc. v.
its execution. Any agreement on such other Taneca et al., 2010]
provision of the CBA entered into within 6
months from the date of expiry of the term Arbitrated CBA
of such other provisions as fixed in such In the absence of an agreement between
Collective Bargaining Agreement shall the parties, an arbitrated CBA takes on the
retroact to the day immediately following nature of any judicial or quasi-judicial
such date. If such agreement is entered into award. It operates and may be executed
beyond 6 months, the parties shall agree on only prospectively unless there are legal
the duration of the effectivity thereof. If no justifications for its retroactive application.
agreement is reached within 6 months from [Manila Electric Company vs. Quisumbing,
the expiry date of the 3 years that follow the 1999]
CBA execution, the law expressly gives the CBA in this case, on the other hand, is part
parties not anybody else the discretion of an arbitral award. As such, it may be
to fix the effectivity of the agreement. The made retroactive to the date of expiration of
law does not specifically cover the situation the previous agreement. Therefore, in the
where 6 months have elapsed but no absence of a specific provision of law
agreement has been reached with respect prohibiting retroactivity of the effectivity of
to effectivity. In this eventuality, any arbitral awards issued by the Secretary of
provision of law should then apply. [Manila Labor pursuant to Art. 263(g), the latter is
Electric Co. v. Quisumbing, 1999] deemed vested with plenary and
discretionary powers to determine the
Hold Over Principle effectivity thereof. [Manila Central Line Corp.
v. Manila Central Line Free Workers Union,
Art. 259. In the absence of a new CBA, the
1998]
parties must maintain the status quo and
must continue in full force and effect the CBA and 3rd Party Applicability
terms and conditions of the existing
Labor contracts such as employment
agreement during the sixty (60) day period
contracts and CBAs are not enforceable
and/or until a new agreement is reached.
against a transferee of an enterprise, labor
contracts being in personam, is binding only
The last sentence of Article 253, which between the parties. As a general rule, there
provides for automatic renewal pertains is no law requiring a bona fide purchaser of
only to the economic provisions of the CBA, the assets of an on-going concern to absorb
and does not include representational in its employ the employees of the latter.
aspect of the CBA. An existing CBA cannot However, although the purchaser of the
constitute a bar to a filing of petition for assets or enterprise is not legally bound to
certification election. When there is a absorb in its employ the employees of the
representational issue, the status quo seller of such assets or enterprise, the
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maintain union membership as a condition collectively, making it liable for unfair labor
for continued employment until they are practice. [GMC v. CA, 2004]
promoted or transferred out of the
bargaining unit or the agreement is REFUSAL TO BARGAIN
terminated. [GMC v. Casio, 2010] Implied refusal. The school is guilty of unfair
No employee is compelled to join the union, labor practice when it failed to make a timely
but all present or future must, as a reply to the proposals of the union more than
condition of employment, remain in good one month after the same were submitted by
standing in the union. [Azucena] the union. In explaining its failure to reply, the
school merely offered a feeble excuse that its
Board of Trustees had not yet convened to
Union shop discuss the matter. Clearly, its actuation showed
There is union shop when all new regular a lack of sincere desire to negotiate. [Colegio de
employees are required to join the union San Juan de Letran v. Association, 2000]
within a certain period as a condition for
their continued employment. [GMC v. Casio, INDIVIDUAL BARGAINING
2010] It is an unfair labor practice for an employer
Non-members may be hired, but to retain operating under a CBA to negotiate with his
employment, they must become union employees individually. That constitutes
members after a certain period. The interference because the company is still
requirement applies to present and future under obligation to bargain with the union
employees. [Azucena] as the bargaining representative.
Individual bargaining contemplates a
Modified union shop Employees who are not situation where the employer bargains with
union members at the time of signing the the union through the employees instead of
contract need not join the union, but all hired the employees through the union. [The
workers thereafter must join. [Azucena] Insular Life Assurance Co. Ltd., Employees
Assn. v. Insular Life Assurance Co. Ltd, 1971]
Agency shop An agreement whereby
employees must either join the union or pay to BLUE SKY BARGAINING
the union as exclusive bargaining agent a sum Blue-Sky Bargaining is defined as "unrealistic
equal to that paid by the members. [Azucena] and unreasonable demands in negotiations by
either or both labor and management, where
UNFAIR LABOR PRACTICE IN neither concedes anything and demands the
COLLECTIVE BARGAINING impossible." It actually is not collective
Unfair Labor Practice in collective bargaining bargaining at all. [Harold S. Roberts, Roberts
Both employers and labor organizations can Dictionary of Industrial Relations (Revised
commit acts of unfair labor practices in Edition, 1971, p. 51) footnote in (Standard Bank
collective bargaining. However, the labor Chartered Employees Union v. Confesor, 2004)]
organization must be the representative of the
employees before any act it does may be SURFACE BARGAINING
considered as a violation of the duty to bargain Surface bargaining is defined as "going through
collectively. [Art. 248 (g) and Art. 249 (c)] the motions of negotiating," without any real
intent to reach an agreement. It violates the
BARGAINING IN BAD FAITH Act's requirement that parties negotiate in
GMCs refusal to make a counter-proposal to "good faith." It is prohibited because, as one
the unions proposal for CBA negotiation on the commentator explained: The bargaining status
excuse that it felt the union no longer of a union can be destroyed by going through
represented the workers is an indication of bad the motions of negotiating almost as easily as
faith. xxx Failing to comply with the mandatory by bluntly withholding recognition As long as
obligation to submit a reply to the unions there are unions weak enough to be talked to
proposals, GMC violated its duty to bargain death, there will be employers who are tempted
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speech. [Insular Life Assurance Co. Example: giving out financial aid to any
Employees Assn. v. Insular Life Assurance union's supporters or organizers.
Co. Ltd, 1971]
(5) Discrimination Encourage/Discourage
Espionage Unionism
Espionage and/or surveillance by the employer General rule: it is ULP to discriminate in
of union activities are instances of interference, regard to wages, hours of work and other
restraint or coercion of employees in connection terms and conditions of employment in
with their right to organize, form and join unions order to encourage or discourage
as to constitute unfair labor practice. xxx The membership in any labor organization.
information obtained by means of espionage is Exception (union security clause): Nothing in
invaluable to the employer and can be used in a this Code or in any other law shall stop the
variety of cases to break a union. [Insular Life parties from requiring membership in a
Assurance Co. Employees Assn. v. Insular Life recognized collective bargaining agent as a
Assurance Co. Ltd, 1971] condition for employment.
Exception to exception: Those employees
(2) Yellow dog contracts who are already members of another union
Yellow dog contracts require as a condition at the time of the signing of the collective
of employment that a person or an bargaining agreement. [Art. 254 (e)]
employee shall not join a labor organization
or shall withdraw from one to which he (6) Testimony
belongs.
Art. 254 (f). It is an act of ULP by an employer
Examples to dismiss, discharge or otherwise prejudice or
(1) a representation by the employee that he discriminate against an employee for having
is not a member of a labor organization given or being about to give testimony under
(2) a promise by the employee that he will this Code.
not join a union
(3) a promise by the employee that upon (7) Violate duty to bargain collectively
joining a labor organization, he will quit his Duty to bargain collectively is a continuous
employment process, non-compliance constitutes ULP.
Collective bargaining does not end with the
(3) Contracting out execution of an agreement, being a continuous
General rule: contracting out is not ULP process, the duty to bargain necessarily
imposing on the parties the obligation to live up
Exception: to the terms of such a collective bargaining
(1) contracted-out services or functions are agreement if entered into, it is undeniable that
performed by union members AND non-compliance therewith constitutes an unfair
(2) contracting out will interfere with, restrain, or labor practice. [Shell Oil Workers Union v Shell
coerce employees in the exercise of their right to Co., 1971]
self-organization. [Art. 248 (c)]
(8) Payment of negotiation or attorney's fees
(4) Company union Sweetheart contracts
Company union means any labor Sweetheart contracts are favorable both to the
organization whose formation, function or union and the employer at the expense of the
administration has been assisted by any act employees. The settlement of bargaining issues
defined as unfair labor practice by this must be made by fair bargaining in good faith,
Code. [Art. 212[i]) and not through the payment of negotiation or
The employer commits ULP if it initiates, attorney's fees which will ultimately lead to
dominates, or otherwise interferes with the sweetheart contracts.
formation or administration of any labor
organization. (9) To violate a collective bargaining agreement
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Exception: provisions of a valid union security Right to self-organization includes the right to
clause and other company policies applicable to engage in lawful concerted activities and may
all employees. not be abridged
Art. 252. It shall be unlawful for any person to
(3) Violate duty to bargain or the CBA restrain, coerce, discriminate against or
Please refer to part B.4 for some examples. unduly interfere with employees and workers
in their exercise of the right to self-
(4) Exaction (Featherbedding) organization. Such right shall include the
Featherbedding or make-work by the union is right to form, join, or assist labor
the practice of the union asking (exacting) for organizations for the purpose of collective
money or other things of value from the bargaining through representatives of their
employer in return for services which are not own choosing and to engage in lawful
performed or are not to be performed. concerted activities for the same purpose or
for their mutual aid and protection, subject to
(5) Asking or accepting negotiation and other the provisions of Article 264 of this Code.
attorney's fees
See counterpart in ULP by employers (sweetheart Concerted activities must be in accordance with
contracts). law
(6) Violate a collective bargaining agreement
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The strike is a powerful weapon of the working General rule: Striking employees are not entitled
class. Precisely because of this, it must be to the payment of wages for un-worked days
handled carefully, like a sensitive explosive, lest during the period of the strike pursuant to the
it blow up in the workers own hands. Thus, it no work-no pay principle.
must be declared only after the most thoughtful
consultation among them, conducted in the Exception: Agreement to the contrary.
only way allowed, that is, peacefully, and in
every case conformably to reasonable Reinstatement after a lawful strike
regulation. Any violation of the legal When strikers abandon the strike and apply
requirements and strictures will render the for reinstatement despite the existence of
strike illegal, to the detriment of the very valid grounds but the employer either:
workers it is supposed to protect. [Batangas (1) refuses to reinstate them or
Laguna Tayabas Bus Co. v NLRC, G.R. No. (2) imposes upon their reinstatement new
101858, 1992] conditions
then the employer commits an act of ULP.
Forms of concerted activities The strikers who refuse to accept the new
(1) Strike conditions and are consequently refused
(2) Picketing reinstatement are entitled to the losses of
Employer's economic weapon: Lockout pay they may have suffered by reason of the
employers discriminatory acts from the
(1) Strike time they were refused reinstatement.
Art. 218 (o). A strike is any temporary stoppage
of work by the concerted action of employees Forms of strikes
as a result of an industrial or labor dispute. As to legality
(1) Legal strike one called for a valid purpose
Strikes not limited to work stoppages and conducted through means allowed by law.
The term strike shall comprise not only (2) Illegal strike one staged for a purpose not
concerted work stoppages, but also slowdowns, recognized by law, or if for a valid purpose,
mass leaves, sit-downs, attempts to damage, conducted through means not sanctioned by
destroy or sabotage plant equipment and law.
facilities, and similar activities. (Samahang
Manggagawa v. Sulpicio Lines, 2004) As to grounds
(1) Economic strike one staged by workers to
As coercive measure by employees force wage or other economic concessions from
A strike is a coercive measure resorted to by the employer which he is not required by law to
laborers to enforce their demands. The idea grant [Consolidated Labor Association of the
behind a strike is that a company engaged in a Phil. v. Marsman and Company 1964]
profitable business cannot afford to have its
production or activities interrupted, much less, (2) ULP strike called against a company's
paralyzed. [Phil. Can Co. v. CIR, 1950] unfair labor practice to force the employer to
desist from committing such practices.
No severance of employer-employee relationship
during lawful strike As to how committed
Although during a strike the worker renders no (1) Slowdown strike one by which workers,
work or service and receives no compensation, without a complete stoppage of work, retard
yet his relationship as an employee with his production or their performance of duties and
employer is not severed or dissolved. [Elizalde functions to compel management to grant their
Rope Factory, Inc. v. SSS, 1972] demands.
Payment of wages during lawful strikes A slowdown is inherently illicit and unjustifiable
because while the employees continue to work,
they, at the same time, select what part of their
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duties they perform. In essence, they work on Picketing is the right of workers to peacefully
their own terms. [Ilaw at Buklod ng march to and fro before an establishment
Manggagawa v. NLRC, 1991] involved in a labor dispute generally
accompanied by the carrying and display of
(2) Wild-cat strike one declared and staged signs, placards and banners intended to inform
without filing the required notice of strike and the public about the dispute. [NCMB Manual,
without the majority approval of the recognized Sec. 1]
bargaining agent.
WHO MAY DECLARE A STRIKE OR
(3) Sit-down strike one wherein workers take LOCKOUT
over possession of the property of such business
to cease production and to refuse access to Who may declare a strike (Book V, Rule XXII, Sec.
owners. 6)
(1) certified or duly recognized bargaining
(4) Sympathetic strike one in which the striking representative
workers have no demands of their own, but (2) any legitimate labor organization in the
strike to make common cause with other strikers absence of #1, but only on grounds of ULP
in other establishments.
Who may declare a lockout (Book V, Rule XXII,
Conversion from economic to ULP strike Sec. 6)
It is possible for a strike to change its character (1) employer
from an economic to a ULP strike. In the instant
case, initially, the strike staged by the Union was
meant to compel the Company to grant it
REQUISITES FOR A VALID STRIKE
A valid strike must have a lawful ground and
certain economic benefits set forth in its
must conform to the procedural requirements
proposal for collective bargaining. However, the
set by law.
strike changed its character from the time the
Company refused to reinstate complainants
Substantial Requirements/Grounds [Art. 263 [c])
because of their union activities after it had
A strike or lockout may be declared in cases of:
offered to admit all the strikers and in fact did
(a) Bargaining deadlocks
readmit the others. It was then converted into
(b) ULP
an unfair labor practice strike. [Consolidated
Labor Assoc. of the Phil. v. Marsman and
When violations of collective bargaining
Company, 1964]
strikeable as ULP
Strike cannot be converted to a lockout by a Violations of collective bargaining agreements
must be flagrant and/or there must be
return to work offer
malicious refusal to comply with its economic
A strike cannot be converted into a pure and
provisions.
simple lockout by the mere expedient filing
before the trial court a notice of offer to return
When no lawful strike can be declared
to work during the pendency of the labor
(1) Ground is an inter-union or intra-union
dispute between the union and the employer.
dispute
[Rizal Cement Workers Union v. CIR, 1962]
(2) No notice of strike
(3) No lock-out vote obtained and reported to
(2) Picketing
the NCMB
Art 269 (b). The right of legitimate labor (4) After assumption or certification by the
organizations to strike and picket and of Secretary of Labor
employers to lockout, consistent with the
national interest, shall continue to be Procedural requirements
recognized and respected. (a) Effort to bargain
(b) Filing and service of notice of strike
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(c) Observance of cooling-off period (d) Proof of a request for conference to settle
(d) Strike vote the differences.
(e) Strike vote report
(f) Observance of the waiting period In cases of ULP:
(a) Statement of Acts complained of
(a) Effort to bargain (b) Efforts taken to resolve the dispute amicably.
Art. 270 (a). No labor organization or
employer shall declare a strike or lockout Action on notice [Book V Rule XXII Sec. 9]
without first having bargained collectively in Upon receipt of a valid notice of strike or
accordance with Title VII of this Book. lockout, the NCMB, through its Conciliator-
Mediators, shall call the parties to a
(b) Filing and service of notice of strike conference the soonest possible time in
Bargaining deadlocks order to actively assist them to explore all
possibilities for amicable settlement.
Art. 269(c). The duly certified or recognized The Conciliator-Mediator may suggest/offer
bargaining agent may file a notice of strike or proposals as an alternative avenue for the
the employer may file a notice of lockout with resolution of their disagreement/conflict
the Department at least 30 days before the which may not necessarily bind the parties.
intended date thereof.
If conciliation/mediation fails, the parties
shall be encouraged to submit their dispute
Unfair labor practice; union busting
for voluntary arbitration.
Art. 269 (c). In cases of unfair labor practice,
the period to file notice of strike shall be 15 (c) Observance of cooling-off periods
days. However, in cases of union busting Cooling off periods
(dismissal of duly elected union officers from bargaining deadlock 30 days
employment), the cooling period shall not ULP but not union busting 15 days
apply. ULP and union busting no cooling-off
period
Note: the notice must be served to the
employer. Failure to do so will constitute Purpose of cooling-off period
noncompliance with the procedural
requirements and will result to an illegal strike. Art. 269 (e). During the cooling-off period, it
Rationale: due process. (IRR) shall be the duty of the Ministry to exert all
efforts at mediation and conciliation to effect
Contents of notice of strike (Book V Rule XXII a voluntary settlement. Should the dispute
Sec. 8) remain unsettled until the lapse of the
(a) Names and addresses of the employer and requisite number of days from the mandatory
the union involved filing of the notice, the labor union may strike
(b) Nature of the industry to which the employer or the employer may declare a lockout.
belongs
(c) Number of union members and of workers in The purpose of the cooling-off period is to
the bargaining unit provide an opportunity for mediation and
(d) Such other relevant data as may facilitate conciliation. [National Federation of Sugar
the settlement of the dispute. Workers v. Ovejera, 1982]
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Art. 269 (c). In cases of unfair labor practice, Art. 269 (f). A decision to declare a lockout
the period of notice shall be 15 days. must be approved by a majority of the board
of directors of the corporation or association
Note: the notice must be served to the or of the partners in a partnership, obtained
employees through the representative union. by secret ballot in a meeting called for that
purpose.
Contents of notice
(a) Names and addresses of the employer and The decision shall be valid for the duration of
the union involved the dispute based on substantially the same
(b) Nature of the industry to which the employer grounds considered when the strike or lockout
belongs vote was taken.
(c) Number of union members and of workers in
the bargaining unit (e) Report of lockout vote
(d) Such other relevant data as may facilitate Art. 269 (f). In every case, the union or the
the settlement of the dispute. employer shall furnish the Ministry the results
of the voting at least seven days before the
Additional Requirements intended strike or lockout, subject to the
In cases of bargaining deadlocks cooling-off period herein provided.
(a) Statement of unresolved issues in the
bargaining negotiations (f) Observance of waiting period (7 days)
(b) Written proposals of the union See notes under strike.
(c) Counterproposals of the employer
(d) Proof of a request for conference to settle Effect of Illegal Lockout
the differences.
Art. 270 (a), par. 3, 1st sentence. Any worker
In cases of ULP whose employment has been terminated as a
(a) Statement of acts complained of consequence of any unlawful lockout shall be
(b) Efforts taken to resolve the dispute amicably. entitled to reinstatement with full backwages.
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Union officers who participated in illegal vote, strike vote report). [Grand Boulevard
strike deemed to have lost their Hotel v. GLOWHRAIN, 2003]
employment Good faith strike requires rational basis A
Union officers who participated in illegal acts mere claim of good faith would not justify
during a lawful strike deemed to have lost the holding of a strike under the aforesaid
their employment. exception as, in addition thereto, the
Ordinary workers deemed to have lost circumstances must have warranted such
their employment only if they participated in belief. It is, therefore, not enough that the
illegal acts. union believed that the employer
committed acts of ULP when the
Stricter penalties for non-compliance with circumstances clearly negate even a prima
orders, prohibitions, and/or injunctions issued by facie showing to sustain such belief.
the Secretary of Labor in strikes involving (Interwood Employees Assoc. v. Intl
hospitals, clinics, and similar medical institutions Hardwood, 1956)
(1) immediate disciplinary action against both
union and employer (3) Noncompliance with procedural
(2) dismissal/loss of employment for members requirements
of the striking union See notes under procedural requirements of a
(3) payment by employer of backwages, valid strike.
damages, and other affirmative relief
(4) criminal prosecution against either or both A strike which does not strictly comply with the
the union and employer procedural requirements set by law and the
rules is an unlawful/illegal strike.
ILLEGAL STRIKE
Reasons for being illegal Good faith strike must still comply with
(1) Prohibited by law procedural requirements
(2) Improper grounds Even if the union acted in good faith in the belief
(3) Noncompliance with procedural that the company was committing an unfair
requirements labor practice, if no notice of strike and a strike
(4) Unlawful means and methods vote were conducted, the said strike is illegal.
(5) Violation of injunction order [Grand Boulevard Hotel v. GLOWHRAIN, 2003]
(6) No strike/lockout provisions in the CBA
(4) Unlawful means and methods
(1) Prohibited by law
Government employees. While the Constitution Purpose and means test
guarantees the right of government employees There must be concurrence between the
to organize, they are otherwise not allowed to validity of the purpose of the strike and the
strike. means of conducting it.
A strike is a legitimate weapon in the
(2) Improper grounds universal struggle for existence. It is
A legal strike must be based on a considered as the most effective weapon in
bargaining deadlock and/or a ULP act only. protecting the rights of the employees to
Intra-union and inter-union disputes are not improve the terms and conditions of their
proper grounds to strike. employment. But to be valid, a strike must
be pursued within legal bounds. The right to
Good faith strike - Good faith may be used
strike as a means for the attainment of
as a defense if the strike is held on the basis
social justice is never meant to oppress or
of an act of ULP by the employer even if it
destroy the employer. The law provides limits
turned out that there was no act of ULP.
for its exercise. Among such limits are the
However, the mandatory procedural
prohibited activities under Art. 264,
requirements cannot be dispensed with
particularly paragraph (e), which states that
(notice of strike, cooling-off period, strike
no person engaged in picketing shall:
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(1) commit any act of violence, coercion, or that individual liability be incurred by those
intimidation or guilty of such acts of violence that call for loss of
(2) obstruct the free ingress to or egress employee status. Such an approach is reflected
from the employer's premises for lawful in our recent decisions. [Shell Oil Workers Union
purposes or v. Shell Co. of the Phils, 1971]
(3) obstruct public thoroughfares.
[Association of Independent Unions in the (5) Violation of injunction order
Philippines (AIUP), et. al. v NLRC, 1999] An automatic injunction under Article 263 (g) or
a valid injunction order under the exceptions to
A legal strike may turn into an illegal strike Article 254 must be complied with. Otherwise,
Even if the strike is valid because its objective or the strike becomes illegal.
purpose is lawful, the strike may still be
declared invalid where the means employed are (6) No strike/lockout provisions in the CBA
illegal. [Phil. Diamond Hotel and Resort, Inc. v. A no strike, no lock-out is a valid provision in
Manila Diamond Hotel Employees Union, 2006] the CBA. However, it only applies to economic
provisions. It cannot prevent a strike which is
Examples of unlawful means and methods grounded on unfair labor practice. [Malayang
(1) Acts of violence and terrorism Samahan ng mga Manggagawa sa Greenfield v.
(2) Destruction of property Ramos, 2000]
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Any worker whose employment has been staged by the respondent and defend the
terminated as a consequence of any unlawful validity of its termination of the
lockout shall be entitled to reinstatement with employment of the members of the
full backwages. respondent who staged a strike. It must be
underscored that a waiver to be valid and
WAIVER OF ILLEGALITY OF STRIKE effective must be couched in clear and
When defense of illegality of strike is deemed unequivocal terms which leave no doubt as
waived to the intention of a party to give up a right
In this case, the Company alleged that the strike or benefit which legally pertains to him.
was illegal as the notice of intention to strike [Filcon Manufacturing Corp v. Lakas
was not sent directly to it. However, it reinstated Manggagawa sa Filcon-Lakas Manggagawa
its striking workers who expressed their desire to Labor Center]
return to work. On the illegality of the strike, the
Court declared: INJUNCTIONS
xxx it is claimed that the strike was
illegal. Admitting for the sake of argument that General rule: injunction prohibited
the strike was illegal for being premature, this
Art. 260. No temporary or permanent
defense was waived by the Bisaya Land
injunction or restraining order in any case
Transportation Company, when it voluntarily
involving or growing out of labor disputes
agreed to reinstate the radio operators. [Bisaya
shall be issued by any court or other entity,
Land Transportation Co., Inc. v. CIR, 1957]
except as otherwise provided in Articles 218
and 264 of this Code.
When defense of illegality of strike is not deemed
waived
REQUISITES FOR LABOR INJUNCTIONS
The ruling cited in the Bisaya case that the
General Rule: is that injunctions are prohibited
employer waives his defense of illegality of
in labor disputes. The exceptions are provided in
the strike upon reinstatement of strikers is
Art. 224 (Powers of NLRC) in connection with
applicable only to strikers who signified
Art. 270 (Prohibited Activities) of the Labor
their intention to return to work and were
Code.
accepted back xxx
Truly, it is more logical and reasonable for Requisites for injunction to issue [Art. 224(e)
condonation to apply only to strikers who Powers of the NLRC]
signified their intention to return and did (a) actual or threatened commission of a
return to work. The reason is obvious. These prohibited or unlawful act OR requirement of
strikers took the initiative in normalizing performance of a particular act in a labor
relations with their employer and thus dispute
helped promote industrial peace. However, (b) if unrestrained or unperformed, the act will
as regards the strikers who decided to cause grave or irreparable damage to any party
pursue with the case, as in the case of the OR render ineffectual any decision in favor of
114 strikers herein, the employer could not such party
be deemed to have condoned their strike,
because they had not shown any willingness Prohibited activities [Art. 270)
to normalize relations with it. [Philippine (a) No labor organization or employer shall
Inter-Fashion, Inc. v. NLRC, 1982] declare a strike or lockout without first having
Considering the terms of the compromise bargained collectively in accordance with Title
agreement (the parties merely agreed to VII of this Book or without first having filed the
maintain the status quo before the notice required in the preceding Article or
commencement of the complaints filed by without the necessary strike or lockout vote first
them without prejudice to the resolution by having been obtained and reported to the
the Labor Arbiter), it cannot thereby be Ministry.
concluded that the petitioner waived its
right to assail the illegality of the strike
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No strike or lockout shall be declared after intimidation or obstruct the free ingress to or
assumption of jurisdiction by the President or egress from the employers premises for lawful
the Minister or after certification or submission purposes, or obstruct public thoroughfares.
of the dispute to compulsory or voluntary
arbitration or during the pendency of cases INNOCENT BYSTANDER RULE
involving the same grounds for the strike or An innocent by-stander is entitled to
lockout. injunction if it is affected by the activities of
a picketing union where no connection or
Any worker whose employment has been interest exists between the union and the
terminated as a consequence of any unlawful innocent by-stander.
lockout shall be entitled to reinstatement with The right [to picket] may be regulated at the
full backwages. Any union officer who knowingly instance of third parties or `innocent
participates in an illegal strike and any worker bystanders' if it appears that the inevitable
or union officer who knowingly participates in result of its exercise is to create an
the commission of illegal acts during a strike impression that a labor dispute with which
may be declared to have lost his employment they have no connection or interest exists
status: Provided, That mere participation of a between them and the picketing union or
worker in a lawful strike shall not constitute constitute an invasion of their rights.
sufficient ground for termination of his (Liwayway Publishing v. Permanent Concrete
employment, even if a replacement had been Worker's Union, 1981)
hired by the employer during such lawful strike.
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had received. [Garcia v. Philippine Airlines, Inc., (4) If serious errors in the findings of fact are
G.R. No.164856, 2009] raised which, if not corrected, would cause
grave or irreparable injury to the appellant
Requirements to perfect appeal to NLRC
(a) The appeal should be filed within the It is clear from the NLRC Rules of Procedure
reglementary period; that appeals must be verified and certified
(b) The Memorandum of Appeal should be against forum-shopping by the parties-in-
under oath; interest themselves. The purpose of verification
(c) The appeal fee should be paid; is to secure an assurance that the allegations in
(d) There should be posting of cash or surety the pleading are true and correct and have been
bond, if judgment involves monetary award; and filed in good faith. [Antonio B. Salenga, et al. v.
(e) There should be proof of service to the CA, 2012]
adverse party.
EFFECT OF NLRC REVERSAL OF
NATIONAL LABOR RELATIONS LABOR ARBITR DECISION
COMMISSION (NLRC) Even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is
JURISDICTION obligatory on the part of the employer to
reinstate and pay the wages of the
NLRC divisions dismissed employee during the period of
(a) Original Jurisdiction: Over petitions for appeal until reversal by the higher court.
injunction or temporary restraining order under On the other hand, if the employee has
Art. 218 (e). been reinstated during the appeal period
(b) Exclusive Appellate Jurisdiction: over all and such reinstatement order is reversed
cases decided by labor arbiters (Art 217[b]) and with finality, the employee is not required to
the DOLE regional directors under Art 129. reimburse whatever salary he received for
he is entitled to such, more so if he actually
Period of Appeal (2005 NLRC Rules of rendered services during the period. [Garcia
Procedure) v. Philippine Airlines, Inc., G.R. No.164856,
2009]
From Labor Arbiter to NLRC: Decisions and
resolutions of the Labor Arbiter shall be
final and executory unless appealed to the REMEDIES
Commission by any or both parties within Requisites for Perfection of Appeal to the Court
(10) calendar days from receipt thereof of Appeals (Rule 43)
From Regional Director to NLRC pursuant to (1) The appeal shall be:
Art. 129: Decisions and resolutions of the Filed within the reglementary period;
Regional Director shall be final and Verified by the appellant himself in
executory unless appealed within 5 days accordance with Section 4, Rule 7 of the
from receipt thereof. Rules of Court;
Note: If the 5th or 10th day falls on a In the form of a memorandum of appeal
Saturday, Sunday, or a holiday, the last day which shall state the grounds relied upon
shall be the next working day. and the arguments in support thereof, the
relief prayed for, and with a statement of
Grounds of Appeal the date the appellant received the
(1) If there is prima facie evidence of abuse of appealed decision, resolution or order;
discretion on the part of the Labor Arbiter or In three (3) legibly typewritten or printed
Regional Director; copies; and
(2) If the decision, resolution or order was Accompanied by (a) proof of payment of
secured through fraud or coercion, including the required appeal fee; (b) posting of a
graft and corruption; cash or surety bond as provided in Section
(3) If made purely on questions of law; and/or 6 of the 2005 NLRC Rules, (c) a certificate
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of non-forum shopping; and (d) proof of that its action would not only serve the interests
service upon the other parties. of the parties alone, but would also have
(2) A mere notice of appeal without complying favorable implications to the community and to
with the other requisites aforestated shall not the economy as a whole. This is the clear
stop the running of the period for perfecting an intention of the legislative body in enacting Art.
appeal. 263 paragraph (g) of the Labor Code, as
(3) The appellee may file with the Regional amended by Section 27 of R.A. 6175 [Union of
Arbitration Branch or Regional Office where the Filipino Employees v. NLRC, 1990]
appeal was filed, his answer or reply to
appellants memorandum of appeal, not later Effects of Certification
than 10 calendar days from receipt thereof. (1) Upon certification, the intended or
Failure on the part of the appellee who was impending strike or lockout is automatically
properly furnished with a copy of the appeal to enjoined, notwithstanding the filing of any
file his answer or reply within the said period motion for reconsideration of the
may be construed as a waiver on his part to file certification order nor the non-resolution of
the same. any such motion which may have been duly
(4) Subject to the provisions of Article 218 of the submitted to the Office of the Secretary of
Labor Code, once the appeal is perfected in Labor and Employment.
accordance with these Rules, the Commission (2) If a work stoppage has already taken place
shall limit itself to reviewing and deciding only at the time of the certification, all striking or
the specific issues that were elevated on appeal. locked out employees shall immediately
return to work and the employer shall
CERTIFIED CASES immediately resume operations and
Certified labor disputes are cases certified to readmit all workers under the same terms
the Commission for compulsory arbitration and conditions prevailing before the strike
under Art. 263 (g) of the Labor Code. [Sec. or lockout.
2, The 2011 NLRC Rules and Procedures] (3) All cases between the same parties, except
When, in his opinion, there exists a labor where the certification order specifies
dispute causing or likely to cause a strike or otherwise the issues submitted for
lockout in an industry indispensable to the arbitration which are already filed or may be
national interest, the Secretary of Labor and filed, and are relevant to or are proper
Employment may assume jurisdiction over incidents of the certified case, shall be
the dispute and decide it or certify the same considered subsumed or absorbed by the
to the Commission for compulsory certified case, and shall be decided by the
arbitration. Such assumption or certification appropriate Division of the Commission.
shall have the effect of automatically (4) The parties to a certified case, under pain of
enjoining the intended or impending strike contempt, shall inform their counsels and
or lockout as specified in the assumption or the Division concerned of all cases pending
certification order. [Art. 263] with the Regional Arbitration Branches and
the Voluntary Arbitrators relative or incident
Function of the NLRC to the certified case before it.
When sitting in a compulsory arbitration (5) When a certified labor dispute involves a
certified to by the Secretary of Labor, the NLRC business entity with several workplaces
is not sitting as a judicial court but as an located in different regions, the Division
administrative body charged with the duty to having territorial jurisdiction over the
implement the order of the Secretary. Its principal office of the company shall acquire
function only is to formulate the terms and jurisdiction to decide such labor dispute;
conditions of the CBA and cannot go beyond unless the certification order provides
the scope of the order. Moreover, the otherwise. [Section 3, 2011 NLRC Rules and
Commission is further tasked to act within the Procedures]
earliest time possible and with the end in view
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Procedure in certified cases The Bureau shall have fifteen (15) calendar
(a) When there is no need to conduct a days to act on labor cases before it, subject to
clarificatory hearing, the Commission shall extension by agreement of the parties.
resolve all certified cases within 30 calendar
days from receipt by the assigned Appellate Jurisdiction
Commissioner of the complete records, which (1) BLR has the power to review the decision of
shall include the position papers of the parties the Regional Director
and the order of the SOLE denying the motion (2) Decisions rendered through its appellate
for reconsideration of the certification order, if power are final and executory. Hence, the
any. remedy of the aggrieved party is to seasonably
(b) Where a clarificatory hearing is needed, the avail of the special civil action of certiorari under
Commission shall, within 5 calendar days from Rule 65 of the Rules of Court.
receipt of the records, issue a notice to be
served on the parties through the fastest means
available, requiring them to appear and submit NATIONAL CONCILIATION AND
additional evidence, if any. All certified cases MEDIATION BOARD
shall be resolved by the Commission within 60
calendar days from receipt of the complete NATURE OF PROCEEDINGS
records by the assigned Commissioner. Conciliation and mediation is non-litigious/non-
(c) No motion for extension or postponement adversarial, less expensive, and expeditious.
shall be entertained. [Sec. 5, 2011 NLRC Rules Under this informal set-up, the parties find it
and Procedures] more expedient to fully ventilate their respective
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from the date of submission of the dispute to such incidental reliefs as law and justice may
voluntary arbitration. require.
Form of award/decision The petition shall be accompanied by a
The award or decision of the VA or panel of Vas certified true copy of the judgment, order or
must state in clear, concise and definite terms resolution subject thereof, copies of all
the facts, the law and/contract upon which it is pleadings and documents relevant and
based. pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
Finality paragraph of section 3, Rule 46. (1a)
It shall be final and executory after 10 calendar
days from the receipt of the copy of the award or Section 2. Petition for prohibition. When the
decision by the parties. proceedings of any tribunal, corporation,
board, officer or person, whether exercising
Execution of award/decision judicial, quasi-judicial or ministerial functions,
Upon motion of any interested party, the are without or in excess of its or his
Voluntary Arbitrator or panel of Voluntary jurisdiction, or with grave abuse of discretion
Arbitrators or the Labor Arbiter in the region amounting to lack or excess of jurisdiction,
where the movant resides, in case of the and there is no appeal or any other plain,
absence or incapacity of the Voluntary speedy, and adequate remedy in the ordinary
Arbitrator or panel of Voluntary Arbitrators, for course of law, a person aggrieved thereby may
any reason, may issue a writ of execution file a verified petition in the proper court,
requiring either the sheriff of the Commission or alleging the facts with certainty and praying
regular courts or any public official whom the that judgment be rendered commanding the
parties may designate in the submission respondent to desist from further proceedings
agreement to execute the final decision, order in the action or matter specified therein, or
or award. [Art, 262-A, LC] otherwise granting such incidental reliefs as
law and justice may require.
REMEDIES The petition shall likewise be accompanied by
Rule 43 Sec. 1, Rules of Court a certified true copy of the judgment, order or
The decision of a Voluntary Arbitrator or panel resolution subject thereof, copies of all
of Voluntary Arbitrators is appealable by pleadings and documents relevant and
ordinary appeal under Rule 43 of the Rules of pertinent thereto, and a sworn certification of
Civil Procedure directly to the Court of Appeals. non-forum shopping as provided in the third
paragraph of section 3, Rule 46. (2a)
COURT OF APPEALS
RULE 65, RULES OF COURT Section 3. Petition for mandamus. When any
tribunal, corporation, board, officer or person
Section 1. Petition for certiorari. When any unlawfully neglects the performance of an act
tribunal, board or officer exercising judicial or which the law specifically enjoins as a duty
quasi-judicial functions has acted without or resulting from an office, trust, or station, or
in excess its or his jurisdiction, or with grave unlawfully excludes another from the use and
abuse of discretion amounting to lack or enjoyment of a right or office to which such
excess of jurisdiction, and there is no appeal, other is entitled, and there is no other plain,
or any plain, speedy, and adequate remedy in speedy and adequate remedy in the ordinary
the ordinary course of law, a person aggrieved course of law, the person aggrieved thereby
thereby may file a verified petition in the may file a verified petition in the proper court,
proper court, alleging the facts with certainty alleging the facts with certainty and praying
and praying that judgment be rendered that judgment be rendered commanding the
annulling or modifying the proceedings of respondent, immediately or at some other
such tribunal, board or officer, and granting time to be specified by the court, to do the act
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advances he had received but had, by his interrupted: Provided, however, that the final
claim, been settled, the same having been judgment in the administrative proceedings
reflected in his payslips, hence, it is shall not be binding in the criminal case nor
assumed that he learned of it at the time he be considered as evidence of guilt but merely
received his monthly paychecks. [Anabe v as proof of compliance of the requirements
Asian Const, et al., 2009] therein set forth. [As amended by Batas 107
Pambansa Bilang 70, May 1, 1980 and later
(2) Illegal dismissal further amended by Section 19, Republic Act
In illegal dismissal cases, the employee No. 6715, March 21, 1989]
concerned is given a period of four years
from the time of his dismissal within which (4) Offenses penalized by the Labor Code and
to institute a complaint. This is based on IRR issued pursuant thereto
Article 1146 of the New Civil Code which
states that actions based upon an injury to Art. 290. Offenses penalized under this Code
the rights of the plaintiff must be brought and the rules and regulations issued pursuant
within four years. [Victory Liner, Inc. v Race, thereto shall prescribe in three (3) years.
2007]
Article 1146. The following actions must be (5) Prescriptive period of illegal recruitment
instituted within four years: cases
(1) Upon an injury to the rights of the
plaintiff; Section 7. Prescription. Illegal recruitment cases
(2) Upon a quasi-delict; under this Rule shall prescribe in five (5) years;
Provided, however, that illegal recruitment
However, when the action arises from or out
cases involving economic sabotage shall
of any act, activity, or conduct of any public
prescribed in twenty (20) years. [RA 804]
officer involving the exercise of powers or
authority arising from Martial Law including
the arrest, detention and/or trial of the
plaintiff, the same must be brought within
one (1) year. [As amended by PD No. 1755,
Dec. 24, 1980.]
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